1
Exhibit 10-AO
EMPLOYMENT AGREEMENT
THIS AGREEMENT (this "Agreement"), dated October 30, 2000, is made by
QUALITY DINING, INC., an Indiana corporation, having its principal place of
business at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ (the "Company"), and
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇, (the "Executive").
Recitals
1. The Executive is currently employed as the Chairman of the
Board, President and Chief Executive Officer of the Company and the Company
desires to assure the continued service of Executive.
2. The Executive is willing to continue such employment by the
Company on the terms set forth herein.
Agreement
NOW, THEREFORE, in consideration of the mutual covenants and premises
herein contained, the Company and the Executive hereby agree as follows:
1. Certain Definitions.
(a) "Effective Date" shall mean the date of this
Agreement.
(b) "Change of Control Date" shall mean the first date
during the Employment Period (as defined in Section 1 (c) on which a Change of
Control (as defined in Section 2) occurs. Anything in this Agreement to the
contrary notwithstanding, if a Change of Control occurs and if the Executive's
employment with the Company is terminated or the Executive ceases to be an
officer of the Company prior to the date on which the Change of Control occurs,
and if it is reasonably demonstrated by the Executive that such termination of
employment or cessation of status as an officer (i) as at the request of a third
party who has taken steps reasonably calculated to effect the Change of Control,
or (ii) otherwise arose in connection with or anticipation of the Change in
Control, then for all purposes of this Agreement the "Change of Control Date"
shall mean the date immediately prior to the date of any such termination of
employment or cessation of officer status.
(c) "Employment Period" shall mean the period commencing
on the Effective Date and, unless earlier terminated under Section 5 hereof or
extended as hereinafter provided, ending on the 30th day of October, 2003.
Commencing on October 31, 2001, and on each anniversary of such date (each such
anniversary shall be hereinafter referred to as the "Renewal Date"), the
Employment Period shall be automatically extended so as to terminate on the
third anniversary of such Renewal Date.
(d) "Board" shall mean the Board of Directors of the
Company.
2. Change of Control. For the purpose of this Agreement, "Change
of Control" shall mean:
2
(a) The acquisition by any 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 (the "Exchange Act") (a "Person") of beneficial
ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act
as in effect from time to time) of 20% or more of either (i) the then
outstanding shares of common stock of the Company or (ii) the combined voting
power of the then outstanding voting securities of the Company entitled to vote
generally in the election of directors; provided, however, that the following
acquisitions shall not constitute an acquisition of control: (A) any acquisition
directly from the Company (excluding an acquisition by virtue of the exercise of
a conversion privilege), (B) any acquisition by the Company, (C) any acquisition
by any employee benefit plan (or related trust) sponsored or maintained by the
Company or any corporation controlled by the Company, (D) any acquisition by any
corporation pursuant to a reorganization, merger or consolidation, if, following
such reorganization, merger or consolidation, the conditions described in
clauses (i), (ii) and (iii) of subsection (c) of this Section 2 are satisfied,
or (5) any acquisition by any Person (or by such Person's estate or heirs upon
such Person's death) who on the date of this Agreement is a director or officer
of the Company or is the beneficial owner of 20% or more of the outstanding
voting securities of the Company ("Affiliated Person"); or
(b) Individuals who, as of the date hereof, constitute
the Board of Directors of the Company (the "Incumbent Board") cease for any
reason to constitute at least a majority of the Board of Directors of the
Company (the "Board"); provided, however, that any individual becoming a
director subsequent to the date hereof whose election, or nomination for
election by the Company's shareholders, was approved by a vote of at least a
majority of the directors then comprising the Incumbent Board shall be
considered as though such individual were a member of the Incumbent Board, but
excluding, for this purpose, any such individual whose initial assumption of
office occurs as a result of either an actual or threatened election contest (as
such terms are used in Rule 14a-11 of Regulation 14A promulgated under the
Exchange Act) or other actual or threatened solicitation of proxies or consents
by or on behalf of a Person other than the Board; or
(c) The Company enters into an agreement for a
