EXHIBIT 99.5
EMPLOYEE TERMINATION, CONSULTING
AND NON-COMPETITION AGREEMENT
Employee Termination, Consulting and Non-Competition Agreement (this
"Agreement"), dated as of February 9, 2000, by and between Xxxxxx'x Seafood
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Restaurants, Inc., a Delaware corporation ("Purchaser"), and Xxxxxx X. Xxxxxxxxx
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(the "Consultant").
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W I T N E S S E T H:
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WHEREAS, Purchaser, LSR Acquisition Corp., a Delaware corporation (the
"Merger Sub"), and Rainforest Cafe, Inc., a Minnesota corporation (the
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"Company"), have entered into an Agreement and Plan of Merger dated as of
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February 9, 2000 (as the same may be amended from time to time, the "Merger
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Agreement");
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WHEREAS, the Consultant desires to perform services for Purchaser in
accordance with and subject to the terms and conditions provided herein;
WHEREAS, the Consultant desires to be bound by the noncompetition,
nonsolicitation, confidentiality and other terms and provisions contained in
this Agreement; and
WHEREAS, the Consultant acknowledges that Purchaser would not have
entered into the Merger Agreement absent the transactions contemplated by this
Agreement.
NOW, THEREFORE, in consideration of the premises and the respective
representations, warranties, covenants and agreements of the parties herein
contained, and intending to be legally bound hereby, the parties hereto agree as
follows:
ARTICLE I
CERTAIN MATTERS
Section 1.1 Effectiveness. This Agreement shall become effective
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only upon consummation of the Merger at the Effective Time (as such capitalized
terms are defined in the Merger Agreement). If the Merger Agreement is
terminated for any reason, then this Agreement shall terminate and be of no
force or effect.
Section 1.2 Forfeiture of Company Option. Consultant agrees that, in
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consideration of compensation received hereunder, any and all Company Options
(as defined in the Merger Agreement) beneficially owned by the Consultant shall
be forfeited as of the Effective Time and the Consultant shall have no further
rights with respect to such Company Options; provided, however, that this
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Section 1.2 shall not apply with respect to 76,500 Company Options which have an
exercise price less than the closing market price of shares of Company common
stock on NASDAQ on the last trading day immediately prior to the date hereof.
Section 1.3 Compensation and Related Matters.
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(a) Consulting Fee. In consideration of the covenants of the
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Consultant contained in this Agreement, Purchaser shall pay to the Consultant
(i) a one-time fee equal to one million four hundred thousand dollars
($1,400,000) at the Closing (as such term is defined in the Merger Agreement)
and (ii) a one-time fee in an amount equal to one hundred thousand dollars
($100,000) on the day which is ninety-days following the Closing Date.
(b) Business Expenses. The Consultant will be reimbursed by
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Purchaser for all ordinary and reasonable business expenses incurred by him in
connection with his performance of consulting services hereunder upon submission
by the Consultant of receipts and other documentation as may be requested by
Purchaser.
Section 1.4 Setoff of Payments under this Agreement. Notwithstanding
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anything to the contrary contained in this Agreement, any amounts payable by
Purchaser to the Consultant under this Agreement
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(including pursuant to Section 1.3 hereof) shall be offset (i) first, against
any and all amounts of interest due or owing to the Company by Consultant under
the Loan Agreement, and (ii) second, against any and all amounts of principal
outstanding under the Loan Agreement. For purposes of this Agreement, the term
"Loan Agreement" means the Secured Demand Note dated November 3, 1999, by
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Consultant in favor of the Company, evidencing indebtedness in the amount of
$1,700,000.
Section 1.5 Termination of Employment. Effective as of the Effective
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Time, the Consultant acknowledges and agrees that his employment with the
Company shall be terminated, and the Company shall not owe Consultant any
monies, securities, severance payments or other consideration with respect to
his terminated employment (other than as provided in the proviso to Section 1.2
hereof and other than amounts payable under this Agreement).
