EXHIBIT 10.14
AMENDED AND RESTATED
EXECUTIVE EMPLOYMENT AGREEMENT
This Amended and Restated Executive Employment Agreement (the "Agreement")
is made as of the 11th day of February, 2000, by and between Einstein/Noah Bagel
Corp., a Delaware corporation (the "Company"), and Xxxxxx X. Xxxxxxxx (the
"Executive").
Recitals
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WHEREAS, Executive is currently serving as Chairman, Chief Executive
Officer and President of the Company; and
WHEREAS, to assure the continued services of the Executive in such
capacities, the Company has entered into an employment agreement with the
Executive; and
WHEREAS, the Company and the Executive desire to amend and restate the
Agreement.
Covenants
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NOW, THEREFORE, in consideration of the premises and the mutual covenants,
terms and conditions hereinafter set forth, and for other good and valuable
consideration, the receipt and sufficiency of which are specifically
acknowledged, the parties hereto hereby agree as follows:
Section 1. Employment. The Company hereby employs the Executive as
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Chairman, Chief Executive Officer and President for a term commencing on the
date hereof and continuing until February 11, 2002, such term to be extended by
one additional year on each anniversary of the date hereof (the "Term" or
"Employment Period"), unless the Term is earlier terminated pursuant to the
provisions hereof. Executive hereby accepts employment from the Company.
Section 2. The Executive's Duties.
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(a) The Executive hereby agrees to serve the Company faithfully and
honestly and to use his best efforts and ability on behalf of the Company in the
position of Chairman, Chief Executive Officer and President, and as a member of
the Board of Directors of the Company, to discharge the duties as Chairman,
Chief Executive Officer and President and to perform such duties and services of
an executive, administrative and managerial nature, which duties are consistent
with his position in the Company, as shall be specified and designated from time
to time by the Board of Directors of the Company in connection with the business
and activities of the Company.
(b) The Company hereby agrees that, in his capacities as a director and
officer of the Company during the term of this Agreement, the Executive shall be
indemnified by the Company (including without limitation by advancement of
expenses) to the fullest extent permitted from time to time by applicable law.
(c) During the term hereof, the Executive shall be employed by the Company
on a full-time basis and shall perform such duties and responsibilities on
behalf of the Company consistent with Executive's position of Chairman, Chief
Executive Officer and President as may be designated from time to time by the
Board of Directors. During the term hereof, the Executive shall devote his full
business time and his best efforts, business judgment, skill and knowledge
exclusively to the advancement of the business and interests of the Company and
its affiliates and to the discharge of his duties and responsibilities
hereunder. The Executive shall not engage in any other business activity or
serve in any industry, trade, professional, governmental or academic position
during the term of this Agreement, except as may be expressly approved in
writing, which approval shall not be unreasonably withheld, by the Board, as the
Company encourages participation by the Executive in community and charitable
activities generally considered to be in the public interest and the Company's
interest. In addition, the Company recognizes that the Executive may make
passive investments which will not interfere with his commitments and duties to
the Company.
(d) The Executive agrees to observe and comply with all lawful written
rules, regulations, policies and practices adopted by the Company as they now
exist and as they may be duly and properly adopted or modified from time to
time.
Section 3. Compensation and Benefits. In consideration for all services
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rendered by the Executive to the Company pursuant to this Agreement, including
services as an officer, director, member of any committee or in the performance
of other like duties consistent with his position of Chairman, Chief Executive
Officer and President assigned to him by the Board of Directors of the Company,
the Company hereby agrees to pay compensation to the Executive as follows:
(a) Executive shall be paid a base salary at a rate of $500,000 (subject
to any increases as may be determined by the Compensation Committee of the Board
of Directors at its discretion), payable in equal bi-weekly installments in
arrears.
(b) The Executive shall participate in an annual bonus plan with a target
payout equal to 50% of the Executive's base salary and which shall be based upon
the Company's performance relative to targets generally applicable in
determining bonus compensation payable to senior executives of the Company.
(c) The Executive shall participate in the Company's Amended and Restated
1997 Stock Option Plan (or such other stock option plan as may hereafter be
adopted to provide for the grant of stock options to executive employees of the
Company), pursuant to which the Executive shall receive option grants at the
same time as other senior executives of the Company and shall in any event
receive an option grant at least once each calendar year, beginning in calendar
year 1999, of a number of shares not less than 150% of the highest number of
shares subject to a regular annual option grant made to any other officer of the
Company.
