EXHIBIT 10.1
SEPARATION AGREEMENT AND GENERAL RELEASE
This Separation Agreement and General Release ("AGREEMENT") is entered
into by and between XXXXXXX X. XXXXX ("XXXXX") and BACK YARD BURGERS, INC.
("BYB") (collectively "Parties").
RECITALS
This AGREEMENT is made with reference to the following facts:
A. WHEREAS, XXXXX served in the position of President and Chief
Operating Officer with BYB; and
B. WHEREAS, all employment compensation and consideration for
this Agreement concededly due to XXXXX has been
unconditionally paid; and
C. WHEREAS, BYB is willing to provide XXXXX with certain
considerations described below, which it is not ordinarily
required to provide, provided XXXXX resigns from his
employment with BYB and releases BYB from any claims XXXXX
might make arising out of his employment with BYB, and agrees
to comply with the other promises and conditions set forth in
this AGREEMENT.
NOW, THEREFORE, in consideration of the mutual covenants and promises
contained herein, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by the Parties, the Parties agree
to be legally bound by the following terms and conditions, which constitute full
settlement of any and all disputes between them:
1. RECITALS: The Parties acknowledge that the "WHEREAS" clauses
preceding paragraph 1 are true and correct, and are
incorporated herein as material parts to this AGREEMENT.
2. DEFINITIONS: Throughout this AGREEMENT, the term "BYB" shall
include the following:
(A) BYB as well as any affiliated entity, related entity,
or subsidiary entity of BYB; and
(B) Any officer, director, trustee, agent, employee, or
insurer of an entity encompassed by subparagraph (A).
3. PAYMENT AMOUNT: As consideration for signing this AGREEMENT
and compliance with the promises made herein (including
without limitation the provisions of paragraph 5 hereof), BYB
agrees to pay to XXXXX the aggregate sum of Eighty Thousand
Dollars ($80,000), less all applicable Federal and State
withholdings (the "Payment Amount"). The Payment Amount shall
be paid by BYB to XXXXX in six (6) equal monthly installments
beginning on the eighth
business day after the date of this AGREEMENT and continuing
on the same date of the following five months.
BYB shall provide the consideration identified in this
paragraph 3 after receiving an original of this AGREEMENT
appropriately executed and dated by XXXXX. This AGREEMENT
shall not become effective, therefore, and none of the
benefits set forth in this paragraph will become due or
payable, until after the Effective Date of this AGREEMENT (the
"Effective Date" defined as the first day after XXXXX' seven
(7) day revocation period has ended and BYB has received from
XXXXX an original of this Agreement executed by XXXXX).
4. TERMINATION OF AMENDED AND RESTATED SEVERANCE AGREEMENT: As
consideration for the sums paid to XXXXX by BYB pursuant to
Paragraph 3 herein, XXXXX hereby terminates the Amended and
Restated Severance Agreement entered into on October 11, 2004
between XXXXX and BYB. XXXXX hereby fully and completely
releases BYB forever from any and all obligations imposed on
BYB under the aforementioned Amended and Restated Severance
Agreement.
5. NON-COMPETE: As consideration for the payment by BYB to XXXXX
of an additional amount of Ten Thousand Dollars ($10,000),
payable on the eighth business day after the date of this
AGREEMENT, XXXXX agrees that during the period that ends on
the date that is one (1) year from the date hereof, XXXXX will
not, directly or indirectly:
(A) engage or participate in any way, as an owner,
officer, partner, member, employee, agent, independent
contractor, board member or stockholder of any entity that is
competitive with BYB (i.e., a fast casual/food restaurant
whose principal business is the sale of hamburgers) where such
entity is either headquartered in or has a majority of its
business located anywhere within the metropolitan statistical
areas (as defined by the Office of Management and Budget as of
the date hereof) that include Memphis, Tennessee, and
(B) solicit or otherwise encourage any officer or
employee of BYB to terminate his or her employee relationship
with BYB.
If the final judgment of a court of competent jurisdiction
declares that any term or provision of this paragraph 5 is
invalid or unenforceable, the parties agree that the court
making the determination of invalidity or unenforceability
shall have the power to reduce the scope, duration, or area of
the term or provision, to delete specific words or phrases, or
to replace any invalid or unenforceable term or provision with
a term or provision that is valid and enforceable and that
comes closest to expressing the intention of the invalid or
unenforceable term or provision, and this AGREEMENT shall be
enforceable as so modified after the expiration of the time
within which the judgment may be appealed.
