EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT, dated as of August 5, 1998, by and between
Chock full O' Nuts Corporation (the "Company"), a New York corporation,
and Xxxxxx X. Xxxxxxx (the "Employee").
W I T N E S S E T H:
WHEREAS, the Employee acknowledges that he is currently employed
by the Company as an employee at will;
WHEREAS, the Company acknowledges that the Employee is a key
employee of the Company whose services are important to the Company; and
WHEREAS, in the event a change in control of the Company (as
hereinafter defined) occurs within five years from the date hereof, the
Company desires to employ the Employee and the Employee wishes to be
employed by the Company on the terms and conditions hereinafter set
forth;
NOW, THEREFORE, in consideration of the mutual covenants set forth
herein and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto hereby
agree as follows:
1. Employment. Prior to the Effective Date (as hereinafter
defined) and subject to Section 15(b) hereof, the Employee will be
employed as an employee at will. As of the Effective Date and upon the
terms and subject to the conditions of this Agreement, the Company
hereby employs the Employee and the Employee hereby accepts employment
with the Company in the capacity hereinafter set forth.
2. Term of Employment; Effective Date. The employment term of
this Agreement (the "Term") shall commence as of the Effective Date and
shall continue in effect until the third anniversary of the Effective
Date or until sooner terminated as provided herein; provided, however,
if the Effective Date has not occurred within five years from the date
hereof, this Agreement shall terminate and be null and void. For
purposes of this Agreement, the "Effective Date" shall mean the date
upon which a change in control of the Company occurs.
3. Change in Control. For purposes of this Agreement, a
"change in control of the Company" shall be deemed to have occurred if
at any time within five years from the date hereof the individuals who
on the date hereof constitute the Board of Directors of the Company
cease to constitute at least a majority of the Board of Directors of the
Company or the successor corporation, as the case may be.
4. Duties. During the Term of this Agreement, the Employee
shall continue to serve the Company in the same executive capacity as he
did on the day prior to the Effective Date. The Employee agrees to
devote substantially all of his working time and effort to the business
and affairs of the Company and shall not be required to relocate outside
of the New York metropolitan area.
5. Compensation and Other Employee Benefits. In consideration
of the services rendered by the Employee hereunder and provided that the
Employee has substantially performed all of his obligations provided for
herein, the Company shall pay the following compensation and provide the
following benefits to the Employee during the Term of this Agreement:
(a) Base Salary. The Company shall pay to the Employee a
base salary (the "Base Salary") per year equal to the base salary paid
by the Company to the Employee on the day prior to the Effective Date.
The Base Salary shall be paid in accordance with the Company's normal
payroll practice.
(b) Bonus. The Employee shall be eligible to be paid a
cash bonus (the "Bonus") each year on the same terms and conditions as
are other executives of the Company in comparable positions. The Bonus
shall be paid in accordance with the Company's normal payroll practice.
(c) Other Employee Benefits. The Employee shall be
entitled to receive the benefits described below which the Employee has
been receiving from the Company (the "Pre-Effective Date Benefits").
(i) Vacation. The Employee shall be entitled to
the same paid vacation time annually as he was entitled to on the day prior
to the Effective Date.
(ii) Insurance. The Employee shall continue to be
entitled to participate in the medical and health, life insurance,
disability, dental and other welfare plans, programs and arrangements of
the Company in which he was entitled to participate on the day prior to
the Effective Date.
(iii) Pension, Supplemental Executive Retirement
Plan, 401(k), Deferred Compensation and Employee Stock Ownership Plan. The
Employee shall continue to be eligible to participate in the Company's
Pension Plan, Supplemental Executive Retirement Plan, 401(k) Plan,
Deferred Compensation Plan and Employee Stock Ownership Plan (the
"Company's Plans") to the extent he was able to participate on the day
prior to the Effective Date, subject to the terms and conditions
thereof. If any of the Company's Plans are terminated after the
Effective Date and prior to the Employee's termination of employment,
the Employee shall be entitled, at the Company's expense, to obtain
benefits from a third party source which are substantially similar to
the benefits provided for under such terminated Company Plan. If a Pre-
Effective Date Benefit cannot be purchased from a third party source,
the Company shall pay the Employee a cash amount representing the
financial equivalent of such benefit.
(iv) Automobile. The Company will provide the
Employee the use of an automobile of a model and type similar or
substantially equivalent to the automobile, if any, or pay the
automobile allowance, provided to the Employee on the day prior to the
Effective Date.
(d) Tax Gross-Up.
