Exhibit 10.5
SEPARATION AGREEMENT
This is a Separation Agreement (hereinafter the "Agreement") between Xxxx
X. Xxx (hereinafter the "Executive") and Volume Services America Holdings, Inc.
(hereinafter the "Company").
WHEREAS, Executive is unable to attend the Company's August 2003 Board of
Directors Meeting due to his ill health; and
WHEREAS, Executive is resigning from his employment with the Company and
from his position as Chairman of the Board of Directors for health reasons; and
WHEREAS, Executive and the Company agree that Executive's last day of
employment with the Company (hereinafter the "Separation Date") shall be the
earlier of: (i) August 28, 2003 or (ii) the date on which the Company decides to
proceed with its currently intended initial public offering of stock; and
WHEREAS, in the interests of compromise and certainty, Executive and the
Company have agreed to the terms of Executive's separation from the Company as
set forth herein.
NOW, THEREFORE, in consideration of the mutual promises and covenants
herein set forth, Executive and the Company hereby covenant and agree as
follows:
1. CONSIDERATION. In consideration for Executive signing this Agreement
and complying with the promises made herein, the Company agrees to
provide Executive with the following payments and benefits:
(a) The Company shall provide separation payments to the Executive
at the rate of $465,000 per year from the Separation Date
through August 24, 2003 and at the rate of $232,500 per year
from August 25, 2003 through August 24, 2005. Such separation
payments shall be made in accordance with the Company's usual
policies and practices for salary payments and shall be
reduced by all applicable taxes and withholdings. In the event
of Executive's death prior to August 24, 2005, the remaining
separation payments shall be made payable to the Executive's
estate.
(b) Executive shall remain eligible to receive bonuses based on
the Company's Annual Bonus Plan until the earlier of August
24, 2005 or the date of his death. The amounts of such
bonuses, if any, shall be calculated in accordance with and,
if applicable, prorated in accordance with the written terms
of the Annual Bonus Plan. In the event that a bonus is
determined to be due Executive, but such payment is not made
prior to Executive's death, then such payment shall be made to
the Executive's estate.
(c) Executive (and/or his estate) shall remain eligible to receive
his deferred bonus for 2002, in the amount of $266,250, if and
when such deferred bonuses are paid to other
similarly-situated senior executives.
(d) The Company will continue to pay the premiums on the base life
insurance policy on the Executive, in effect as of the
Separation Date, until the earlier of August 24, 2005 or the
date of Executive's death. The Company also hereby waives its
right and authority to recover its interest in the Executive's
"split-dollar" life insurance policy.
(e) For a period of eighteen (18) months after the Separation
Date, the Executive and his spouse shall continue to be
eligible to participate in the Company's health insurance plan
in accordance with the continuation coverage provisions of the
Consolidated Omnibus Budget Reconciliation Act (hereinafter
"COBRA"). If the Executive elects to receive such continuation
coverage under COBRA, the Company shall increase the monthly
payments payable to Executive under subsection (a) above by
the cost of such continued COBRA coverage and Executive's
payments for such continued COBRA coverage shall be deducted
automatically by the Company from those monthly payments.
(f) The Company shall allow Executive to continue to use the
leased automobile in his possession on the Separation Date
until the earlier of August 24, 2005 or the date of the
Executive's death. The Company shall make the lease payments
and pay for the maintenance of the leased automobile during
this time period.
(g) The Company shall continue to reimburse the Executive up to
$10,000 per year for fees and expenses related to membership
in two clubs designated by the Executive. Such reimbursement
shall continue until the earlier of August 24, 2005 or the
date of the Executive's death.
(h) Executive's rights under the Company's deferred compensation
plan, pension plan and/or 401(k) plan shall be governed by the
written terms of those plans. For the purposes of those plans,
Executive's last day of employment shall be considered the
same as his Separation Date.
2. NO CONSIDERATION ABSENT EXECUTION OF THIS AGREEMENT. Executive and
the Company understand and agree that Executive would not receive
the consideration specified in Section 1 above, except for
Executive's execution of this Agreement and his fulfillment of the
promises contained herein. Executive agrees and acknowledges that he
is receiving the consideration set forth above in Section 1 in
consideration for his execution of this Agreement and that he is not
otherwise entitled to such consideration. Executive further agrees
that the consideration set forth in Section 1 above is adequate and
fair consideration for all of his promises and obligations herein.
