Commission File No. 0-6544

                      EMPLOYMENT AGREEMENT
                                
          AGREEMENT, made September 12, 1996, by and between

BRUNO'S, INC., an Alabama corporation (the "Company"), and LAURA

HAYDEN ("Executive").

                            RECITALS


          In order to induce Executive to serve as an executive

officer of the Company, the Company desires to provide Executive

with compensation and other benefits on the terms and conditions

set forth in this Agreement.

          Executive is willing to accept such employment and

perform services for the Company, on the terms and conditions

hereinafter set forth.

          It is therefore hereby agreed by and between the
parties as follows:

           1. Employment.

           1.1  Subject to the terms and conditions of this Agreement, the

Company agrees to employ Executive during the term hereof as its Senior

Vice President - Human Resources.

           1.2  Subject to the terms and conditions of this

Agreement, Executive hereby accepts employment as Senior Vice

President - Human Resources of the Company and agrees to devote

her full working time and efforts, to the best of her ability,

experience and talent, to the performance of services, duties and

responsibilities in connection therewith.

           2. Term of Employment.  Executive's term of employment

under this Agreement shall commence on July 8, 1996 and, subject to

the terms hereof, shall terminate on the earlier of (i) July 7, 1999

(the "Termination Date") or (ii) termination of Executive's

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employment pursuant to this Agreement (alternatively, the

"Term"); provided, however, that any termination of employment by

Executive (other than for death or Permanent Disability) may only

be made upon 30 days prior written notice to the Company.

           3. Compensation.

           3.1  Salary.  During the Term, the Company shall pay

Executive a base salary ("Base Salary") at the rate of $190,000

per annum.  Base Salary shall be payable in

accordance with the ordinary payroll practices of the Company,

but no less frequently than semi-monthly.  Any increase in Base

Salary shall be in the reasonable discretion of the Company and,

as so increased, shall constitute "Base Salary" hereunder.

           3.2  Annual Bonus.  In addition to her Base Salary,

Executive shall be paid an annual bonus (the "Bonus") during the

term of her employment hereunder with a target amount equal to

50% of Base Salary (the "Target Bonus") and a maximum amount

equal to 100% of Base Salary based on performance criteria

determined by the Company in its reasonable discretion.

           3.3  Compensation Plans and Programs.  Executive shall

be eligible to participate in any compensation plan or program

maintained by the Company in which other senior executives of the

Company participate on terms comparable to those applicable to

such other senior executives.

           3.4  Payment of Relocation Allowance.  To assist the

Executive with her relocation to the Birmingham, Alabama area,

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the Company agrees to either reimburse the Executive for or pay

directly the expenses set forth on Exhibit A hereto to the extent

actually incurred by Executive in relocating from the location of

her current residence (if other than the Birmingham area) to the

Birmingham area.

           4. Employee Benefits.

           4.1  Employee Benefit Programs, Plans and Practices.

The Company shall provide Executive during the term of her

employment hereunder with coverage under all employee pension and

welfare benefit programs, plans and practices (commensurate with

her positions in the Company and to the extent permitted under

any employee benefit plan) in accordance with the terms thereof,

which the Company makes available to its senior executives.

           4.2  Vacation and Fringe Benefits.  Executive shall be

entitled to twenty (20) business days paid vacation in each

calendar year, which shall be taken at such times as are

consistent with Executive's responsibilities hereunder.  Unless

otherwise approved by the Company, any vacation days not taken in

any calendar year shall be forfeited without payment therefor.

In addition, Executive shall be entitled to the perquisites and

other fringe benefits, including, without limitation, a Company

automobile, made available to senior executives of the Company,

commensurate with her position with the Company.

           5. Expenses.  Executive is authorized to incur

reasonable expenses in carrying out her duties and responsibilities

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                                        Commission File No. 0-6544
                                        
under this Agreement, including, without limitation, expenses for

travel and similar items related to such duties and responsibilities.

The Company will reimburse Executive for all such expenses upon

presentation by Executive from time to time of appropriately

itemized and approved (consistent with the Company's policy)

accounts of such expenditures.

           6. Termination of Employment.  The Company may terminate

Executive's employment at any time for any reason.

