SEVERANCE, RELEASE AND INDEMNITY AGREEMENT
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This Severance, Release and Indemnity Agreement ("Agreement") is being
made and entered into this 27th day of January, 1997, by and between XXXXXX X.
XXXXXXX ("XxXxxxx") and CHECKERS DRIVE-IN RESTAURANTS, INC. ("Checkers").
WHEREAS, XxXxxxx and Checkers entered into an Employment Agreement, Stock
Option Agreement and Indemnification Agreement, all dated July 28, 1995
(hereinafter collectively referred to as the "Employment Agreement") pursuant to
which XxXxxxx was employed as the President, Chief Executive Officer and
Director of Checkers; and
WHEREAS, by Resolution of the Checkers Board of Directors dated November
22, 1996, the Employment Agreement was amended to extend the Term of Employment
through December 31, 1998; and
WHEREAS, XxXxxxx and Checkers wish to terminate all of their respective
rights and obligations under the Employment Agreement but only on the terms and
conditions specifically set forth herein.
NOW, THEREFORE, in consideration of the mutual promises contained herein
and other good and valuable consideration, the receipt of which is hereby
acknowledged, the parties hereto agree as follows:
1. Termination of Employment Agreement. Upon the execution of this
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Agreement, all respective rights and obligations of Checkers and XxXxxxx under
the Employment Agreement except for the indemnity obligations specifically
referenced herein are canceled and terminated and shall be of no further force
and effect. The term of XxXxxxx'x Employment Agreement shall end and XxXxxxx'x
last day of employment shall be the date of this Agreement.
2. Cash and Stock Consideration to XxXxxxx. Upon execution of this
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Agreement. XxXxxxx shall receive the following cash and stock consideration from
Checkers. All of the cash and stock consideration will be subject to all federal
and state withholding and other required deductions.
a) CASH. The total amount of $360,000.00 to be paid as follows:
(i) for a period ending no later than March 31, 1997, XxXxxxx
shall continue to receive his regular salary paid in the
normal course at regular intervals; (ii) the entire balance
remaining due after application of XxXxxxx'x regular gross
salary payments provided for in (i) above shall be paid in
cash, certified check or wire transfer in full upon the first
to occur of either (1) Checkers obtaining new equity through a
rights offering and/or private placement of Checkers'
securities or (2) March 31, 1997. Payment of a total of
$360,000 at any time prior to March 31, 1997 terminates all
cash obligations owing from Checkers to XxXxxxx.
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Upon execution of this Agreement, Checkers shall execute and
deliver to XxXxxxx a note in the principal amount of
$360,000.00 in the form of Exhibit "A" attached hereto. Said
note shall be held in escrow by counsel for XxXxxxx pending
the timely and full payment of the obligations set forth in
this subparagraph. Payments made pursuant to Section 2(a)(i)
and (ii) above shall reduce any amounts due under said note
and said note shall be canceled and returned to Checkers upon
payment of $360,000 as set forth above.
b) STOCK OPTIONS. XxXxxxx shall retain all current stock options
totaling Three Hundred Thousand (300,000) shares of stock,
which options shall immediately vest on the date prior to the
date of this Agreement and shall be exercisable at any time
within two years from the date of this Agreement at the prices
set forth in the existing Stock Option Agreements between
XxXxxxx and Checkers (copies of which are attached hereto as
Exhibit "B") (the "XxXxxxx Options"). Should Checkers file
with the Securities and Exchange Commission an S-8
Registration Statement, an S-3 Registration Statement, or an
S-1 Registration Statement which reasonably can include the
XxXxxxx Options, Checkers agrees to include the XxXxxxx'x
Options in the first of such Registration Statements to be
filed. XxXxxxx acknowledges that his options remain
non-qualified options.
3. Continuation of Indemnity Obligations. Checkers and XxXxxxx agree
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and acknowledge that the Indemnity Agreement dated July 28, 1995 between Checker
and XxXxxxx (a copy of which is attached hereto as Exhibit "C") is and will
remain a continuing, valid, binding and enforceable agreement and that neither
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the termination of XxXxxxx'x employment and/or the execution of this Agreement
will have any effect whatsoever on the Indemnity Agreement.
4. Other Consideration to XxXxxxx. XxXxxxx shall receive from Checkers
and Checkers shall provide to XxXxxxx the following additional consideration:
a) Checkers hereby assigns and XxXxxxx hereby assumes the
automobile lease and all obligations related to XxXxxxx'x
company automobile. If XxXxxxx is unable to assume of if
Checkers is unable to assign such lease, Checkers will
continue to provide XxXxxxx with use of the company automobile
currently driven by XxXxxxx through the end of the lease term,
provided all lease, insurance and other obligations are paid
by and are the responsibility of XxXxxxx. In either event,
XxXxxxx agrees to indemnify and hold harmless Checkers from
and against all obligations relating to the lease or the use
of the automobile after the date hereof.
b) With respect to health and insurance benefits, XxXxxxx shall
make a COBRA election and Checkers shall pay his COBRA costs
for a period of one year from the date of this Agreement or
until XxXxxxx is employed at a company providing comparable or
superior benefits, whichever occurs first.