reorganization, merger or consolidation, in each case, unless, following such
reorganization, merger or consolidation, (i) more than eighty percent (80%) of,
respectively, the then outstanding shares of common stock of the corporation
resulting from such reorganization, merger or consolidation and the combined
voting power of the then outstanding voting securities of such corporation
entitled to vote generally in the election of directors is then beneficially
owned, directly or indirectly, by all or substantially all of the individuals
and entities who were the beneficial owners, respectively, of the outstanding
Company common stock and outstanding Company voting securities immediately prior
to such reorganization, merger or consolidation in substantially the same
proportions as their ownership, immediately prior to such reorganization, merger
or consolidation, of the outstanding Company stock and outstanding Company
voting securities, as the case may be, (ii) no Person (excluding the Company,
any employee benefit plan or related trust of the Company or such corporation
resulting from such reorganization, merger or consolidation and any Person
beneficially owning, immediately prior to such reorganization, merger or
consolidation, directly or indirectly, 20% or more of the outstanding Company
common stock or outstanding voting securities, as the case may be) beneficially
owns, directly or indirectly, 20% or more of, respectively, the then outstanding
shares of common stock of the corporation resulting from such reorganization,
merger or consolidation or the combined voting power of the then outstanding
voting securities of such corporation entitled to vote generally in the election
of directors and (iii) at least a majority of the members of the board of
directors of the corporation resulting from such reorganization, merger or
2
3
consolidation were members of the Incumbent Board at the time of the execution
of the initial agreement providing for such reorganization, merger or
consolidation; or
(d) Approval by the shareholders of the Company of a
complete liquidation or dissolution of the Company or the Company enters into an
agreement for the sale or other disposition of all or substantially all of the
assets of the Company, other than to a corporation with respect to which
following such sale or other disposition (i) more than 80% of, respectively, the
then outstanding shares of common stock of such corporation and the combined
voting power of the then outstanding voting securities of such corporation
entitled to vote generally in the election of directors is then beneficially
owned, directly or indirectly, by all or substantially all of the individuals
and entities who were the beneficial owners, respectively, of the outstanding
Company common stock and outstanding Company voting securities immediately prior
to such sale or other disposition in substantially the same proportion as their
ownership, immediately prior to such sale or other disposition, of the
outstanding Company common stock and outstanding Company voting securities, as
the case may be, (ii) no Person (excluding the Company and any employee benefit
plan or related trust of the Company or such corporation, any Affiliated Person
and any Person beneficially owning, immediately prior to such sale or other
disposition, directly or indirectly, 20% or more of the outstanding Company
common stock or outstanding Company voting securities, as the case may be)
beneficially owns, directly or indirectly, 20% or more of, respectively, the
then outstanding shares of common stock of such corporation and the combined
voting power of the then outstanding voting securities of such corporation
entitled to vote generally in the election of directors and (iii) at least a
majority of the members of the board of directors of such corporation were
members of the Incumbent Board at the time of the execution of the initial
agreement or action of the Board providing for such sale or other disposition of
assets of the Company.
(e) Notwithstanding the foregoing, none of the
transactions contemplated in subsections (a), (b), (c)or (d) shall constitute a
Change of Control if such transaction occurs in connection with or as the result
of a transaction subject to Rule 13e-3 promulgated under the Exchange Act as in
effect from time to time provided that executive officers of the Company are the
beneficial owners of 75% or more of the voting securities of the Company
outstanding following such transaction.
3. Employment. Subject to the terms and conditions provided
herein, the Company hereby agrees, during the Employment Period, to employ the
Executive as its Chairman of the Board, President and Chief Executive Officer.
The Executive hereby agrees to accept such employment and offices during the
Employment Period.
3
4
4. Terms of Employment.
(a) Position and Location.
