CHANGE IN CONTROL AND
NONCOMPETE AGREEMENT
This Agreement is made as of , ______, by and between XXXXXXXX'X
INTERNATIONAL, INC., a Delaware corporation (the "Company") and ____________
(the "Executive").
WHEREAS, ___ for purposes of this ___ Agreement, ___ "Company" is hereby
defined to include ___ Xxxxxxxx'x International, Inc. and all of its
wholly-owned subsidiaries or subsidiaries of subsidiaries now or hereafter in
existence.
WHEREAS, the Company believes it to be in its best interest to provide for
continuity of management and to protect its management personnel against
financial hardship in the event of a change in control of the Company.
NOW, THEREFORE, in consideration of premises and the mutual terms and
conditions hereof, the company and the Executive hereby agree as follows:
1. Termination After Change in Control. In the event of a Change in
Control, as defined below, upon any termination of Executive's employment with
the Company within the 18 month period following such Change in Control, if by
Executive for Good Reason, as defined below, or by the Company without Cause, as
defined below, the following shall occur:
a. On the tenth business day following the effective date of
such termination, the Executive shall receive a lump sum payment equal
to (A) the Executive's base salary in effect immediately prior to the
change in control, plus the greater of (i) the average of the
Executive's actual bonus attributable to each of the preceding three
(3) fiscal years or (ii) the Executive's target bonus amount for the
fiscal year in which the termination occurs (B) divided by twelve (12)
and (C) multiplied by _______;
b. The Company shall pay health insurance premiums on behalf
of the Executive, for coverage substantially similar to that provided
under the Company's group health policy, for so long as the Executive
elects to continue such coverage, up to a maximum of _____ months.
c. The immediate vesting of any unvested stock options held by
the Executive as of the day immediately preceding the effective date
of termination and, with respect to all Restricted Share awards, all
restrictions will immediately be removed and deemed to have been
satisfied and any vesting periods will be accelerated, and with
respect to all Performance Share awards, the Executive will receive a
pro rata portion (based upon the number of complete months that have
passed in the Performance Period as of the date of the Change in
Control) of the applicable Award Agreement as if all performance
criteria were achieved at their targeted levels.
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d. Participation by the Executive in all compensation and
benefit plans of the Company will cease immediately and all unvested
bonuses, equity awards and other like items will immediately lapse,
except as specifically provided in subsection (c), above. In addition,
all amounts owed by the Executive to the Company for any reasons
whatsoever will become immediately due and payable and the Company
will have the right in its discretion to collect any or all such
amounts by offset against any amounts due to the Executive from the
Company whether or not under this Agreement.
2. Definitions.
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a. "Change in Control" means any one of the following: (i)
Continuing Directors no longer constitute at least 2/3 of the Board of
Directors; (ii) any person or group of persons (as defined in Rule
13d-5 under the Securities Exchange Act of 1934 (the "Exchange Act")),
together with its affiliates, become the beneficial owner (as defined
in Rule 13d-3 under the Exchange Act), directly or indirectly, of
thirty percent (30%) or more of the Company's then outstanding Common
Stock or thirty percent (30%) or more of the combined voting power of
the Company's then outstanding securities (calculated in accordance
with Section 13(d)(3) or 14(d) of the Exchange Act) entitled generally
to vote for the election of the Company's Directors; (iii) the merger
or consolidation of the Company with any other corporation, the sale
of substantially all of the assets of the Company or the liquidation
or dissolution of the Company, unless, in the case of a merger or
consolidation, the then Continuing Directors in office immediately
prior to such merger or consolidation will constitute at least 2/3 of
the Board of Directors of the surviving corporation of such merger or
consolidation and any parent (as such term is defined in Rule 12b-2
under the Exchange Act of such corporation; or (iv) at least 2/3 of
the then Continuing Directors in office immediately prior to any other
action proposed to be taken by the Company's stockholders or by the
Company's Board of Directors determine that such proposed action, if
taken, would constitute a change in control of the Company and such
action is taken.