5. Mutual Release. XxXxxxx and Checkers mutually agree to release and
discharge each other to the fullest extent possible and with respect to
XxXxxxx'x release of Checkers, its affiliated corporations, benefit plans, and
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programs, its shareholders, creditors, officers, agents, administrators,
directors, attorneys and employees from any and all claims, losses, expenses
either of them may now have, have had in the past or may have in the future of
any kind or nature, known or unknown, with respect to the Employment Agreement,
XxXxxxx'x status as a shareholder or creditor of Checkers, any actions or lack
of actions of XxXxxxx as an employee, President, Chief Executive Officer and
Director of Checkers, or of the Company up through the date hereof. XxXxxxx'x
release of Checkers includes, but is not limited to, any claimed violation of
state, federal or other law prohibiting discrimination such as claims arising
under Title VII of the Civil Rights Act of 1964, claims under the Age
Discrimination in Employment Act of 1967 and claims arising under any federal,
state or local law pertaining to benefits. This release will not waive any
rights arising under this Agreement or the Indemnity Agreement referenced in
paragraph 3 hereof.
6. Age Discrimination. XxXxxxx expressly acknowledges that, by entering
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into this Agreement, he is waiving any and all right or claims that he may have
arising under the Age Discrimination in Employment Act of 1967, as amended,
which have arisen on or before the date of the execution of this Agreement.
XxXxxxx further expressly acknowledges and agrees that:
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a) In return for this Agreement, he will receive compensation
beyond that which he was already entitled to receive before
entering into this Agreement.
b) He was orally advised by Checkers and is hereby informed that
he had twenty-one (21) day within which to consider the
Agreement, which twenty-one (21) days is hereby waived;
c) He was given a copy of this Agreement and informed that he had
twenty-one (21) days within which to consider the Agreement,
which twenty-one (21) days is hereby waived;
d) He was informed that he has seven (7) days following the date
of the execution of this Agreement (which date is January 27,
1997) in which to revoke the Agreement. Any revocation must be
in writing and hand-delivered during the revocation period to
Checkers. If this Agreement is not so revoked, it shall become
effective and enforceable seven (7) days following execution
by XxXxxxx. If revoked, all consideration theretofore paid to
XxXxxxx under this Agreement shall be immediately returned to
Checkers by XxXxxxx.
7. Availability. XxXxxxx agrees to be reasonably available, considering
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the time constraints of any new position he may take, for interviews or
depositions at his principal place of business or pursuant to a validly subpoena
in any matter in which Checkers is a party and about which XxXxxxx has
knowledge.
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8. Conduct of Parties. XxXxxxx and Checkers agree to refrain from taking
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any action or making any comments that would or would likely damage the good
reputation and integrity of each other and with respect to Checkers, its
affiliated companies, shareholders, creditors, directors or employees.
9. Merger, Modification and Waiver. This Agreement constitutes the entire
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understanding of the parties with respect to the subject matter hereof. No
provision of this Agreement may be modified, waived or discharged unless such
waiver, modification of discharge is agreed to in writing. No waiver by either
party at any time of any breach by the other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or any prior or
subsequent time.
10. Governing Law. This Agreement shall be construed and enforced
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pursuant to the laws of the State of Florida.
11. Arbitration. Any controversy or claim arising out of or relating to
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this Agreement or any transactions provided for herein, or the breach thereof,
other than a claim for injunctive relief shall be settled by arbitration in
accordance with the Commercial Arbitration Rules of the American Arbitration
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Association (the "Rules") in effect at the time demand for arbitration is made
by any party. The evidentiary and procedural rules in such proceedings shall be
kept to the minimum level of formality that is consistent with the Rules. One
arbitrator shall be named by the Company, a second shall be named by Employee
and the third arbitrator shall be named by the two arbitrators so chosen. In the
event that the third arbitrator is not agreed upon, he or she shall be named by
the American Arbitration Association. Arbitration shall occur in Tampa, Florida
or such other location agreed to by the Company and Employee. The award made by
all or a majority of the panel of arbitrators shall be final and binding, and
judgment may be entered in any court of law having competent jurisdiction. The
award is subject to confirmation, modification, correction, or vacation only as
explicitly provided in Title 9 of the United States Code. The prevailing party
shall be entitled to an award of pre- and post-award interest as well as
reasonable attorneys' fees incurred in connection with the arbitration and any
judicial proceedings related thereto.
12. Counterparts. This Agreement may be executed in one or more
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counterparts. Each of which shall be deemed to be an original, but all of which
together shall constitute but one document.
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13. No Assignment. Each party represents that such party has made no
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assignment or other transfer of all or any part of the claims release herein to
any other person or party.
14. Inurement. This Agreement shall inure to the benefit of and be
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binding upon the parties hereto and their respective heirs, successors and
assigns.
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IN WITNESS WHEREOF, this Agreement has been duly executed by Checkers and
XxXxxxx as of the date first above written.
CHECKERS DRIVE-IN RESTAURANTS, INC.
BY: \s\ Xxxxxxx Xxxxxxx
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Xxxxxxx Xxxxxxx, President
BY: \s\ Xxxxxx X. XxXxxxx
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Xxxxxx X. XxXxxxx
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