Exhibit 10.47
TERMINATION AGREEMENT
This Agreement (the "Agreement") is made this 26th day of December 1997, by
and between Boston Chicken, Inc., a Delaware corporation (hereinafter referred
to as the "Company"), and Xxxx X. Xxxxxxxx (hereinafter referred to as
"Xxxxxxxx").
Recitals
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Xxxxxxxx has served as a consultant to, and a director, officer and
employee of, the Company. Xxxxxxxx resigned as Vice Chairman of the Board and as
a director of the Company effective December 26, 1997. In consideration of
the mutual covenants hereinafter set forth and in full satisfaction of any claim
Xxxxxxxx may have or assert arising from or in any way relating to his
employment or engagement with, and separation from, the Company, the parties
hereto agree as follows:
Covenants
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In consideration of the mutual promises contained herein, and other good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
1. Termination Payments. In full satisfaction of any obligations the
Company may have to Xxxxxxxx relating in any way to his employment or engagement
with, and separation from, the Company, the Company agrees to pay to Xxxxxxxx
(a) the sum of $300,000 in cash, which shall be payable to Xxxxxxxx on the later
of (i) January 5, 1998 or (ii) five business days after the expiration of the
revocation period described in Section 12(c) hereof, and (b) the sum of $240,000
in cash, which shall be payable in twenty-six (26) substantially equal
installments over the one-year period commencing upon the expiration of the
revocation period described in Section 12(c) hereof. The Company shall be
entitled to deduct from all such payments all applicable FICA contributions,
federal and state income taxes and any other payroll taxes. The Company shall
have the option to pay the amounts provided for herein in registered shares of
common stock, $.01 par value per share, of the Company.
2. Confidentiality. Xxxxxxxx acknowledges that he is a party to the
Confidentiality Agreement dated as of June 2, 1995, a copy of which is attached
hereto as Schedule A (the "Confidentiality Agreement"), reaffirms his
obligations thereunder and agrees to comply therewith.
3. Inventions, Designs and Product Developments. All inventions,
innovations, designs, ideas and product developments developed or conceived by
Xxxxxxxx, solely or jointly with others, whether or not patentable or
copyrightable, at any time during the employment or engagement of Xxxxxxxx by
the Company and that relate to the actual or then-currently planned business
activities of the Company or its
subsidiaries (collectively, the "Developments") and all of Xxxxxxxx'x right,
title and interest therein, shall be the exclusive property of the Company.
Xxxxxxxx hereby assigns, transfers and conveys to the Company all of his right,
title and interest in and to any and all such Developments. At any time and from
time to time, upon the request of the Company, Xxxxxxxx shall execute and
deliver to the Company any and all instruments, documents and papers, give
evidence and do any and all other acts that, in the opinion of counsel for the
Company, are or may be necessary or desirable to document such transfer or to
enable the Company to file and prosecute applications for and to acquire,
maintain and enforce any and all patents, trademark registrations or copyrights
under United States or foreign law with respect to any Developments or to obtain
any extension, validation, reissue, continuance or renewal of any such patent,
trademark or copyright. The Company will be responsible for the preparation of
any such instruments, documents and papers and for the prosecution of any such
proceedings and will reimburse Xxxxxxxx for all reasonable expenses incurred by
him in compliance with the provisions of this Section.
4. Covenant Restricting Solicitation. For a period of two years from the
date hereof Xxxxxxxx shall not, directly or indirectly, solicit or attempt to
solicit for employment any person who is an employee of the Company on the date
of Xxxxxxxx'x date of termination.
5. Covenant Restricting Competition. The obligations of Xxxxxxxx set
forth in this Section 5 are separate from and in addition to those obligations
set forth in any other sections of this Agreement. For a period of two years
from the date hereof, Xxxxxxxx agrees not to compete against the Company and/or
any subsidiary or developer thereof by directly or indirectly, owning, managing,
operating, controlling, being employed by, participating in, or being connected
in any manner with the ownership, management, operation, or control of (A) any
entity that prepares, serves, or sells, and derives more than 5% of its revenues
(directly or indirectly) from, rotisserie roasted chicken, roasted turkey, baked
ham, meat loaf, or pot pies, or (B) any entity, at least 15% of the revenue of
which is derived either from items which include chicken products or from any
other product which accounts for at least 15% of the revenue of any Boston
Market establishment owned or operated by the Company and/or any subsidiary or
developer thereof at the time Xxxxxxxx commences or significantly increases his
ownership, management, or other participation therein, which entity described in
either (A) or (B) above, is or has outlets located within five miles of any
store owned or operated by the Company and/or any subsidiary or developer
thereof or within any standard metropolitan statistical area or Designated
Market Area in which the Company and/or any subsidiary or developer thereof
engage, or have developed specific plans to engage, in business. Nothing in this
Section 5 shall prevent Xxxxxxxx from participating as an investor, officer, or
director in any restaurant venture not covered by the foregoing applicable
restrictions, and does not prevent Xxxxxxxx from investing so as to hold less
than 2% of the outstanding shares of any company which is a "reporting company"
under the Securities Exchange Act of 1934, as amended.