(i) Before Change of Control. During the
Employment Period and prior to the Change of Control Date, the Executive, in his
capacity as Chairman of the Board, President and Chief Executive Officer of the
Company, shall have the duties, authority and responsibility normally associated
with and typically afforded to the position of Chairman of the Board, President
and Chief Executive Officer of a publicly-owned and traded corporation. The
Executive's duties shall only be performed at Mishawaka, Indiana, except for
travel reasonably required in the performance of the Executive's duties.
(ii) After Change of Control. During the
Employment Period and on and after the Change of Control Date, (A) the
Executive's position (including, without limitation, the Executive's status,
offices, titles and reporting relationships), authority, duties and
responsibilities shall be at least commensurate in all material respects with
the most significant of those held or exercised by, and/or assigned to, the
Executive at any time during the ninety (90) day period immediately preceding
the Change of Control Date, and (B) the Executive's duties shall be performed at
the location where such services were performed immediately preceding the Change
of Control Date.
(iii) Responsibilities. Subject to the immediately
succeeding sentence, during the Employment Period, excluding any periods of
vacation and sick leave to which the Executive is entitled, the Executive agrees
to devote his full business time during normal business hours to the business
and affairs of the Company and, to the extent necessary to discharge the
responsibilities assigned to the Executive hereunder, to use the Executive's
reasonable best efforts to perform faithfully and efficiently the duties and
responsibilities set forth in this Section 4(a). During the Employment Period it
shall not be a violation of this Agreement for the Executive to (A) serve on
community, corporate, civic or charitable boards or committees, (B) deliver
lectures, fulfill speaking engagements or teach at educational institutions, (C)
manage personal affairs and/or investments, so long as such activities do not
significantly interfere with the performance of the Executive's duties and
responsibilities under this Agreement. Notwithstanding the above, the Executive
shall not be required to perform any duties and/or responsibilities which, in
the Executive's reasonable judgment, would be likely to result in a
non-compliance with or violation of any applicable law, regulation or rule of
professional conduct.
(iv) Reporting. The Executive shall report solely
and directly to the Board.
4
5
(b) Compensation.
(i) Base Salary. During the Employment Period,
the Executive shall receive a base salary of no less than Three Hundred Seventy
Thousand Dollars $370,000.00 per annum (the "Base Salary"), payable in
accordance with normal payroll practices. During the Employment Period, the Base
Salary shall be reviewed at least once annually for an increase (of no less than
5%) and shall be increased (but not decreased) at any time and from time to time
as shall be substantially consistent with increases in base salary awarded in
the ordinary course of business to other officers of the Company. Any increase
in the Base Salary shall not serve to limit or reduce any other obligation to
the Executive under this Agreement and any such increased Base Salary shall then
constitute the "Base Salary" for purposes of this Agreement.
(ii) Annual Bonus, Incentive, Savings and
Retirement Plans. For each fiscal year of the Company ending during the
Employment Period, the Executive shall also be eligible for an annual bonus of
up to 50% of the Base Salary, payable no later than 75 days after the end of
each fiscal year of the Company. During the Employment Period, the Executive
shall also be entitled to participate in all bonus, short-or long-term
incentive, savings and retirement plans, practices, policies and programs
maintained or provided by the Company from time to time on or after the
Effective Date for the benefit of senior executives of the Company.
(iii) Welfare Benefit Plans. During the Employment
Period, the Executive and/or the Executive's family, as the case may be, shall
be entitled to participate in and shall receive all benefits under any and all
welfare benefit plans, practices, policies and programs maintained or provided
by the Company (including, without limitation, medical, hospitalization,
prescription, dental, retiree health, disability, salary continuance, employee,
life, group life, accidental death/dismemberment and travel accident insurance
plans and programs) from time to time on or after the Effective Date for the
benefit of senior executives of the Company.