           6.1  Termination Not for Cause or for Good Reason.  (a)

If Executive's employment is terminated (i) by the Company other

than for Cause (as defined in this Section 6.1) or (ii) by

Executive for Good Reason (as defined in this Section 6.1) prior

to the Termination Date, Executive shall receive a severance

payment equal to twelve month's Base Salary, as in effect

immediately prior to the event giving rise to such termination,

payable in accordance with the ordinary payroll practices of the

Company, but no less frequently than semi-monthly following such

termination of employment.  In addition, the Company shall pay to

Executive any earned but unpaid bonus of Executive with respect

to the year preceding her termination.

          (b)   For purposes of this Agreement, "Good Reason" shall mean

any of the following (without Executive's express prior written

consent):

          (i)  Any material breach by the Company of any
     provision of this Agreement, including a demotion by
     the Company in Executive's position or the assignment
     to Executive of duties or responsibilities which are
     materially inconsistent with the duties or
     responsibilities contemplated by Section 1 of this
     Agreement (except, in either case, in connection with
     the termination of Executive's employment for Cause, as
     a result of Permanent Disability, as a result of
     Executive's death or by Executive other than for Good
     Reason); or
                              
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          (ii)  A reduction by the Company in Executive's
     Base Salary, other than a reduction which is part of a
     general salary reduction program affecting senior
     executives of the Company and which reduction is not,
     on average, greater than the salary reduction (as a
     percentage of Base Salary) of other senior executives
     of the Company.

          (c)  For purposes of this Agreement, "Cause" mean any

of the following:

          (i)  willful malfeasance or willful misconduct by Executive in
     connection with her employment;
     
          (ii)  continuing refusal by Executive to perform her
     duties hereunder or any lawful direction of the Chief
     Executive Officer of the Company ("CEO"), within 10 days
     after notice of any such refusal to perform such duties or
     direction was given to Executive;
     
          (iii)  any breach of the provisions of Section 13 of
     this Agreement by Executive or any other material breach of
     this Agreement by Executive; or

          (iv)        the commission by Executive of (A) any felony or
     (B) a misdemeanor involving moral turpitude.
     
          (d)  For purposes of this Agreement, "Permanent

Disability" shall mean a disability that would entitle Executive

to receive benefits under the Company's long-term disability plan

applicable to senior executive officers as in effect from time to

time, which prevents the Executive from performing her duties

hereunder for 180 consecutive days or more.

           6.2  Voluntary Termination by Executive; Discharge for

Cause; Death or Disability.  In the event that Executive's

employment is terminated (i) by the Company

for Cause; (ii) by Executive other than for Good Reason or (iii)

as a result of the Executive's Permanent Disability or death,

prior to the Termination Date, Executive shall only be entitled

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to receive the amounts already earned and accrued, including Base

Salary through the date of termination and any earned but unpaid

bonus of Executive with respect to the year preceding her

termination, based on Executive's employment with the Company

prior to such termination.  Executive shall not be entitled,

among other things, to the payment of any

Bonus in respect of all or any portion of the fiscal year in

which such termination occurs.  After the termination of

Executive's employment under this Section 6.2 and payment of all

amounts due to Executive under the terms of this Agreement in the

event of the termination of Executive's employment under this

Section 6.2, the obligations of the Company under this Agreement

to make any further payments, or provide any benefits specified

herein (other than benefits required to be provided by applicable

law or under the terms of any employee benefit of the Company in

which the Executive was a participant) to Executive shall

thereupon cease and terminate.  Termination of Executive pursuant

to this Section 6.2 shall be made by delivery to Executive of a

notice from the CEO setting forth in reasonable detail the reasons

for such termination.

           7. Stock Arrangements.  (a)  The Company shall provide

Executive with the opportunity to purchase 15,625 shares of

common stock, par value $.01 per share, of the Company ("Common

Stock") at a price of $12.00 per share.  Executive and the

Company  shall enter into the Management Stockholder's Agreement

(the "Stock Agreement"), substantially in the form attached

hereto as Exhibit B, with such changes as the Company shall

deem necessary or desirable.  In respect of the Common Stock to

be purchased pursuant to the Stock Agreement (the "Purchase

Stock"), the company shall lend to Executive half of

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Commission File No. 0-6544

such purchase price at an interest rate equal to the applicable

Federal rate as determined under Section 1274(d) of the Internal

Revenue Code of 1986, as amended, at the time such loan is made

(the "Loan").  The Loan shall be due upon the earliest of (i) one

year following termination of Executive's employment by the

Company without Cause or by Executive for Good Reason or

immediately upon the termination of Executive's employment for

any other reason, (ii) the disposition of the Purchase Stock by

Executive or (iii) seven years from the date of the purchase of

the Purchase Stock.  The Loan shall be secured by the entire

amount of the Purchase Stock and the Company shall have full

recourse thereto in the event of Executive's default on the Loan.