b. "Continuing Director" means any individual who either (i)
was a member of AII's Board of Directors on the date hereof, or (ii)
was designated (as of the day of initial election as a Director) as a
continuing Director by a majority of the then Continuing Directors.
c. The following shall constitute "Cause":
(i) The Executive is convicted of -- or pleads no
contest / nolo contendre to -- any felony or any criminal
offense involving fraud; or
(ii) The Executive is determined by a g overnment
agency or court to have violated any applicable local, state
or federal employment law, including, but not limited to, any
anti-discrimination law.
d. The Executive shall have "Good Reason" to effect a
termination in the event the Company (i) diminishes the Executive's
compensation or benefits as in effect prior to the Change in Control,
(ii) requires the Executive to relocate more than 50 miles from the
greater Kansas City area, or (iii) diminishes the responsibilities of
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the Executive, and in any of (i), (ii) or (iii) the Executive has
given written notice to the Company as to the details of the basis for
such Good Reason within 30 days following the date on which the
Executive alleges the event giving rise to such Good Reason occurred
and the Company has failed to provide a reasonable cure within ten
(10) days after its receipt of such notice.
3. Confidentiality/Trade Secrets. The Executive acknowledges that his/her
position with the Company is one of the highest trust and confidence both by
reason of his/her position and by reason of his/her access to and contact with
the trade secrets and confidential and proprietary business information of the
Company. Both during the term of this Agreement and thereafter, the Executive
covenants and agrees as follows:
a. He/She shall use his/her best efforts and exercise utmost
diligence to protect and safeguard the trade secrets and confidential
and proprietary information of the Company, including but not limited
to the identity of its customers and suppliers, its arrangements with
customers and suppliers, and its technical and financial data,
records, compilations of information, processes, recipes and
specifications relating to its customers, suppliers, products and
services;
b. He/She shall not disclose any of such trade secrets and
confidential and proprietary information, except as may be required in
the course of his/her employment with the Company or by law; and
c. He/She shall not use, directly or indirectly, for his/her
own benefit or for the benefit of another, any of such trade secrets
and confidential and proprietary information.
All files, records, documents, drawings, specifications, memoranda,
notes, or other documents relating to the business of the Company, whether
prepared by the Executive or otherwise coming into his/her possession, shall be
the exclusive property of the Company and shall be delivered to the Company and
not retained by the Executive upon termination of his/her employment for any
reason whatsoever or at any other time upon request of the Company.
4. Discoveries. The Executive covenants and agrees that he/she will fully
inform the Company of and disclose to the Company all inventions, designs,
improvements, discoveries, and processes ("Discoveries") that he/she has now or
may hereafter have during his/her employment with the Company and that pertain
or relate to the business of the Company or to any experimental work, products,
services, or processes of the Company in progress or planned for the future,
whether conceived by the Executive alone or with others, and whether or not
conceived during regular working hours or in conjunction with the use of any
Company assets. All such Discoveries shall be the exclusive property of the
Company whether or not patent or trademark applications are filed thereon. The
Executive shall assist the Company, at any time during or after his/her
employment, in obtaining patents on all such Discoveries deemed patentable by
the Company and shall execute all documents and do all things necessary to
obtain letters patent, vest the Company with full and exclusive title thereto,
and protect the same against infringement by others. If such assistance takes
place after his her employment is terminated, then the Executive shall be paid
by the Company at an hourly rate determined based on fifty percent (50%) of
his/her existing salary at the date of termination divided by 2500 for any time
actually spent in rendering such assistance at the request of the Company.
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5. Non-Competition. The Executive covenants and agrees that during the
period of his/her employment and for 12 months thereafter, he/she shall not,
without the prior written consent of the Board, directly or indirectly, as an
employee, employer, consultant, agent, principal, partner, shareholder,
corporate officer, director, or through any other kind of ownership (other than
ownership of securities of publicly held corporations of which the Executive
owns less than five percent 5% of any class of outstanding securities) or in any
other representative or individual capacity, engage in or render any services to
any business in United States engaged in the casual dining restaurant industry,
or in any other segment of the restaurant industry in which the Company or any
subsidiary of the Company may become involved after the date hereof and prior to
the date of termination of Executives employment. For purposes of this Agreement
"casual dining restaurant industry" consists of "sit down" restaurants serving
alcoholic beverages, with a per guest average guest check within the United
States of under $20.00 (adjusted upward each year to recognize Company menu
price increases).