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6. Nondisparagement. Xxxxxxxx and the Company each agree not to
disparage, or otherwise speak negatively of, the other. The Company further
agrees to use reasonable best efforts to cause its directors not to disparage,
or otherwise speak negatively, of Xxxxxxxx.
7. Equitable Relief. Each of the parties acknowledges that the
restrictions contained in the Confidentiality Agreement and Sections 3, 4, 5 and
6 are reasonable and necessary to protect the legitimate interests of the
Company and Xxxxxxxx, and that any violation of any provisions of those Sections
by a party will result in irreparable injury to the other party. Each party
also acknowledges that the other party shall be entitled in enforcing the
provisions of the Confidentiality Agreement or those Sections to obtain
temporary and permanent injunctive relief, without the necessity of proving
actual damages, and to an equitable accounting of all earnings, profits and
other benefits arising from any such violation, which rights shall be cumulative
of and in addition to any other rights or remedies to which such party may be
entitled.
8. Stock Options. (a) Xxxxxxxx has been granted stock options on shares
of the Company and, pursuant to that certain Option Agreement dated as of April
8, 1996, on shares of Einstein/Noah Bagel Corp. all as set forth on Schedule B
attached hereto (collectively, the "Options"). The Options to purchase 125,362
shares of common stock granted on November 10, 1997 shall continue to vest in
accordance with their terms and to be exercisable in each case for a period of
one year after they have vested, provided, however, that the Company shall have
the right to terminate, at any time and for any reason, the vesting and
exercisability of all of such Options other than the options to purchase 41,787
shares which vest on November 10, 1998 and provided further that all of such
Options shall terminate and be of no further force and effect upon any material
breach by Xxxxxxxx of the Confidentiality Agreement or Sections 3, 4, 5 or 6
hereof. All other Options shall continue to vest for a period of one year from
the date hereof and shall continue to be exercisable for a period of two years
from the date hereof, in each case pursuant to and in accordance with the terms
thereof; provided, however, that such options shall terminate and be of no
further force and effect upon any material breach by Xxxxxxxx of the
Confidentiality Agreement or Sections 3, 4, 5 or 6 hereof. In the event that the
Company intends to terminate Xxxxxxxx'x options pursuant to this Section 8(a),
in the event of a material breach that is capable of being cured, the Company
shall first provide Xxxxxxxx written notice thereof, which notice shall set
forth in reasonable detail Xxxxxxxx'x breach of covenants. Upon receipt of such
notice Xxxxxxxx shall have ten (10) days in which to cure any such alleged
breach which is capable of being cured.
(b) Xxxxxxxx shall not be eligible for any additional stock option
grants after the date hereof.
9. Xxxxxxxx Representations. Xxxxxxxx represents and warrants to
the Company that (i) he is free to enter into this Agreement and (ii) this
Agreement does not violate the terms of any other agreement to which Employee is
a party or by which he is bound.
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10. Waiver. Failure by either party to insist upon strict compliance
with any of the terms, covenants or conditions hereof shall not be deemed a
waiver of such term, covenant or condition, nor shall any waiver or
relinquishment of any right or remedy hereunder at any one or more times be
deemed a waiver or relinquishment of such right or remedy at any other time or
times.
11. Severability. Each section, paragraph, term and provision of
this Agreement, and any portion thereof, shall be considered severable and if
for any reason any such portion of this Agreement is held to be invalid,
contrary to, or in conflict with any applicable present or future law or
regulation in a final, unappealable ruling issued by any court, agency or
tribunal with competent jurisdiction in a proceeding to which the Company is a
party, that ruling shall not impair the operation of, or have any other effect
upon, such other portions of this Agreement as may remain otherwise
intelligible, which shall continue to be given full force and effect and bind
the parties hereto. Xxxxxxxx agrees that if any provisions hereof shall be
adjudicated to be invalid or unenforceable in whole or in part, such
modifications made to this Agreement as a result of such adjudication shall be
effective only in the particular jurisdiction in which such adjudication is
made. To the extent any provision hereof is deemed unenforceable by virtue of
its scope but may be enforceable by limitations thereon, the parties hereto
agree that the same shall be enforceable to the fullest extent permissible under
the laws and public policies applied in such jurisdiction in which the
enforcement is sought. The parties hereto hereby authorize any court of
competent jurisdiction to modify the restrictive covenants to the extent
necessary to make the same enforceable.
