-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, gykp+WsGbD3Iv04cJY1JQkbTsMMpWDQxPoBbJzz494eVcgtvVJTkuSuGVyWDMxU/ XwGt0GG1b4n4vTu3a2t40Q== 0000715633-94-000008.txt : 19940727 0000715633-94-000008.hdr.sgml : 19940727 ACCESSION NUMBER: 0000715633-94-000008 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19940619 FILED AS OF DATE: 19940726 FILER: COMPANY DATA: COMPANY CONFORMED NAME: VONS COMPANIES INC CENTRAL INDEX KEY: 0000715633 STANDARD INDUSTRIAL CLASSIFICATION: 5411 IRS NUMBER: 381623900 STATE OF INCORPORATION: MI FISCAL YEAR END: 1230 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-08452 FILM NUMBER: 94540074 BUSINESS ADDRESS: STREET 1: 618 MICHILLINDA AVE CITY: ARCADIA STATE: CA ZIP: 91007 BUSINESS PHONE: 8188217000 MAIL ADDRESS: STREET 1: 618 MICHILLINDA AVENUE CITY: ARCADIA STATE: CA ZIP: 91007 FORMER COMPANY: FORMER CONFORMED NAME: ALLIED SUPERMARKETS INC /MI//NEW/ DATE OF NAME CHANGE: 19870805 10-Q 1 2ND QUARTER 10-Q UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 --------------------- FORM 10-Q (Mark one) /X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 19, 1994 OR / / 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 1-8452 ----------------------- THE VONS COMPANIES, INC. (Exact name of registrant as specified in its charter) Michigan 38-1623900 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 618 Michillinda Avenue, Arcadia, California 91007 (Address of principal executive offices and zip code) (818) 821-7000 (Registrant's telephone number, including area code) Not Applicable (Former name, former address and former fiscal year, if changed since last report) ------------------------ Indicate by check mark whether the registrant (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 (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No --- --- Shares of common stock outstanding at July 22, 1994 - 43,379,041. PART 1. FINANCIAL INFORMATION Item 1: Financial Statements THE VONS COMPANIES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND RETAINED EARNINGS All amounts except share data in millions of dollars and as a percentage of sales (Unaudited)
Twelve Weeks Ended Twenty-Four Weeks Ended --------------------------------------- --------------------------------------- June 19, 1994 June 20, 1993 June 19, 1994 June 20, 1993 ------------------ ------------------ ------------------ ------------------ Sales.............. $ 1,160.2 100.0% $ 1,175.3 100.0% $ 2,304.2 100.0% $ 2,369.5 100.0% ----------- ----- ----------- ----- ----------- ----- ----------- ----- Costs and expenses: Cost of sales, buying and occupancy...... 892.7 76.9 878.1 74.7 1,749.9 75.9 1,769.9 74.7 Selling and administrative expenses....... 238.7 20.6 246.6 21.0 489.3 21.3 502.0 21.2 Amortization of excess cost over net assets acquired....... 3.5 .3 3.5 .3 7.0 .3 7.0 .3 ----------- ----- ----------- ----- ----------- ----- ----------- ----- 1,134.9 97.8 1,128.2 96.0 2,246.2 97.5 2,278.9 96.2 ----------- ----- ----------- ----- ----------- ----- ----------- ----- Operating income... 25.3 2.2 47.1 4.0 58.0 2.5 90.6 3.8 Interest expense, net.............. 16.8 1.5 15.2 1.3 32.5 1.4 30.1 1.2 ----------- ----- ----------- ----- ----------- ----- ----------- ----- Income before income tax provision........ 8.5 .7 31.9 2.7 25.5 1.1 60.5 2.6 Income tax provision........ 4.0 .3 14.2 1.2 12.0 .5 26.9 1.2 ----------- ----- ----------- ----- ----------- ----- ----------- ----- Net income......... 4.5 .4 17.7 1.5 13.5 .6 33.6 1.4 ----- ----- ----- ----- ----- ----- ----- ----- Retained earnings - beginning of period........... 190.2 165.5 181.2 149.6 ----------- ----------- ----------- ----------- Retained earnings - end of period.... $ 194.7 $ 183.2 $ 194.7 $ 183.2 ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- Income per common share: Net income....... $ .10 $ .40 $ .31 $ .77 ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- Weighted average common shares and common share equivalents...... 43,516,000 43,512,000 43,496,000 43,531,000 ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- See accompanying notes to these condensed consolidated financial statements.
THE VONS COMPANIES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS All amounts in millions of dollars (Unaudited)
June 19, January 2, 1994 1994 -------- ----------- ASSETS Current assets: Cash...................................... $ 6.1 $ 8.5 Accounts receivable....................... 46.9 36.3 Inventories............................... 342.8 383.5 Other..................................... 46.0 45.1 -------- ----------- Total current assets.................... 441.8 473.4 Property and equipment, net................. 1,223.2 1,215.6 Excess of cost over net assets acquired..... 505.9 512.9 Other....................................... 61.7 47.6 -------- ----------- TOTAL ASSETS................................ $2,232.6 $ 2,249.5 -------- ----------- -------- ----------- LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Current maturities of capital lease obligations and long-term debt.......... $ 8.6 $ 8.6 Accounts payable.......................... 253.5 314.5 Accrued liabilities....................... 232.3 219.6 -------- ----------- Total current liabilities............... 494.4 542.7 Accrued self-insurance and noncurrent liabilities............................... 105.7 102.3 Deferred income taxes....................... 118.8 111.2 Other noncurrent liabilities................ 84.5 86.4 Senior debt and capital lease obligations... 566.9 559.9 Subordinated debt, net...................... 323.8 322.1 -------- ----------- Total liabilities....................... 1,694.1 1,724.6 -------- ----------- Shareholders' equity: Common stock.............................. 4.3 4.3 Paid-in capital........................... 339.6 339.5 Retained earnings......................... 194.7 181.2 Notes receivable for stock................ (.1) (.1) -------- ----------- Total shareholders' equity.............. 538.5 524.9 -------- ----------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY.. $2,232.6 $ 2,249.5 -------- ----------- -------- ----------- See accompanying notes to these condensed consolidated financial statements.