(i) To the extent that benefits provided to the
Employee under subsections 5(c)(ii) and 5(c)(iv) of this Agreement
result in imputed income and a resulting increased income tax liability
to the Employee, the Company shall pay the Employee a tax reimbursement
benefit in an amount such that, after deduction of all income taxes
payable with respect to such tax reimbursement benefit, the amount
retained by the Employee will be equal to the amount of such increased
income tax liability.
(ii) To the extent that payments provided to the
Employee under this Agreement result in a "golden parachute excise tax"
under Section 4999 of the Internal Revenue Code of 1986, as amended,
being assessed against the Employee, the Company will pay the Employee a
gross-up payment in an amount which places the Employee in the same
after-tax position as if the golden parachute excise tax had not been
assessed against the Employee.
(e) Other Compensation, Benefits and Perquisites. The
Employee shall also be eligible to receive such other compensation,
benefits and perquisites as are or may become available to other
executives of the Company. Nothing contained in this Agreement shall be
deemed to have any effect, or limit in any way, the Employee's rights
under any stock option agreement or arrangement with the Company.
6. Termination Provisions.
(a) Termination for Cause. The Company may terminate the
Employee's employment hereunder for Cause, as hereinafter defined,
immediately upon written notice to the Employee. For purposes of this
Agreement, "Cause" shall mean dishonesty or any act or conduct on the
part of the Employee which is materially injurious to the business or
reputation of either the Company or any of its subsidiaries or
affiliates. If the Employee's employment is terminated for Cause, the
Employee shall be entitled to receive only the unpaid portion of the
Base Salary then in effect which has accrued to the date of termination.
(b) Termination By Reason of Permanent Disability. If at
any time during the Term the Company reasonably determines that the
Employee has been or will be unable, as a result of physical or mental
illness or incapacity, to perform his duties hereunder for a period of
four consecutive months or for an aggregate of more than six months in
any twelve month period (a "Permanent Disability"), the Employee's
employment hereunder may be terminated by the Company upon 30 days'
written notice to the Employee. If the Employee's employment is
terminated by reason of Permanent Disability, the Employee shall be
entitled to receive the unpaid portion of the Base Salary then in effect
which has accrued to the date of termination. In addition, the Employee
shall be entitled to receive, within 60 days of the end of the year in
which such Permanent Disability occurs, a pro rated portion of the
Bonus. For these purposes the pro rata portion shall be determined by
dividing the number of days in such year prior to the Employee's
Permanent Disability by 365.
(c) Termination By Reason of Death. The Employee's
employment hereunder shall automatically terminate on the date of his
death. If the Employee's employment is so terminated by his death, the
Company shall pay to the Employee's estate a lump sum amount equal to
the unpaid portion of the Base Salary then in effect through the end of
the month in which his death occurs. Such amount shall be paid within
30 days after the date of his death if a personal representative has
been appointed by the end of such thirty day period or, if a personal
representative has not been appointed by the end of such thirty day
period, promptly after a personal representative has been appointed. In
addition, the Employee's estate shall be entitled to receive, within 60
days of the end of the year in which the Employee's death occurs, a pro
rated portion of the Bonus. For these purposes the pro rata portion
shall be determined by dividing the number of days in such year prior to
the Employee's death by 365.
(d) Other Termination Provisions. (i) The Board of
Directors of the Company may terminate the Employee's employment
hereunder at any time for any reason without Cause or the Employee may
terminate his employment for Good Reason (as defined below) in which
cases the Employee shall remain entitled to receive (A) all Base Salary
and Bonuses hereunder, whether or not yet earned (at the times when such
Base Salary and Bonuses would otherwise have been payable) and (B) all
Pre-Effective Date Benefits hereunder through continued participation in
the Company's Plans, as if he was an active employee, or, if continued
participation in a Company Plan is not possible, a cash amount
representing the financial equivalent of the Pre-Effective Date Benefits
ceasing to be provided to the Employee, until the earlier of the third
anniversary of the Effective Date or his earlier Permanent Disability or
death.
(ii) Termination by the Employee of the Employee's
employment for "Good Reason" shall mean termination upon the election of
the Employee following a change in control of the Company upon the
occurrence, without the Employee's consent, of any of the following
events:
(A) the assignment to the Employee of any duties
inconsistent with the Employee's positions, duties, responsibilities and
status with the Company immediately prior to a change in control of the
Company, or a change in the Employee's reporting responsibilities,
titles or offices from those in effect immediately prior to a change in
control of the Company, other than in connection with the termination of
the Employee's employment for Cause or by Permanent Disability or as a
result of the Employee's Death or by the Employee other than for Good
Reason;
(B) a reduction by the Company in the Employee's
Base Salary and Pre-Effective Date Benefits; or
(C) required relocation outside of the New York
metropolitan; area.