12. Releases. (a) In partial consideration for the termination
payments provided for in Section 1 hereof, Xxxxxxxx acknowledges and agrees that
he, for himself and his successors, assigns and legal representatives, fully and
forever releases and discharges the Company, its subsidiaries and area
developers and their respective officers, directors, employees, agents,
representatives and insurers (collectively, the "Company Released Parties") from
and against any and all claims, liabilities, demands, obligations, damages,
actions, or causes of action of any nature or type whatsoever, whether or not
presently known, including future claims, liabilities, demands, obligations,
damages, actions or causes of action if based in whole or part on acts or
omissions occurring before he delivers this release to the Company, in any way
relating to his employment or engagement with, his separation from, or his
investment in the Company, except, in each case, for his rights described in
this Agreement, rights under the Company's Director and Officer Insurance
Policy, under the indemnification provisions of the Company's Certificate of
Incorporation and under the provisions of Section 145 of the Delaware General
Corporation Law ("DGCL"), in each case as they relate to his duties and service
as an officer and director of the Company, if any. Xxxxxxxx acknowledges and
agrees that the legal rights and claims that he is giving up include, but are
not limited to, his rights, if any, under all state and federal statutes that
protect him from discrimination in employment on the basis of sex, race,
national origin, religion, disability and age, such as the Age Discrimination in
Employment Act of 1987, Title VII of the Civil Rights Act of
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1964, as amended, the Rehabilitation Act of 1973, the Americans With
Disabilities Act, the Family and Medical Leave Act, the Equal Pay Act, and the
Colorado Civil Rights Act, as well as all common law rights and claims, such as
breach of contract, express or implied, tort, whether negligent or intentional,
wrongful discharge and any claim for fraud, omission or misrepresentation
against the Company Released Parties.
(b) The Company acknowledges and agrees that it, for itself and its
successors and assigns fully and forever releases and discharges Xxxxxxxx, his
heirs and legal representatives from and against any and all claims,
liabilities, demands, obligations, damages, actions, or causes of action of any
nature or type whatsoever, whether or not presently known, including future
claims, liabilities, demands, obligations, damages, actions or causes of action
if based in whole or in part on acts or omissions occurring before it delivers
this release to Xxxxxxxx, except, in each case, for the Company's rights
described in this Agreement, the Company's rights under the Company's Director
and Officer Insurance policy and the Company's right under Section 145 of the
DGCL to be reimbursed by Xxxxxxxx, if required by law, for expenses of any
litigation advanced to him in defense of such litigation, including the
Undertaking relating to reimbursement of expenses incurred in connection with
Case No. 97-WM-1308 entitled In re Boston Chicken, Inc. Securities Litigation.
(c) Xxxxxxxx acknowledges that he has up to 21 days after he has
received this Agreement to consider whether to sign it. In addition, after he
has signed and delivered this Agreement to the Company, it will not be effective
or enforceable until the end of a seven-day revocation period beginning the day
that he delivers it to the Company. During this seven-day period, Xxxxxxxx may
revoke this Agreement, without reason and in his sole judgment, but he may do so
only by delivering a written statement of revocation to the Company as provided
in Section 18. If the Company does not receive Employee's written statement of
revocation by the end of the revocation period, then this Agreement will become
legally enforceable and Xxxxxxxx may not thereafter revoke it. Any termination
of this Agreement in accordance with its terms shall not effect the validity of
the releases contained in this Section 12.
(d) Xxxxxxxx acknowledges that he has been fully advised of the
contents of Section 1542 of the Civil Code of the State of California and he
hereby expressly waives all rights and benefits under that section and under any
law of any jurisdiction of similar effect with respect to his release of any
claims he may have against the Company. Section 1542 reads as follows:
"Section 1542. (General Release Claims Extinguished). A
general release does not extend to claims which the creditor
does not know or suspect to exist in his favor at the time
of executing the release, which if known by him must have
materially affected his settlement with the debtor."