THE VONS COMPANIES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS All amounts in millions of dollars (Unaudited)
Twelve Weeks Ended Twenty-Four Weeks Ended --------------------- ----------------------- June 19, June 20, June 19, June 20, 1994 1993 1994 1993 -------- ---------- --------- ---------- Cash flows from operating activities: Net income......................... $ 4.5 $ 17.7 $ 13.5 $ 33.6 Adjustments to reconcile net income to cash provided by operating activities: Depreciation and amortization of property and capital leases....................... 23.6 20.3 46.9 39.5 Amortization of excess cost over net assets acquired and other assets................. 3.7 4.7 7.4 9.3 Amortization of debt discount and deferred financing costs. 1.5 1.4 2.9 2.9 LIFO (credit) charge........... (.5) 1.1 .8 2.9 Deferred income taxes.......... 2.3 8.3 2.5 10.0 Change in assets and liabilities: (Increase) decrease in accounts receivable...... 8.2 1.4 (10.6) 4.0 (Increase) decrease in inventories at FIFO costs 27.3 19.5 39.9 18.7 (Increase) decrease in other current assets..... 8.4 6.0 4.2 2.4 (Increase) decrease in noncurrent assets........ (10.8) (.2) (15.7) (7.8) Increase (decrease) in accounts payable......... (10.2) .7 (58.3) (59.7) Increase (decrease) in accrued liabilities...... (12.6) (30.5) 12.7 (27.4) Increase (decrease) in noncurrent liabilities... 2.7 (.8) 1.5 1.3 -------- ---------- --------- ---------- Net cash provided by operating activities......................... 48.1 49.6 47.7 29.7 -------- ---------- --------- ---------- Cash flows from investing activities: Addition of property and equipment. (24.9) (44.8) (56.4) (75.7) Disposal of property and equipment. 1.1 - 2.2 .3 -------- ---------- --------- ---------- Net cash used for investing activities......................... (23.8) (44.8) (54.2) (75.4) -------- ---------- --------- ---------- Cash flows from financing activities: Net borrowings (payments) on revolving debt................... (13.5) 6.5 10.5 47.3 Increase (decrease) in net outstanding drafts............... (8.8) (10.1) (2.7) 1.6 Payments on other debt and capital lease obligations and other...... (2.0) (1.5) (3.7) (5.1) -------- ---------- --------- ---------- Net cash provided (used) by financing activities......................... (24.3) (5.1) 4.1 43.8 -------- ---------- --------- ---------- Net cash increase (decrease)......... - (.3) (2.4) (1.9) Cash at beginning of period.......... 6.1 6.7 8.5 8.3 -------- ---------- --------- ---------- Cash at end of period................ $ 6.1 $ 6.4 $ 6.1 $ 6.4 -------- ---------- --------- ---------- -------- ---------- --------- ---------- Supplemental disclosures of cash flow information: Cash paid during the period for: Interest......................... $ 23.1 $ 22.2 $ 30.8 $ 28.5 -------- --------- --------- ---------- -------- --------- --------- ---------- Income taxes..................... $ 10.9 $ 17.3 $ 14.5 $ 23.4 -------- --------- --------- ---------- -------- --------- --------- ---------- Supplemental disclosures of non-cash investing and financing activity: Capital leases................... $ - $ - $ .3 $ 7.7 -------- --------- --------- ---------- -------- --------- --------- ---------- See accompanying notes to these condensed consolidated financial statements.
1. Basis of Presentation The financial data included herein have been prepared by the Company without audit. In the opinion of management, all adjustments of a normal recurring nature necessary to present fairly the Company's consolidated financial position at June 19, 1994 and January 2, 1994 and the consolidated results of operations and cash flows for the twelve and twenty-four weeks ended June 19, 1994 and June 20, 1993 have been made. Certain reclassifications were made to prior periods' balances for comparative purposes. This interim information should be read in conjunction with the consolidated financial statements nd notes thereto included in the Company's latest annual report filed on Form 10-K. Due to seasonality and other market conditions, the results for the twenty-four weeks ended June 19, 1994, should not be considered as indicative of the results to be expected for a full year. At June 19, 1994, the Company operated 344 supermarket and food nd drug combination stores, primarily in Southern California, under the names Vons, Vons Food and Drug, Pavilions, Tianguis, and EXPO. The Company also operates a fluid milk processing facility, an ice cream plant, a bakery, and distribution facilities for meat, grocery, produce and general merchandise. 2. Earthquake Loss On January 17, 1994, Southern California was struck by a major earthquake which resulted in the temporary closure of 45 of the Company's stores. All of the closed stores reopened within approximately one week of the earthquake. The Company carries insurance to protect against earthquake loss. The estimated total cost due to the earthquake is approximately $25 million which, after insurance recoveries, results in a pre-tax nonrecurring charge of approximately $5 million, or $.07 per share. The accompanying condensed consolidated financial statements include a $10 million receivable for insurance recoveries and a $5 million selling and administrative charge for the earthquake insurance deductible which was recorded in first quarter 1994. Item 2: Management's Discussion and Analysis of Financial Condition and Results of Operations (Unaudited) Results of Operations On January 13, 1994, the Company introduced the "Vons Value program." This program emphasizes low prices every day and improved customer service, and it represents a strategic repositioning of the Company's market focus. The Company plans to substantially offset the cost of the program over time through aggressive cost and expense reductions designed to permanently lower the Company's expense structure. The new marketing and cost and expense reduction programs are long-term strategies, the implementation of which will extend beyond 1994. During the first half of 1994, the Company reduced the prices of over 12,200 items, increased the allocation of store labor for customer checkout, and increased broadcast media advertising to better inform customers as to the many ways to save money at Vons, including newly reduced prices, weekly advertised specials and free membership club savings. The Northridge earthquake occurred four days following the introduction of the Vons Value Program. This event substantially disrupted the initial phase of the new program as both the Company and the communities it serves were focused on recovering from this tragic event. As a result, the Company undertook a costly relaunch of the new program late in first quarter 1994 which continued through second quarter 1994. By accelerating price reductions planned for later in the program and offering attractive promotions and advertised specials to reintroduce the program to consumers, gross margin and operating income were significantly reduced in second quarter 1994. The Company believes that during the second half of 1994 it can achieve the desired sales momentum of the new program and that buying improvements, changes in promotional and advertising mix and further expense reductions will substantially offset the effects of the price reductions in the second half of 1994. The Company expects that third and fourth quarter earnings will be significantly improved over the second quarter 1994. However, there can be no assurance that, if the Company is unsuccessful at improving its sales performance and achieving necessary cost and expense reductions, the ability of the Company to improve its short-term financial performance would not be adversely impacted. In aggregate, the Company's programs are intended to initially benefit sales, which in turn will improve the Company's ability to achieve strong, sustainable earnings growth over the long run. Twelve Weeks Ended June 19, 1994 Compared with the Twelve Weeks Ended June 20, 1993. Sales. Second quarter 1994 sales were $1,160.2 million, a decrease of $15.1 million, or 1.3%, from second quarter 1993 sales. Same store sales decreased 3.2% from second quarter 1993 sales. This represents the third consecutive quarter of an