(iv) Fringe Benefits. During the Employment
Period, the Executive shall be entitled to perquisites and/or fringe benefits in
effect as of the Effective Date and, to the extent more favorable to the
Executive, such perquisites and/or fringe benefits in accordance with the plans,
practices, policies and programs maintained or provided by the Company from time
to time on or after the Effective Date for the benefit of senior executives of
the Company.
(v) Vacation. During the Employment Period, the
Executive shall be paid vacation in accordance with plans, practices, policies
and programs maintained or provided by the Company from time to time on or after
the Effective Date for the benefit of senior executives of the Company.
(vi) Additional Cash Bonus. The Company shall pay
the Executive the following amounts on the following dates: on the Effective
Date, $150,000; on January 31, 2001, $150,000; and on January 31, 2002,
$150,000.
5
6
5. Termination.
(a) Death or Disability. The Employment Period shall
terminate automatically upon the Executive's death. If during the Employment
Period, the Disability (as defined below) of the Executive has occurred, the
Company may give the Executive written notice (in accordance with Section 13(b)
of this Agreement) of its intention to terminate the Executive's employment with
the Company due to such Disability. The Executive's employment with the Company
as the case may be, shall be terminated by the Company on the 90th day (the
"Disability Effective Date"), after receipt by the Executive of such notice if,
within the ninety (90) day period commencing on the date such notice is
received, the Executive shall not have returned to the full-time performance of
the Executive's duties. For purposes of this Agreement, "Disability" means
physical or mental disability which, at least six months after its commencement,
is determined to be total and permanent by a physician mutually selected by the
Company and the Executive (or the Executive's legal representative).
(b) Cause. During the Employment Period, the Company may
terminate the Executive's employment with the Company hereunder for "Cause." For
purposes of this Agreement, "Cause" means (i) an act or acts of personal
dishonesty taken by the Executive and intended to result in substantial personal
enrichment of the Executive at the expense of the Company, (ii) repeated
violations by the Executive of the Executive's obligations under Section 4(a) of
this Agreement which are demonstrably willful and deliberate on the Executive's
part and which are not remedied in a reasonable period of time after receipt of
written notice from the Company, or (iii) the conviction of the Executive of a
felony involving moral turpitude.
(c) Good Reason. During the Employment Period, the
Executive's employment with the Company hereunder may be terminated by the
Executive for "Good Reason." For purposes of this Agreement, "Good Reason"
means:
(i) the assignment to the Executive of any duties
inconsistent in any respect with the Executive's position (including,
without limitation, the Executive's status, offices, titles and
reporting relationships), authority, duties or responsibilities as
contemplated by Section 4(a) of this Agreement, or any other action by
the Company, which, in his reasonable judgment, results in a diminution
in such position, authority, duties or responsibilities, excluding for
this purpose an isolated, insubstantial and inadvertent action not
taken in bad faith and which is remedied by the Company promptly after
receipt of notice thereof given by the Executive; or
(ii) (A) failure by the Company to comply with any of the
provisions of Section 4(b) of this Agreement, other than an isolated,
insubstantial and inadvertent failure not occurring in bad faith and
which is remedied by the Company promptly after receipt of notice
thereof given by the Executive, or (B) after the Change of Control
Date, any failure to pay the Base Salary in accordance with Section
4(b)(i), or any failure to maintain or provide for the benefit of the
Executive the plans, practices, policies and programs and the benefits
provided thereunder, described in Sections 4(b),(ii) through (v) on the
most favorable basis such plans, practices, policies and programs were
maintained, and such benefits provided, during the ninety (90) day
period immediately preceding the Change of Control Date, or, if more
favorable to the Executive and/or the Executive's family, as in effect
at any time thereafter; or
6
7
(iii) the Company requiring the Executive to be based at
any office or location other than that set forth in Section 4(a)
hereof, except for travel reasonably required in the performance of the
Executive's duties; or
(iv) any purported termination by the Company of the
Executive's employment otherwise than as expressly permitted by this
Agreement or expressly consented to in writing by the Executive; or
(v) any failure by the Company to comply with and satisfy
Section 5(c) of this Agreement.