ARTICLE II
CONSULTING
Section 2.1 Engagement as Consultant. Purchaser hereby agrees to
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engage the Consultant, and the Consultant hereby agrees to perform services for
Purchaser, on the terms and conditions set forth herein.
Section 2.2 Term. The term (the "Term") of the covenants contained
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in Article II of this Agreement is for the twenty-four month period commencing
on the Effective Time, subject to earlier termination pursuant hereto.
Section 2.3 Duties and Reporting Relationship. From time to time
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during the Term, the Consultant shall perform such services relating to the
business of Purchaser as the Consultant and the President of the Purchaser (or
his designee) shall mutually agree. The Consultant shall in no event be required
to provide more than ten (10) hours per week of consulting services to Purchaser
for the first three months of the Term, and no more than twenty (20) hours per
month of consulting services to Purchaser thereafter, except in each case as
agreed to by the Consultant. The scheduling of such time shall be at the
Consultant's sole discretion. Except as provided in Article IV hereof, Purchaser
acknowledges
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that the Consultant is permitted to pursue other activities, whether of a
personal or business nature, and, accordingly, may not always be immediately
available to Purchaser.
Section 2.4 Place of Performance. The Consultant shall perform his
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duties and conduct his business at such locations as are reasonably acceptable
to him; provided, however, that, as mutually agreed, the Consultant will be
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available to travel domestically to meet from time to time with representatives
of Purchaser.
ARTICLE III
TRANSITION MATTERS
Section 3.1 Transition Matters. The Consultant shall render such
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services to Purchaser as the Consultant and the President of the Purchaser (or
his designee) shall mutually agree with respect to (i) Purchaser and Company
business matters relating to the transition period prior to and following the
Merger and (ii) integration of the business of the Company with the business of
Purchaser.
ARTICLE IV
NON-COMPETITION
Section 4.1 Reasonableness of Provisions.
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(a) The Consultant acknowledges and agrees that the provisions
contained in Article IV of this Agreement are reasonable with respect to their
duration, geographical area and scope. Without limiting the generality of the
foregoing, the Consultant further acknowledges and agrees that any and all of
the provisions of Article IV of this Agreement are reasonable and necessary to
protect the legitimate interests of the Purchaser. For purposes of this Article
IV only, the term "Purchaser" shall mean any and all of Purchaser and its
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subsidiaries from time to time (including, without limitation, the Surviving
Corporation (as such term is defined in the Merger Agreement) from and after the
Effective Time).
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(b) The Consultant acknowledges and agrees that the food service
and theme restaurant business of the Purchaser (as such business is conducted as
of the date of this Agreement and may be conducted from time to time in the
future, the "Business") is intensely competitive and that the Consultant has had
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access to, has and may in the future have knowledge of confidential information
of the Purchaser, including, but not limited to, the identity of the Purchaser's
franchisees and other persons with whom Purchaser has business relationships,
the identity of the representatives of such persons with whom the Purchaser has
dealt, information concerning the creation or development of products offered by
Purchaser, demographic and other information related to actual and targeted
customers of Purchaser, computer software applications and other programs,
personnel information, intellectual property and other trade secrets
(collectively, the "Confidential Information").
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(c) The Consultant acknowledges and agrees that the direct or
indirect disclosure by the Consultant of any Confidential Information to
existing or potential competitors of the Purchaser or the Business would place
the Purchaser at a competitive disadvantage and would do serious damage,
monetary and otherwise, to the Purchaser and the Business.
(d) The Consultant acknowledges and agrees that the Consultant's
engaging in any of the activities prohibited by this Agreement may constitute
improper appropriation or use of the Confidential Information or both. The
Consultant acknowledges the trade secret status of the Confidential Information
and that the Confidential Information constitutes a protectible business
interest of Purchaser.
Section 4.2 Noncompetition.