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6. RETURN OF PROPERTY: XXXXX represents that he has (or will
within three (3) days after executing this AGREEMENT) returned
all equipment and property in his possession that belong to
BYB or that relate or refer to BYB or its business, including
all files and programs (hard copy, electronic or otherwise),
all originals and copies of documents, notes, memoranda or any
other materials that relate or refer to BYB or its business
(hard copy, electronic or otherwise), and material that
constitutes trade secrets or "Confidential Information" as
defined in Paragraph 12 of this Agreement. In addition, XXXXX
acknowledges that BYB has the right to electronically examine
all computer or telecommunications equipment that he may have
used in the course of performing his job duties and delete any
Confidential Information contained therein.
7. CONSIDERATION: XXXXX understands and agrees that he would not
receive the monies and/or benefits specified in paragraphs 3
and 5 hereof, but for his execution of this AGREEMENT and the
fulfillment of the promises contained herein.
8. GENERAL RELEASE OF CLAIMS: In exchange for, and in
consideration of, the payments, benefits, and other
commitments described above, XXXXX, for himself and for each
of his heirs, executors, administrators, and assigns, hereby
fully releases, acquits, and forever discharges BYB and each
of any predecessors, successors and assigns, parent
corporations, subsidiary corporations thereof, affiliated
corporations, and the officers, directors, shareholders,
partners, employees, attorneys and agents, past and present,
of each of the aforesaid entities ("Related Persons") of and
from any and all claims, liabilities, causes of action,
demands to any rights, damages, costs, attorneys' fees,
expenses, and compensation whatsoever, of whatever kind or
nature, in law, equity or otherwise, whether known or unknown,
vested or contingent, suspected or unsuspected, that XXXXX may
now have, has ever had, or hereafter may have relating
directly or indirectly to XXXXX' employment with BYB or the
separation therefrom including, but not limited to, claims for
wages, which, as set forth in "WHEREAS" clause "B" preceding
paragraph 1 of this AGREEMENT, as well as paragraph 8 of this
AGREEMENT, have been fully paid to XXXXX prior to the
execution of this AGREEMENT, or are fully paid by way of
paragraph 3 of this AGREEMENT; back pay; front pay;
reinstatement; damages; or benefits. XXXXX also releases any
and all claims he may have that arose prior to the date of
this AGREEMENT, and hereby specifically waives and releases
all claims, including, but not limited to, those arising under
Title VII of the Civil Rights Act of 1964, as amended, the
Civil Rights Act of 1991; the Equal Pay Act; the Americans
With Disabilities Act of 1990; the Rehabilitation Act of 1973,
as amended; Sections 1981 through 1988 of Title 42 of the
United States Code, as amended; the Immigration Reform and
Control Act, as amended; the Workers Adjustment and Retraining
Notification Act, as amended; the Occupational Safety and
Health Act, as amended; the Xxxxxxxx-Xxxxx Act of 2002; the
Consolidated Omnibus Budget Reconciliation Act (COBRA); the
Family and Medical Leave Act; the Employee Retirement Income
Security Act of 1974, as amended; the
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National Labor Relations Act; the Fair Labor Standards Act;
the Age Discrimination in Employment Act of 1967; and any and
all state or local statutes, ordinances, or regulations, as
well as all claims arising under federal, state, or local law
involving any tort, employment contract (express or implied),
public policy, wrongful discharge, whistleblower or any other
claim.
This AGREEMENT shall not apply to rights or claims that may
arise after the Effective Date of this AGREEMENT; nor shall
any provision of this AGREEMENT be interpreted to waive,
release, or extinguish any rights that -- by express and
unequivocal terms of law -- may not under any circumstances be
waived, released, or extinguished.
