EXHIBIT 10-AX
CONSULTING AND RESIGNATION AGREEMENT
THIS CONSULTING AGREEMENT (the "Agreement") is
made to be effective as of the 13th day of August, 1999,
by and between Xxxxxxx X. Xxxxxxxxxx ("Consultant") and Quality
Dining, Inc., an Indiana corporation ("Company").
Recitals
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1. Consultant has been employed by the
Company pursuant to an Employment Agreement dated as of
August 14, 1995 (the "Employment Agreement") the term of
which expires on the effective date hereof.
2. Consultant desires to resign his employment with the
Company upon the effective date of this Agreement.
3. Consultant is also a party to a NonCompetition
Agreement with the Company dated as of August 14,
1995 ("NonCompetition Agreement") the term of which expires
on the date hereof.
4. Consultant is, and will continue to be,
knowledgeable concerning the Company's business and through
years of experience has gained valuable knowledge and
expertise in the Burger King restaurant business.
5. The Company desires to retain Consultant as a
consultant and Consultant desires to be so retained, upon the terms and
conditions set forth in this Agreement.
Agreement
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NOW, THEREFORE, in consideration of the foregoing and the
mutual undertakings contained herein, the parties hereto
agree as follows:
SECTION 1
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Term
Section 1.1. Term. The term ("Term") of
this Agreement shall commence on August 13, 1999, and shall
continue through August 12, 2001.
SECTION 2
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Resignation
Section 2.1. Resignation.
Consultant hereby resigns his employment with the Company
effective as of the effective date hereof.
Section 2.2 Stock Options.
Consultant acknowledges that any and all stock options to
acquire shares of the Company's common stock are
"underwater" and hereby agrees that all such options shall
be terminated as of the effective date hereof.
SECTION 3
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Consulting Services
Section 3.1. Creation of the Relationship.
Upon the terms of this Agreement, and in recognition of Consultant's
extensive experience and expertise, the Company hereby
agrees to retain Consultant, and Consultant hereby agrees
to be retained by the Company, during the Term of this Agreement and on the
terms and conditions set forth herein, in the capacity of a
consultant to the Company.
Section 3.2. Duties of Consultant.
During the Term hereof, Consultant agrees to render
service to the Company as a consultant from time to time
as may be reasonably requested by the Company, including
but not limited to, advising the Company with respect to (i)
the operations, marketing and development of the Company's
Burger King business, (ii) assisting the Company in
evaluating any potential Burger King acquisitions and (iii)
such other matters as may reasonably be requested by the
Company. There shall not be a prescribed minimum or
maximum number of hours to be devoted by Consultant in
fulfillment of Consultant's duties hereunder. Consultant
may provide services to the Company under this Agreement
from Consultant's home or business location by telephone or
in such other manner as is acceptable to Consultant and the Company.
The relationship of Consultant to the Company hereunder shall
be that of independent contractor and not as employee.
SECTION 4
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Compensation
Section 4.1. Compensation. Consultant shall be entitled
to a consulting fee of $100,000 per year during the Term of
this Agreement, payable in arrears in equal monthly
installments of $8,333.34 on the 15th day of each month
commencing September 15, 1999, with the last installment
due on August 12, 2001. In the event of Consultant's
death during the Term of this Agreement, Consultant shall
be entitled only to the compensation provided for herein
through the date of his death.
SECTION 5
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Non-Competition Provisions
Section 5.1. Covenant Not-to-Compete.
Until August 13, 2002, except as may be for the benefit of the Company
or as the Company may otherwise consent in writing,
Consultant shall not, directly or indirectly, own, manage,
operate, control or otherwise engage or participate in the
ownership, management, operation or control of (as
principal, agent, proprietor, partner, member,
shareholder, director, trustee, officer, administrator,
employee, consultant, independent contractor, or
otherwise), any business or entity which as one of its
business activities competes, directly or indirectly,
with the Company within any city, town, or metropolitan
area in which the Company, during such period, owns or
operates a restaurant or has the right
to own or operate a restaurant. Notwithstanding anything
to the contrary in this Agreement, the Consultant may
directly or indirectly, (a) continue to engage in the
ownership and operation of two Burger
King restaurants (store #7900 and store #8732), (b) own
securities of the Company, and (c) own securities of any
person or entity which securities are publicly traded
on a national or regional stock exchange or on an over-
the-counter market as long as Consultant does not own 5% or
more of any class of securities of any such person or
entity.
Section 5.2. Trade Secrets.
For purposes of this Agreement, the term "Trade
Secret" includes not only that confidential or
proprietary information defined as a "Trade Secret"
under the Indiana Trade Secrets Act, I.C. 24-2-3-1 et
seq. (the "Act"), but also that information which
possesses independent economic benefit to the Company (including
without limitation customer lists) and, from not being generally known
by other persons who can obtain economic benefit from its disclosure or use.