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(a) During the Restricted Period, the Consultant shall not
(either directly or indirectly, through Representatives or otherwise), anywhere
in the world, engage in, invest in, own, manage, operate, finance, control, or
participate in the ownership, management, operation, financing, or control of,
be associated with as an officer, employee, partner, director or otherwise with,
or aid or assist any other person in the conduct of, any restaurant, food
service or
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restaurant business (i) with an environmental, jungle, forest, zoological,
animal (including living, mannequin or robotic animals) or aquarium theme, (ii)
with a name, logo, trade dress or other Company Intellectual Property (as such
term is defined in the Merger Agreement) used by, or similar to the name, logo,
trade dress or other Company Intellectual Property of, the Company (including,
without limitation, the "Rainforest Cafe" name, logo, trade dress and other
Company Intellectual Property), or (iii) (A) located at a theme park owned,
managed, leased or operated in whole or in part by Disney or any one or more of
its subsidiaries (each, a "Disney Theme Park") during the period from and after
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the date hereof through to and including the first anniversary of the Closing
Date and (B) (x) within a one-quarter mile radius of any Rainforest Cafe at any
Disney Theme Park during the period from the first anniversary of the Closing
Date through to and including the fifth anniversary of the Closing Date and (y)
if outside a one-quarter mile radius during the period from the first
anniversary of the Closing Date through to and including the fifth anniversary
of the Closing Date, only with the prior written approval of Purchaser (such
approval not to be unreasonably withheld or delayed); provided, however, that
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notwithstanding anything to the contrary in this Section 4.2(a), the Consultant:
(i) may purchase or otherwise acquire up to ten percent (10%) of any class of
securities of any person (but without otherwise participating in the activities
of such person) if such securities are listed on any national securities
exchange or NASDAQ; and (ii) may, pursuant to license agreements to be entered
into with the Company (which shall contain financial terms and conditions
consistent with other license agreements entered into by the Company for
international Rainforest Cafe restaurants), develop, own and operate Rainforest
Cafe restaurants in New Zealand, Australia and Germany, provided that the
exclusion contained in this clause (ii) shall not be available to Consultant if
the Consultant and the Company do not enter into definitive written license
agreements with respect thereto within one year following the Closing Date,
provided further that if prior to the time a definitive license agreement is
entered into between the Company and Consultant with respect to any one or more
of New Zealand, Australia and Germany, Purchaser receives a bona fide offer with
respect to any such country, then Purchaser shall notify Consultant thereof and,
not withstanding the immediately preceding proviso,
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Consultant shall have until the earlier of (x) 90 days following Consultant's
receipt of notice of such offer and (y) the first anniversary of the Closing
Date, to enter into a definitive written license agreement with the Company with
respect to such country.
(b) During the Restricted Period, the Consultant shall not
(either directly or indirectly, through Representatives or otherwise), engage
in, invest in, own, manage, operate, finance, control, or participate in the
ownership, management, operation, financing, or control of, be associated with
as an officer, employee, partner, director or otherwise with, or aid or assist
any other person in the conduct of, any restaurant, food service or restaurant
business (i) within a two mile radius of any Rainforest Cafe identified on
Exhibit A hereto during the period from and after the date hereof through to and
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including the second anniversary of the Closing Date and (ii) within a one mile
radius of any Rainforest Cafe identified on Exhibit A hereto during the period
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after the second anniversary of the Closing Date through to and including the
fifth anniversary of the Closing Date; provided, however, that notwithstanding
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anything to the contrary in this Section 4.2(b), (A) the Consultant may purchase
or otherwise acquire up to ten percent (10%) of any class of securities of any
person (but without otherwise participating in the activities of such person) if
such securities are listed on any national securities exchange or NASDAQ, (B)
the Consultant's involvement in any manner with the "Redstone Grill" restaurant
concept within the forementioned radius with respect to the Mall of America
shall not constitute a violation of this Section 4.2(b), and (C) the Consultant
may engage in, invest in, own, manage, operate, finance, control, or participate
in the ownership, management, operation, financing, or control of, any food
service or restaurant business (1) which has a restaurant inside the applicable
forementioned radius and which either (I) has been in operations for at least
twelve months at the time of his involvement or (II) does not constitute the
primary asset of such food service or restaurant business (provided further that
the exclusions contained in clauses (C)(1)(I) and (C)(1)(II) shall not be
available to Consultant with respect to any Disney Theme Park, (2) which is
located on property currently owned by Lakes Gaming Inc. in the vicinity of the
MGM Grand Hotel in Las Vegas, Nevada, or (3) which is located in a casino
managed by Lakes Gaming Inc.; and (C) the
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Consultant shall not be required to reduce the extent of, divest or terminate
his involvement in any of the entities listed on Exhibit B hereto.
