SEVERANCE AGREEMENT
EXHIBIT 10
This SEVERANCE AGREEMENT (“Agreement”) is made this 21st day of February, 2003, by and among BIG BUCK BREWERY & STEAK HOUSE, INC., a Michigan corporation (“Company”); XXXXX COUNTY EMPLOYEES’ RETIREMENT SYSTEM (“WCERS”); and XXXXXXX XXXXXXXX (“Xxxxxxxx”).
RECITALS:
This Agreement is based on the following recitals:
X. Xxxxxxxx is currently the chief executive officer and president of the Company; Xxxxxxxx is a member of the board of directors of the Company; and Xxxxxxxx is the chairman of the board of directors of the Company.
B. WCERS is the largest secured creditor of the Company and also has the right to acquire the controlling interest in the Company pursuant to various loan documents (“Loan Documents”) and equity agreements by and among the Company, WCERS, Xxxxxxxx and Xxxxx Xxxxxx.
C. Xxxxx Xxxxxx has died making the estate liable under any guaranty.
D. WCERS has granted certain concessions to the Company and Xxxxxxxx in connection with the financing of the Company by WCERS.
X. Xxxxxxxx has determined that it is in the best interest of Xxxxxxxx and the Company that Xxxxxxxx tender his resignation as chief executive officer of the Company and as a member of the board of directors of the Company.
F. The Company and WCERS are willing to accept such resignation from Xxxxxxxx and to provide Xxxxxxxx and the estate of Xxxxx Xxxxxx a release in connection with any guaranty of Xxxxxxxx and the estate of Xxxxx Xxxxxx under the Loan Documents.
NOW, THEREFORE, the parties agree as follows:
1. The recitals set for the above are incorporated into and shall form a part of this Agreement.
2. Xxxxxxxx acknowledges and agrees that Xxxxxxxx has resigned as the chief executive officer and president of the Company, and Xxxxxxxx has resigned from the board of directors of the Company, both effective March 1, 2003 (“Effective Date”) as evidenced by his letter of resignation dated January 27, 2003 (“Termination Date”) attached hereto as Exhibit A.
3. Xxxxxxxx covenants and agrees that from and after the Termination Date he will not take any management role whatsoever in connection with the Company without the prior written consent of the board of directors of the Company and WCERS. It is agreed that Xxxxxxxx’x activities on behalf of the Company will be transitioned to another person or entity in order to replace Xxxxxxxx as of the Termination Date. As of the Effective Date, Xxxxxxxx shall return to the Company all reports, records, information, personal property, documents, and assets of the Company in the possession of Xxxxxxxx without retaining any copies of those items.
Xxxxxxxx will only use the Company credit cards in furtherance of Company business and will turn over such credit cards as of the Effective Date.
4. Xxxxxxxx also covenants and agrees to cooperate with the Company to the Effective Date in facilitating the transition of the Company from Xxxxxxxx’x operational control to a replacement acceptable to the Company, its board of directors and/or WCERS. Xxxxxxxx will also undertake such reasonable acts or activities as requested of the Company, the board of directors of the Company and/or WCERS with respect to any operations or assets of the Company, including, without limitation, negotiating with any landlords; provided, however, that Xxxxxxxx will not undertake such activities unless directed in writing by the Company, its board of directors or WCERS. All costs and expenses in connection with such activities shall be at the sole cost and expense of the Company and not Xxxxxxxx.
5. Xxxxxxxx agrees, at his election, that he may present opportunities to the Company, and Xxxxxxxx will be compensated for such activities at the time that the Company elects to move forward with such activities. However, the Company will owe no compensation, fees, salary and/or wages except as specifically provided in this Agreement or agreed to by the Company in writing with Xxxxxxxx.