Executive agrees that other than the consideration set forth in this
Agreement, he is not entitled to and will not receive
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any other monies, benefits or compensation from the Company,
including but not limited to any other wages, salary, bonuses, stock
options, restricted stock, vacation or sick pay, separation pay or
any other benefits or compensation of any kind.
3. DUTY OF ONGOING COOPERATION. The parties jointly agree that
Executive will continue to support and cooperate with the Company to
aid with the management transition and will remain available for
contact with clients, employees, and any additional persons as
reasonably requested by the Company through August 24, 2005. In
connection therewith, the Company shall make available to the
Executive reasonable office space and secretarial assistance through
at least February 28, 2004. All reasonable out-of-pocket expenses
incurred by Executive while assisting the Company with the
transition duties listed above shall be reimbursed in full, provided
however, that written permission is obtained in advance of any
expenditures.
4. GENERAL RELEASE OF CLAIMS. Executive knowingly and voluntarily for
himself and his heirs, executors, and administrators, releases and
forever discharges the Company and its respective parent companies,
subsidiaries, predecessors, successors, affiliated companies and
businesses, related companies and businesses, and each of their
current, former and future owners, shareholders, managers, members,
partners, directors, officers, employees, representatives and
agents, and their heirs, executors or administrators (hereinafter
collectively referred to as the "Released Entities") of and from all
demands, complaints, appeals, causes of action, claims and charges
whatsoever, in law or in equity, known or unknown, which Executive
ever had, may have had, now has, or which his heirs, executors or
administrators hereinafter can, shall or may have as a result of any
act, incident, event or omission that has occurred on or before the
date on which Executive signs this Agreement. Executive agrees to
release and forever discharge the Released Entities from any and all
claims which Executive did file or could have filed with any
federal, state or local court or agency, including but not limited
to all claims arising from or related to his employment or
separation from employment at the Company. Executive understands and
acknowledges that this General Release of Claims includes, but is
not limited to, any and all claims of age discrimination or any
other type of discrimination, whether such claims arise under the
federal Age Discrimination in Employment Act ("ADEA"), the
Connecticut Fair Employment Practices Act ("CFEPA"), or any other
federal, state or local statute, law, regulation or ordinance.
5. COVENANT NOT TO XXX. Except to enforce this Agreement, the Executive
hereby promises never to file or make, or permit to be filed or made
on his behalf, a lawsuit, charge, complaint, or other claim
asserting any claim or demand against any of the Released Entities
which is within the scope of the claims released in Section 4 above.
This Agreement may and shall be pleaded by any of the Released
Entities as a full and complete defense to, and may be used as a
basis for an injunction against any action, suit or other proceeding
which may be instituted, prosecuted or maintained in breach thereof.
If the Executive files or makes, or
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permits to be filed or made on his behalf, a lawsuit, charge,
complaint, appeal or other claim asserting any claim or demand
against any of the Released Entities which is within the scope of
the claims released in Section 4 above, whether or not such claim is
otherwise valid, that Released Entity shall be entitled to: (i) the
full enforcement of the terms of this Agreement; (ii) the immediate
dismissal of all claims released in Section 4 above; and (iii) the
recovery of his/its attorneys' fees and legal costs incurred in
defending such claim(s).
6. NO SOLICITATION OF CUSTOMERS OR CLIENTS FOR ONE YEAR. For a period
of two (2) years from the Separation Date (the "Non-Solicitation
Period"), Executive agrees not to request, suggest, solicit, entice
or induce any client or customer of the Company, or of any
subsidiary, affiliate, joint venturer, predecessor or successor of
the Company (hereinafter collectively referred to as the
"Centerplate Companies"), to modify or curtail its business with the
Centerplate Companies in any way. Executive also agrees that during
the Non-Solicitation Period, he shall not receive any payments or
compensation, either directly or indirectly, either individually or
as an employee, agent, partner, shareholder, consultant, director or
in any other individual, corporate or representative capacity, from
any current customer or client of the Centerplate Companies or from
any former customer or client to which the Centerplate Companies
provided services during Executive's employment with the Company.
7. NO SOLICITATION OF EMPLOYEES. During the Non-Solicitation Period,
Executive agrees not to employ, retain, solicit, recruit, hire,
induce or attempt to induce to leave the Centerplate Companies,
either directly or indirectly, either individually or as an
employee, agent, partner, shareholder, consultant, director or in
any other individual, corporate or representative capacity, any
person who was an employee of the Centerplate Companies as of the
Separation Date. Executive further agrees that if an employee of the
Centerplate Companies contacts Executive during the Non-Solicitation
Period about prospective employment, Executive will inform such
employee that he cannot discuss the matter further without informing
the Company.