9. TAX LIABILITY: XXXXX understands that BYB shall issue an IRS
Form 1099 for those portions of the payment specified in
paragraphs 3 and 5 of this AGREEMENT that are not subject to
withholding. In paying the amount specified in paragraphs 3
and 5, BYB makes no representation regarding the tax
consequences or liability arising from said payment. XXXXX
understands and agrees that any and all tax liability that may
be due or become due because of the payment referenced above
is his sole responsibility, and that he will pay any such
taxes that may be due or become due. BYB has no monetary
liability or obligation regarding payment whatsoever (other
than delivering a valid check in the sum referenced in
paragraphs 3 and 5 of this AGREEMENT to XXXXX). XXXXX agrees
to bear all tax consequences, if any, attendant upon the
payment to him of the above-recited sums. XXXXX further agrees
to hold BYB harmless from and against any tax or tax
withholdings claims, amounts, interest, penalties, fines or
assessments brought or sought by any taxing authority or
governmental agency with regard to the above recited sums. In
the event BYB receives written notice that any claim or
assessments for taxes, withholding obligations, penalties
and/or interest arising out of this settlement are being or
will be made against BYB, BYB shall promptly, after receipt of
such written notice, notify XXXXX in accordance with the
notice terms provided by this AGREEMENT.
10. AFFIRMATIONS: XXXXX represents and affirms that he has no
suits, claims, charges, complaints or demands of any kind
whatsoever currently pending against BYB with any local,
state, or federal court or any governmental, administrative,
investigative, civil rights or other agency or board. XXXXX
further represents and affirms that, except for the fourth
(4th) quarter 2005 incentive bonus which will be calculated in
the manner and per the criteria used to establish the first
(1st) second (2nd) and third (3rd) quarter bonuses, salary
through the end of the February 26, 2006, certain reimbursable
expenses including a life insurance payment, and payment for
accrued yet unused vacation time as per the records of BYB,
all of which BYB agrees to pay, he has been paid and/or
received all leave (paid or unpaid), compensation, wages,
bonuses, commissions, and/or benefits to which he may be
entitled and that no other leave (paid or unpaid),
compensation, wages, bonuses, commissions, and/or benefits are
due him, except as provided for in this AGREEMENT.
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11. CONFIDENTIALITY: XXXXX agrees not to make any unauthorized
use, publication, or disclosure of any confidential,
proprietary and non-public information generated or acquired
by XXXXX during the course of his employment with BYB,
including, but not limited to, any confidential, trade secret
or non-public information ("Confidential Information"). XXXXX
understands that Confidential Information includes information
not generally known by or available to the public about or
belonging to BYB, or belonging to other companies to whom BYB
may have an obligation to maintain information in confidence,
and that authorization for disclosure may be obtained only
through BYB's general counsel or designee.
12. NO ASSIGNMENT: The Parties represent and warrant that no
person other than the signatories hereto had or has any
interest in the matters referred to in this AGREEMENT, that
the Parties have the sole right and exclusive authority to
execute this AGREEMENT, and that the Parties have not sold,
assigned, transferred, conveyed, or otherwise disposed of any
claim, demand or legal right that is the subject of this
AGREEMENT.
13. NON-DISPARAGEMENT: XXXXX agrees that he will not provide
information, issue statements, or take any action, directly or
indirectly, that would cause BYB embarrassment or humiliation
or otherwise cause or contribute to BYB being held in
disrepute. BYB agrees that it will not provide information,
issue statements, or take any action, directly or indirectly,
that would cause XXXXX embarrassment or humiliation or
otherwise cause or contribute to XXXXX being held in
disrepute.
14. NON-VOLUNTARY COOPERATION. Unless BYB is seeking XXXXX'
assistance or testimony, XXXXX explicitly agrees not to assist
or become involved with any litigation in which BYB is a
defendant unless ordered by a court to do so. If ordered,
XXXXX explicitly agrees to provide reasonable notice of such
order to BYB pursuant to this AGREEMENT and its notice
provision.
15. GOVERNING LAW AND JURISDICTION: This AGREEMENT shall be
governed and conformed in accordance with the laws of the
State of Tennessee without regard to its conflict of laws
provision. In the event XXXXX or BYB breaches any provision of
this AGREEMENT, XXXXX and BYB affirm that either may institute
an action to specifically enforce any term or terms of this
AGREEMENT.
16. CONDITIONS: Should XXXXX ever breach any provision or
obligation under this AGREEMENT, XXXXX explicitly agrees to
pay all damages (including, but not limited to, litigation
and/or defense costs, expenses, and reasonable attorneys'
fees) incurred by BYB as a result of XXXXX' breach. Nothing in
this paragraph shall, or is intended to, limit or restrict any
other rights or remedies BYB may
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have by virtue of this AGREEMENT or otherwise. Should BYB ever
breach any provision or obligation under this AGREEMENT, BYB
explicitly agrees to pay all damages (including, but not
limited to, litigation and/or defense costs, expenses, and
reasonable attorneys' fees) incurred by XXXXX as a result of
BYB' breach. Nothing in this paragraph shall, or is intended
to, limit or restrict any other remedies XXXXX may have by
virtue of this AGREEMENT or otherwise.