Executive and the Company shall enter into written arrangements

necessary to effect the foregoing, including, without limitation,

a loan agreement, note and pledge agreement, upon such terms and

conditions as the parties shall agree.

          (b)  For each share of Purchase Stock purchased by

Executive pursuant to Section 7(a) hereof, Executive shall be

granted an option (the "Option") to purchase three shares of

Company stock at an exercise price of $12.00 per share.  With

respect to Options granted to Executive, Executive and the

Company shall enter into a standard form stock option agreement,

with such changes as the Company shall deem necessary or

desirable.

           8.  Mitigation of Damages.  Executive shall not be

required to mitigate damages or the amount of any payment

provided for under this Agreement by seeking other employment or

otherwise after the termination of her employment hereunder, and

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no amounts earned by Executive, whether from self-employment, as a

common-law employee or otherwise, shall reduce the amount of any

termination amount otherwise payable to her.

           9. Notices.  All notices or communications hereunder

shall be in writing, addressed as follows:

          To the Company:

               William J. Bolton
               Bruno's,  Inc.
               800 Lakeshore Parkway
               Birmingham, Alabama  35211

          with a copy to:

               Alvin H. Brown, Esq.
               Simpson Thacher & Bartlett
               425 Lexington Avenue
               New York, New York  10017

          To Executive:

               Laura Hayden
               c/o Bruno's, Inc.
               800 Lakeshore Parkway
               Birmingham, Alabama 35211

Any such notice or communication shall be delivered by hand or by

courier or sent certified or registered mail, return receipt

requested, postage prepaid, addressed as above (or to such other

address as such party may designate in a notice duly delivered as

described above), and the third business day after the actual

date of mailing shall constitute the time at which notice

was given.

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           10. Separability; Legal Fees.  If any provision of this

Agreement shall be declared to be invalid or unenforceable, in

whole or in part, such invalidity or unenforceability shall not

affect the remaining provisions hereof which shall remain in full

force and effect.  The Company shall pay the reasonable fees and

disbursements (not in excess of $7,500) of Executive's legal counsel

in connection with the negotiation and execution of this Agreement

and the other documents contemplated hereby.  Other than as provided

in the foregoing sentence, each party shall bear the costs of any

legal fees and other fees and expenses which may be incurred in

respect of negotiating or enforcing its respective rights under this

Agreement.

           11. Assignment.  This Agreement shall be binding upon and

inure to the  benefit of the heirs and representatives of

Executive and the assigns and successors of the

Company, but neither this Agreement nor any rights or obligations

hereunder shall be assignable or otherwise subject to

hypothecation by Executive (except by will or by operation of the

laws of intestate succession) or by the Company, except that the

Company may assign this Agreement to any successor (whether by

merger, purchase or otherwise) to all or substantially all of the

stock, assets or businesses of the Company, if such successor

expressly agrees to assume the obligations of the Company

hereunder.

           12. Amendment.  This Agreement may only be amended by

written agreement of the parties hereto.

           13. Nondisclosure of Confidential Information; Non-

Competition. (a)  Executive shall not, without the prior written

consent of the Company, use, divulge, disclose

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or make accessible to any other person, firm, partnership,

corporation or other entity any Confidential Information

pertaining to the business of the Company or any of its

affiliates, except (i) while employed by the Company, in the

business of and for the benefit of the Company, or (ii) when

required to do so by a court of competent jurisdiction, by any

governmental agency having supervisory authority over the

business of the Company, or by any administrative body or

legislative body (including a committee thereof) with

jurisdiction to order Executive to divulge, disclose or make

accessible such information.  For purposes of this Section

13(a), "Confidential Information" shall mean non-public

information concerning the financial data, strategic business

plans, product development (or other proprietary product data),

customer lists, marketing plans and other non-public, proprietary

and confidential information of the Company, Kohlberg Kravis

Roberts & Co. or their respective affiliates (the "Restricted Group")

or customers, that, in any case, is not otherwise available to the

public (other than by Executive's breach of the terms hereof).