Section 4.3 No Disparagement or Communication. Consultant shall not
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make, or cause to be made, any statement, observation or opinion, or communicate
any information (whether oral or written) to the press, media or any third
party, that (i) disparages the reputation or business of Purchaser, the Merger
or the other transactions contemplated by the Merger Agreement, or (ii)
discusses or otherwise relates to the Rainforest Cafe concept, its creation, or
the historical or ongoing business of the Company or Rainforest Cafe, or new
restaurant openings; provided, however, that nothing in clause (ii) of this
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Section 4.3 shall prohibit Consultant from making factual statements relating to
the Company or Rainforest Cafe with respect to the period of time between its
creation and the Merger in connection with a personal interest article about the
Consultant. In the event that the Consultant is questioned, or is asked to
comment or respond to a statement or inquiry from any press or media which
relates, directly or indirectly, to business activities of the Company or
Rainforest Cafe or the opening of a new restaurant, then Consultant shall
unequivocally state at the outset of any such interaction that he is no longer
employed by the Company and that all inquiries relating to the Company or
Rainforest Cafe should be referred to Purchaser.
Section 4.4 Confidentiality.
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(a) Except as and only to the extent set forth in Section 4.4(b)
hereof, the Consultant shall, and shall cause the Control Representatives of
such Consultant to, and shall use his reasonable best efforts to ensure that the
Other Representatives of such Consultant shall, hold in strict confidence, and
not (directly or indirectly) make known, or disclose, furnish or otherwise make
available to any person or business, any of the Confidential Information.
(b) Notwithstanding Section 4.4(a) hereof:
(i) the Consultant shall not have any obligation under
Section 4.4(a) with respect to, and only to the extent that, any
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Confidential Information becomes generally known or is publicly disclosed
or publicly available, in each case, through disclosure other than by the
Consultant or the Representatives of such Consultant; and
(ii) in the event that the Consultant or any of its
Representatives are requested or required (by oral questions,
interrogatories, requests for information or documents, subpoena, civil
investigative demand, any investigation by any Governmental Authority (as
defined in the Merger Agreement) or arbitration tribunal or otherwise) to
disclose any of the Confidential Information, the Consultant shall, to the
extent permitted under law, notify the Purchaser promptly orally and in
writing so that the Purchaser may seek a protective order or other
appropriate remedy. In such an event, the Consultant (on its own behalf and
on behalf of each of the Representatives of such Consultant) (x) agrees
that only such portion of the Confidential Information shall be disclosed
which is legally required to be so disclosed or which the Consultant or the
Representative of such Consultant is advised by counsel as being reasonably
likely to be legally required to be so disclosed and (y) shall exercise
reasonable best efforts to obtain reliable assurance that confidential
treatment will be accorded such disclosed Confidential Information.
Section 4.5 Nonsolicitation.
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(a) During the Restricted Period, the Consultant shall not
(either directly or indirectly through Control Representatives, circulars,
advertisements or otherwise), whether on behalf of the Consultant or on behalf
of any other person:
(i) solicit (or cause, or authorize, to be solicited),
divert or otherwise attempt to obtain the business of any person who is, or
has at any time within three (3) years prior to the date of such action
been, a franchisee, licensee or business
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relation of the Purchaser for any purpose which is competitive with the
Business;
(ii) disturb or attempt to disturb in any adverse respect any
business relationship between any person and the Purchaser;
(iii) seek or attempt to persuade, induce or encourage any
director, officer, employee, consultant, advisor or other agent of the
Purchaser to discontinue his or her status or employment therewith or to
become employed or otherwise engaged in a business of the same or of a
similar nature to the Business;
(iv) solicit or employ, or otherwise hire or engage as an
employee, independent contractor, consultant, advisor or otherwise, any
person employed by, under exclusive contract with, providing exclusive
services to, or otherwise exclusively engaged by Purchaser; and
(v) solicit or employ, or otherwise hire or engage as an
employee, independent contractor, consultant, advisor or otherwise, any
person at any time within six (6) months following the date of cessation of
employment of such person or the termination of such person's other status,
as the case may be, with the Purchaser.
