EXHIBIT 10.5
TERMINATION AGREEMENT
This Agreement (the "Agreement") is made as of this 1st day of May 1998, by
and between Einstein/Noah Bagel Corp., a Delaware corporation (hereinafter
referred to as the "Company"), and Xxxxxxx X. Xxxxxx (hereinafter referred to as
"Xxxxxx").
RECITALS
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Xxxxxx has served as President, and a director, of, the Company. Xxxxxx
resigned as President and as a director of the Company effective May 1, 1998.
In consideration of the mutual covenants hereinafter set forth and in full
satisfaction of any claim Xxxxxx 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
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Company may have to Xxxxxx relating in any way to his employment or engagement
with, and separation from, the Company, the Company agrees to pay to Xxxxxx (a)
the sum of $350,000, $50,000 of which shall be payable upon execution and
delivery of this Agreement and $300,000 of which shall be payable in twenty-six
(26) substantially equal installments over the one-year period commencing upon
the date 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 will also reimburse Xxxxxx'x cost of continuing his
health insurance under COBRA until the earlier of twelve months from the date
hereof or the date he is covered under another employer-paid health insurance
plan.
2. CONFIDENTIALITY. Xxxxxx acknowledges that he is a party to the
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Confidentiality and Non-Compete Agreement dated as of the date hereof, a copy
of which is attached hereto as Schedule A (the "Confidentiality Agreement") and
agrees to comply therewith.
3. INVENTIONS, DESIGNS AND PRODUCT DEVELOPMENTS. All inventions,
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innovations, designs, ideas and product developments developed or conceived by
Xxxxxx, solely or jointly with others, whether or not patentable or
copyrightable, at any time during the employment or engagement of Xxxxxx 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 Xxxxxx'x right, title and interest therein, shall be the exclusive
property of the Company. Xxxxxx 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, Xxxxxx 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 Xxxxxx for all reasonable expenses incurred by him in compliance with
the provisions of this Section. Xxxxxx shall not be required to devote more than
ten hours of his time in any calendar year to perform his obligations under this
Section 3.
4. COVENANT RESTRICTING SOLICITATION. For a period of two years from the
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date hereof Xxxxxx 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 Xxxxxx'x date of termination.
5. DISPARAGEMENT. Xxxxxx agrees not to disparage, or otherwise speak
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negatively of, the Company or any of the Company Released Parties (as
hereinafter defined) and the Company agrees not to disparage, or otherwise speak
negatively, of Xxxxxx. The Company further agrees to use reasonable best
efforts to cause its directors not to disparage, or otherwise speak negatively,
of Xxxxxx.
6. EQUITABLE RELIEF. Each of the parties acknowledges that the
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restrictions contained in the Confidentiality Agreement and Sections 3, 4 and 5
are reasonable and necessary to protect the legitimate interests of the Company
and Xxxxxx, 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 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.
7. STOCK OPTIONS. (a) Xxxxxx has been granted stock options on shares of
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the Company, as set forth on Schedule B attached hereto (collectively, the
"Options"). The Options shall continue to vest for a period of one year from
the date hereof (except that the options to purchase 6,797 shares granted on
July 25, 1995, which vest on July 25, 1999 shall continue to vest for a period
of two years) 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. Notwithstanding the foregoing, such options shall terminate
immediately and be of no further force and effect upon any material breach by
Xxxxxx of
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the Confidentiality Agreement or Sections 3, 4 or 5 hereof. In the event that
the Company intends to terminate Xxxxxx'x options pursuant to this Section 7(a),
the Company shall first provide Xxxxxx written notice thereof, which notice
shall set forth in reasonable detail Xxxxxx'x breach of covenants hereunder.
Upon receipt of such notice Xxxxxx shall have ten (10) days in which to cure any
such alleged breach which is capable of being cured, but the Options shall not
be exercisable during such ten (10) day period unless the alleged breach is
capable of being cured during such period.
(b) Xxxxxx shall not be eligible for any additional stock option
grants after the date hereof.