(iii) Notwithstanding anything to the contrary provided
hereunder, to the extent any of the Employee's Bonuses payable to the
Employee pursuant to this Section 6(d)(i) following a change in control
of the Company are less than the Minimum Bonus (as defined below), each
such Bonus shall be increased by the difference between the amount of
such Bonus and the Minimum Bonus. For purposes of this Section 6(d), a
"Minimum Bonus" shall mean an annual bonus equal to the average annual
bonus paid to the Employee over the four complete fiscal years next
preceding the change in control of the Company.
7. Covenants of the Employee.
(a) Non-Competition. During the Term and thereafter for
so long as the Employee is entitled to receive payments of Base Salary
under Section 6(d) the Employee shall not, directly or indirectly, be
associated with any entity which competes with the Company and whose
primary business is, or personally engage in, the same or similar line
of business of the Company, whether as a director, officer, employee,
agent, consultant, partner, owner, independent contractor or otherwise.
(b) Non-Solicitation of Employees of the Employer. Until
the date six (6) months from the date of such termination, the Employee
shall not, and shall cause each business or entity with which he shall
become associated in any capacity not to, solicit for employment or
employ any person who is then, or who was at any time after the date
four months prior to the date of such termination, employed in a
professional or managerial position by the Company, its subsidiaries or
affiliates.
(c) Confidentiality. The Employee agrees and acknowledges
that the Confidential Information of the Company and its subsidiaries
and affiliates, as hereinafter defined, is valuable, special and unique
to their business; that such business depends on such Confidential
Information; and that the Company wishes to protect such Confidential
Information by keeping it confidential for the use and benefit of the
Company and its subsidiaries and affiliates. Based on the foregoing,
the Employee agrees to undertake the following obligations with respect
to such Confidential Information:
(i) the Employee agrees to keep any and all Confidential
Information in trust for the use and benefit of the Company and its
subsidiaries and affiliates;
(ii) the Employee agrees that, except as required by
applicable law or as authorized in writing by the Board of Directors of
the Company, he will not at any time during or after the termination of
his employment hereunder, disclose, directly or indirectly, any
Confidential Information of the Company or any of subsidiaries or
affiliates;
(iii) the Employee agrees to take all reasonable steps
necessary, or reasonably requested by the Company, to ensure that all
Confidential Information is kept confidential for the use and benefit of
the Company and subsidiaries and affiliates; and
(iv) the Employee agrees that, upon termination of his
employment hereunder or at any other time the Company, may in writing so
request, he will promptly deliver to the Company all materials
constituting Confidential Information (including all copies thereof)
that are in his possession or under his control. The Employee further
agrees that, if requested by the Company, to return any Confidential
Information pursuant to this subparagraph (iv), he will not make or
retain any copy or extract from such materials.
For purposes of paragraph (c) of this Section 7, "Confidential
Information" means any and all information developed by or for the
Company or any of its subsidiaries or affiliates of which the Employee
gains or has acquired knowledge during or prior to the Term by reason of
his employment with the Company that is (A) not generally known in any
industry in which the Company or any of its subsidiaries or affiliates
is or may become engaged or (B) not publicly available. Confidential
Information includes, but is not limited to, any and all information
developed by or for the Company or any of its subsidiaries or affiliates
concerning plans, marketing and sales methods, customer lists,
materials, processes, business forms, procedures, devices, plans for
development of products, services or expansion into new areas or
markets, internal operations, and any trade secrets and proprietary
information of any type owned by the Company or any of its subsidiaries
or affiliates, together with all written, graphic and other materials
relating to all or any part of the same.
8. Successors; Assignment.
(a) The Company. The Company may assign any of its rights
and obligations hereunder, without the written consent of the Employee.
This Agreement shall be binding upon and shall inure to the benefit of
the Company and its successors and assigns.
(b) The Employee. Neither this Agreement nor any right or
interest hereunder may be assigned by the Employee, his beneficiaries,
or legal representatives without the prior written consent of the Board
of Directors of the Company; provided, however, that nothing in this
Section 8 shall preclude (i) the Employee from designating a beneficiary
to receive any benefit payable hereunder upon his death, or (ii) the
executors, administrators, or other legal representatives of the
Employee or his estate from assigning any rights hereunder to
distributees, legatees, beneficiaries, testamentary trustees or other
legal heirs of the Employee.
9. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed to have been given when
delivered by hand, mailed by first-class registered or certified mail,
postage prepaid and return receipt requested, or delivered by overnight
courier addressed as follows:
(i) If to the Company:
Chock full O' Nuts Corporation
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Chief Executive Officer
(ii) If to the Employee:
Xxxxxx X. Xxxxxxx
c/o Chock full O' Nuts Corporation
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
or, in each case, at such other address as may from time to time be
specified to the other party in a notice similarly given.
10. Governing Law; Arbitration.
(a) Governing Law. This Agreement shall be governed by
and construed in accordance with the laws of the State of New York
without giving effect to the conflicts of law principles thereof.
(b) Arbitration. Any controversy or claim arising out of
this Agreement shall be settled by arbitration which shall be in
accordance with the Commercial Arbitration Rules of the American
Arbitration Association as such rules shall be in effect on the date of
delivery of demand for arbitration. The arbitration of such issues,
including the determination of the amount of any damages suffered by
either party hereto by reason of the acts or omissions of the other,
shall be to the exclusion of any court of law. The decision of the
arbitrator shall be final and binding on both parties and their
respective heirs, executors, administrators, successors and assigns.
Each party shall pay its own attorneys and the expenses of its witnesses
and all other expenses connected with the presentation of its case;
provided, however, if the Employee substantially prevails in enforcing
his rights in the arbitration, the Company shall pay all of the
Employee's reasonable legal fees and expenses connected with the case.
11. Entire Agreement. This Agreement contains the entire
agreement of the parties and their affiliates relating to the subject
matter hereof and supersedes all prior agreements, representations,
warranties and understandings, written or oral, with respect thereto.
12. Severability. If any term or provision of this Agreement or
the application thereof to any person, property or circumstance shall to
any extent be invalid or unenforceable, the remainder of this Agreement,
or the application of such term or provision to persons, property or
circumstances other than those as to which it is invalid or
unenforceable, shall not be affected thereby, and each term and
provision of this Agreement shall remain valid and enforceable to the
fullest extent permitted by law.
13. Remedies.
(a) Injunctive Relief. The Employee acknowledges and
agrees that the covenants and obligations of the Employee contained in
subsections (a), (b) and (c) of Section 7 hereof relate to special,
unique and extraordinary matters and are reasonable and necessary to
protect the legitimate interests of the Company and its subsidiaries and
affiliates and that a breach of any of the terms of such covenants and
obligations will cause the Company irreparable injury for which adequate
remedies at law are not available. Therefore the Employee agrees that
the Company shall be entitled to an injunction, restraining order, or
other equitable relief from any court of competent jurisdiction,
restraining the Employee from any such breach.
(b) Remedies Cumulative. The Company's rights and
remedies under this Section 13 are cumulative and are in addition to any
other rights and remedies the Company may have at law or in equity.
14. Withholding Taxes. The Company may deduct any federal,
state or local withholding or other taxes from any payments to be made
by the Company hereunder in such amounts which the Company reasonably
determine are required to deduct under applicable law.
15. Amendments, Miscellaneous, Etc.
(a) Amendments. The Company may amend, modify, cancel or
terminate this Agreement or any term hereof prior to a change in control
of the Company by giving written notice to the Employee ninety (90) days
in advance of the effective date of such termination (the "Notice
Period"). Notwithstanding the foregoing, neither this Agreement nor any
term hereof may be changed, waived, discharged, cancelled or terminated
after a change in control of the Company except by an instrument in
writing signed by the party against which such change, waiver,
discharge, cancellation or termination is sought to be enforced.
(b) Termination of Employment During Notice Period. If the
Employee's employment with the Company is terminated during the Notice
Period for any reason other than for Cause, the Employee shall be
treated for the purposes of this Agreement as if he was an active
employee entitled to all Base Salary and Bonuses and Pre-Effective Date
Benefits hereunder as in effect on the day prior to the Notice Period.
(c) Headings. The headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
16. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, and all of
which together shall constitute one and the same instrument and shall be
the valid and binding agreement of the parties when such counterparts
have been duly executed and delivered by each party hereto.
[Remainder of this page intentionally left blank]
IN WITNESS WHEREOF, the parties hereto have duly executed and
delivered this Agreement as of the date first written above.