8. CONFIDENTIAL INFORMATION. Executive agrees not to use, not to
disclose and to keep confidential any non-public, secret,
confidential or proprietary information, knowledge or data relating
to the Centerplate Companies, including but not limited to the
Centerplate Companies' processes, products, client lists, client
identities, customers, vendors, financial data, marketing
strategies, business plans, pricing information, trade secrets, and
all other non-public information relating to the Centerplate
Companies (the "Confidential Information"). Executive agrees that
Confidential Information shall also include, but not be limited to,
all internal discussions among Company personnel and agents related
to any bids, responses to requests for proposal, or other efforts to
obtain business contemplated, proposed or made by the Centerplate
Companies in the two (2) year prior to the Separation Date.
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9. NO CLAIMS FILED BY EXECUTIVE. Executive confirms that he has not
filed and will not file, or permit to be filed on his behalf, any
charge, complaint, or action in any forum or form against the
Released Entities. Nothing in this Section or elsewhere in this
Agreement shall prevent any party from filing an action in order to
enforce the terms and conditions of this Agreement.
10. REVOCATION. Executive may revoke this Agreement within a seven (7)
day period following the day he executes this Agreement. Any
revocation within this period must be submitted, in writing, and
state, "I hereby revoke my acceptance of my Separation Agreement
with Volume Services America Holdings, Inc." The revocation must be
delivered within the seven (7) day revocation period to:
Xxxxx X. Xxxxxxxxxx, Esq.
Executive Vice President, General Counsel
and Secretary
Centerplate
000 Xxxxx Xxxxxxxx Xxxxx
Xxxxxxxx, XX 00000
This Agreement shall not become effective or enforceable until the
revocation period has expired. If the last day of the revocation
period is a Saturday, Sunday, or legal holiday in Connecticut, then
the revocation period shall not expire until 5:00 p.m. on the next
following day which is not a Saturday, Sunday, or legal holiday.
11. COMPANY'S OPTION TO ACQUIRE UNITS. Executive currently owns 360.65
units of Class II partnership interests in VSI Management II L.P.
and 1,179.71 units of partnership interests in VSI Management Direct
L.P. (hereinafter collectively referred to as the "Units"), subject
to applicable loans. Executive hereby grants to the Company an
option, exercisable by the Company at any time up to and including
the first anniversary of the Separation Date, to acquire all of the
Units from Executive for cash at a purchase price for each such Unit
equal to the fair market value of that Unit as of the date the
Company exercises this option, as such fair market value is
determined jointly in good faith by the General Partner of VSI
Management II L.P. or VSI Management Direct L.P., as applicable, and
the board of directors of the Company. Executive agrees that, if the
Company exercises this option, the purchase price shall first be
applied to repay all outstanding principal of and accrued interest
on the loans he incurred to acquire the Units. If the Company
exercises this option, the closing of the purchase and sale of the
Units shall occur on such business day as the Company selects that
is no earlier than 2 business days and no later than 20 business
days after the date of such exercise. The Company's rights under
this Section 11 are in addition to, and not in substitution for, the
Company's rights under Section 4.6(c) of the partnership agreement
of each of VSI Management II L.P. and VSI Management Direct L.P.
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12. RESIGNATION OF POSITIONS. Executive agrees and acknowledges that he
resigned as an employee, Officer, Director, and Chairman of the
Board of Directors of the Company effective as of the Separation
Date. Executive also agrees and acknowledges that he also resigned
as an employee, Officer and Director of any and all of the
Centerplate Companies effective as of the Separation Date.
13. NO ASSISTANCE IN ACTIONS AGAINST THE RELEASED ENTITIES. Executive
agrees that he will not advise, counsel or otherwise cooperate with
or assist current or former employees or independent contractors of
the Released Entities to pursue any type of legal action or
administrative proceeding against the Released Entities. Executive
further agrees that he will not participate, directly or indirectly,
as a witness, consultant, expert or otherwise, in any action at law,
proceeding in equity or administrative proceeding against the
Released Entities, unless requested to do so in writing by the
Released Entities or unless compelled to do so by force of law. In
the event that Executive believes he is compelled by force of law or
for any other reason to testify or otherwise participate in any
action or proceeding against any of the Released Entities, he agrees
to provide the Released Entities with reasonable advance notice of
the subpoena, judicial notice, or other reason which he believes
compels his participation.