Consultant covenants that Consultant will, at all times,
conform Consultant's conduct to the requirements of the
Act and will not misappropriate (e.g., use or disclose
to any third party) any Trade Secret of the Company.
Consultant recognizes that the penalties for a Trade Secret violation may
include disgorgement of profits, payment of royalties,
compensatory damages, punitive damages, and
attorney's fees. Consultant understands that (a) Consultant may ask the
Company to render an opinion as to whether the Company considers
certain knowledge to be a Trade Secret, if such a
question should arise, and (b) upon termination of this
Agreement for any reason, Consultant will continue to
be prohibited from any time thereafter from
misappropriating any Trade Secret of the Company.
Section 5.3. Confidentiality.
During the Term of this Agreement, Consultant shall keep
confidential all Trade Secrets of the Company; maintain in
trust, as the Company's property, all information
concerning the Company's business; and return to the
Company, all documents that belong to the Company and any
and all copies thereof in Consultant's possession or under
Consultant's control when this Agreement terminates, or
at any time upon request by the Company.
Section 5.4. Covenant Not to Raid Employees.
Until August 13, 2002, Consultant shall not, directly or indirectly,
employ, engage for personal service or favor (whether or not
compensated), solicit for employment or advise or
recommend to any other person that such person
employ, or solicit for employment, any individual now or
hereafter employed by the Company, or any affiliate of
the Company; nor induce or entice any such employee to
leave his or her employment; nor adversely interfere with
past, present or prospective relationships between the
Company and any of their clients, customers, suppliers,
dealers, employees, agents or other persons or entities
with which any of such companies deals. Notwithstanding
anything to the contrary in this Agreement, the
restrictions set forth in this Section 5.4 above will
not apply with regard to any individual (a) who has
been terminated by the Company or any such affiliate, or
(b) beginning six months after such individual ceases
or terminates his relationship (for any reason) with the
Company or any such affiliate.
Section 5.5. Separate Covenants.
The parties hereto acknowledge and agree that the
covenants contained herein shall be construed as a
series of separate covenants. In the event that any of
the covenants as to a geographical area shall be held
invalid or unenforceable, then the remaining provisions
and covenants thereof shall nevertheless continue to be valid and
enforceable as though the invalid or unenforceable parts
had not been included therein to the extent necessary to
permit the remaining separate provisions and covenants
to be enforced. Additionally, if such geographical
area, class of protected clients or any time period
referenced herein shall be declared by a court of
competent jurisdiction to exceed the maximum area, class
of clients or time period such court deems reasonable and
enforceable, such area of restriction or time period
shall be deemed to become and thereafter be the maximum area or time
period which such court deems reasonable and enforceable.
Section 5.6. Remedies.
Consultant acknowledges and agrees that the Company would
suffer irreparable harm as a result of any breach of the
covenants contained herein and, therefore, agrees that, in
the event of any actual or threatened breach of any such
covenant, in addition to any other right or remedy which
the Company may have (including monetary damages), the
Company shall be entitled to specific enforcement through
injunctive or other equitable relief obtained from a
court with appropriate equity jurisdiction.
SECTION 6
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Company Stock
Section 6.1. Restrictions on Transfer; Right of First Refusal.
(a) Consultant owns an aggregate of 349,234 shares
of the Company's common stock ("Company Stock") as of the
date of this Agreement. Consultant agrees that, without
the prior written consent of the Company, he will not,
during the Term of this Agreement, transfer, pledge,
grant a security interest in or otherwise encumber any
shares of Company Stock now or hereafter owned by him.
(b) Consultant hereby agrees that, should he wish to sell
any Company Stock during the term of this Agreement,
he will give the Company prior written notice of
the number of shares of Company Common Stock he wishes to
sell. Within 60 days after the date of such notice, the
Company (or its designee) shall have the right to
acquire from Consultant the number of shares specified in
such notice at a per share price equal to the average
of the closing prices of the Company Stock on the Nasdaq National
Market System on the five trading days commencing on the date of
Consultant's notice to the Company. The Company (or its
designee) shall exercise this right of first refusal
by written notice to the Consultant and closing of the
purchase shall take place within five business days after
the date of the notice of exercise by the Company (or its
designee). Payment for the shares of Company Stock
shall be made in immediately available funds at the
closing. If the Company (or its designee) does not
exercise its right of first refusal to purchase the
shares of Company Stock specified in the Consultant's
notice to the Company within 60 days after the
date of such notice, the Consultant shall thereafter
have the right to sell such specified shares of Company
Common Stock for a period of 120 days after the date of
such notice to the Company.If the Consultant does not
sell the specified shares within such period, such shares
of Company Common Stock shall again be subject to the
right of first refusal described in this Section 6.1.