          (b)  During the period of her employment hereunder and

for one year  thereafter, Executive agrees that, without the

prior written consent of the Company, (A) she will not, directly

or indirectly, either as principal, manager, agent, consultant,

officer, stockholder, partner, investor, lender or employee or in

any other capacity, carry on, be engaged in or have any financial

interest in, any business which is in competition with the

business of the Company and (B) she shall not, on her own behalf

or on behalf of any person, firm or company, directly or

indirectly, solicit or offer employment to any person who has

been employed by the Restricted Group at any time during the 12

months immediately preceding such solicitation.

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                                        Commission File No. 0-6544

          (c)  For purposes of this Section 13, a business shall

be deemed to be in competition with the Company if it is

principally involved in the purchase, sale or other dealing in

any property or the rendering of any service purchased, sold,

dealt in or rendered  by the Company as a material part of the

business of the Company within the same   geographic area in

which the Company makes such purchases, sales or dealings or

renders such services.  Nothing in this Section 13 shall be

construed so as to preclude Executive from investing in any

publicly or privately held company, provided Executive's

beneficial  ownership of any class of such company's securities

does not exceed 1% of the outstanding securities of such class.

          (d)  Executive and the Company agree that this covenant

not to compete is a reasonable covenant under the circumstances,

and further agree that if in the opinion of any court of

competent jurisdiction such restraint is not reasonable in any

respect, such court shall have the right, power and authority to

excise or modify such provision or provisions of this covenant as

to the court shall appear not reasonable and to enforce the

remainder of the covenant as so amended.  Executive agrees that

any breach of the covenants contained in this Section 13 would

irreparably injure the Company.  Accordingly, Executive agrees

that the Company may, in addition to pursuing any other remedies

it may have in law or in equity, cease making any payments

otherwise required by this Agreement and obtain an injunction

against Executive from any court having jurisdiction over the

matter restraining any further violation of this Agreement by

Executive.

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           14. Beneficiaries; References.  Executive shall be

entitled to select (and  change, to the extent permitted under

any applicable law) a beneficiary or beneficiaries to receive any

compensation or benefit payable hereunder following Executive's

death, and may change such election, in either case by giving the

Company written notice thereof.  In the event of Executive's

death or a judicial determination of her incompetence, reference

in this Agreement to Executive shall be deemed, where

appropriate, to refer to her beneficiary, estate or other legal

representative.  Any reference to the masculine gender in this

Agreement shall include, where appropriate, the feminine.

           15. Survivorship.  The respective rights and obligations

of the parties hereunder shall survive any termination of this

Agreement to the extent necessary to the intended preservation of

such rights and obligations.  The provisions of this Section 15

are in addition to the survivorship provisions of any other

section of this Agreement.

           16. Governing Law.  This Agreement shall be construed,

interpreted and governed in accordance with the laws of the State

of Alabama, without reference to rules relating to conflicts of

law.

           17.  Effect on Prior Agreements.  This Agreement

contains the entire understanding between the parties hereto and

supersedes in all respects any prior agreement or

understanding between the Company or any affiliate of the Company

and Executive as to employment matters other than the agreements

to in Section 7 hereof.

           18.  Withholding.  The Company shall be entitled to

withhold from payment any amount of withholding required by law.

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           19.  Counterparts.  This Agreement may be executed in

two or more counterparts, each of which will be deemed an

original.


                                   BRUNO'S, INC.


                                   By   /s/     William J. Bolton
                                     Name:  William J. Bolton
                                     Title:  President and Chief
                                     Executive Officer




                                   EXECUTIVE


                                     /s/     Laura Hayden
                                     Laura Hayden



                                                        Exhibit A


          In connection with Executive's relocation to the
Birmingham, Alabama area,  the Company shall reimburse Executive
for the following expenses, subject to reasonable substantiation
thereof:

     1.   Reasonable travel costs, including airfare and lodging,
          associated with locating  a residence in the Birmingham
          area.

     2.   The reasonable costs of moving company fees incurred in
          moving Executive's household to the Birmingham area and
          of local moving (from temporary  housing and storage to
          permanent housing).

     3.   The reasonable costs of temporary housing and storage
          in the Birmingham area for a period not to exceed six
          months.

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