14. CONFIDENTIALITY. Executive agrees that all circumstances and
discussions leading to or relating to the negotiation of this
Agreement, as well as all terms and conditions of this Agreement,
are confidential and he shall not, without the prior written consent
of the Company, individually or jointly, in any manner, publish,
publicize, disclose or otherwise make known or permit or cause to be
made known to any third person such information.
For purposes of this Section, "any third person" includes but is not
limited to any individual, organization, labor union, association or
group, and the news and communication media, including but not
limited to television, radio, newspaper, magazine and the Internet,
or any agents thereof. Nothing in this Section shall be construed to
prohibit the disclosure by Executive of such information as may be
required by law, or by judicial or administrative process or order,
or as is necessary to enforce the provisions of this Agreement;
provided that Executive agrees to provide the Company with
reasonable advance notice of the subpoena, judicial notice, or other
reason which he believes requires such disclosure. Nothing in this
Section shall be construed to prohibit the disclosure of the terms
and conditions of this Agreement by Executive to his spouse or to
any legal or financial consultant retained by him; provided the
persons to whom the disclosure is made agree to be bound by the
confidentiality provisions of this Section and further provided that
Executive agrees to be liable to the Company for any breaches of
confidentiality by any such person. Nothing in this Section or
elsewhere in this Agreement shall be construed to prohibit either
party from stating or announcing that Executive resigned due to
health reasons.
15. NON-DISPARAGEMENT. Executive hereby agrees that he will not in any
way whatsoever or to any extent whatsoever disparage, demean,
deprecate, rebuke,
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condemn, belittle, slander or libel, either orally or in writing,
any of the Released Entities.
16. RETURN OF COMPANY PROPERTY. Executive represents and warrants that
he has returned to appropriate officers of the Company all files
(electronic, hard copy, or otherwise), documents, notes and records
relating to the business of the Company. Executive also represents
and warrants that he has returned all Company property, files
(electronic, hard copy or otherwise), documents, notes and records
and has not kept and is not keeping copies of any such materials.
Nothing in this Section or elsewhere in this Agreement shall
prohibit Executive from retaining the cellular telephone that he has
received from the Company; provided, however, that the Company shall
not be responsible for paying bills for cellular service occurring
after the Separation Date.
17. ARBITRATION. In the event that any future dispute arises among or
between Executive and any of the Released Entities, whether or not
related to or arising from the obligations of the parties set forth
in this Agreement, the complaining party agrees to provide the other
party with written notice of the dispute and fifteen (15) days to
cure it. In the event the dispute continues after fifteen (15) days,
the parties agree to submit any and all such disputes to binding
arbitration. Any such arbitration shall be conducted in accordance
with the American Arbitration Association ("AAA") Rules for
Employment Disputes then in effect, shall take place in Stamford,
Connecticut, and shall be conducted before a single neutral
arbitrator mutually agreed upon by the parties. In any such
arbitration, each party shall be responsible for paying its own
attorneys' fees and costs.
The award rendered by the arbitrator shall be final and binding upon
the parties, and judgment may be entered and enforced in accordance
with the applicable law in any court in Connecticut. Nothing in this
Section or elsewhere in this Agreement, however, shall preclude any
party from seeking or obtaining through state or federal courts any
injunctive relief that is necessary in order to ensure specific
performance or to prevent a breach of this Agreement. Executive and
the Company each expressly consent that the state and federal courts
of Connecticut shall have personal jurisdiction over each of them
for any such injunctive action and for any action to confirm or
vacate an arbitration award.
18. NO ADMISSION OF WRONGDOING. The parties agree that this Agreement is
not, and shall not be considered as, an admission of any wrongdoing
or liability on the part of any of the Released Entities or on the
part of Executive.
19. GOVERNING LAW AND INTERPRETATION. This Agreement shall be governed
and conformed in accordance with the laws of the State of
Connecticut without regard to its conflict of laws provision.
20. SEVERABILITY. Should any provision of this Agreement, excluding
Sections 4 and 5, be declared illegal or unenforceable by any court
of competent jurisdiction, and cannot be modified to be enforceable,
such provision shall immediately become
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null and void, leaving the remainder of this Agreement in full force
and effect. However, if any portion of Sections 4 and 5 are ruled to
be unenforceable for any reason, Executive shall return to the
Company all payments that he has received pursuant to Section 1 of
this Agreement.
