Exhibit 10.42
CONSULTING AGREEMENT
This Consulting Agreement (the "Agreement") is made and entered into this
13th day of November, 1996, by and between BOSTON CHICKEN, INC. (the "Company")
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ("Bingle").
WHEREAS, Bingle is employed by the Company in the positions of Vice
President, General Counsel, and Secretary; and
WHEREAS, Bingle intends to resign from such offices of the Company and any
other offices or directorships of any of the Company's subsidiaries effective
December 13, 1996, but will continue to remain employed by the Company until
February 14, 1997; and
WHEREAS, on February 14, 1997, Bingle's employment with the Company will
terminate; and
WHEREAS, the Company desires to obtain the services of Bingle from the date
hereof through the Employment Termination Date and, thereafter, for an
additional period of time in connection with issues relating to transition of
his job functions or that are otherwise within the scope of his knowledge and
expertise, on the terms and conditions set forth in this Agreement; and
WHEREAS, Bingle desires to provide the services set forth under the terms
of this Agreement;
NOW THEREFORE, in consideration of the mutual covenants and agreements
contained herein, the parties hereto agree as follows:
1. Employment/Consultant Status.
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(a) On December 13, 1996, Bingle and the Company will announce that
effective immediately (the "Officer Resignation Date"), Bingle will resign from
the offices of Vice President, General Counsel, and Secretary of the Company and
all offices and directorships of any of the Company's subsidiaries. From the
date hereof through and including the Officer Resignation Date, Bingle will
remain an employee of the Company (working at least 35 hours per week) at his
salary level as of the date hereof and will continue participation in, and be
entitled to receive, all employee benefits offered by the Company to full-time
employees during such period.
(b) From the Officer Resignation Date until February 14, 1997, Bingle will
remain an employee of the Company (working at least 15 hours per week) at his
salary level as of the date
hereof and will continue participation in, and be entitled to receive, all
employee benefits offered by the Company to part-time employees during such
period.
(c) Bingle will resign from the employment of the Company effective on
February 14, 1997 (the "Employment Termination Date"). Bingle hereby confirms
that he is an employee at will with the Company and that as of the Employment
Termination Date his status as an employee of the Company will be properly
terminated.
(d) Bingle acknowledges that as of the Employment Termination Date he
will be an independent contractor and not an employee of the Company. Effective
upon the Officer Resignation Date except as otherwise provided herein, Bingle
will not be authorized to act on behalf of the Company and may not enter into
any contracts or make any promises or commitments of any kind whatsoever on
behalf of the Company without express written authorization from a Chairman, a
Vice Chairman, or General Counsel of the Company to do so. The Company will
maintain a voice-box for Bingle during the term of this Agreement. Bingle agrees
to promptly forward any voice-mail messages intended for his successor or other
Company personnel to the proper Company personnel.
2. Term.
The term of this Agreement shall be from the date hereof through
February 14, 1998; provided that the term hereof will be automatically extended
for successive one year periods unless either party gives the other written
notice of termination at least sixty (60) days prior to the expiration date or
any extension date; provided further that the Company may terminate this
Agreement upon thirty (30) days notice upon and breach hereof or any conduct
hereunder which constitutes malpractice. Inc the event that the Release attached
hereto as Exhibit A is not executed and returned to the Company within thirty
(30) days of the Employment Termination Date or such Release is properly revoked
in accordance with its terms, this Agreement shall terminate and all amounts
paid hereunder and all profits on stock option exercises after the fifteenth day
following the Employment Termination Date in excess of the profits that would
have been garnered had such options been exercised on the last day exercisable
but for the existence of this Agreement shall immediately be paid over to the
Company.
3. Scope of Work.
From and after the Employment Termination Date, Bingle shall, upon request
by the Company, provide information, advice, and assistance concerning matters
that were within the scope of his knowledge and expertise during the course of
his employment by the Company. The scope of Bingle's work shall include, but not
necessarily be limited to, consultation regarding the history of the Company and
precedent created during his employment; advice related to problem resolution,
transaction structuring, and corporate culture events; providing transition
assistance to the employee or employees performing job functions similar to
those previously performed by Bingle; providing assistance to the Company in
connection with any litigation that is pending or that may arise during the term
of this Agreement; and providing other advice and assistance that reasonably
fall with Bingle's knowledge and expertise and the scope.