For purposes of this Section 5(c), any good faith
determination of "Good Reason" made by the Executive on or after the Change of
Control Date shall be conclusive, final and binding on all persons. Anything in
this Agreement to the contrary notwithstanding, a termination by the Executive
for any reason during the one (1) year period immediately following the Change
of Control Date shall be deemed to be a termination for Good Reason for all
purposes of this Agreement.
(d) Voluntary Termination. During the Employment Period,
the Company may terminate, upon thirty (30) days advance written notice given to
the Executive, the Executive's employment with the Company hereunder other than
for Cause and the Executive may voluntarily terminate, upon thirty (30) days
advance written notice given to the Company, the Executive's employment with the
Company hereunder without Good Reason.
(e) Notice of Termination. Any termination by the Company
for cause or by the Executive for Good Reason shall be communicated by a notice
of termination as defined below, given in accordance with Section 13(b) of this
Agreement and which specifies (i) the termination provision in this Agreement
relied upon, (ii) the facts and circumstances (in reasonable detail) claimed to
provide a basis for termination of the Executive's employment under the
provision so indicated, and (iii) the Date of Termination (as defined below).
The failure by the Executive to set forth in such notice of termination any fact
or circumstance which contributes to a showing of Good Reason shall not waive
any right of the Executive hereunder or preclude the Executive from asserting
such fact or circumstance in enforcing his rights hereunder.
7
8
6. Obligations of the Company upon Termination.
(a) Death. If the Executive's employment is terminated by
reason of the Executive's death, the Executive, or the Executive's legal
representatives, as the case may be, shall be entitled to receive (i) the
Executive's Base Salary through the date of death at the rate in effect (as
provided for in Section 4(b) of this Agreement) on the date of death, (ii) any
compensation previously deferred by the Executive (together with any accrued
interest thereon) and not yet paid by the Company, (iii) any accrued vacation
pay not yet paid by the Company, and (iv) a lump sum payment equal to one year
of the Executive's then Base Salary and the full amount of the bonus the
Executive then was eligible to receive assuming for purposes hereof that the
Executive would have received 100% of the Executive's bonus potential (such
amounts specified in clauses (i), (ii) and (iii), are hereinafter referred to as
the "Accrued Obligations"). All such Accrued Obligations shall be paid to the
Executive's estate or beneficiary, as applicable, in a lump sum in cash within
thirty (30) days after the date of death. In addition, the Executive's family
shall be entitled to receive the most favorable family death and other benefits
provided by the Company to surviving families of senior executives of the
Company under the plans, practices, policies and programs, if any, maintained or
provided by the Company (or the economic equivalent thereof).
(b) Disability. If the Executive's employment with the
Company and/or the Parent hereunder is terminated due to the Executive's
Disability, the Employment Period shall terminate on the date of termination and
the Executive shall be entitled to receive all Accrued Obligations. All such
Accrued Obligations shall be paid to the Executive in a lump sum in cash within
thirty (30) days after the Date of Termination. In addition, the Executive shall
be entitled to receive (A) after the Disability Effective Date the most
favorable disability benefits provided by the Company to disabled senior
executives of the Company under the plans, practices, policies and programs, if
any, maintained or provided by the Company (or the economic equivalent thereof)
and a lump sum payment equal to one year of the Executive's then Base Salary and
the full amount of the bonus the Executive then was eligible to receive assuming
for purposes hereof that the Executive would have received 100% of the
Executive's bonus potential.
(c) Cause; Without Good Reason. If the Executive's
employment with the Company shall be terminated for Cause by the Company or by
the Executive without Good Reason, the Employment Period shall terminate on the
date of termination and the Executive shall be entitled to receive all Accrued
Obligations. All such Accrued Obligations shall be paid to the Executive in a
lump sum in cash within thirty (30) days after the date of termination.