21. AMENDMENT. This Agreement may not be modified, altered or changed
except upon express written consent of the Company and Executive
wherein specific reference is made to this Agreement.
22. ENTIRE AGREEMENT. This Agreement sets forth the entire agreement
between the parties with respect to any and all matters described
herein, and fully supersedes any prior agreements or understandings
between the parties with respect to any such matters.
Notwithstanding the foregoing, the parties expressly agree that the
"Certain Restrictions" set forth in Section 6 of their Employment
Agreement dated August 24, 1998 shall remain in full force and
effect and Executive shall remain obligated to comply with all
provisions set forth in that Section 6 and all of its subsections.
Executive acknowledges that he has not relied on any
representations, promises, or agreements of any kind made to him in
connection with his decision to sign this Agreement, except for
those set forth in writing in this Agreement.
23. INJUNCTIVE RELIEF AND TERMINATION OF PAYMENTS AND BENEFITS.
Executive understands and acknowledges that any threatened or actual
breach of Sections 4, 5, 6, 7, 8, 9, 11, 13, 14, 15, or 16 of this
Agreement, or of Section 6 of the parties' Employment Agreement
dated August 24, 1998, would cause irreparable injury to the Company
and that the Company shall be authorized and entitled to obtain,
from any court of competent jurisdiction, preliminary and permanent
injunctive relief to prevent or redress such a threatened or actual
breach. In the event that the Company believes that Executive has
breached any of the Sections enumerated above, the Company shall
have the right to cease providing any and all of the payments and
benefits set forth in Sections 1(a)-(h) of this Agreement. In the
event that such a breach occurs after the Company has provided such
payments and benefits, the Company shall be entitled to recover them
from Executive and/or his estate. In addition, if a court,
arbitrator, or other finder of fact determines that Executive has
breached any of the Sections enumerated above, Executive and/or his
estate agrees to pay the attorneys' fees and costs incurred by the
Company in any such action.
24. ABLE TO UNDERSTAND AGREEMENT. Executive represents and acknowledges
that he is able to read the language, and understand the meaning and
effect of this Agreement. Executive acknowledges that he has been
advised in writing to consult with an attorney about the meaning and
effect of this Agreement before signing it. Executive further
acknowledges that he has received an adequate opportunity to consult
with his attorney before signing this Agreement. Executive further
represents and acknowledges that he is executing this Agreement
voluntarily and knowingly.
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25. TWENTY-ONE DAY CONSIDERATION PERIOD. Executive has been advised in
writing that he has at least twenty-one (21) days to consider this
Agreement and to consult with an attorney prior to execution of this
Agreement. Executive agrees that any modifications, material or
otherwise, made to this Agreement do not restart or affect in any
manner the original twenty-one (21) day consideration period.
Executive may elect to sign and enter into this Agreement, or to
reject this Agreement, at anytime during the twenty-one (21) day
consideration period.
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IN WITNESS WHEREOF, the parties hereto knowingly and voluntarily execute this
Agreement as of the date set forth below:
BY SIGNING THIS AGREEMENT, EXECUTIVE WAIVES ANY RIGHT THAT HE HAS, EVER
HAD OR EVER WILL HAVE TO BRING OR MAINTAIN A LAWSUIT OR MAKE ANY CLAIMS AGAINST
THE RELEASED ENTITIES INVOLVING ANY MATTER ARISING PRIOR TO EXECUTIVE'S SIGNING
OF THIS AGREEMENT. THIS ADDITIONAL NOTICE REGARDING THE EFFECT OF THIS AGREEMENT
IS PROVIDED SOLELY AS A REMINDER AND DOES NOT LESSEN, MODIFY OR ALTER IN ANY WAY
THE SCOPE, MEANING AND EFFECT OF THE GENERAL RELEASE OF CLAIMS AND COVENANT NOT
TO XXX SET FORTH ABOVE IN SECTIONS 4 AND 5.
XXXX X. XXX
/s/ Xxxx X. Xxx
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Xxxx X. Xxx
August 4, 2003
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Date
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VOLUME SERVICES AMERICA HOLDINGS, INC.
By: /s/ Xxxxx X. Xxxxxxxxxx
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Title: Executive Vice President
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Date: August 28, 2003
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