Section 6.2. Covenant Regarding Joining Group.
The Consultant hereby covenants that, during the term
of this Agreement and for one (1) year following the
expiration of this Agreement, he will not, directly or indirectly,
join with any other individual, entity or group
(within the meaning of Section 13(d)(3) or 14(d)(2) of
the Securities Exchange Act of 1934, as amended, for
the purpose of acquiring, holding or disposing of any
shares of Company Stock, soliciting any proxies for any
meetings of the holders of Company Stock, or otherwise
attempting to influence in any manner how any holder of
Company Stock votes on any matters presented to such
holders.
SECTION 7
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Miscellaneous
Section 7.1. Termination and Release.
The Consultant and the Company acknowledge and agree
that the Employment Agreement is hereby terminated and
each hereby releases the other from any claims each may
have under those agreements except that the Company shall
pay to the Consultant, the sum of $49,783.65 representing
the bonus to which Consultant is entitled in respect of his
employment during the Company's 1999 fiscal year though
the date of termination of his employment. Such amount
shall be paid to Consultant at the time of and in
accordance with the Company's usual practice for paying
bonuses.
Section 7.2. Benefit and Burden.
Consultant acknowledges that the covenants of Consultant are
unique and personal; accordingly, Consultant may not
assign any of Consultant's rights or delegate any of
Consultant's duties or obligations under this Agreement.
The rights and obligations of the Company under this
Agreement shall inure to the benefit of, and be binding
upon, the successors and assigns of the Company. The
rights and obligations of Consultant under this Agreement
shall inure to the benefit of and be binding upon the
heirs, legal representatives, successors and permitted
assigns of Consultant.
Section 7.3. Nature of Relationship.
The relationship of Consultant to the Company hereunder
shall be that of an independent contractor, and not as
an employee, a partner or joint venturer of the Company
for any purpose. Consultant shall not have any right to
make contracts or commitments for or on behalf of the
Company, or to act in any manner as a
representative of the Company.
Section 7.4. Notices.
Any notices to be given hereunder shall be deemed
sufficiently given when in writing and when (a) actually
served on the party to be notified, or (b) deposited
in a receptacle of the United States mail, certified
or registered, postage prepaid, addressed appropriately as
follows:
If to Company at: Xxxxxx X. Xxxxxxxxxxx
Quality Dining,Inc.
0000 Xxxxxx Xxxxx Xxxxxxx
Xxxxxxxxx, XX 00000
If to Consultant at: Xxxxxxx X. Xxxxxxxxxx
0000 Xxxxxxxxx Xxxx
Xxx Xxxxx, XX 00000
Such addresses may be changed by any party by written
advice given pursuant to this Section.
Section 7.5. Applicable Law.
This Agreement shall be governed by and construed in
accordance with the laws of the State of Indiana.
Section 7.6. No Waiver.
No failure on the part of any party at any time to require
the performance by any other party of any term of this
Agreement shall be taken or held to be a waiver of such
term or in any way affect such parties' right to enforce
such term, and no waiver on the part of any party of any
term of this Agreement shall be deemed a continuing waiver
or a waiver of any other term hereof or the breach
thereof.
Section 7.7. Modifications.
This Agreement may not be amended, modified, or supplemented without the
written agreement of the parties at the time of such amendment,
modification, or supplement.
Section 7.8. Captions.
The captions in this Agreement are for convenience and
identification purposes only, are not an integral part of
this Agreement, and are not to be considered in the
interpretation of any part hereof.
Section 7.9. Attorneys' Fees.
In any action at law or in equity to enforce any of the provisions or rights
under this Agreement, the unsuccessful party or parties to such
litigation, as determined by the court in a final judgment
or decree, shall pay the successful party or parties all
costs, expenses, and reasonable attorneys' fees incurred
by the successful party or parties (including without
limitation, costs, expenses, and fees on any appeals), and
if the successful party or parties recovers judgment in
any such action or proceeding, such costs, expenses, or
attorneys' fees shall be included as part of the judgment.
Section 7.10. Severability.
The invalidity or unenforceability of any particular
provision, or part thereof, of this Agreement shall not
affect the other provisions, and this Agreement shall
continue in all respects as if such invalid or
unenforceable provision had not been contained herein.
If any provision of this Agreement is in conflict with
any applicable statute, rule, or other law, it shall be
deemed, if possible, to be modified or altered to conform
thereto or, if not possible, to be omitted herefrom.
IN WITNESS WHEREOF, the parties have executed this
Agreement as of the day and year first above written.
QUALITY DINING, INC.
By:___/s/__________________________
Xxxxxx X. Xxxxxxxxxxx, President
______/s/__________________________
Xxxxxxx X. Xxxxxxxxxx