Section 4.6 Additional Acknowledgments and Agreements. In addition
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to the foregoing, Consultant acknowledges and agrees that he will not make any
use whatsoever of any Company Intellectual Property for any reason whatsoever.
Consultant also acknowledges and agrees that he has no right, title, or interest
in, or to any Company Intellectual Property. Notwithstanding the foregoing, to
the extent that Consultant created any Company Intellectual Property, Consultant
hereby assigns to Company all of his right, title and interest (if any) in, to
and under, all Company Intellectual Property retroactive to the date he created
such Company Intellectual Property.
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Section 4.7 Term.
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(a) Unless otherwise expressly limited by the terms hereof, all
covenants contained in Sections 4.3, 4.4 and 4.6 of this Agreement shall remain
in effect and survive indefinitely.
(b) For purposes of Article IV of this Agreement, the term
"Restricted Period" means the period commencing on the Closing Date through to
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the fifth annual anniversary of the Closing Date.
Section 4.8 Definitions. For purposes of Article IV of this
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Agreement, the following terms shall have the following meanings:
(a) "affiliate" of any person means another person that
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directly or indirectly controls, is controlled by, or is under common control
with, such first person, where "control" means the possession, directly or
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indirectly, of the power to direct or cause the direction of the management
policies of a person, whether through the ownership of voting securities, by
contract, as trustee or executor, or otherwise. For the purposes of this
Agreement, the term "affiliated" has a meaning correlative to the foregoing;
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(b) "Control Representative" of any person means the
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Representatives of such person which are controlled (as such term is defined in
the definition of "affiliate" above) by such person;
(c) "Other Representative" of any person means all
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Representatives of such person other than the Control Representatives of such
person;
(d) "person" means any natural person, firm, partnership,
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association, corporation, company, limited liability company, unincorporated
organization, joint venture, trust, self-regulatory organization, business
trust, Governmental Authority or other entity;
(e) "Representative" of any person means such person's
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subsidiaries and affiliates and the directors, officers, employees, agents,
affiliates, consultants, advisors and other representatives of such
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person and each of such person's subsidiaries and affiliates; and
(f) "subsidiary" of any party means (x) a corporation, a
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majority of the voting or capital stock of which is as of the time in question
directly or indirectly owned by such party and (y) any other partnership, joint
venture, association, joint stock company, trust, unincorporated organization or
similar entity, in which such party, directly or indirectly, owns a majority of
the equity interest thereof or has the power to elect or direct the election of
a majority of the members of the governing body of such entity or otherwise has
control over such entity (e.g., as the managing partner of a partnership).
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ARTICLE V
MISCELLANEOUS
Section 5.1 Independent Contractor. During the term of this
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Agreement, the Consultant shall be an independent contractor and not an employee
of Purchaser.
Section 5.2 Successors; Binding Agreement. This Agreement and all
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rights of the parties hereunder shall inure to the benefit of and be enforceable
by each party's personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees.
Section 5.3 Notices. All notices and other communications hereunder
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shall be in writing and shall be deemed given if delivered personally,
telecopied (which is confirmed) or sent by an overnight courier service to the
parties at the following addresses (or at such other addresses for a party as
shall be specified by the notice):
If to Purchaser:
Xxxxxx'x Seafood Restaurants, Inc.