(d) Executive shall be entitled to first class air travel and lodging when
he is traveling on Company business and shall be entitled to such other fringe
benefits as are paid to other senior executives of the Company.
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(e) The Company shall provide and maintain such group medical, dental,
life and disability insurance benefits for the Executive as are provided to
other senior executives of the Company.
(f) The Executive shall receive from the Company a paid vacation each year
in accordance with the present policy and practice of the Company regarding
vacations for senior executives.
Section 4. Expenses. The Company shall pay or reimburse the Executive for
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reasonable and necessary expenses incurred in the ordinary course of conducting
the Company's business and in accordance with written policies established by
the Company. Executive shall submit expense reports accompanied by receipts and
other appropriate substantiation for all items of business expenses for which
payment or reimbursement is sought.
Section 5. Duration and Termination.
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(a) The Executive's employment shall be for the Term provided for in
Section 1 hereof, unless the Term is earlier terminated pursuant to the
provisions hereof.
(b) If during the Employment Period the Executive shall be unable to
perform his duties hereunder on account of illness or disability, he shall be
entitled to compensation in accordance with this Agreement providing that such
illness or disability lasts for less than six months. In the event such illness
or disability lasts for more than a consecutive six month period, the Executive
shall be entitled to compensation in accordance with the sick leave plan of the
Company, if any, and shall be covered by the Company's disability income policy,
if any, and in all other respects the Company's obligations under this Agreement
shall terminate.
(c) In the event of the Executive's death during his employment hereunder,
his compensation shall cease as of the last day of the full calendar month
following the month in which such event occurs, or the last day of the
Employment Period, whichever is earlier. The salary for the period following
the Executive's death shall be paid to his legal heirs or the representative of
his estate and in all other respects the Company's obligations under this
Agreement shall terminate.
(d) In the event the Executive voluntarily terminates his employment
without Just Grounds for any reason, his right to all compensation shall cease
as of the end of the month of the date of termination of his employment. "Just
Grounds" shall mean resignation by the Executive due to (i) a material breach of
this Agreement by the Company which the Company has failed to cure within thirty
days after the Company receives written notice thereof, or (ii) the material
diminution of the Executive's duties, authority or responsibilities as Chairman
and Chief Executive Officer or a member of the Board of Directors except in
connection with a termination of Executive's employment for Just Cause.
(e) In the event (i) this Agreement and the Executive's employment shall
be terminated without Just Cause (as hereinafter defined) or (ii) the Executive
terminates his employment with Just Grounds, (A) the Executive shall receive
from the Company within five
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days after such termination a lump-sum payment equal to the greater of (x) one
time the sum of his then current annual base salary and his then current target
bonus, or (y) the amount that would have been paid to him for the balance of the
Employment Period assuming that he were to receive during such period an annual
salary equal to his then current annual base salary and an annual bonus for each
fiscal year ending during the Employment Period equal to his then current target
bonus, (B) the Company shall continue to provide, for a period of eighteen
months from the date of termination and at its expense, the benefits then being
provided to the Executive at the time of such termination pursuant to Section
3(e) hereof, and (C) each option to purchase shares of common stock of the
Company outstanding at the time of termination shall become fully vested and
exercisable at the time of termination and shall remain exercisable during the
term of the option. The amount of any payment or benefit provided for in this
Section 5(e) shall not be reduced by any compensation earned by the Executive as
the result of employment or engagement by another person, by retirement
benefits, by offset against any amount claimed to be owed by the Executive to
the Company or otherwise.
(f) In the event the Board of Directors determines that this Agreement and
the Executive's services hereunder should be terminated with Just Cause, the
Executive's right to all compensation and benefits shall cease as of the end of
the month of the date of termination of his employment. In such event, the
Executive shall be entitled only to such rights as shall have vested prior to
such termination or violation, and he shall not be entitled to any future cash
or non-cash compensation, benefits or termination pay. For purposes of this
Agreement, termination for "Just Cause" shall mean (i) a termination due to (A)
a material breach of this Agreement by the Executive, (B) willful or gross
neglect of duties for which employed or (C) willful misconduct or gross
negligence in the performance of such duties, all of such facts to be determined
in good faith by the Board of Directors of the Company after the Executive has
been given written notice of his purported material breach of this Agreement,
willful or gross neglect of duties or willful misconduct or gross negligence and
has failed to cure such breach or alter such conduct within thirty days after
the Executive's receiving such written notice, or (ii) a termination due to the
Executive's committing a felony for which he is convicted with no further rights
of appeal.