improving trend in negative same store sales results. Sales reflect reduced prices as a result of the Vons Value Program, deflation in perishables, the ongoing impact of the weak economy, competitive new store and remodel activity and the effect of the Northridge earthquake. Since June 20, 1993, the Company has opened 14 new stores, closed 16 stores and completed 30 store remodel projects. Costs and Expenses. Second quarter 1994 costs and expenses were $1,134.9 million, an increase of $6.7 million, or 0.6%, over second quarter 1993. Cost of sales, buying and occupancy expenses as a percentage of sales increased by 2.2 percentage points to 76.9% in second quarter 1994. This increase reflects lower prices and increased promotions associated with the Vons Value Program. During second quarter 1994, the Company recorded a $.5 million LIFO credit compared with a $1.1 million LIFO charge in second quarter 1993 reflecting the Company's expectation of low inflation for the year. Selling and administrative expenses as a percentage of sales decreased by 0.4 percentage points to 20.6% in second quarter 1994. This decrease reflects increased store labor expenses during second quarter 1994, related to the Vons Value Program, which were more than offset by a decrease in administrative expenses as a result of the reduction in work force implemented during fourth quarter 1993 and other cost savings initiatives. Certain cost and expense reductions resulted from the Company's cost containment and strategic restructuring program which was implemented in fourth quarter 1993. Operating Income. Second quarter 1994 operating income was $25.3 million, a decrease of $21.8 million from second quarter 1993. Operating margin decreased to 2.2% in second quarter 1994 versus 4.0% in second quarter 1993, primarily due to the decline in sales and gross margin reduction for price decreases. Operating income before depreciation and amortization of property, amortization of goodwill and other assets and LIFO ("FIFO EBITDA") was $52.1 million, or 4.5% of sales, in second quarter 1994 compared with $73.2 million, or 6.2%, of sales in second quarter 1993. Interest Expense. Second quarter 1994 net interest expense was $16.8 million, an increase of $1.6 million over second quarter 1993. This increase was primarily due to higher average debt borrowings. Income Tax Provision. Second quarter 1994 income tax provision was $4.0 million, or a 47.1% effective tax rate. Second quarter 1993 income tax provision was $14.2 million, or a 44.5% effective tax rate. The increase in the second quarter 1994 effective tax rate reflects the 1.0% increase in the Federal statutory tax rate and the decrease in income before income tax provision which was not offset by a comparable decrease in amortization of excess cost over net assets acquired, the majority of which is not deductible for tax purposes. Income. Second quarter 1994 net income was $4.5 million, or $.10 per share, compared with $17.7 million, or $.40 per share, in second quarter 1993. Twenty-Four Weeks Ended June 19, 1994 Compared with the Twenty-Four Weeks Ended June 20, 1993 Sales. Sales for the twenty-four weeks ended June 19, 1994 were $2,304.2 million, an decrease of $65.3 million, or 2.8%, from the twenty-four weeks ended June 20, 1993. The 1994 year-to-date same store sales decreased 4.4% from the 1993 year-to-date sales. Sales reflect reduced prices as a result of the Vons Value Program, deflation in perishables, the continuing weak overall economic environment in Southern California, ongoing competitive new store and remodel activity and the effect of the Northridge earthquake. Costs and Expenses. Costs and expenses for the twenty-four weeks ended June 19, 1994 were $2,246.2 million, a decrease of $32.7 million, or 1.4%, from the comparable 1993 period. Cost of sales, buying and occupancy expenses as a percentage of sales were 75.9% for the twenty-four weeks ended June 19, 1994, an increase of 1.2 percentage points, compared with the twenty-four weeks ended June 20, 1993. The increase reflects the impact of lower prices and increased promotional activities. The LIFO charge was $.8 million for the twenty-four weeks ended June 19, 1994 compared with $2.9 million for the comparable 1993 period reflecting the Company's expectation of low inflation for the year. Selling and administrative expenses as a percentage of sales were 21.3% in the 1994 period, an increase of 0.1 percentage points over the comparable 1993 period. This increase reflects a $5.0 million charge related to the insurance deductible related to the Northridge earthquake. Increased store labor expenses as part of the Vons Value Program were fully offset by administrative expense reductions achieved as part of the cost containment and strategic restructuring program. Operating Income. Operating income for the twenty-four weeks ended June 19, 1994 was $58.0 million, a decrease of $32.6 million, or 36.0%, from the twenty-four weeks ended June 20, 1993. Operating margin decreased to 2.5% in the 1994 twenty-four week period versus 3.8% in the 1993 twenty-four week period. FIFO EBITDA excluding the earthquake insurance deductible was $118.1 million, or 5.1% of sales, for the twenty-four weeks ended June 19, 1994 versus $142.3 million, or 6.0% of sales, for the twenty-four weeks ended June 20, 1993. Interest Expense. Net interest expense for the twenty-four weeks ended June 19, 1994 was $32.5 million, an increase of $2.4 million over the comparable 1993 period. This increase was primarily due to higher average debt borrowings. Income Tax Provision. The income tax provision for the twenty-four weeks ended June 19, 1994 was $12.0 million, or a 47.1% effective tax rate. The effective tax rate is higher than the incremental tax rate of 41.0% due primarily to amortization of excess cost over net assets acquired, the majority of which is not deductible for tax purposes. Income. Net income for the twenty-four weeks ended June 19, 1994 was $13.5 million, or $.31 per share, compared with net income of $33.6 million, or $.77 per share, for the twenty-four weeks ended June 20, 1993. Labor Contract Status The Company's contract with the International Brotherhood of Teamsters Union, primarily located within the Los Angeles, Orange and San Diego Counties expires on September 11, 1994. Although discussions have begun, it is not possible to predict the outcome of forthcoming negotiations. Liquidity and Capital Resources The Company's primary sources of liquidity are cash flows from operations and available credit under its Revolving Credit Facility. Management believes that these sources adequately provide for its working capital, capital expenditure and debt service needs. Net cash provided by operating activities was $48.1 million in second quarter 1994 compared with $49.6 million in second quarter 1993 and $47.7 million for the twenty-four weeks ended June 19, 1994 compared with $29.7 million for the twenty-four weeks ended June 20, 1993. These changes were primarily due to changes in assets and liabilities generally reflecting the timing of receipts and disbursements partially offset by a decrease in net income. The ratio of current assets to current liabilities was 0.89 to 1 at June 19, 1994 compared with 0.87 to 1 at January 2, 1994. Net cash used by investing activities was $23.8 million in second quarter 1994 compared with $44.8 million in second quarter 1993 and $54.2 million for the twenty-four weeks ended June 19, 1994 compared with $75.4 million for the twenty-four weeks ended June 20, 1993. These decreases reflect a reduction in the Company's capital expenditure program. Full year capital expenditures are expected to be $168 million, a reduction of $47 million from prior estimates primarily reflecting delays in new store openings. The Company opened three stores, closed four stores and completed five store remodel projects during the twenty-four weeks ended June 19, 1994. Capital expenditures in 1994 have been and will continue to be funded out of cash provided by operations, the Revolving Credit Facility and/or through operating leases, although no assurance can be given that such sources will be sufficient. The capital expenditure program