8. XXXXXX REPRESENTATIONS. Xxxxxx represents and warrants to the
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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 Xxxxxx is a party or
by which he is bound.
9. WAIVER. Failure by either party to insist upon strict compliance
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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.
10. SEVERABILITY. Each section, paragraph, term and provision of this
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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. Xxxxxx 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 pubic 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.
11. RELEASES. (a) In partial consideration for the termination payments
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provided for in Section 1 hereof, Xxxxxx 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
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"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. Xxxxxx
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 Title VII of the
Civil Rights Act of 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 Xxxxxx, 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 Xxxxxx, 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 Xxxxxx, if required by law, for expenses of any litigation
advanced to him in defense of such litigation.
12. SUCCESSORS AND ASSIGNS. This Agreement shall inure to the benefit of
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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 Xxxxxx, except that duties and responsibilities
of Xxxxxx under this Agreement are personal to him, and are not subject to
assignment or transfer by him.
13. ENTIRE AGREEMENT. This Agreement contains the entire agreement between
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the parties concerning the termination of Xxxxxx'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.
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14. ARBITRATION. Any controversy, claim or dispute between the parties
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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 or 5 of this Agreement. Any arbitration will be
conducted in Denver, Colorado by a panel of three neutral arbitrators.
15. CONFIDENTIALITY AND PUBLICITY. (a) The parties agree to maintain the
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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 Xxxxxx 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 Xxxxxx'x name that the Company deems necessary, based on
the advice of its counsel, with or without his review.
(c) Xxxxxx 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.
16. FUTURE COOPERATION. Xxxxxx agrees to cooperate in good faith with the
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Company in any third-party litigation instituted by or against the Company with
respect to matters which occurred during the period in which Xxxxxx was employed
by or served as a director or officer of the Company. The Company agrees to
reimburse Xxxxxx or reasonable expenses incurred by him in connection with such
cooperation with respect to such matters. Xxxxxx shall not be required to devote
more than ten hours of his time in any calendar year commencing after 1998 to
perform his obligations under this Section 16, provided, however, that nothing
herein shall limit the right of the Company to compel
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Xxxxxx to testify or provide documents or information in any matter pursuant to
subpoena or other legal means, regardless of the amount of time required to be
expended by him in connection therewith.
17. NOTICES. All notices, request, demands, and other communications
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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: Einstein/Noah Bagel Corp.
00000 Xxxxxx Xxxx Xxxxxxx
Xxxxxx, XX 00000
Attention: General Counsel
Facsimile: (000) 000-0000
to Employee: Xxxxxxx X. Xxxxxx
c/o Xxxxx Xxxxxxxx
Triune, Inc.
0000 Xxxxxxxx Xxxx, Xxxxx 000
Xxxxxxx, XX 00000
Facsimile: (000) 000-0000
18. GOVERNING LAW. This Agreement and the rights and obligations of the
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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.
19. SURVIVAL. The parties acknowledge and agree that the covenants
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contained in this Agreement and the Confidentiality Agreement shall survive the
termination of Xxxxxx'x employment with the Company.
20. ATTORNEYS' FEES. In the event any violation of any term of this
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Agreement or the Confidentiality Agreement is asserted by any party hereto, the
prevailing party shall be entitled to recover from the other party its
reasonable costs and attorneys' fees, and if the Company is the prevailing
party, the Company will be entitled to recover such amounts by setoff against
amounts otherwise due Xxxxxx to recover such amounts.
21. WAIVER OF LOCKUP AGREEMENT. The Company hereby waives the restriction
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on the sale of 95,385 shares of common stock of ENBC owned by Xxxxxx set forth
in the letter agreement attached hereto as Schedule C and agrees that no further
consent of the Company shall be required thereunder.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement the day
and year first above written.
EMPLOYEE: EINSTEIN/NOAH BAGEL CORP.
By: /s/ Xxxx X. Xxxxxxx
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/s/ Xxxxxxx X. Xxxxxx Its: Senior Vice President
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Xxxxxxx X. Xxxxxx
5-1-98
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