(g) Notwithstanding any other provision of this Agreement, in the event of
any termination of Executive's employment the Executive shall be entitled to
receive amounts payable under the Company's Amended and Restated Employee
Retention Program on the terms and subject to the conditions provided for
therein.
(h) If any of the payments or benefits received or to be received by the
Executive (whether pursuant to the terms of this Agreement or any other plan,
arrangement or agreement with the Company, any person whose actions result in a
change in control of the Company or any person affiliated with the Company or
such person) (all such payments and benefits, excluding the Gross-Up Payment,
being hereinafter referred to as the "Total Payments") will be subject to an
excise tax (the "Excise Tax") imposed pursuant to Section 280G of the Internal
Revenue Code of 1986, as amended (the "Code"), the Company shall pay to the
Executive an additional amount (the "Gross-Up Payment") such that the net amount
retained by the Executive, after deduction of any Excise Tax on the Total
Payments and any federal, state and local income and employment
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taxes and Excise Tax upon the Gross-Up Payment, shall be equal to the Total
Payments. For purposes of determining whether any of the Total Payments will be
subject to the Excise Tax and the amount of such Excise Tax, (i) all of the
Total Payments shall be treated as "parachute payments" (within the meaning of
Section 280G(b)(2) of the Code) unless, in the opinion of tax counsel ("Tax
Counsel") reasonably acceptable to the Executive and selected by the accounting
firm which was, immediately prior to the change in control of the Company, the
Company's independent auditor (the "Auditor"), such payments or benefits (in
whole or in part) do not constitute parachute payments, including by reason of
Section 280G(b)(4)(A) of the Code, (ii) all "excess parachute payments" within
the meaning of Section 280G(b)(l) of the Code shall be treated as subject to the
Excise Tax unless, in the opinion of Tax Counsel, such excess parachute payments
(in whole or in part) represent reasonable compensation for services actually
rendered (within the meaning of Section 280G(b)(4)(B) of the Code) in excess of
the Base Amount (as defined in Section 280G(b)(3) of the Code) allocable to such
reasonable compensation, or are otherwise not subject to the Excise Tax, and
(iii) the value of any noncash benefits or any deferred payment or benefit shall
be determined by the Auditor in accordance with the principles of Sections
280G(d)(3) and (4) of the Code. For purposes of determining the amount of the
Gross-Up Payment, the Executive shall be deemed to pay federal income tax at the
highest marginal rate of federal income taxation in the calendar year in which
the Gross-Up Payment is to be made and state and local income taxes at the
highest marginal rate of taxation in the state and locality of the Executive's
residence on the date on which the Gross-Up Payment is to be made, net of the
maximum reduction in federal income taxes which could be obtained from deduction
of such state and local taxes. In the event that the Excise Tax is finally
determined to be less than the amount taken into account hereunder in
calculating the Gross-Up Payment, the Executive shall repay to the Company,
within five (5) business days following the time that the amount of such
reduction in the Excise Tax is finally determined, the portion of the Gross-Up
Payment attributable to such reduction (plus that portion of the Gross-Up
Payment attributable to the Excise Tax and federal, state and local income and
employment taxes imposed on the Gross-Up Payment being repaid by the Executive,
to the extent that such repayment results in a reduction in the Excise Tax and a
dollar-for-dollar reduction in the Executive's taxable income and wages for
purposes of federal, state and local income and employment taxes, plus interest
on the amount of such repayment at 120% of the rate provided in Section
1274(b)(2)(B) of the Code. In the event that the Excise Tax is determined to
exceed the amount taken into account hereunder in calculating the Gross-Up
Payment (including by reason of any payment the existence or amount of which
cannot be determined at the time of the Gross-Up Payment), the Company shall
make an additional Gross-Up Payment in respect of such excess (plus any
interest, penalties or additions payable by the Executive with respect to such
excess) within five (5) business days following the time that the amount of such
excess is finally determined. The Executive and the Company shall each
reasonably cooperate with the other in connection with any administrative or
judicial proceedings concerning the existence or amount of liability for Excise
Tax with respect to the Total Payments. The provisions of this Section 5(h)
shall survive the expiration of the Term.
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Section 6. Governing Law and Arbitration.