has substantial flexibility and is subject to revision based on various factors; including, but not limited to, business conditions, changing time constraints, cash flow requirements and competitive factors. In the near term, if the Company were to reduce substantially or postpone these programs, there would be no substantial impact on current operations and it is likely that more cash would be available for debt servicing. In the long-term, if these programs were substantially reduced, in the Company's opinion, its operating business and ultimately its cash flow would be adversely impacted. Net cash used by financing activities was $24.3 million in second quarter 1994 compared with $5.1 million in second quarter 1993. Net cash provided by financing activities was $4.1 million for the twenty-four weeks ended June 19, 1994 compared with $43.8 million for the twenty-four weeks ended June 20, 1993. The level of borrowings under the Company's revolving debt is dependent primarily upon cash flows from operations and capital expenditure requirements. At June 19, 1994, the Company's revolving debt borrowings totaled $228.3 million compared with $301.9 million at June 20, 1993. This change reflects the impact of the $150 million Term Loan Facility entered into in fourth quarter 1993 and cash flows from operations offset by borrowings relating to the capital expenditure program. At June 19, 1994, the Company had available unused credit of $169.9 million under its Revolving Credit Facility. For the twenty-four weeks ended June 19, 1994 the weighted average interest cost on revolving debt was 4.8%, the corresponding bank prime rate at June 19, 1994 was 7.25%. PART II. OTHER INFORMATION Item 1. Legal Proceedings Not applicable. Item 2. Changes in Securities Not applicable. Item 3. Defaults upon Senior Securities Not applicable. Item 4. Submission of Matters to a Vote of Security Holders On May 11, 1994, the Company held its Annual Meeting of Shareholders in Arcadia, California. At that meeting, the shareholders elected all three directors nominated by the Board of Directors. The number of votes cast for, against or withheld for each elected director were as follows:
Number of Votes Cast ________________________ For Withheld __________ ________ Steven A. Burd 38,876,711 199,576 Fritz L. Duda 38,886,777 189,510 Roger E. Stangeland 38,869,184 207,103
The other directors whose term of office as a director continued after the meeting are as follows: William S. Duda James H. Green, Jr. Robert I. MacDonnell Peter A. Magowan Charles. E. Rickershauser Elizabeth A. Sanders* William Y. Tausher * Ms. Sanders subsequently resigned effective July 12, 1994. There was no other business brought to the meeting. Item 5. Other Information Not applicable. Item 6. Exhibits and Reports on Form 8-K (a) Exhibits. Managements Contracts or Compensatory Plans or Arrangements: 10.28 Employment Agreement dated April 26, 1994 between the Registrant and Lawrence A. Del Santo. 10.29 Employment Agreement dated April 26, 1994 between the Registrant and Richard E. Goodspeed. (b) Reports on Form 8-K. No reports on Form 8-K were filed during the quarter ended June 19, 1994. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. THE VONS COMPANIES, INC. Date: July 25, 1994 /s/ LAWRENCE A. DEL SANTO ------------------------------- Lawrence A. Del Santo Vice Chairman and Chief Executive Officer Date: July 25, 1994 /s/ PAMELA K. KNOUS ------------------------------- Pamela K. Knous Senior Vice President and Chief Financial Officer EXHIBIT INDEX Sequentially Exhibit Numbered No. Description Page - ------- ----------- ------------ 10.28 Employment Agreement dated April 26, 1994 between the Registrant and Lawrence A. Del Santo. 10.29 Employment Agreement dated April 26, 1994 between the Registrant and Richard E. Goodspeed. EX-1 2 EXHIBIT 10.28 Exhibit 10.28 EMPLOYMENT AGREEMENT This Employment Agreement is entered into between The Vons Companies, Inc. (the "Company") and Lawrence A. Del Santo ("Executive"), effective as of April 26, 1994. R E C I T A L S - - - - - - - - WHEREAS, the Company desires to employ Executive to act as its Chief Executive Officer and Vice Chairman of its Board of Directors and desires to be assured of Executive's future association and services in order to retain Executive's experience, skill and ability, and is willing to engage Executive's services upon the terms contained herein; and WHEREAS, the Company and Executive desire to enter into a contract for the employment of Executive by the Company which provides compensation and certain other benefits to Executive and assures the Company of Executive's future services; A G R E E M E N T - - - - - - - - - NOW, THEREFORE, in consideration of the above premises, the mutual promises and covenants set forth below, and other good and valuable consideration, the receipt of which is hereby acknowledged, the Company and Executive hereby agree as follows. ARTICLE I EMPLOYMENT Section 1.1. Employment, Position, Responsibilities, Duties and ----------- -------------------------------------------------- Authority. The Company hereby agrees to employ Executive, and Executive - --------- agrees to be so employed, in the capacity of Chief Executive Officer and Vice Chairman of the Board of Directors. During Executive's employment hereunder, Executive shall devote all necessary energies, experience, skills, abilities, knowledge and productive time to the performance of this Agreement and shall not render to others services which would materially interfere with the performance of Executive's duties under this Agreement. Executive's responsibilities shall include those customarily attendant to an executive of this position, plus any additional responsibilities, duties or authority which the Board of Directors may designate from time to time. Section 1.2. Term of Employment. Subject to Sections 2.9 and ----------- ------------------ 2.10, Executive's employment is for a period of three (3) years, beginning April 26, 1994 and ending April 30, 1997. ARTICLE II COMPENSATION AND BENEFITS Section 2.1. Base Salary. Executive's base salary shall be Five ----------- ----------- Hundred Fifty Thousand Dollars ($550,000) per annum, payable in biweekly installments. Section 2.2. Performance Bonus. The Company shall establish a ----------- ----------------- bonus plan, based upon performance criteria approved in advance by the Company's Board of Directors, under which Executive may earn an annual bonus equal to up to one hundred percent (100%) of Executive's base salary, payable in the Company's discretion in cash or other compensation. Section 2.3. Stock Options. Pursuant to "The Vons Companies, ----------- ------------- Inc. 1990 Stock Option and Restricted Stock Plan" (the "Stock Plan"), Executive shall be granted two hundred thousand (200,000) non-qualified stock options at fair market value ("FMV Options") and one hundred seventy-five thousand (175,000) non-qualified stock options at a price of twenty-five percent (25%) of fair market value (the "Discounted Options"). Except as provided in Sections 2.9 and 2.10, Executive shall vest in one-third (1/3) of the options granted hereunder at the end of each full year of employment. As used herein, "fair market value" shall be the average closing price of the Company's common stock on the New York Stock Exchange for the ten (10) trading days prior to the effective date of this Agreement, in accordance with the Stock Plan. The Company and Executive shall execute any separate agreement(s) as may be necessary pursuant to the Stock Plan to implement the terms of this Section. Such agreement(s) shall provide that, upon retirement from employment, as defined therein, all options then vested shall remain exercisable for the entire term of the initial option grant. Section 2.4. Insurance Benefits. Executive shall be entitled to ----------- ------------------ participate in the Company's Personal Choice Flexible Benefit Plan with respect to insurance benefits generally available to the Company's senior executives. If any insurance plan provides for a waiting period before coverage begins, the Company will waive or obtain the waiver of that period waived and, if it cannot be