6. Nonsolicitation. The Executive agrees that during the period of his/her
employment, and for a period of 12 months thereafter, he/she will not, either
directly or indirectly, for himself or for any third party, solicit, induce,
recruit, or cause another person in the employ of the Company to terminate
his/her employment for the purpose of joining, associating, or becoming employed
with any business or activity that is engaged in the casual dining restaurant
industry or any other segment of the restaurant industry in which the Company
may become involved after the date hereof and prior to the date of any
termination of employment.
7. Remedies for Breach of Covenants of the Executive.
a. The Company and the Executive specifically acknowledge and
agree that the foregoing covenants of the Executive in Sections 3, 4,
5, and 6 are reasonable in content and scope and are given by the
Executive for adequate consideration. The Company and the Executive
further acknowledge and agree that, if any court of competent
jurisdiction or other appropriate authority shall disagree with the
parties' foregoing agreement as to reasonableness, then such court or
other authority shall reform or otherwise the foregoing covenants as
reason dictates.
b. The covenants set forth in Sections 3, 4, 5 and 6 of this
Agreement shall continue to be binding upon the Executive,
notwithstanding the termination of his/her employment with the Company
for any reason whatsoever, except in the case where the Executive both
(i) voluntarily terminates his/her employment following a Change in
Control and (ii) does not do so for Good Reason. Such covenants shall
be deemed and construed as separate agreements independent of any
other provisions of this Agreement and any other agreement between the
Company and the Executive. The existence of any claim or cause of
action by the Executive against the Company, whether predicated on
this Agreement or otherwise, shall not constitute a defense to the
enforcement by the Company of any or all such covenants. It is
expressly agreed that the remedy at law for the breach of any such
covenant is inadequate and injunctive relief and specific performance
shall be available to prevent the breach or any threatened breach
thereof.
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8. Arbitration of Disputes. Any dispute or claim arising out of or relating
to this Agreement shall be settled by arbitration in Xxxxxxx County, Kansas by
one arbitrator in accordance with the then current rules of the American
Arbitration Association, and judgment upon any award rendered therein may be
entered in any court having proper jurisdiction.
a. Pre-Change in Control. If the dispute or claim arises prior
to any Change in Control, this subsection (a) shall apply. The Company
shall bear the full cost of any arbitration, including the expenses
and attorneys' fees incurred by the Executive related thereto and
including any actions taken by either party to appeal or enforce the
judgment rendered therein, regardless of the outcome of such
arbitration, and the Company shall not be entitled to use any lawyer
who is a Company employee to represent it in any dispute or
arbitration related hereto. Notwithstanding the foregoing, if the
Company refuses to arbitrate such a dispute and the same is submitted
to a court for resolution, the Company shall pay all attorneys' fees
and expenses as incurred by Executive in enforcing this Agreement, in
addition to any such fees and expenses incurred by the Company.
Conversely, if the Executive refuses to arbitrate such a dispute and
the same is submitted to a court for resolution, the Company shall not
be obligated to pay Executive's attorneys' fees or expenses. Provided
however, in no event shall the attorneys' fees to be paid by the
Company on behalf of the Executive exceed $25,000.
b. Post-Change in Control. If the dispute or claim arises
after any Change in Control, this subsection (b) shall apply. Each
party shall bear its own costs and expenses, including attorneys'
fees, related to the dispute or claim and the parties shall share
equally the costs and fees of the arbitrator; provided, however, that
the arbitral award or any court rendered judgment may include a
finding that one party substantially prevailed in the proceeding and,
if so, such prevailing party may be awarded a judgment (in addition to
any other judgment awarded to such party) for all or any part of its
costs and expenses, including attorneys' fees and its portion of the
costs and fees of the arbitrator.