17. NO ADMISSION OF LIABILITY: The parties agree that neither this
AGREEMENT nor the furnishing of the consideration for this
AGREEMENT shall be deemed or construed at anytime for any
purpose as an admission by BYB or XXXXX of any liability or
unlawful conduct of any kind.
18. HEADINGS: The headings of the provisions herein are intended
for convenient reference only, and the same shall not be, nor
be deemed to be, interpretative of the contents of such
provision.
19. MODIFICATION OF AGREEMENT: This AGREEMENT may not be amended,
revoked, changed, or modified in any way, except in writing
executed by all Parties. XXXXX agrees not to make any claim at
any time or place that this AGREEMENT has been verbally
modified in any respect whatsoever. No waiver of any provision
of this AGREEMENT will be valid unless it is in writing and
signed by the party against whom such waiver is charged. The
parties acknowledge that only Counsel for BYB has the
authority to modify this AGREEMENT on behalf of BYB.
20. INTERPRETATION: The language of all parts of this AGREEMENT
shall in all cases be construed as a whole, according to its
fair meaning, and not strictly for or against any of the
Parties. This AGREEMENT has been negotiated by and between
attorneys for the Parties and shall not be construed against
the "drafter" of the AGREEMENT. If any portion or provision of
this AGREEMENT (including, without implication of limitation,
any portion or provision of any section of this AGREEMENT) is
determined to be illegal, invalid, or unenforceable by any
court of competent jurisdiction and cannot be modified to be
legal, valid, or enforceable, the remainder of this AGREEMENT
shall not be affected by such determination and shall be valid
and enforceable to the fullest extent permitted by law, and
said illegal, invalid, or unenforceable portion or provision
shall be deemed not to be a part of this AGREEMENT. To the
extent any provision herein that relates to XXXXX' release of
claims under paragraph 8 above is deemed to be illegal,
invalid, or unenforceable, BYB is not obligated to honor any
of the terms set forth herein and XXXXX shall return any
amounts paid by BYB. In the event of a breach or threatened
breach of any of the duties and obligations of XXXXX under
this AGREEMENT, BYB shall be entitled, in addition to any
other legal or equitable remedies it may have in connection
therewith (including any right to damages that BYB may
suffer), to a temporary, preliminary, and/or permanent
injunction restraining such breach or threatened breach.
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21. BINDING NATURE OF AGREEMENT: This AGREEMENT shall be binding
upon each of the Parties and upon their respective heirs,
administrators, representatives, executors, successors, and
assigns, and shall inure to the benefit of each party and to
their respective heirs, administrators, representatives,
executors, successors, and assigns.
22. ENTIRE AGREEMENT: This AGREEMENT sets forth the entire
AGREEMENT between the parties hereto, and fully supersedes any
prior obligation of BYB to XXXXX. XXXXX acknowledges that he
has not relied on any representations, promises, or agreements
of any kind made to him in connection with his decision to
accept this AGREEMENT, except for those set forth in this
AGREEMENT.
23. NOTICE REQUIREMENTS: Each notice ("Notice") provided for under
this AGREEMENT, must comply with the requirements as set forth
in this paragraph. Each Notice shall be in writing and sent by
facsimile or depositing it with a nationally recognized
overnight courier service that obtains receipts (such as
Federal Express or UPS Next Day Air), addressed to the
appropriate party (and marked to a particular individual's
attention, if so indicated) as hereinafter provided. Each
Notice shall be effective upon being so telecopied or
deposited, but the time period in which a response to any
notice must be given or any action taken with respect thereto
shall commence to run from the date of receipt of the Notice
by the addressee thereof, as evidenced by the return receipt.
Rejection or other refusal by the addressee to accept or the
inability to deliver because of a changed address of which no
Notice was given shall be deemed to be the receipt of the
Notice sent. Any party shall have the right from time to time
to change the address or individual's attention to which
notices to it shall be sent by giving to the other party at
least ten (10) days prior Notice thereof. The Parties'
addresses for providing Notices hereunder shall be as follows:
If to BYB: Back Yard Burgers, Inc.