waived, will reimburse Executive the cost of continuing insurance coverage from Executive's current employer until the Company's insurance coverage becomes effective. Section 2.5. Retirement Plans, Etc. Executive shall participate ----------- ---------------------- in the Company's pension plan, 401(k) plan and 401(k) wraparound plan in accordance with the terms of those plans. Executive shall not be eligible for, or participate in, the Company's Supplemental Executive Retirement Plan or the Company's Severance Plan for Senior Management and Key Employees. Section 2.6. Individual Retirement Benefits. Subject to ----------- ------------------------------ Section 2.9, beginning in May 1997, the Company shall pay Executive a monthly retirement benefit of Sixteen Thousand Six Hundred Sixty-Six Dollars and Sixty-Seven Cents ($16,666.67) for the duration of Executive's own life. Upon written notice to the Company, Executive may elect to receive an actuarially equivalent joint and survivor benefit for Executive and his spouse. Section 2.7. Relocation Allowance. Executive shall relocate his ----------- -------------------- residence to Southern California, and the Company shall pay all reasonable expenses incurred by Executive in connection with the relocation, including shipping costs for the transfer of household goods and automobiles and Executive's temporary living expenses in Southern California through September 1994. Section 2.8. Vacations and Holidays. Executive shall be entitled ----------- ---------------------- to such holidays and vacation (a minimum of one (1) month per year) each year as the Company's other senior executives. Section 2.9. Early Termination of Employment by Executive or the ----------- -------------------------------------------------- Company. Either Executive or the Company may terminate Executive's employment - ------- prior to April 30, 1997. In any such event, the Company's sole obligation to Executive shall be as follows: (a) If Executive resigns other than for "Good Reason" (as defined in subsection (as defined in subsection (d) below), Executive shall be paid any accrued but unused vacation and any earned but unpaid base salary as of the date of termination and any benefits to which Executive may be entitled under any Company benefit plan. Executive shall not be entitled to any other compensation whatsoever, including any performance bonus under Section 2.2, any unvested stock options under Section 2.3 or any retirement benefits under Section (b) If Executive resigns for "Good Reason" (as defined in subsection (c) below), or if the Company terminates Executive other than for "Cause" (as defined in subsection following, in addition to any accrued but unused vacation, any earned but unpaid base salary and prorated performance bonus as of the date of termination and any benefits to which Executive may be entitled under any Company benefit plan: (1) salary continuance equal to his base salary (but no performance bonus) through April 30, 1997, payable on normal payroll dates and without interest; (2) continuation of medical and life (but not disability) insurance benefits at the Company's expense through April 30, 1997; (3) immediate vesting of all Discounted Options (but no FMV Options) under Section 2.3; and (4) retirement benefits in accordance with Section 2.6. (c) As used in this Agreement, "Good Reason" for resignation shall mean (i) a substantial change in the nature, or diminution in the status of, Executive's duties or position; or (ii) resulting from (A) the merger or consolidation of the Company with an entity that is not a current stockholder of the Company as of the effective date of this Agreement resulting in the holders of the Company's voting stock immediately prior to such transaction holding less than fifty percent (50%) of the total voting stock of the surviving corporation after such transaction, or (B) any acquisition of stock by a person or entity that is not a current stockholder as of the effective date of this Agreement that results in that acquiring person or entity being the beneficial owner of fifty percent (50%) or more of the Company's voting stock. (d) As used in this Agreement, "Cause" for termination shall mean (i) felony which in the judgment of the Board of Directors of the Company adversely affects the business or reputation of the Company; (iii) wanton and knowing disregard of corporate policy; and (iv) willful and continuous failure, in the judgment of the Board of Directors, to perform substantially the reasonably assigned duties with the Company after written notice and reasonable opportunity to perform. Section 2.10. Termination Due to Death or Disability ------------ -------------------------------------- (a) This Agreement shall terminate immediately upon Executive's death or disability (as defined in subsection (b) below). Executive or Executive's legal representatives, beneficiaries or heirs and assigns, as the case may be, shall receive Executive's base salary (including prorated performance bonus) through the date of death or disability, any unvested Discounted Options (but not unvested FMV Options) shall immediately vest as of that date, and, only in the event of Executive's death, Executive's surviving spouse shall receive the actuarially equivalent benefit (based on an one hundred percent (100%) joint and survivor benefit) of the benefit set forth in Section 2.6 beginning May 1997. Except with respect to any obligations to Executive or Executive's legal representatives, beneficiaries or heirs and assigns, as the case maybe, that may exist under the terms of the various benefit plans, including exercise rights under the Stock Plan, all other obligations of the Company hereunder shall immediately cease. (b) As used herein, "disability" shall occur, and this Agreement shall terminate, as of the date Executive becomes eligible to receive long term disability benefits under the Company's long-term disability insurance plan. Section 2.11. Short-Term Loan for Purchase of Stock. Within ------------ ------------------------------------- thirty (30) days after the effective date of this Agreement, the Company shall lend Executive at least One Million Dollars ($1,000,000) and up to Two Million Dollars ($2,000,000), at an interest rate equal to the lowest rate at which the Company is able to borrow funds during the period the loan is outstanding, to be used solely for the purchase of Company common stock from the Company at fair market value (as defined in Section 2.3) as of the effective date of this Agreement. Executive shall liquidate all of his common stock holdings in his former employer within one hundred twenty (120) days of the effective date of this Agreement, or such longer period of time as may be required under federal securities laws. The loan and interest shall be repaid in full no later than October ARTICLE III COMPANY INFORMATION Section 3.1. Ownership of Records, Etc. All records, reports, ----------- -------------------------- notes, compilations or other recorded matter, and copies of reproductions thereof, relating to the Company's operations, activities or business, made or received by Executive during any past or future period of employment with the Company are and shall be the property of the Company exclusively, and Executive shall keep the same at all times in Executive's custody, subject to the Company's control, and Executive shall surrender the same at the termination of Executive's employment, if not before, Section 3.2. Duration of Obligations. Executive's obligations ----------- ----------------------- under this Article shall continue after Executive's employment with the Company is terminated, regardless of the nature or reason for such termination. The provisions of this Article shall be binding upon Executive and Executive's heirs, executors and administrators. ARTICLE IV GENERAL PROVISIONS Section 4.1. Assignment. Executive may not assign or transfer ----------- ---------- any rights hereunder, this Agreement being a contract for Executive's personal services. Section 4.2. Sole and Entire Agreement. This Agreement ----------- ------------------------- constitutes the sole and entire existing agreement