9. Mitigation. The Executive shall have no duty to attempt to mitigate the
level of benefits payable by the Company to him hereunder and the
Company shall not be entitled to set off against the amounts payable hereunder
any amounts received by the Executive from any other source, including any
subsequent employer.
10.Excess Payment. In the event of a Change in Control, as defined above,
if the total amount payable by the Company to the Executive pursuant to Section
1 of this Agreement (the "Paragraph 1 Amount") would create an excess parachute
payment, as that term is defined in Section 280G of the Internal Revenue Code
(the "Code"), then, the Executive shall be paid either (i) the Paragraph 1
Amount, or (ii) the Paragraph 1 Amount reduced to an amount equal to one-dollar
($1) less than the maximum amount allowed under the Code, whichever amount
results in the greater after-tax payment to the Executive.
11. General Provisions.
a. Law governing. This Agreement shall be governed by and
construed in accordance with the laws of the State of Kansas.
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b. Termination. This Agreement shall remain in effect for a
period of two (2) years from and after the date hereof and shall be
automatically extended thereafter for additional terms of one (1) year
each, unless either party has provided the other party written notice
of the termination hereof sixty (60) days prior to the end of the then
applicable term. Notwithstanding the foregoing, if a Change in Control
occurs, this Agreement shall not terminate or be terminable by either
party until eighteen (18) months after the effective date of the
Change in Control.
c. Invalid Provisions. If any provision of this Agreement is
held to be illegal, invalid, or unenforceable, such provision shall be
fully severable and this Agreement shall be construed and enforced as
if such illegal, invalid, or unenforceable provision had never
comprised a part hereof; and the remaining provisions hereof shall
remain in full force and effect and shall not be affected by the
illegal, invalid, or unenforceable provision or by its severance
herefrom. Furthermore, in lieu of such illegal, invalid, or
unenforceable provision there shall be added automatically as a part
of this Agreement a provision as similar in terms to such illegal,
invalid, or unenforceable provision as may be possible and still be
legal, valid or enforceable.
d. Entire Agreement. This Agreement sets forth the entire
understanding of the parties and supersedes all prior agreements or
understandings, whether written or oral, with respect to termination
or severance benefits payable by the Company to the Executive. No
terms, conditions, warranties, other than those contained herein, and
no amendments or modifications hereto shall be binding unless made in
writing and signed by the parties hereto.
e. Binding Effect. This Agreement shall extend to and be
binding upon and inure to the benefit to the parties hereto, their
respective heirs, representatives, successors and assigns. This
Agreement may not be assigned by the Executive.
f. Waiver. The waiver by either party hereto of a breach of
any term or provision of this Agreement shall not operate or be
construed as a waiver of a subsequent breach of the same provision by
any party or of the breach of any other term or provision of this
Agreement.
g. Titles. Titles of the paragraphs herein are used solely for
convenience and shall not be used for interpretation or construing any
work, clause, paragraph, or provision of this Agreement.
h. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but which
together shall constitute one and the same instrument.
i. Notices. Any notices to be given hereunder by either party
to the other may be effected either by personal delivery in writing or
by mail, registered or certified, postage prepaid, with return receipt
requested. Mailed notices shall be addressed as follows:
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a. If to the Company:
Xxxxxxxx'x International, Inc.
0000 Xxxx 000xx Xxxxxx, Xxxxx 000
Xxxxxxxx Xxxx, Xxxxxx 00000
Attn: General Counsel
b. If to the Executive:
Either party may change its address for notice by giving notice in
accordance with the terms of this Section 10(i).
IN WITNESS WHEREOF, the Company and the Executive have executed this
Agreement as of the date and year first above written above.
EXECUTIVE: XXXXXXXX'X INTERNATIONAL, INC.
By:
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Xxxxx X. Xxxx
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PARTIES TO CHANGE IN CONTROL AGREEMENT
XXXXX X. XXXXXX
XXXX X. XXXXXXXXX
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