0000 Xxxx Xxx Xxxx., Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: Xxxxxx X. Xxxxxxxxxx
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
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If to the Consultant:
Xxxxxx X. Xxxxxxxxx
0000 Xxxxxxxxxx Xxxxxx Xxxxx
Xx. Xxxxx Xxxx, Xxxxxxxxx 00000
Telephone No.: (000) 000-0000
Section 5.4 Specific Performance. The Consultant recognizes and
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agrees that if for any reason any of the provisions of this Agreement are not
performed in accordance with their specific terms or are otherwise breached,
immediate and irreparable harm or injury would be caused to the Purchaser for
which money damages would not be an adequate remedy. Accordingly, the Consultant
agrees that, in addition to any other available remedies, the Purchaser shall be
entitled to an injunction restraining any violation or threatened violation of
the provisions of this Agreement without the necessity of posting a bond or
other form of security. In the event that any action should be brought in equity
to enforce the provisions of this Agreement, the Consultant shall not allege,
and the Consultant hereby waives the defense, that there is an adequate remedy
at law.
Section 5.5 Severability; Modification. If any provision(s) of this
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Agreement shall for any reason be invalid or unenforceable in any jurisdiction,
such provision(s) shall be ineffective in such jurisdiction to the extent of
such invalidity or unenforceability without invalidating or rendering
unenforceable the remaining provisions hereof, and any such invalidity or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provisions in any other jurisdiction. Without limiting the
generality of the immediately preceding sentence, in the event that a court of
competent jurisdiction determines that the provisions of this Agreement would be
unenforceable as written because they cover too extensive a geographic area, too
broad a range of activities, or too long a period of time, or otherwise, then
such provisions will automatically be modified to cover the maximum geographic
area, range of activities, and period of time as may be enforceable, and, in
addition, such court is hereby expressly authorized so to modify this Agreement
and to enforce it as so modified.
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Section 5.6 Interpretation. The parties have participated jointly in
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the negotiation and drafting of this Agreement. Consequently, in the event an
ambiguity or question of intent or interpretation arises, this Agreement shall
be construed as if drafted jointly by the parties hereto, and no presumption or
burden of proof shall arise favoring or disfavoring any party by virtue of the
authorship of any provisions of this Agreement.
Section 5.7 Assignment. Neither this Agreement, nor any rights,
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interests or obligations hereunder, may be directly or indirectly assigned,
delegated or transferred by any party to this Agreement, in whole or in part, to
any other person without the prior written consent of the other party hereto;
provided, however, that the Purchaser may freely assign (whether by operation of
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law or otherwise) all or a portion of its rights under this Agreement.
Section 5.8 Miscellaneous. No provisions of this Agreement may be
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modified, waived or discharged unless such waiver, modification or discharge is
agreed to in writing signed by the parties hereto. No waiver by a party hereto
at any time of any breach by the other party hereto of, or compliance with, any
condition or provision of this Agreement to be performed by such other party
shall be deemed a waiver of similar or dissimilar provisions or conditions at
the same or at any prior or subsequent time. No agreements or representations,
oral or otherwise, express or implied, with respect to the subject matter hereof
have been made by the parties which are not set forth expressly in this
Agreement. This Agreement shall be governed and construed in accordance with the
laws of the State in which the Purchaser is incorporated on the date hereof,
without giving effect to the principles of conflicts of law thereunder or of any
other jurisdiction.
Section 5.9 Contents of Agreement. This Agreement sets forth the
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entire agreement of the parties hereto with respect to the matters contemplated
hereby. This Agreement supersedes all prior agreements and understandings among
the parties hereto relating to the subject matter hereof.
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Section 5.10 Section Headings and Gender. All Section headings and
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the use of a particular gender are for convenience only and shall in no way
modify or restrict any of the terms or provisions hereof.
Section 5.11 Counterparts. This Agreement may be executed in
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counterparts, each of which shall be deemed to be an original but both of which
together will constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have executed this Employee
Termination, Consulting and Non-Competition Agreement as of the date and year
first above written.
/s/ Xxxxxx X. Xxxxxxxxx
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Xxxxxx X. Xxxxxxxxx
XXXXXX'X SEAFOOD
RESTAURANTS, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
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Name: Xxxxxx X. Xxxxxxxx
Title: Chairman, President and
Chief Executive Officer