between the parties, and completely and correctly expresses all of the rights and obligations of the parties. All prior agreements, conditions, practices, customs, usages and obligations are completely superseded and revoked, insofar as any such prior agreement, condition, practice, custom, usage or obligation might have given rise to any enforceable right. Section 4.3. Waivers. The waiver in any particular instance or ----------- ------- series of instances of any term or condition of this Agreement or any breach hereof by any party shall not constitute a waiver of such term or condition or of any breach thereof in any other instance. Section 4.4. Amendment. This Agreement is subject to amendment ----------- --------- only by subsequent written agreement between, and executed by, the parties hereto. Commencement or continuation of any custom, practice or usage by the Company shall not constitute an amendment hereof or otherwise give rise to enforceable rights or create obligations of the Company. Section 4.5. Severability. If any one or more provisions, ----------- ------------ clauses, paragraphs, subclauses or subparagraphs contained in this Agreement shall for any reason be held to be invalid, illegal, void or unenforceable, the same shall not affect any other provision, clause, paragraph, subclause or subparagraph of this Agreement, but this Agreement shall be construed as if such invalid, illegal, void or unenforceable provision, clause, paragraph, subclause or subparagraph had never been contained herein. Section 4.6. Indemnification. The Company shall indemnify and ----------- --------------- hold Executive harmless from any damages or costs, including reasonable attorney's fees, arising from any claims brought by Executive's former employer relating to Executive's resignation from that employer or Executive's employment by the Company. The Company shall reimburse Executive for the reasonable costs, including reasonable attorney's fees, Executive may incur in recovering from Executive's former employer any salary, vacation pay, stock and/or other compensation or benefits in which Executive is vested or to which Executive is otherwise clearly entitled as of Executive's last day of employment with such employer, to the extent Executive is not otherwise compensated for any such costs. Section 4.7. Attorney's Fees. If any legal action or proceeding ----------- --------------- is brought to enforce this Agreement, the successful or prevailing party shall be entitled to recover reasonable attorney's fees and other costs incurred in such action or proceeding, in addition to any other relief to which such party may be entitled. Section 4.8. Time Is of the Essence. Time is of the essence in ----------- ---------------------- this Agreement. Any time limit mentioned herein has been carefully considered and represents the agreed absolute outside limit of time within which the applicable right must be exercised. The parties may extend such time limit only by mutual agreement in writing. Section 4.9. Duration of Rights. Rights and obligations created ----------- ------------------ by or arising under this Agreement shall terminate automatically upon termination of this Agreement, except as otherwise expressly provided herein. Section 4.10. Full Performance Required. The doctrine of ------------ ------------------------- substantial performance has no application hereunder. Each condition and provision has been carefully considered and represents the agreed minimum limit of performance giving rise to applicable rights or obligations. Section 4.11. Captions. Any captions of articles, sections, ------------ -------- subsections or paragraphs of this Agreement are solely for the convenience of the parties and are not a part of this Agreement or to be used for the interpretation of this Agreement or any provision hereof. Section 4.12. Applicable Law. This Agreement shall governed ------------ -------------- by, and shall be construed and enforced in accordance with, the laws of the state of California. IN WITNESS WHEREOF, this Agreement has been duly executed as of the date first above written. THE VONS COMPANIES, INC. /s/ LAWRENCE A. DEL SANTO /s/ ROGER E. STANGELAND - ---------------------------------- By-------------------------------- Lawrence A. Del Santo Chairman of the Board Title----------------------------- EX-2 3 EXHIBIT 10.29 Exhibit 10.29 EMPLOYMENT AGREEMENT This Employment Agreement is entered into between The Vons Companies, Inc. (the "Company") and Richard E. Goodspeed ("Executive"), effective as of April 26, 1994. R E C I T A L S - - - - - - - - WHEREAS, the Company desires to employ Executive to act as its President and Chief Operating Officer and desires to be assured of Executive's future association and services in order to retain Executive's experience, skill and ability, and is willing to engage Executive's services upon the terms contained herein; and WHEREAS, the Company and Executive desire to enter into a contract for the employment of Executive by the Company which provides compensation and certain other benefits to Executive and assures the Company of Executive's future services; A G R E E M E N T - - - - - - - - - NOW, THEREFORE, in consideration of the above premises, the mutual promises and covenants set forth below, and other good and valuable consideration, the receipt of which is hereby acknowledged, the Company and Executive hereby agree as follows. ARTICLE I EMPLOYMENT Section 1.1. Employment, Position, Responsibilities, Duties and ----------- -------------------------------------------------- Authority. The Company hereby agrees to employ Executive, and Executive - --------- agrees to be so employed, in the capacity of President and Chief Operating Officer. During Executive's employment hereunder, Executive shall devote all necessary energies, experience, skills, abilities, knowledge and productive time to the performance of this Agreement and shall not render to others services which would materially interfere with the performance of Executive's duties under this Agreement. Executive's responsibilities shall include those customarily attendant to an executive of this position, plus any additional responsibilities, duties or authority which the Board of Directors may designate from time to time. Section 1.2. Term of Employment. Subject to Sections 2.9 and ----------- ------------------ 2.10, Executive's employment is for a period of three (3) years, beginning April 26, 1994 and ending April 30, 1997. ARTICLE II ---------- COMPENSATION AND BENEFITS Section 2.1. Base Salary. Executive's base salary shall be Four ----------- ----------- Hundred Thousand Dollars ($400,000) per annum, payable in biweekly installments. Section 2.2. Performance Bonus. The Company shall establish a ----------- ----------------- bonus plan, based upon performance criteria approved in advance by the Company's Board of Directors, under which Executive may earn an annual bonus equal to up to one hundred percent (100%) of Executive's base salary, payable in the Company's discretion in cash or other compensation. Section 2.3. Stock Options. Pursuant to "The Vons Companies, ----------- ------------- Inc. 1990 Stock Option and Restricted Stock Plan" (the "Stock Plan"), Executive shall be granted one hundred seventy-five thousand (175,000) non- qualified stock options at fair market value ("FMV Options") and ninety-seven thousand five hundred (97,500) non-qualified stock options at a price of twenty-five percent (25%) of fair market value (the "Discounted Options"). Except as provided in Sections 2.9 and 2.10, Executive shall vest in one- third (1/3) of the Discounted Options and in twenty percent (20%) of the FMV Options granted hereunder at the end of each full year of employment. As used herein, "fair market value" shall be the average closing price of the Company's common stock on the New York Stock Exchange for the ten (10) trading days prior to the effective date of this Agreement, in accordance with the Stock Plan. The Company and Executive shall execute any separate agreement(s) as may be necessary pursuant to the Stock Plan to implement the terms of this Section. Such agreement(s) shall provide