CHOCK FULL O' NUTS CORPORATION
By
Name:
Title:
XXXXXX X. XXXXXXX
- 7 -
R&O-403325.4
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
AMENDED AND RESTATED EMPLOYMENT AGREEMENT(the "Agreement"), dated as
of October 27, 1998, by and between Chock full O' Nuts Corporation (the
"Company"), a New York corporation, and Xxxxxx X. Xxxx (the "Employee").
W I T N E S S E T H:
WHEREAS, the Employee acknowledges that he is currently employed
by the Company as an employee at will;
WHEREAS, the Company acknowledges that the Employee is a key
employee of the Company whose services are important to the Company; and
WHEREAS, in the event a change in control of the Company (as
hereinafter defined) occurs within five years from the date hereof, the
Company desires to employ the Employee and the Employee wishes to be
employed by the Company on the terms and conditions hereinafter set
forth;
NOW, THEREFORE, in consideration of the mutual covenants set forth
herein and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto hereby
agree as follows:
1. Employment. Prior to the Effective Date (as hereinafter
defined) and subject to Section 15(b) hereof, the Employee will be
employed as an employee at will. As of the Effective Date and upon the
terms and subject to the conditions of this Agreement, the Company
hereby employs the Employee and the Employee hereby accepts employment
with the Company in the capacity hereinafter set forth.
2. Term of Employment; Effective Date. The employment term of
this Agreement (the "Term") shall commence as of the Effective Date and
shall continue in effect until the third anniversary of the Effective
Date or until sooner terminated as provided herein; provided, however,
if the Effective Date has not occurred within five years from the date
hereof, this Agreement shall terminate and be null and void. For
purposes of this Agreement, the "Effective Date" shall mean the date
upon which a change in control of the Company occurs.
3. Change in Control. For purposes of this Agreement, a
"change in control of the Company" shall be deemed to have occurred if
at any time within five years from the date hereof the individuals who
on the date hereof constitute the Board of Directors of the Company
cease to constitute at least a majority of the Board of Directors of the
Company or the successor corporation, as the case may be.
4. Duties. During the Term of this Agreement, the Employee
shall continue to serve the Company in the same executive capacity as he
did on the day prior to the Effective Date. The Employee agrees to
devote substantially all of his working time and effort to the business
and affairs of the Company and shall not be required to relocate outside
of the New York City area.
5. Compensation and Other Employee Benefits. In consideration
of the services rendered by the Employee hereunder and provided that the
Employee has substantially performed all of his obligations provided for
herein, the Company shall pay the following compensation and provide the
following benefits to the Employee during the Term of this Agreement:
(a) Base Salary. The Company shall pay to the Employee a
base salary (the "Base Salary") per year equal to the base salary paid
by the Company to the Employee on the day prior to the Effective Date.
The Base Salary shall be paid in accordance with the Company's normal
payroll practice.
(b) Bonus. The Employee shall be eligible to be paid a
cash bonus (the "Bonus") each year on the same terms and conditions as
are other executives of the Company in comparable positions. The Bonus
shall be paid in accordance with the Company's normal payroll practice.
(c) Other Employee Benefits. The Employee shall be
entitled to receive the benefits described below which the Employee has
been receiving from the Company (the "Pre-Effective Date Benefits").
(i) Vacation. The Employee shall be entitled to
the same paid vacation time annually as he was entitled to on the day prior
to the Effective Date.
(ii) Insurance. The Employee shall continue to be
entitled to participate in the medical and health, life insurance,
disability, dental and other welfare plans, programs and arrangements of
the Company in which he was entitled to participate on the day prior to
the Effective Date.
(iii) Pension, Supplemental Executive Retirement
Plan, 401(k), Deferred Compensation and Employee Stock Ownership Plan. The
Employee shall continue to be eligible to participate in the Company's
Pension Plan, Supplemental Executive Retirement Plan, 401(k) Plan,
Deferred Compensation Plan and Employee Stock Ownership Plan (the
"Company's Plans") to the extent he was able to participate on the day
prior to the Effective Date, subject to the terms and conditions
thereof. If any of the Company's Plans are terminated after the
Effective Date and prior to the Employee's termination of employment,
the Employee shall be entitled, at the Company's expense, to obtain
benefits from a third party source which are substantially similar to
the benefits provided for under such terminated Company Plan. If a Pre-
Effective Date Benefit cannot be purchased from a third party source,
the Company shall pay the Employee a cash amount representing the
financial equivalent of such benefit.