(d) Good Reason; Other than for Cause, Death or
Disability. If, during the Employment Period, the Company hereunder shall
terminate the Executive's employment with the Company hereunder (other than for
Cause, Death or Disability), or the Executive shall terminate his employment
with the Company hereunder for Good Reason (i) the Executive shall receive the
Accrued Obligations, payable in a lump sum in cash within thirty (30) days after
the date of termination, (ii) a lump sum payment equal to 2.99 times the sum of
(A) the Executive's Base Salary on the date of termination, plus (B) the full
amount of the bonus the Executive was eligible to receive in the current fiscal
year assuming for purposes hereof that the Executive would have received 100% of
the Executive's bonus potential payable at the same time payment of the Accrued
Obligations is made, (iii) additional and accelerated vesting and exercisability
as to the portion of any outstanding option scheduled to vest on the next
following vesting date for any such option (as if the Executive remained
employed through such next date), and (iv) for one (1) year, after the
8
9
date, or such longer period as any plan, practice, policy or program may
provide, the Company shall continue the benefits described in Section 4(b)(iii)
to the Executive and/or the Executive's family, including, without limitation,
health insurance and life insurance, in amounts and on a basis at least equal to
those provided to senior executives (and their families) of the Company or the
economic equivalent thereof.
7. Non-exclusivity of Rights. Nothing in this Agreement shall
prevent or limit the Executive's continuing or future participation in any
benefit, bonus, incentive or other plans, practices, policies or programs,
provided by the Company nor shall anything herein limit or otherwise affect such
rights as the Executive may have under any stock option, stock appreciation,
short or long term incentive plans, restricted stock or other plans,
arrangements, or agreements with or maintained by the Company and any
compensation or benefits which are vested in the Executive or which the
Executive is otherwise entitled to receive under any plan, practice, policy or
program of the Company at or subsequent to the date of termination shall be
payable in accordance with the terms and provisions of such plan, practice,
policy or program.
8. Full Settlement. The Company's obligations to make the
payments provided for in this Agreement and otherwise to perform their
obligations hereunder shall not be affected by any set-off, counterclaim,
recoupment, defense or other claim, right or action which the Company may have
against the Executive or others. In no event shall the Executive be obligated to
seek other employment or take any other action by way of mitigation of the
amounts payable to the Executive under any of the provisions of this Agreement.
The Company agrees to pay all the legal fees and expenses incurred by the
Company, the Executive and others as a result of the negotiation and/or drafting
of this Agreement or any contest or dispute (regardless of the outcome thereof)
arising out of this Agreement including, without limitation, any contest
regarding the amount of any payment pursuant to this Agreement.
9. Certain Additional Payments by the Company.
(a) Additional Payments. Anything in this Agreement to
the contrary notwithstanding, if it shall be determined that any payment or
distribution by the Company to or for the benefit of the Executive, whether paid
or payable or distributed or distributable, pursuant to the terms of this
Agreement or otherwise (a "Payment"), would be subject to the excise tax imposed
by Section 4999 of the Internal Revenue Code of 1986, as amended (the "Code")
(or any similar tax) and/or any interest or penalties with respect to such
excise tax (such excise tax, together with any such interest and penalties, are
hereinafter collectively referred to as the "Excise Tax"), then the Executive
shall be entitled to receive an additional payment from the Company (a "Gross-Up
Payment") in an amount such that, after payment by the Executive of all taxes
(including, without limitation, any interest or penalties imposed with respect
to such taxes), including, without limitation, any Excise Tax, imposed upon or
attributable to the Gross-Up Payment, the Executive retains an amount of the
Gross-Up Payment equal to the Excise Tax imposed upon the Payments.