6. Xxxxxxxx shall receive the following compensation under this Agreement in connection with his resignation: (a) Xxxxxxxx shall be paid his current salary through February 28, 2003; (b) Xxxxxxxx shall receive payment for two weeks of his customary vacation time; (c) Xxxxxxxx’x car allowance will be paid by the Company until June 30, 2003; and (d) Xxxxxxxx’x current health benefits will be paid by the Company until September 1, 2003; provided, however, Xxxxxxxx will be eligible to apply for all Cobra continuation benefits as provided under applicable law. Except as otherwise provided herein, Xxxxxxxx will receive no other salary, wages, compensation or fees from the Company.
7. In consideration of the foregoing, Xxxxxxxx hereby releases, discharges and covenants not to xxx (a) the Company, its shareholders, directors, officers, employees, agents, attorneys, successors and assigns and (b) WCERS, its trustees, members, employees, attorneys, agents, successors and assigns (collectively, “Owning Group”) as to any and all claims, suits, cause of actions, torts, contracts, liabilities, obligations, damages, costs and expenses of every nature and kind, (collectively, “Claims”) expecting worker’s compensation, which Xxxxxxxx had, has now or has in the future arising from any acts, omissions or business relationships between any of the Owning Group on one hand and Xxxxxxxx on the other hand, except that such release shall not extend to any breach of this Agreement by the Owning Group.
8. The Owning Group hereby releases, discharges and covenants not to xxx Xxxxxxxx, his heirs, estates, successors and assigns (collectively, “Xxxxxxxx Group”) as to any and all Claims, including, without limitation, any guaranty under the Loan Documents, which Xxxxxxxx had, has now or has in the future arising from any acts, omissions or business relationships between the Xxxxxxxx Group on one hand and any of the Owning Group on the other hand, except that such release shall not extend to any breach of this Agreement by Xxxxxxxx.
9. It is expressly acknowledged and agreed by Xxxxxxxx that he has voluntarily resigned from his employment with the Company and as a member of the board of directors of the Company. As such, Xxxxxxxx acknowledges that he has no unemployment, or similar claims in connection with his employment by the Company excepting worker’s compensation. From
2
and after the Termination Date, Xxxxxxxx has no right to participate in any existing stock option plans in connection with his employment.
10. In consideration of the foregoing, WCERS is willing to provide a release to the estate of Xxxxx Xxxxxx so long as a corresponding acceptable release is received by WCERS from the estate of Xxxxx Xxxxxx, and such release is appropriately documented in the probate proceedings of the estate of Xxxxx Xxxxxx.
11. This Agreement is the entire agreement of the parties and all prior agreements and understandings are merged into this Agreement. This Agreement may not be amended or modified except by a writing signed by all of the parties. If there shall be any dispute under this Agreement, the prevailing party shall be entitled to be reimbursed for all its costs and expenses, including, without limitation, reasonable attorney fees in connection with such dispute. This Agreement may not be assigned, transferred, mortgaged or hypothecated in any manner by Xxxxxxxx without the prior consent of the Company and WCERS. This Agreement shall be governed by and construed under the laws of the State of Michigan. This Agreement shall be binding upon and inure to the benefit of parties hereto and their permitted successors and assigns.
IN WITNESS WHEREOF, this Agreement has been executed the date first above written.
|
|
BIG BUCK BREWERY & STEAKHOUSE, INC., |
||
|
|
a Michigan corporation |
||
|
|
|
||
|
|
|
||
|
|
By: |
/s/ Xxxxxxx X. Xxxxxxxxxx |
|
|
|
Its: |
Chief Financial Officer |
|
|
|
|
||
|
|
|
||
|
|
XXXXX COUNTY EMPLOYEES’ |
||
|
|
RETIREMENT SYSTEM |
||
|
|
|
||
|
|
|
||
|
|
By: |
/s/ Xxxxxx Xxx |
|
|
|
Its: |
Director |
|
|
|
|
||
|
|
|
|
|
|
|
/s/ Xxxxxxx Xxxxxxxx |
|
|
|
|
XXXXXXX XXXXXXXX |
||
3