(iv) Automobile. The Company will provide the
Employee the use of an automobile of a model and type similar or
substantially equivalent to the automobile, if any, or pay the
automobile allowance, provided to the Employee on the day prior to the
Effective Date.
(v) Office and Secretarial Services. The Company
will provide the Employee an office and secretarial and office support
services similar or substantially equivalent to the office and
secretarial and office support services provided to the Employee on the
day prior to the Effective Date.
(d) Tax Gross-Up.
(i) To the extent that benefits provided to the
Employee under subsections 5(c)(ii), 5(c)(iv) and 5(c)(v) of this
Agreement result in imputed income and a resulting increased income tax
liability to the Employee, the Company shall pay the Employee a tax
reimbursement benefit in an amount such that, after deduction of all
income taxes payable with respect to such tax reimbursement benefit, the
amount retained by the Employee will be equal to the amount of such
increased income tax liability.
(ii) To the extent that payments provided to the
Employee under this Agreement result in a "golden parachute excise tax"
under Section 4999 of the Internal Revenue Code of 1986, as amended,
being assessed against the Employee, the Company will pay the Employee a
gross-up payment in an amount which places the Employee in the same
after-tax position as if the golden parachute excise tax had not been
assessed against the Employee.
(e) Other Compensation, Benefits and Perquisites. The
Employee shall also be eligible to receive such other compensation,
benefits and perquisites as are or may become available to other
executives of the Company. Nothing contained in this Agreement shall be
deemed to have any effect, or limit in any way, the Employee's rights
under any stock option agreement or arrangement with the Company.
6. Termination Provisions.
(a) Termination for Cause. The Company may terminate the
Employee's employment hereunder for Cause, as hereinafter defined,
immediately upon written notice to the Employee. For purposes of this
Agreement, "Cause" shall mean dishonesty or any act or conduct on the
part of the Employee which is materially injurious to the business or
reputation of either the Company or any of its subsidiaries or
affiliates. If the Employee's employment is terminated for Cause, the
Employee shall be entitled to receive only the unpaid portion of the
Base Salary then in effect which has accrued to the date of termination.
(b) Termination By Reason of Permanent Disability. If at
any time during the Term the Company reasonably determines that the
Employee has been or will be unable, as a result of physical or mental
illness or incapacity, to perform his duties hereunder for a period of
four consecutive months or for an aggregate of more than six months in
any twelve month period (a "Permanent Disability"), the Employee's
employment hereunder may be terminated by the Company upon 30 days'
written notice to the Employee. If the Employee's employment is
terminated by reason of Permanent Disability, the Employee shall be
entitled to receive the unpaid portion of the Base Salary then in effect
which has accrued to the date of termination. In addition, the Employee
shall be entitled to receive, within 60 days of the end of the year in
which such Permanent Disability occurs, a pro rated portion of the
Bonus. For these purposes the pro rata portion shall be determined by
dividing the number of days in such year prior to the Employee's
Permanent Disability by 365.
(c) Termination By Reason of Death. The Employee's
employment hereunder shall automatically terminate on the date of his
death. If the Employee's employment is so terminated by his death, the
Company shall pay to the Employee's estate a lump sum amount equal to
the unpaid portion of the Base Salary then in effect through the end of
the month in which his death occurs. Such amount shall be paid within
30 days after the date of his death if a personal representative has
been appointed by the end of such thirty day period or, if a personal
representative has not been appointed by the end of such thirty day
period, promptly after a personal representative has been appointed. In
addition, the Employee's estate shall be entitled to receive, within 60
days of the end of the year in which the Employee's death occurs, a pro
rated portion of the Bonus. For these purposes the pro rata portion
shall be determined by dividing the number of days in such year prior to
the Employee's death by 365.
(d) Other Termination Provisions. (i) The Board of
Directors of the Company may terminate the Employee's employment
hereunder at any time for any reason without Cause or the Employee may
voluntarily resign at any time for any reason without Cause, in which
cases the Employee shall remain entitled to receive (A) all Adjusted Base
Salary(as defined below) and Bonuses hereunder whether or not yet earned
(at the times when the Employee's Base Salary and Bonuses would
otherwise have been payable) and (B) all Pre-Effective Date Benefits
hereunder through continued participation in the Company's Plans for those
Pre-Effective Date Benefits provided under the Company Plans, as if he was
an active employee, or, if continued participation in a Company Plan or
provision of Pre-Effective Date Benefits not offered through a Company Plan
is not possible, a cash amount representing the financial equivalent of the
Pre-Effective Date Benefits ceasing to be provided to the Employee, until the
earlier of the third anniversary of the Effective Date or his earlier
Permanent Disability or death. For purposes of this Section 6(d)(i), "Adjusted
Base Salary" shall mean the Employee's Base Salary increased by $75,000.