that, upon retirement from employment, as defined therein, all options then vested shall remain exercisable for the entire term of the initial option grant. Section 2.4. Insurance Benefits. Executive shall be entitled to ----------- ------------------- participate in the Company's Personal Choice Flexible Benefit Plan with respect to insurance benefits generally available to the Company's senior executives. If any insurance plan provides for a waiting period before coverage begins, the Company will waive or obtain the waiver of that period waived and, if it cannot be waived, will reimburse Executive the cost of continuing insurance coverage from Executive's current employer until the Company's insurance coverage becomes effective. Section 2.5. Retirement Plans, Etc. Executive shall participate ----------- --------------------- in the Company's pension plan, 401(k) plan and 401(k) wraparound plan in accordance with the terms of those plans. Executive shall not be eligible for, or participate in, the Company's Supplemental Executive Retirement Plan or the Company's Severance Plan for Senior Management and Key Employees. Section 2.6. Individual Supplemental Retirement Plan. The ----------- --------------------------------------- Company shall provide Executive with an individual supplemental retirement plan that provides for vesting after five (5) years and benefits in accordance with the schedule attached hereto as Appendix A. The Company and Executive shall execute a separate agreement implementing the terms of this Section. Section 2.7. Relocation Allowance. Executive shall relocate his ----------- -------------------- residence to Southern California, and the Company shall provide him with the following relocation allowance: (a) The Company shall pay all reasonable expenses incurred by Executive in connection with the relocation, including (i) sales commissions incurred by Executive on the sale of Executive's residence; (ii) shipping costs for the transfer of household goods and automobiles; and (iii) Executive's temporary living expenses in Southern California through October 1994. If Executive terminates his employment with the Company for any reason other than death or disability during the first year following the date Executive commences employment with the Company, Executive will reimburse the Company for the sales commission on the sale of Executive's existing residence. (b) If Executive is unable to sell his existing residence prior to purchasing a new residence, the Company shall provide Executive with an interest-free loan, secured by an appropriate deed of trust on the existing residence, (i) in an amount not to exceed the original cost, plus improvements, less current mortgage balance of Executive's current residence; and (ii) until the existing residence is sold. Such loan shall be repayable in one (1) lump sum. If the existing residence is not sold by October 31, 1994, the Company shall purchase it for One Million Four Hundred Twenty-Five Thousand Dollars ($1,425,000). Section 2.8. Vacations and Holidays. Executive shall be entitled ----------- ---------------------- to such holidays and vacation (a minimum of one (1) month per year) each year as the Company's other senior executives. Section 2.9. Early Termination of Employment by Executive or the ----------- --------------------------------------------------- Company. Either Executive or the Company may terminate Executive's employment - ------- prior to April 30, 1997. In any such event, the Company's sole obligation to Executive shall be as follows: (a) If Executive resigns other than for "Good Reason" (as defined in subsection (c) below) or is terminated by the Company for "Cause" (as defined in subsection (d) below), Executive shall be paid any accrued but unused vacation and any earned but unpaid base salary as of the date of termination and any benefits to which Executive may be entitled under any Company benefit plan. Executive shall not be entitled to any other compensation whatsoever, including any performance bonus under Section 2.2, any unvested stock options under Section 2.3 or any retirement benefits under Section 2.6. (b) If Executive resigns for "Good Reason" (as defined in subsection (c) below), or if the Company terminates Executive other than for "Cause" (as defined in subsection (d) below), Executive shall receive the following, in addition to any accrued but unused vacation, any earned but unpaid base salary and prorated performance bonus as of the date of termination and any benefits to which Executive may be entitled under any Company benefit plan: (1) salary continuance equal to his base salary (but no performance bonus) through April 30, 1997, payable on normal payroll dates and without interest; (2) continuation of medical and life (but not disability) insurance benefits at the Company's expense through April 30, 1997; (3) immediate vesting of all Discounted Options (but no FMV Options) under Section 2.3; and (4) if Executive is not vested in the individual supplemental retirement plan described in Section 2.6, a monthly benefit of Eight Thousand Three Hundred Thirty-Three Dollars and Thirty-Four Cents ($8,333.34) beginning the month after Executive turns sixty-five (65) years of age and continuing for the duration of Executive's own life (provided that, upon written notice to the Company, Executive may elect to convert any such benefit to an actuarially equivalent joint and survivor benefit for Executive and his spouse). (c) As used in this Agreement, "Good Reason" for resignation shall mean (i) a substantial change in the nature, or diminution in the status of, Executive's duties or position; or (ii) a change in control of the Company resulting from (A) the merger or consolidation of the Company with an entity that is not a current stockholder of the Company as of the effective date of this Agreement resulting in the holders of the Company's voting stock immediately prior to such transaction holding less than fifty percent (50%) of the total voting stock of the surviving corporation after such transaction, or (B) any acquisition of stock by a person or entity that is not a current stockholder as of the effective date of this Agreement that results in that acquiring person or entity being the beneficial owner of fifty percent (50%) or more of the Company's voting stock. (d) As used in this Agreement, "Cause" for termination shall mean (i) embezzlement or fraud against the Company; (ii) conviction of a felony which in the judgment of the Board of Directors of the Company adversely affects the business or reputation of the Company; (iii) conduct in wanton and knowing disregard of corporate policy; and (iv) willful and continuous failure, in the judgment of the Board of Directors, to perform substantially the reasonably assigned duties with the Company after written notice and reasonable opportunity to perform. Section 2.10. Termination Due to Death or Disability ------------ -------------------------------------- (a) This Agreement shall terminate immediately upon Executive's death or disability (as defined in subsection (b) below). Executive or Executive's legal representatives, beneficiaries or heirs and assigns, as the case may be, shall receive Executive's base salary (including prorated performance bonus) through the date of death or disability, any unvested Discounted Options (but not unvested FMV Options) shall immediately vest as of that date, and, only in the event of Executive's death, Executive's surviving spouse shall receive the actuarially equivalent benefit (based on an one hundred percent (100%) joint and survivor benefit) of the benefit set forth in Section 2.9(b)(4) beginning November 2001. Except with respect to any obligations to Executive or Executive's legal representatives, beneficiaries or heirs and assigns, as the case maybe, that may exist under the terms of the various benefit plans, including exercise rights under the Stock Plan, all other obligations of the Company hereunder shall immediately cease. (b) As used herein, "disability" shall occur, and this Agreement shall terminate, as of the date Executive becomes eligible to receive long- term disability benefits under the Company's