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(a) Any controversy or claim arising out of or relating to this Agreement
or its interpretation, construction or any breach thereof, or any relationship
between the parties hereto, whether such claim is grounded in common law or
statutory law, shall be settled exclusively by arbitration in the State of
Colorado, in accordance with the then-applicable rules of the American
Arbitration Association, and judgment upon the award rendered may be entered in
any court of competent jurisdiction. In the event of any such controversy or
claim, the prevailing party shall be entitled to recover from the other party
all of the costs and expenses of the prevailing party in connection with such
claim or controversy including reasonable attorneys' fees.
(b) The failure or refusal of either party to submit to arbitration in
accordance with this provision shall be deemed a breach of this Agreement.
(c) Notwithstanding anything to the contrary herein contained, neither
party shall pursue the arbitration remedy provided for herein without thirty
days prior written notice, which thirty-day period shall be available for
informal dispute resolution discussions.
Section 7. Non-Assignment. The Executive shall have no right to delegate
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any of the duties created by this Agreement, and any delegation or attempted
delegation of the Executive's duties, shall be null and void. In all other
respects, this Agreement shall be binding upon and shall inure to the benefit of
the parties hereto and their respective heirs, beneficiaries, personal
representatives, successors, assigns, officers and directors.
Section 8. Authorization, Validity and No-Conflict.
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(a) The Company represents and warrants to the Executive that the
execution, delivery and performance by the Company of this Agreement has been
duly authorized and constitutes a valid and legally binding obligation of the
Company enforceable in accordance with the terms hereof, and that the execution,
delivery and performance of this Agreement by the Company will not violate the
terms of any agreement or obligation of the Company.
(b) The Executive represents and warrants to the Company that this
Agreement constitutes the valid and legally binding obligation of the Executive
enforceable in accordance with its terms, and that the execution, delivery and
performance of this Agreement by the Executive will not violate the terms of any
other agreement or obligation of the Executive.
Section 9. Severability. If any portion or provision of this Agreement
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shall to any extent be declared illegal or unenforceable by a court of competent
jurisdiction, then the remainder of this Agreement, or the application of such
portion or provision in circumstances other than those to which it is so
declared illegal or unenforceable, shall not be affected thereby, and each
portion and provision of this Agreement shall be valid and enforceable to the
fullest extent permitted by law.
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Section 10. Waiver. No waiver of any provision hereof shall be effective
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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.
Section 11. Notices. All notices pursuant to this Agreement shall be in
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writing.
a. Notice to Executive. A notice to the Executive shall be sufficient in
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all respects if delivered, or mailed by first class registered or certified
mail, postage and fees prepaid, or sent by an established, reputable courier
service, addressed to the following or such other address as provided by written
notice made pursuant to this Section 11:
If to Executive: Xxxxxx X. Xxxxxxxx
000 Xxxxxxx
Xxxxxx, XX 00000
b. Notice to Company. A notice to the Company shall be sufficient in all
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respects if delivered, or mailed by first class registered or certified mail,
postage and fees prepaid, or sent by an established, reputable courier service,
addressed to the following or such other address provided by written notice made
pursuant to this Section 12:
If to Company: Einstein/Noah Bagel Corp.
0000 Xxxx Xxxxxxxxx
Xxxxxx, XX 00000
Attention: General Counsel
Section 12. Entire Agreement. Except for that certain Confidentiality and
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Non-Compete Agreement previously entered into by the Executive, this Agreement
constitutes the entire agreement between the parties and supersedes all prior
communications, agreements and understandings, written or oral, with respect to
the terms and conditions of the Executive's employment. Without limiting the
generality of the foregoing, this Agreement supersedes that certain letter
agreement dated April 29, 1998 between the Company and the Executive and that
certain severance agreement dated May 8, 1998 between the Company and the
Executive, and this Agreement amends and restates that certain executive
employment agreement dated September 11, 1998, as amended.
Section 13. Amendment. This Agreement may be amended or modified only by a
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written instrument signed by the Executive and by a representative of the
Company expressly authorized by the Board of Directors or the Compensation
Committee of the Board of Directors to execute any such amendment.
Section 14. Headings. The headings and captions in this Agreement are for
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convenience only and in no way define or describe the scope or content of any
provision of this Agreement.
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Section 15. Counterparts. This Agreement may be executed in two or more
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counterparts, each of which shall be an original and all of which together shall
constitute one and the same instrument.
EINSTEIN/NOAH BAGEL CORP.
By /s/ Xxxx X. Xxxxxxx
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/s/ Xxxxxx X. Xxxxxxxx
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Xxxxxx X. Xxxxxxxx
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