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Exhibit 5
TERMINATION AND GENERAL RELEASE AGREEMENT
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This Termination and General Release Agreement (the "Agreement"), is
entered into as of this 27th day of May, 1997, by and between Xxxxx X. Xxxxxxx
("Executive"), DAKA International, Inc. a Delaware corporation (the "Company")
and Unique Casual Restaurants, Inc., a Delaware corporation ("Newco").
WHEREAS, Executive is currently employed by the Company pursuant to
that certain Employment Contract dated as of October 1, 1996 (the "Existing
Employment Contract"); and
WHEREAS, in connection with a proposed tender offer (the "Offer") being
made by Compass Holdings, Inc. for all outstanding shares of capital stock of
the Company and related transactions as set forth in an Agreement and Plan of
Merger, dated as of May 27, 1997 (the "Merger Agreement"), Executive is entering
into a new employment agreement with the Company to become effective following
the consummation of the Offer (the "New Employment Agreement"). Capitalized
terms used herein and not otherwise defined shall have the meaning set forth in
the Merger Agreement; and
WHEREAS, in connection with the reorganization of the Company, on the
date hereof or as soon as practicable thereafter, Executive is entering into an
Indemnification Agreement by and among Executive and Newco, a newly formed
wholly owned subsidiary of the Company that will be spun-off to the shareholders
of the Company and after the consummation of the Offer will own and operate the
restaurant and other businesses of the Company other than the food service
business as an independent company;
NOW, THEREFORE, in consideration of the mutual promises contained in
this Agreement, Executive and the Company agree as follows:
1. TERMINATION OF EXISTING EMPLOYMENT AGREEMENT; RELEASE OF CLAIMS
(a) Conditioned upon consummation of the Offer and effective as of the
Offer Closing Time, Executive hereby agrees to the termination of the Existing
Employment Contract. Executive shall be paid all base salary accrued through the
Offer Closing Time, based on Executive's final base salary rate of Two Hundred
Sixty-Five Thousand Dollars ($265,000) per year (the "Salary Rate"). This
Agreement shall be null and void if the Offer is not consummated.
(b) Conditioned upon the consummation of the Offer and effective as of
the Offer Closing Time, Executive unconditionally and irrevocably releases and
discharges the Company and its subsidiaries (and their respective directors,
officers, employees, agents, affiliates, stockholders, predecessors, successors
and assigns) (collectively, "DAKA") from any and all charges, complaints,
claims, promises, agreements, causes of action, damages, and debts of
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any nature whatsoever, known or unknown ("Claims"), which Executive now has or
now could claim to have against DAKA that have arisen prior to the Offer Closing
Time. This general release of Claims includes, without implication of
limitation, all Claims related to Executive's employment with the Company and
its predecessors, Executive's activities on behalf of the Company and its
predecessors and the termination of the Existing Employment Agreement with the
Company, including, without limitation, any Claims of wrongful discharge, any
Claims of intentional or negligent misrepresentation, and any Claims of
discrimination under the common law or any statute (including, without
limitation, Title VII of the Civil Rights Act of 1964 and the Age Discrimination
in Employment Act). Executive also waives any Claim for attorneys' fees or
costs.
(c) Conditioned upon the consummation of the Offer and effective as of
the Offer Closing Time, the Company unconditionally and irrevocably releases and
discharges Executive from any and all Claims which it now has or now could claim
to have against Executive that have arisen at any time prior to the date hereof.
This general release of Claims includes, without limitation, all Claims related
to Executive's employment with the Company and its predecessors, Executive's
activities on behalf of the Company and its predecessors and the termination of
the Existing Employment Agreement with the Company. The Company also waives any
Claim for attorneys' fees or costs. Notwithstanding the foregoing, the Company's
release and discharge of Claims does not include any Claims based on intentional
tortious conduct, intentional breach of any fiduciary duty or any other
intentional misconduct (collectively, "Intentional Misconduct Claims") except to
the extent that an Intentional Misconduct Claim is currently known to the
Company. For purposes of this Section 3, a Claim shall be considered to be known
to the Company if and only if one of the Company's officers (other than
Executive) knows of or has reason to believe facts that would give the Company a
basis for initiating legal proceedings against Executive.
2. PAYMENT IN LIEU OF SEVERANCE
In consideration for Executive's agreement to terminate the Existing
Employment Contract and the release set forth in Section 1(b) hereof and in
light of the fact that the New Employment Agreement in certain significant
respects less advantageous to Executive that the Existing Employment Agreement,
Newco hereby agrees to pay to Executive an aggregate sum of Five Hundred
Thousand Dollars ($500,000), payable in periodic installments over a period of
three (3) years commencing January 1, 1998 at regular intervals consistent with
Newco's normal business practices of paying salary compensation to senior
executives.
3. INTERPRETATION AND AMENDMENT
This Agreement shall be governed by and construed in accordance with
the laws of the Commonwealth of Massachusetts, without regard to any
conflicts-of-law principle that might refer the governance or the construction
of this Agreement to the laws of another jurisdiction. This Agreement may be
modified only by a written agreement signed by Executive and an
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authorized representative of the Company and Newco.
4. WAIVER
No waiver of any provision hereof shall be effective unless made in
writing and signed by the waiving party. The failure of either party to require
the performance of any term or obligation of this Agreement, or the waiver by
either party of any breach of this Agreement, shall not prevent any subsequent
enforcement of such term or obligation or be deemed a waiver of any subsequent
breach.
5. SUCCESSORS; BINDING AGREEMENT
Newco shall require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all of the
business or assets of Newco to expressly assume and agree to perform this
Agreement to the same extent that would be required if no such succession had
taken place. This Agreement may not be assigned by Executive without the prior
written consent of Newco and shall be binding on his heirs, executors and
administrators.
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IN WITNESS WHEREOF, this Agreement has been executed by the Company and
Newco, by their duly authorized officer, and by Xxxxx X. Xxxxxxx, as of the date
first set forth above.
DAKA INTERNATIONAL, INC.
By: /s/ Xxxxxxx X. Xxxxxxxxx
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Xxxxxxx X. Xxxxxxxxx
Chairman and Chief Executive Officer
UNIQUE CASUAL RESTAURANTS, INC.
By: /s/ Xxxxxxx X. Xxxxxxxxx
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Xxxxxxx X. Xxxxxxxxx
Chairman and Chief Executive Officer
EXECUTIVE:
/s/ Xxxxx X. Xxxxxxx
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Xxxxx X. Xxxxxxx
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