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of his prior activities as an employee. The Company acknowledges that Bingle is
acting as a consultant and adviser and that the Company is solely responsible
for business decisions based on such advice.
Bingle shall not be required to be available any more than fifteen (15)
hours per month from and after the Employment Termination Date through the
expiration or earlier termination of this Agreement, provided that Bingle may be
required to be available for short periods for a reasonable number of days as
may be required in the event of any crisis or significant litigation.
4. Compensation.
From and after the Employment Termination Date, Bingle will be paid at an
annual rate of $50,000 per year through the expiration or earlier termination of
this Agreement, payable in monthly installments of $4,166.66 during the first
week of each month (the "Consulting Fee"). In addition to the Consulting Fee, in
the event that Bingle is required to consult in excess of fifteen (15) hours per
month after the Employment Termination Date, upon written notice from Bingle
documenting such additional devotion of time, the Company shall pay Bingle
$213.33 per hour for each additional hour in excess of fifteen (15), payable by
the Company in the ordinary course after receipt of such supporting
documentation. The Company agrees to reimburse Bingle for his COBRA insurance
expenses (at a $1,000 deductible level for family coverage) from and after the
Officer Resignation Date for the maximum time permitted under applicable law and
regulation. If the Company elects to pay bonuses pursuant to the terms of the
Company's 1996 Employee Incentive Plan, Bingle shall be eligible to receive a
bonus in an amount determined in accordance with the terms of the Company's 1996
Employee Incentive Plan (based upon his salary as of the date hereof), as if
Bingle were still a full-time employee of the Company throughout 1996 and on the
date such bonuses, if any, are paid.
5. Reimbursement for Reasonable Expenses.
Bingle shall be reimbursed for reasonable expenses incurred in performing
the work contemplated by this Agreement which are approved in writing by a
Chairman, a Vice Chairman or General Counsel of the Company upon the submission
of an itemized statement of expenses supported by receipts for any such
expenses, including, but not limited to, all costs associated with maintaining
his license to practice law in the State of Colorado and expenses related to
attendance at Continuing Legal Education courses in accordance with the
Company's regular travel and entertainment policies. Bingle will be reimbursed
for all reasonable expenses incurred in the performance of his duties in his
prior position as an employee, upon submission of expense reports in accordance
with the Company's regular travel and entertainment policies.
6. Stock Options.
It is understood and agreed by the parties that the time during which this
Agreement is in effect, and for twelve months after the expiration or
termination of this Agreement (the "Continuation Period"), shall be credited
toward satisfying the requirements for vesting of stock options and
exercisability of vested options pursuant to the terms of the Company's Amended
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and Restated 1991 Employee Stock Option Plan and the Company's 1995 Employee
Stock Option Plan and any successor or subsequent similar plan under which he
receives or holds options, subject to all of the other provisions, terms, and
conditions of such plans, as they may be amended or modified from time to time.
Upon the expiration of the Continuation Period, all stock options held by
Bingle, whether vested or unvested, shall be terminated and of no further force
or effect. If any broad-based annual grant shall be made to employees of the
Company from the date hereof until the Employment Termination Date, management
of the Company shall recommend to the Stock Option Committee of the Board of
Directors that Bingle receive an annual grant of stock options under such plans
having a value equal to two (2) times Bingle's salary as of the date hereof,
subject to the plan's other standard provisions and restrictions. If any
broad-based annual grant shall be made to employees of the Company from the
Employment Termination Date to the termination of this Agreement, management of
the Company shall recommend to the Stock Option Committee of the Board of
Directors that Bingle receive an annual grant of stock options under such plans
having a value equal to two (2) times the Consulting Fee, subject to the plan's
other standard provisions and restrictions. Bingle currently has options to
purchase, pursuant to the foregoing plans and subject to the vesting,
acceleration, and other terms and requirements thereof, shares of the Company's
common stock as reflected on the Company's records on the date hereof and in the
Stock Option Summary delivered to Bingle coincident herewith.
