Amendment to Employment Agreement between Eagle Food Centers, Inc. and Robert J. Kelly (January 24, 2002)

Summary

This agreement amends the previous employment terms between Eagle Food Centers, Inc. and Robert J. Kelly. It extends Mr. Kelly’s employment as Director and Chairman of the Board through December 31, 2002, sets his compensation, and outlines additional benefits such as extended stock option exercise periods and insurance coverage if his employment ends for reasons other than cause. The agreement also removes certain prior provisions and confirms that all other terms of the original agreements remain in effect.

EX-10.14 3 a2078448zex-10_14.txt EXHIBIT 10.14 EXHIBIT 10.14 January 24, 2002 Mr. Robert J. Kelly Chairman & Chief Executive Officer Eagle Food Centers, Inc. Route 67 and Knoxville Road Milan, Illinois 61264 Dear Mr. Kelly: Reference is made herein to the Employment Agreement, dated as of May 10, 1995 between yourself (the "Executive") and Eagle Food Centers, Inc. (the "Company") (the "Employment Agreement") and the Letter of Agreement between the Executive and the Company dated May 10, 1998 (the "Extension Agreement"). Capitalized terms used herein shall have the meaning set forth in the Employment Agreement, unless otherwise defined herein. The Executive served as Chief Executive Officer and President of the Company beginning May 10, 1995 and the term of employment of the Executive pursuant to the Employment Agreement was originally scheduled to expire on May 22, 1998. The Company, desiring to continue to retain the services of the Executive for an additional term and to amend certain terms of the Employment Agreement in light of significant contributions made by the Executive to the business and affairs of the Company, entered into the Extension Agreement, which, INTER ALIA, extended the Executive's term of employment to December 31, 2001, and caused the Executive to be elected as a Director and Chairman of the Board of Directors. The Company now desires to further continue to retain the services of the Executive for an additional term, as a Director and Chairman of the Board of Directors only, and to amend certain terms of the Extension Agreement in light of the continuing significant contributions made by the Executive to the affairs of the Company. In furtherance of the foregoing, the parties agree to the following: 1. EXTENDED TERM/CHAIRMANSHIP. Paragraph (1) of the Extension Agreement shall be amended to extend the Executive's term of employment to December 31, 2002. During the extended term, and for so long as the Executive remains employed, the Company shall cause the Executive to be elected as a Director and Chairman of the Board of Directors. 2. COMPENSATION. The Executive shall receive an annual salary of $190,000.00, paid on a weekly basis. Such salary rate shall be predicated on the Executive performing work at the Milan headquarters or at the retail store sites of the Company for a time period of one week per month, and additional availability for telephone calls relating to Company business, on an as-needed basis. Any period of time spent by the Executive working at the Milan headquarters or at the retail store sites of the Company over and above one week per month shall be compensated at the annual salary of $350,000.00 per year, paid on a weekly basis. The Executive shall be reimbursed by the Company for out-of-pocket expenses incurred by him during the course of his duties throughout the term of this Agreement. 3. INCENTIVE COMPENSATION AND INSURANCE MATTERS. For each full calendar year the Executive remains employed by the Company, commencing on December 31, 1997 and continuing on each December 31 thereafter (the one year period from December 31, 1997 through December 31, 1998, and each year ending on December 31 thereafter, are referred to herein as a "Service Year" or "Service Years," as the case may be), the Company shall ensure that: (a) EXTENDED OPTION EXERCISE PERIOD. In the event of a Change of Control of the Company occurring within two years of the date of termination of the Executive's employment for any reason other than cause (the "Termination Date"), the exercise period for each tranche of then vested and unexercised Option as provided for in Section (5)(b) of the Employment Agreement shall be extended by one year for each completed Service Year, up to the maximum ten-year expiration period provided for under the Company's stock incentive plans; IT BEING UNDERSTOOD that (i) there shall be no extended option exercise period attributable in any respect to any portion of the Option exercised by the Executive for any reason prior to the occurrence of a Change in Control and (ii) there shall be no extended option period with respect to any unexercised portion of the Option in the event that a Change in Control fails to occur within two years of the Termination Date. (b) EXTENDED TERM LIFE INSURANCE COVERAGE. Upon the Executive's termination of employment for any reason other than cause, the Company shall continue to pay all premiums associated with the Executive's term life insurance policy as in effect at the time of such termination, for a period of 2 years following such termination. (c) EXTENDED HEALTH INSURANCE COVERAGE. Upon the Executive's termination of employment for any reason other than cause, the Company shall pay all COBRA premiums associated with the Executive's health insurance program as in effect at the time of such termination, for a period of 2 years following such termination. 4. MISCELLANEOUS. Paragraphs 2. (Executive Payment) and 4. (Moving Costs) of the Extension Agreement are hereby deleted. 5. SURVIVAL. Except as otherwise provided for herein, the Employment Agreement and Extension Agreement shall remain in full force and effect. 6. COUNTERPARTS. This Letter Agreement may be executed in counterparts which, taken together, shall be deemed to be a fully executed original hereof. 7. GOVERNING LAW. This Letter Agreement shall be governed by and construed in accordance with the laws of the State of Illinois. Please acknowledge your agreement to the foregoing by signing where indicated below. Very truly yours, EAGLE FOOD CENTERS, INC. By: /s/ Jeffrey L. Little ------------------------ Title: President and CEO ACCEPTED AND AGREED TO THIS 25TH DAY OF January, 2002: /s/ Robert J. Kelly - --------------------------- Robert J. Kelly