long-term disability insurance plan. Section 2.11. Short-Term Loan for Purchase of Stock. Within ------------ ------------------------------------- thirty (30) days after the effective date of this Agreement, the Company shall lend Executive at least Three Hundred Seventy-Five Thousand Dollars ($375,000) and up to One Million Dollars ($1,000,000), at an interest rate equal to the lowest rate at which the Company is able to borrow funds during the period the loan is outstanding, to be used solely for the purchase of Company common stock from the Company at fair market value (as defined in Section 2.3) as of the effective date of this Agreement. Executive shall liquidate all of his common stock holdings in his former employer within one hundred twenty (120) days of the effective date of this Agreement, or such longer period of time as may be required under federal securities laws. The loan and interest shall be repaid in full no later than October 31, 1994. ARTICLE III COMPANY INFORMATION Section 3.1. Ownership of Records, Etc. All records, reports, ----------- -------------------------- notes, compilations or other recorded matter, and copies of reproductions thereof, relating to the Company's operations, activities or business, made or received by Executive during any past or future period of employment with the Company are and shall be the property of the Company exclusively, and Executive shall keep the same at all times in Executive's custody, subject to the Company's control, and Executive shall surrender the same at the termination of Executive's employment, if not before, Section 3.2. Duration of Obligations. Executive's obligations ----------- ----------------------- under this Article shall continue after Executive's employment with the Company is terminated, regardless of the nature or reason for such termination. The provisions of this Article shall be binding upon Executive and Executive's heirs, executors and administrators. ARTICLE IV GENERAL PROVISIONS Section 4.1. Assignment. Executive may not assign or transfer ----------- ---------- any rights hereunder, this Agreement being a contract for Executive's personal services. Section 4.2. Sole and Entire Agreement. This Agreement ----------- ------------------------- constitutes the sole and entire existing agreement between the parties, and completely and correctly expresses all of the rights and obligations of the parties. All prior agreements, conditions, practices, customs, usages and obligations are completely superseded and revoked, insofar as any such prior agreement, condition, practice, custom, usage or obligation might have given rise to any enforceable right. Section 4.3. Waivers. The waiver in any particular instance or ----------- ------- series of instances of any term or condition of this Agreement or any breach hereof by any party shall not constitute a waiver of such term or condition or of any breach thereof in any other instance. Section 4.4. Amendment. This Agreement is subject to amendment ----------- --------- only by subsequent written agreement between, and executed by, the parties hereto. Commencement or continuation of any custom, practice or usage by the Company shall not constitute an amendment hereof or otherwise give rise to enforceable rights or create obligations of the Company. Section 4.5. Severability. If any one or more provisions, ----------- ------------ clauses, paragraphs, subclauses or subparagraphs contained in this Agreement shall for any reason be held to be invalid, illegal, void or unenforceable, the same shall not affect any other provision, clause, paragraph, subclause or subparagraph of this Agreement, but this Agreement shall be construed as if such invalid, illegal, void or unenforceable provision, clause, paragraph, subclause or subparagraph had never been contained herein. Section 4.6. Indemnification. The Company shall indemnify and ----------- --------------- hold Executive harmless from any damages or costs, including attorney's fees, arising from any claims brought by Executive's former employer relating to Executive's resignation from that employer or Executive's employment by the Company. The Company shall reimburse Executive for the reasonable costs, including reasonable attorney's fees, Executive may incur in recovering from Executive's former employer any salary, vacation pay, stock and/or other compensation or benefits in which Executive is vested or to which Executive is otherwise clearly entitled as of Executive's last day of employment with such employer, to the extent Executive is not otherwise compensated for any such costs. Section 4.7. Attorney's Fees. If any legal action or proceeding ----------- --------------- is brought to enforce this Agreement, the successful or prevailing party shall be entitled to recover reasonable attorney's fees and other costs incurred in such action or proceeding, in addition to any other relief to which such party may be entitled. Section 4.8. Time Is of the Essence. Time is of the essence in ----------- ---------------------- this Agreement. Any time limit mentioned herein has been carefully considered and represents the agreed absolute outside limit of time within which the applicable right must be exercised. The parties may extend such time limit only by mutual agreement in writing. Section 4.9. Duration of Rights. Rights and obligations created ----------- ------------------ by or arising under this Agreement shall terminate automatically upon termination of this Agreement, except as otherwise expressly provided herein. Section 4.10. Full Performance Required. The doctrine of ------------ ------------------------- substantial performance no application hereunder. Each condition and provision has been carefully considered and represents the agreed minimum limit of performance giving rise to applicable rights or obligations. Section 4.11. Captions. Any captions of articles, sections, ------------ -------- subsections or paragraphs of this Agreement are solely for the convenience of the parties and are not a part of this Agreement or to be used for the interpretation of this Agreement or any provision hereof. Section 4.12. Applicable Law. This Agreement shall governed by, ------------ -------------- and shall be construed and enforced in accordance with, the laws of the state of California. IN WITNESS WHEREOF, this Agreement has been duly executed as of the date first above written. THE VONS COMPANIES, INC. /s/ RICHARD E. GOODSPEED /s/ ROGER E. STANGELAND - ---------------------------------- By-------------------------------- Richard E. Goodspeed Chairman of the Board Title----------------------------- APPENDIX A to the Employment Agreement entered into between The Vons Companies, Inc. and Richard E. Goodspeed, effective as of April 26, 1994 APPENDIX A
Vesting of Individual Supplemental Retirement Plan YEARS OF SERVICE Remuneration 5 6 7 8 9 10 11 12 13 14 15 $100,000 $20,000 $22,000 $24,000 $26,000 $28,000 $30,000 $32,000 $34,000 $36,000 $38,000 $40,000 $150,000 $30,000 $33,000 $36,000 $39,000 $42,000 $45,000 $48,000 $51,000 $54,000 $57,000 $60,000 $200,000 $40,000 $44,000 $48,000 $52,000 $56,000 $60,000 $64,000 $68,000 $72,000 $76,000 $80,000 $300,000 $60,000 $66,000 $72,000 $78,000 $84,000 $90,000 $96,000 $102,000 $108,000 $114,000 $120,000 $400,000 $80,000 $88,000 $96,000 $104,000 $112,000 $120,000 $128,000 $136,000 $144,000 $152,000 $160,000 $500,000 $100,000 $110,000 $120,000 $130,000 $140,000 $150,000 $160,000 $170,000 $180,000 $190,000 $200,000 $600,000 $120,000 $132,000 $144,000 $156,000 $168,000 $180,000 $192,000 $204,000 $216,000 $228,000 $240,000 $700,000 $140,000 $154,000 $168,000 $182,000 $196,000 $210,000 $224,000 $238,000 $252,000 $266,000 $280,000 $800,000 $160,000 $176,000 $192,000 $208,000 $224,000 $240,000 $256,000 $272,000 $288,000 $304,000 $320,000 $900,000 $180,000 $198,000 $216,000 $234,000 $252,000 $270,000 $288,000 $306,000 $324,000 $342,000 $360,000 $1,000,000 $200,000 $220,000 $240,000 $260,000 $280,000 $300,000 $320,000 $340,000 $360,000 $380,000 $400,000 $1,250,000 $250,000 $275,000 $300,000 $325,000 $350,000 $375,000 $400,000 $425,000 $450,000 $475,000 $500,000
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