7. Confidentiality and Non-Compete; Return of Company Property.
Bingle acknowledges that he has executed, and hereby reaffirms his
obligations under a confidentiality and Non-Compete Agreement dated as of June
1, 1992 (the "Confidentiality Agreement"), and Non-Compete Agreement dated as of
September 1, 1992 (the "Non-Compete Agreement"), copies of which are attached
hereto as Exhibit B. The parties hereto agree (i) that the two year period
referred to in Section 2 of the Non-Compete Agreement shall not commence until
the expiration or earlier termination of this Agreement, and (ii) that the
period during which this Agreement is in effect shall be included within the
"Applicable Term," as defined in the Confidentiality Agreement, so that the
two-year period in Section 6 of the Confidentiality Agreement shall not commence
until at least the expiration or earlier termination of this Agreement, or until
such later period as provided in such Section 6.
Bingle shall return to the Company on the Employment Termination Date all
Company documents (including any and all copies) and other Company property in
his possession or under his control. Bingle hereby agrees that he shall keep no
Company documents of any kind whatsoever, and agrees that he shall promptly
return any such documents that may come into his possession. Bingle shall not
return the lap-top computer provided to him by the Company until expiration or
termination of this Agreement. During the term of this Agreement, Bingle shall
continue on the Company's Lotus Notes database and shall have access thereto.
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8. Ownership of Work Product.
Bingle agrees that any and all ideas, improvements, and inventions
conceived, created, or first reduced to practice in the performance of work
under this Agreement shall be the sole and exclusive property of the Company.
Bingle further agrees that the Company is and shall be vested with all
rights, title, and interest including patent, copyright, trade secret, and
trademark rights in Bingle's work product under this Agreement.
Bingle shall execute all papers including patent applications, inventing
assignments, and copyright assignments, and otherwise shall assist the Company
at the Company's expense and as reasonably shall be required to perfect in the
Company the rights, title, and other interests in Bingle's work product
expressly granted to the Company under this Agreement.
9. Indemnification.
Notwithstanding the resignation by Bingle of his status as an officer of
the Company or termination of Bingle's employment with the Company, the Company
shall, in accordance with the terms of the Company's Certificate of
Incorporation, as amended (the "Certificate"), indemnify and hold harmless
Bingle against all expense, liability, and loss reasonably incurred or suffered
by Bingle as a result of being made a party or threatened to be made a party to
or involved in any action, suit, or proceeding, by reason of the fact that he
was an officer or employee of the Company.
After the Employment Termination Date, the Company shall, in accordance
with the terms of the Company's Certificate, (i) indemnify and hold harmless
Bingle against all expense, liability, and loss reasonably incurred or suffered
by Bingle that result from any claims arising out of or relating to Bingle's
services hereunder to the same extent as officers of the Company are indemnified
by the Company, and (ii) reimburse Bingle for all expenses incurred by Bingle in
connection with any such action or claim. Furthermore, in the event the Company
chooses not to provide to Bingle malpractice insurance coverage, to the extent
permitted by law, the Company agrees to waive any rights it may have to bring an
action, whether legal or administrative, against Bingle for malpractice based
upon legal advice rendered by Bingle to the Company hereunder from the Officer
Resignation Date through expiration of the term of this Agreement; provided,
however, notwithstanding the Company's waiver of such right, any such claim or
action which would otherwise arise in favor of the Company may give rise to
termination pursuant to Section 2. The Company acknowledges it has consulted
with legal counsel other than Bingle in making such waiver.
10. Release.
Bingle acknowledges and agrees that this Agreement is partial consideration
for the release of any and all claims, liabilities, demands, and causes of
action arising out of his former
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employment or the termination of his employment with the Company that Bingle may
have against the Company, all as described more fully in the "Release" attached
hereto as Exhibit "A".