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13. Successors and Assigns. This Agreement shall inure to the benefit of
and be binding upon the Company, its successors and assigns. This Agreement
shall inure to the benefit of and be enforceable by the personal or legal
representatives, executors, administrators, successors, assigns, heirs,
distributees and/or legatees of Xxxxxxxx, except that duties and
responsibilities of Xxxxxxxx under this Agreement are personal to him, and are
not subject to assignment or transfer by him.
14. Entire Agreement. This Agreement and the Confidentiality Agreement
contain the entire agreement between the parties concerning the termination of
Xxxxxxxx'x employment with the Company. This Agreement may not be modified or
rescinded except by a written agreement to such effect signed by both parties.
15. Arbitration. Any controversy, claim or dispute between the parties
relating to or arising out of this Agreement will be finally settled by
arbitration governed by the then current Commercial Arbitration Rules of the
American Arbitration Association in accordance with the terms of this Agreement,
provided, however, that the Company shall not be prevented from seeking or
obtaining in any court of competent jurisdiction appropriate injunctive relief
in the event of a breach of the Confidentiality Agreement or any of the
provisions of Sections 3, 4, 5 or 6 of this Agreement. Any arbitration will be
conducted in Denver, Colorado by a panel of three neutral arbitrators.
16. Confidentiality and Publicity. (a) The parties agree to maintain the
confidentiality of this Agreement and the terms hereof (the "Confidential
Information"), except that (i) either party may make disclosures of Confidential
Information that has become publicly known other than by an action of the
disclosing party, or a person acting on their behalf, in violation of the terms
of this Agreement, (ii) the Company may make such disclosure of Confidential
Information as it may determine to be required under applicable securities laws
or the rules of any applicable securities exchange or quotation system, or in
connection with the preparation of any disclosure document to be distributed to
investors, lenders or similar persons, (iii) either party may disclose
Confidential Information that it may be legally compelled to disclose (after
using reasonable best efforts to notify the other party hereto in advance of
such disclosure, and reasonably cooperating in efforts of the other party to
resist such disclosure), (iv) either party may disclose such Confidential
Information as may be required to permit it to enforce the provisions of this
Agreement, and (v) either party may disclose Confidential Information to its
attorneys, accountants or other professional advisors.
(b) The Company agrees to provide Xxxxxxxx, to the extent he is
available, the opportunity to review prior to its issuance any press release to
be issued by the Company that mentions his name, provided, however, that this
section shall not be interpreted to limit Company's ability to issue any press
release that mentions Xxxxxxxx'x name that the Company deems necessary, based on
the advice of its counsel, with or without his review.
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(c) Xxxxxxxx agrees to provide the Company an opportunity to review
any press release or other public communication or statement he may make
regarding the Company prior to the issuance of such press release or, to the
extent practicable, making of such communication or statement.
17. Future Cooperation. Xxxxxxxx agrees to cooperate in good faith
with the Company in any third-party litigation instituted by or against the
Company with respect to matters which occurred during the period in which
Xxxxxxxx was employed by or served as a director or officer of the Company. The
Company agrees to reimburse Xxxxxxxx or reasonable expenses incurred by him in
connection with such cooperation with respect to such matters.
18. Notices. All notices, request, demands, and other communications
required or permitted hereunder shall be in writing and shall be deemed to have
been duly given if delivered by hand or by electronic transmission. If mailed,
first class, certified mail, postage prepaid, or sent by reliable overnight
delivery service and addressed as follows, or at such other addresses as the
parties hereto may from time to time designate in writing, such notices,
requests, demands, and other communications shall be deemed delivered three
business days after being so duly posted:
to the Company: Boston Chicken, Inc.
00000 Xxxxxx Xxxx Xxxxxxx
Xxxxxx, XX 00000
Attention: General Counsel
Facsimile: (000) 000-0000
to Employee: Xxxx X. Xxxxxxxx
0000 Xxxxxxxxx Xxxx
Xxxxxxx Xxxxx, XX 00000
Facsimile: (000) 000-0000
19. Governing Law. This Agreement and the rights and obligations of
the parties hereunder shall be governed by and construed in accordance with the
laws of the State of Colorado applicable to contracts made and to be performed
therein.
20. Survival. The parties acknowledge and agree that the covenants
contained in this Agreement and Confidentiality Agreement shall survive the
termination of Xxxxxxxx'x employment or engagement with the Company.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement
the day and year first above written.
EMPLOYEE: BOSTON CHICKEN, INC.
By: /s/ Xxxx X. Xxxx
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/s/ Xxxx X. Xxxxxxxx Its: Senior Vice President
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Xxxx X. Xxxxxxxx
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