0000 Xxxxxx Xxxx Xx. X. Xxx. 000
Xxxxxxx, Xxxxxxxxx 00000
Attn: Chief Executive Officer
If to Xxxxx: Xxxxxxx X. Xxxxx
0000 Xxxxxxxxx Xxxx Xxxx
Xxxxxxxxxx, XX 00000
24. TIME TO SIGN AND RETURN AGREEMENT: XXXXX acknowledges and
agrees that he first received the original of this Agreement
on or before February 23, 2006. XXXXX also understands and
agrees that he has been given at least 21 calendar days from
the date he first received this Agreement to obtain the advice
and counsel of the legal representative of his choice and to
decide whether to sign it. XXXXX acknowledges that he has been
advised and has sought the advice of his
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own counsel. XXXXX understands that he may sign the Agreement
at any time on or before the expiration of this 21-day period.
XXXXX also understands that for seven calendar days after he
signs this Agreement he has the right to revoke it, and that
this Agreement will not become effective and enforceable until
after the expiration of this seven-day period in which he did
not exercise his right of revocation. XXXXX specifically
understands and agrees that any attempt by him to revoke this
Agreement after the seven-day period has expired is, or will
be, ineffective. XXXXX represents and agrees that he has
thoroughly discussed all aspects and effects of this Agreement
with his attorney, that he has had a reasonable time to review
the Agreement, that he fully understands all the provisions of
the Agreement and that he is voluntarily entering into this
Agreement.
25. SELECTIVE ENFORCEMENT: The Parties agree that the failure of
any party to enforce or exercise any right, condition, term,
or provision of this AGREEMENT shall not be construed as or
deemed a relinquishment or waiver thereof, and the same shall
continue in full force and effect.
XXXXX IS HEREBY ADVISED THAT HE HAS A REASONABLE PERIOD OF TIME TO REVIEW AND
CONSIDER THIS AGREEMENT AND IS HEREBY ADVISED THAT HE SHOULD CONSULT WITH AN
ATTORNEY PRIOR TO THE EXECUTION OF THIS AGREEMENT.
HAVING ELECTED TO EXECUTE THIS AGREEMENT, TO FULFILL THE PROMISES AND TO RECEIVE
THE SUMS AND BENEFITS IN PARAGRAPHS 3 AND 5 ABOVE, XXXXX FREELY, VOLUNTARILY AND
KNOWINGLY, AND AFTER DUE CONSIDERATION, ENTERS INTO THIS AGREEMENT INTENDING TO
WAIVE, SETTLE, AND RELEASE ALL CLAIMS HE HAS OR MIGHT HAVE AGAINST BYB.
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ACCEPTED AND AGREED:
By: /s/ XXXXXXX X. XXXXX
---------------------------
XXXXXXX X. XXXXX
2/26/2006
---------------------------
Date
STATE OF TENNESSEE )
)
COUNTY OF SHELBY )
BEFORE ME, the undersigned authority on this 26 day of Feb. 2006,
personally appeared XXXXXXX X. XXXXX, known to me to be the person whose name is
subscribed to the foregoing instrument and signed in my presence and swore upon
oath this AGREEMENT was executed for the purposes and consideration therein
expressed.
SUBSCRIBED AND SWORN TO BEFORE ME on this 26 day of Feb. 2006, to
certify which witness my hand and seal of office.
/s/ XXXXXX X. XXXXXX
---------------------------------------
NOTARY PUBLIC
Xxxxxx X. Xxxxxx
---------------------------------------
(Printed Name of Notary)
My Commission Expires:
6-7-2006
----------------------
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ACCEPTED AND AGREED:
BACK YARD BURGERS
By: /s/ Xxxxxxxxx M. Michael
---------------------------
Xxxxxxxxx X. Xxxxxxx
February 27, 2006
---------------------------
Date
STATE OF TENNESSEE )
)
COUNTY OF SHELBY )
BEFORE ME, the undersigned authority on this _____ day of _________
2006, personally appeared Xxxxxxxxx X. Xxxxxxx, known to me to be the person
whose name is subscribed to the foregoing instrument and signed in my presence
and swore upon oath this AGREEMENT was executed for the purposes and
consideration therein expressed.
SUBSCRIBED AND SWORN TO BEFORE ME on this _____ day of ________ 2006,
to certify which witness my hand and seal of office.
----------------------
NOTARY PUBLIC
----------------------
(Printed Name of Notary)
My Commission Expires:
--------------------
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