11. Remedies for Breach by the Consultant.
THE PARTIES INTEND THIS AGREEMENT TO BE GOVERNED BY THE LAWS OF THE STATE
OF COLORADO. If the scope of any provision contained herein is too broad to
permit enforcement of such provision to its full extent, then such provision
shall be enforced to the maximum extent permitted by law and Bingle hereby
consents and agrees that such scope may be judicially modified in any proceeding
brought with respect to the enforcement of such provision. Except as otherwise
provided in the previous sentence, if any provision of this Agreement shall be
construed to be illegal or invalid, the legality or validity of any other
provision hereof shall not be affected thereby, and any illegal or invalid
provision of this Agreement shall be severable, and all other provisions shall
remain in full force and effect. Bingle recognizes that money damages alone
would not adequately compensate the Company in the event of any breach of this
Agreement, and he or she therefore agrees that, in addition to all other
remedies available to the Company at law or in equity, the Company shall be
entitled to injunctive relief for the enforcement hereof. All payments to be
made to Bingle in accordance with the terms of this Agreement, and the
performance by the Company of its obligations hereunder, shall be conditioned on
Bingle's continued cooperation and performance of his obligations hereunder,
during the term hereof.
12. Amendment.
This Agreement, and each section thereof, may be amended only in writing,
signed by the party against whom enforcement of any such amended provision is
sought.
13. Headings.
Any headings of sections of this Agreement are solely for the convenience
of the parties and are not a part of this Agreement nor are they to be used in
its interpretation.
14. Counterparts.
This Agreement may be executed in several counterparts; each such
counterpart shall be considered as an original agreement and all such executed
counterparts shall constitute one Agreement.
15. Notices.
Any notice, request, instruction, or other document required to be given
under this Agreement by either party to the other shall be in writing and
delivered in person or by reputable express delivery service, or by facsimile
transmission or mailed by certified mail, postage prepaid, return receipt
requested (such mailed notice to be effective on the date such receipt is
acknowledged) as follows:
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To the Company:
General Counsel
Boston Chicken, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
To the Consultant:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
BOSTON CHICKEN, INC. CONSULTANT
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Title: Chief Financial Officer ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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EXHIBIT A
Exhibit "A"
RELEASE
I, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, am giving this release to Boston Chicken, Inc. (the
"Company") in partial consideration of the payment of consideration pursuant to
the Consulting Agreement between me and Boston Chicken, Inc. dated as of
November 13, 1996, to which it is attached and forms a part.
In exchange for this and other valuable consideration, I hereby agree to release
the Company, its parents, subsidiaries, and affiliated organizations, if any,
and their respective past, present, and future directors, officers, agents,
attorneys, franchisees, and employees (collectively referred to as the
"Company") from any and all claims, liabilities, demands, and causes of action
of any nature or type whatsoever which I or any of my heirs or personal
representatives may have, either now or at any time before now, against the
Company based on any action, inaction, fact, occurrence, cause, or matter
whatsoever, including but not limited to: any judicial, quasi-judicial, or
administrative action relating to my employment or termination of my employment
or arising under the Age Discrimination in Employment Act, Title VII of the
Civil Rights Act of 1964, the Employee Retirement Income Security Act, the Fair
Labor Standards Act, the Illinois Human Rights Act, the Massachusetts Fair
Employment Practice Law or other similar applicable federal, state, or local
statute; my service as an employee of the Company; or otherwise; provided,
however, this release shall not affect (i) the Company's indemnification
obligations to me, if any, that currently exist or may subsequently arise as
provided for by the Company's Certificate of Incorporation and Bylaws, each as
amended, in connection with my service to the Company in my capacity as an
officer or pursuant to the above-referenced Consulting Agreement, and (ii) my
rights to recovery under any applicable directors and officers policy of
insurance in connection with my service to the Company in my capacity as an
officer.
I acknowledge that before signing this Release the Company has advised me in
writing to consult with an attorney before signing this Release.
Before signing this Release, I acknowledge that I am being given at least 21
days within which to consider the Release.
This Release may be revoked by me within seven (7) days following my signing of
this Release if, within (7) days following my signing, I serve a written notice
of revocation to the General Counsel of Boston Chicken, Inc. at ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇. The payments and/or consideration referred to in
the Consulting Agreement shall not be eligible for payment in accordance with
its terms, and subject to the provisions in Section 2 of the Consulting
Agreement any amounts previously paid or profits received shall be paid over,
and this Release shall not become binding and enforceable until the seven (7)
day revocation period has expired.
Signed:
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Date Signed: November 13, 1996
