Exhibit 10.1

[BI-LO HOLDING, LLC LETTERHEAD]

January 11, 2012

Peter L. Lynch

President & CEO

Winn-Dixie Stores, Inc.

5050 Edgewood Court

Jacksonville, FL 32254-3699

 

Re: Winn-Dixie Stores, Inc. Executive Retention Bonus Agreement

Dear Peter:

As you know, pursuant to the Agreement and Plan of Merger (“Merger Agreement”)
among Opal Holdings, LLC, Opal Merger Sub, Inc., and Opal, Inc. (also known as
Winn-Dixie Stores, Inc.) (the “Company”), dated as of December 16, 2011, Opal
Merger Sub will be merged with and into the Company (the “Merger”), and the
Company will become an indirect wholly-owned subsidiary of BI-LO Holding,
LLC (“Parent”). To encourage you to remain with the Company and to use your best
efforts to promote the success and profitability of the Company and its
integration with Parent from the signing of the Merger Agreement through the end
of the first full Grocery Period (as defined below) occurring after the Closing
of the Merger (“Transition Period”), the Parent, on behalf of the Company, is
pleased to offer you with the opportunity to earn a (i) Performance Bonus and
(ii) Discretionary Bonus from the Company, as follows:

(i) You are employed by the Company pursuant to the terms of an Employment
Agreement dated October 23, 2006 and amended by a First Amendment to Employment
Agreement dated November 20, 2007 (collectively, the “Employment Agreement”).
The Employment Agreement shall remain in full force and effect unless and until
amended or terminated in accordance with its terms. Without waiving any of your
rights under the Employment Agreement, you understand that on and after the
closing of the Merger, you will no longer be the Chief Executive Officer or
Chairman of the Board of the Company, but rather will be an adviser to the
Company. You also acknowledge and agree that you will solely be an employee of
the Company and not the Parent hereunder. As a result of the foregoing, Parent
will not contest that your anticipated removal as the Company’s Chairman and
Chief Executive Officer would give rise to your right to resign for Good Reason
pursuant to Section 4(e) of the Employment Agreement.

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Peter L. Lynch

January 11, 2012

Page 2

 

(ii) Contingent upon the closing of the Merger, if you remain employed with the
Company through the Transition Period, then for each Grocery Period ending
within the Transition Period in which the Company meets its fiscal 2012 Budgeted
EBITDA and Cash Balance Targets (each, a “Target”), as set forth in the latest
revisions to the Company’s FY12 Annual Operating Plan and FY12 Cash Flow
Forecast, and as determined by the Parent in good faith, in addition to all
other compensation to which you may be entitled, you will be entitled to a
Performance Bonus from the Company equal to the quotient of $750,000 divided by
the number of Grocery Periods ending within the Transition Period. In the
alternative, you may also earn the full $750,000 Performance Bonus if the
Company meets its aggregate fiscal 2012 Budgeted EBITDA and Cash Balance Targets
for the entire Transition Period, whether or not such performance goals were met
in each and every Grocery Period ending within the Transition Period. In no
event may the total Performance Bonus exceed $750,000. For purposes hereof,
“Grocery Period” means the 28 consecutive day period typically construed as a
so-called “grocery period” within the grocery industry, as reasonably determined
by the Parent in good faith. Any portion of the Performance Bonus that is earned
based on the Company’s unaudited financials as of the end of the Transition
Period shall be paid to you by the Company within ten business days of the end
of the Transition Period (the “Payment Date”), subject to normal withholding. If
for any Grocery Period the Company cannot determine if the applicable Target has
been achieved prior to the Payment Date, any additional earned but unpaid
portion of the Performance Bonus shall be paid to you as soon as practicable
following the Payment Date but in no event shall payment be made later than
thirty days following the Payment Date. If your employment with the Company is
terminated not for Cause under Section 4(d) of the Employment Agreement after
the Closing but prior to the end of the Transition Period, you will nonetheless
remain entitled to the Performance Bonus, payable as set forth above. For
avoidance of doubt, if your employment is terminated for any other reason prior
to the end of the Transition Period, no Performance Bonus is payable hereunder.

(iii) Contingent upon the closing of the Merger, if you remain employed with the
Company through the end of the Transition Period; help drive the integration
program (including assisting with the transition of the new management team and
integration of the Company with the Parent); positively embrace and help others
to positively embrace the proposed changes; and publicly support the new
management’s decisions, all as determined in good faith by the Parent, then, at
the sole discretion of the Board of Directors of Parent, in addition to all
other compensation to which you may otherwise be entitled, you will also be
entitled to a purely Discretionary Bonus of up to a maximum of $750,000, as
determined in the sole discretion of the Board of Directors of Parent. This
amount will be paid to you by the Company within ten business days of the final
day of your employment, subject to normal withholding.

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Peter L. Lynch

January 11, 2012

Page 3

 

(iv) Your employment remains subject to the terms of the Employment Agreement.
This Executive Retention Bonus Agreement (this “Agreement”) does not give you
any right with respect to continued employment by the Company, Parent, their
affiliates, or any successor or assign thereof, or the right to any specific
amount of compensation, or to any particular Company or Parent assets beyond
those set forth in the Employment Agreement. Any Performance Bonus or
Discretionary Bonus earned hereunder shall not be considered compensation under
any other Company or Parent employee benefit plan and shall not increase any
amount due under any other such plan. For avoidance of doubt, any amounts earned
hereunder shall not be considered in determining any severance benefit owed
under your Employment Agreement or any benefits owed under any annual incentive
plan, death benefit plan, or retirement plan. Amounts due hereunder are
unfunded, unsecured general liabilities of the Parent. Your rights to benefits
hereunder may not be alienated, transferred or assigned.

(v) The Parent shall have the right to interpret and construe all issues,
eligibility, and benefits hereunder and to adjudicate all claims and appeals.
The validity, interpretation, construction and performance of this Agreement
shall in all respects be governed by the laws of the State of Florida. Any
dispute relating hereto shall be settled exclusively by binding arbitration
before a single arbitrator in Jacksonville, FL, pursuant to the Commercial
Arbitration Rules of the American Arbitration Society. Judgment may be entered
on the arbitrator’s award in any court having jurisdiction. Each party shall
bear its own costs of arbitration and own attorney’s fees.

(vi) First the Discretionary Bonus and then the Performance Bonus payable under
this Agreement will be reduced to the extent necessary to avoid the payment to
you of an “excess parachute payment” subject to the loss of deduction and excise
tax under Internal Revenue Code Sections 280G and 4999.

(vii) Benefits hereunder are expressly contingent upon you continuing to comply
with the non-solicitation, non-disparagement, non-disclosure, and
non-competition covenants set forth in Section 11 of your Employment Agreement,
and such restrictive covenants are hereby incorporated by reference as if set
out in full herein.

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Peter L. Lynch

January 11, 2012

Page 4

 

BI-LO Holding, LLC By:  

/s/ Marc L. Lipsky

Name: Marc L. Lipsky Title: Vice President

 

Accepted: January 12, 2012

/s/ Peter L. Lynch

Peter L. Lynch