(ii) Notwithstanding anything to the contrary provided
hereunder, to the extent any of the Employee's Bonuses payable to the
Employee pursuant to this Section 6(d)(i) following a change in control
of the Company are less than the Minimum Bonus (as defined below), each
such Bonus shall be increased by the difference between the amount of
such Bonus and the Minimum Bonus. For purposes of this Section 6(d), a
"Minimum Bonus" shall mean an annual bonus equal to the average annual
bonus paid to the Employee over the four complete fiscal years next
preceding the change in control of the Company.
7. Covenants of the Employee.
(a) Non-Competition. During the Term and thereafter for
so long as the Employee is entitled to receive payments of Base Salary
under Section 6(d) the Employee shall not, directly or indirectly, be
associated with any entity which competes with the Company and whose
primary business is, or personally engage in, the same or similar line
of business of the Company, whether as a director, officer, employee,
agent, consultant, partner, owner, independent contractor or otherwise.
(b) Non-Solicitation of Employees of the Employer. Until
the date six (6) months from the date of such termination, the Employee
shall not, and shall cause each business or entity with which he shall
become associated in any capacity not to, solicit for employment or
employ any person who is then, or who was at any time after the date
four months prior to the date of such termination, employed in a
professional or managerial position by the Company, its subsidiaries or
affiliates.
(c) Confidentiality. The Employee agrees and acknowledges
that the Confidential Information of the Company and its subsidiaries
and affiliates, as hereinafter defined, is valuable, special and unique
to their business; that such business depends on such Confidential
Information; and that the Company wishes to protect such Confidential
Information by keeping it confidential for the use and benefit of the
Company and its subsidiaries and affiliates. Based on the foregoing,
the Employee agrees to undertake the following obligations with respect
to such Confidential Information:
(i) the Employee agrees to keep any and all Confidential
Information in trust for the use and benefit of the Company and its
subsidiaries and affiliates;
(ii) the Employee agrees that, except as required by
applicable law or as authorized in writing by the Board of Directors of
the Company, he will not at any time during or after the termination of
his employment hereunder, disclose, directly or indirectly, any
Confidential Information of the Company or any of subsidiaries or
affiliates;
(iii) the Employee agrees to take all reasonable steps
necessary, or reasonably requested by the Company, to ensure that all
Confidential Information is kept confidential for the use and benefit of
the Company and subsidiaries and affiliates; and
(iv) the Employee agrees that, upon termination of his
employment hereunder or at any other time the Company, may in writing so
request, he will promptly deliver to the Company all materials
constituting Confidential Information (including all copies thereof)
that are in his possession or under his control. The Employee further
agrees that, if requested by the Company, to return any Confidential
Information pursuant to this subparagraph (iv), he will not make or
retain any copy or extract from such materials.
For purposes of paragraph (c) of this Section 7, "Confidential
Information" means any and all information developed by or for the
Company or any of its subsidiaries or affiliates of which the Employee
gains or has acquired knowledge during or prior to the Term by reason of
his employment with the Company that is (A) not generally known in any
industry in which the Company or any of its subsidiaries or affiliates
is or may become engaged or (B) not publicly available. Confidential
Information includes, but is not limited to, any and all information
developed by or for the Company or any of its subsidiaries or affiliates
concerning plans, marketing and sales methods, customer lists,
materials, processes, business forms, procedures, devices, plans for
development of products, services or expansion into new areas or
markets, internal operations, and any trade secrets and proprietary
information of any type owned by the Company or any of its subsidiaries
or affiliates, together with all written, graphic and other materials
relating to all or any part of the same.
8. Successors; Assignment.
(a) The Company. The Company may assign any of its rights
and obligations hereunder, without the written consent of the Employee.
This Agreement shall be binding upon and shall inure to the benefit of
the Company and its successors and assigns.
(b) The Employee. Neither this Agreement nor any right or
interest hereunder may be assigned by the Employee, his beneficiaries,
or legal representatives without the prior written consent of the Board
of Directors of the Company; provided, however, that nothing in this
Section 8 shall preclude (i) the Employee from designating a beneficiary
to receive any benefit payable hereunder upon his death, or (ii) the
executors, administrators, or other legal representatives of the
Employee or his estate from assigning any rights hereunder to
distributees, legatees, beneficiaries, testamentary trustees or other
legal heirs of the Employee.
9. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed to have been given when
delivered by hand, mailed by first-class registered or certified mail,
postage prepaid and return receipt requested, or delivered by overnight
courier addressed as follows:
(i) If to the Company:
Chock full O' Nuts Corporation
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Chief Executive Officer
(ii) If to the Employee:
Xxxxxx X. Xxxx
c/o Chock full O' Nuts Corporation
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
or, in each case, at such other address as may from time to time be
specified to the other party in a notice similarly given.
10. Governing Law; Arbitration.
(a) Governing Law. This Agreement shall be governed by
and construed in accordance with the laws of the State of New York
without giving effect to the conflicts of law principles thereof.
(b) Arbitration. Any controversy or claim arising out of
this Agreement shall be settled by arbitration which shall be in
accordance with the Commercial Arbitration Rules of the American
Arbitration Association as such rules shall be in effect on the date of
delivery of demand for arbitration. The arbitration of such issues,
including the determination of the amount of any damages suffered by
either party hereto by reason of the acts or omissions of the other,
shall be to the exclusion of any court of law. The decision of the
arbitrator shall be final and binding on both parties and their
respective heirs, executors, administrators, successors and assigns.
Each party shall pay its own attorneys and the expenses of its witnesses
and all other expenses connected with the presentation of its case;
provided, however, if the Employee substantially prevails in enforcing
his rights in the arbitration, the Company shall pay all of the
Employee's reasonable legal fees and expenses connected with the case.
11. Entire Agreement. This Agreement contains the entire
agreement of the parties and their affiliates relating to the subject
matter hereof and supersedes all prior agreements, representations,
warranties and understandings, written or oral, with respect thereto.
12. Severability. If any term or provision of this Agreement or
the application thereof to any person, property or circumstance shall to
any extent be invalid or unenforceable, the remainder of this Agreement,
or the application of such term or provision to persons, property or
circumstances other than those as to which it is invalid or
unenforceable, shall not be affected thereby, and each term and
provision of this Agreement shall remain valid and enforceable to the
fullest extent permitted by law.
13. Remedies.
(a) Injunctive Relief. The Employee acknowledges and
agrees that the covenants and obligations of the Employee contained in
subsections (a), (b) and (c) of Section 7 hereof relate to special,
unique and extraordinary matters and are reasonable and necessary to
protect the legitimate interests of the Company and its subsidiaries and
affiliates and that a breach of any of the terms of such covenants and
obligations will cause the Company irreparable injury for which adequate
remedies at law are not available. Therefore the Employee agrees that
the Company shall be entitled to an injunction, restraining order, or
other equitable relief from any court of competent jurisdiction,
restraining the Employee from any such breach.
(b) Remedies Cumulative. The Company's rights and
remedies under this Section 13 are cumulative and are in addition to any
other rights and remedies the Company may have at law or in equity.
14. Withholding Taxes. The Company may deduct any federal,
state or local withholding or other taxes from any payments to be made
by the Company hereunder in such amounts which the Company reasonably
determine are required to deduct under applicable law.
15. Amendments, Miscellaneous, Etc.
(a) Amendments. The Company may amend, modify, cancel or
terminate this Agreement or any term hereof prior to a change in control
of the Company by giving written notice to the Employee ninety (90) days
in advance of the effective date of such termination (the "Notice
Period"). Notwithstanding the foregoing, neither this Agreement nor any
term hereof may be changed, waived, discharged, cancelled or terminated
after a change in control of the Company except by an instrument in
writing signed by the party against which such change, waiver,
discharge, cancellation or termination is sought to be enforced.
(b) Termination of Employment During Notice Period. If the
Employee's employment with the Company is terminated during the Notice
Period for any reason other than for Cause, the Employee shall be
treated for the purposes of this Agreement as if he was an active
employee entitled to all Base Salary and Bonuses and Pre-Effective Date
Benefits hereunder as in effect on the day prior to the Notice Period.
(c) Headings. The headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
16. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, and all of
which together shall constitute one and the same instrument and shall be
the valid and binding agreement of the parties when such counterparts
have been duly executed and delivered by each party hereto.
[Remainder of this page intentionally left blank]
IN WITNESS WHEREOF, the parties hereto have duly executed and
delivered this Agreement as of the date first written above.
CHOCK FULL O' NUTS CORPORATION
By
Name:
Title:
Xxxxxx X. Xxxx
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R&O-410173.2