(b) Related Determinations. All determinations required
to be made under this Section 9, including whether and when the Gross-Up Payment
is required and the amount of such Gross-Up Payment including any determination
of the parachute payments under Code Section 280G(b)(2), and the assumptions to
be utilized in arriving at such determinations shall be made by a nationally
recognized certified public accounting firm that is mutually selected by the
Executive and the Company (the "Accounting Firm") which shall provide detailed
supporting calculations
9
10
both to the Company and the Executive within fifteen business days of the
receipt of notice from the Executive that there has been a Payment, or such
earlier time as is requested by the Company. All fees and expenses of the
Accounting Firm shall be borne solely by the Company. Any Gross-Up Payment shall
be paid by the Company to the Executive within five days of the receipt of the
Accounting Firm's determination. Any determination by the Accounting Firm shall
be binding upon the Company and the Executive. As a result of uncertainty in the
application of Section 4999 of the Code at the time of the initial determination
by the Accounting Firm hereunder, it is possible that the Gross-Up Payment made
will have been an amount less than the Company should have paid pursuant to this
Section 9 (the "Underpayment"). In the event that the Executive thereafter is
required to make a payment of any Excise Tax, the Accounting Firm shall
determine the amount of the Underpayment and any such Underpayment shall be
promptly paid by the Company to or for the benefit of the Executive. The
obligations of the parties under this Section 9 shall indefinitely survive the
termination of the Executive's employment with the Company and the termination
of this Agreement.
10. (a). Restrictive Covenants. In consideration of the
Employee's continued employment and the mutual promises contained herein,
Employee agrees and promises that Employee will not, directly or indirectly, for
Employee or any other person, firm, corporation, entity or business:
(i) Compete with Company. During the term of his
employment by the Company and for a period of one year after
termination of employment with the Company for any reason own, manage,
operate, control or otherwise be in any manner affiliated or connected
with, or 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 that owns or operates any full service or quick service
restaurants within 15 miles of any restaurant owned by the Company on
the last day of Employee's employment.
(ii) Employees. For a period of one year after termination
of employment by the Company, Employee shall not, directly or
indirectly, (i) induce or influence or attempt to induce or influence,
any person who is engaged as an employee, agent, independent contractor
or otherwise by the Company to terminate his or her employment or
engagement with the Company, nor (ii) aid, assist or abet any other
person, firm, or corporation in any of the prohibited matters
identified in clause (i) of this Section 10(a).
(b). Severability. The parties hereto intend that the
covenants contained in Section 10(a)(i) shall be construed as a series of
separate covenants, one for each restaurant operated by the Company. Except for
geographic coverage, each such separate covenant shall be deemed identical in
terms to the covenants contained in Section 10(a)(i). If, in any judicial
proceeding, a court shall refuse to enforce any of the separate covenants deemed
included in this section, then this unenforceable covenant shall be deemed
eliminated from these provisions for the purpose of those proceedings to the
extent necessary to permit the remaining separate covenants to be enforced.
(c). Proprietary and Confidential Information. The parties
hereto acknowledge and agree that proprietary and confidential information means
information or material which is not
10
11
generally available to or used by others outside the Company or the utility or
value of which is not generally known or recognized as standard practice,
whether or not the underlying details are in the public domain. Information and
material which is considered proprietary and confidential by the Company
includes, but is not limited to, the following:
(i) Information and material which relates to the
Company's purchasing, accounting, operating or marketing methods;
(ii) Information and material related to business plans
and methods of operations or methods of doing business or relating to
marketing or expansion plans developed or to be developed by the
Company;
(iii) Information and material related to the Company's
method and manner of compensating its employees;
(iv) Any of the information of the type described above
which the Company obtained from another source and which the Company
treats as proprietary or designates as confidential, whether or not
owned or developed by the Company.
(d). Use of Information. Employee acknowledges and agrees
that he is in a fiduciary relationship with the Company and as a consequence of
this fiduciary relationship and the trust and confidence reposed in the Employee
by the Company, Employee will receive proprietary and confidential information
and/or trade secrets of the Company, as previously defined in this Agreement. In
partial consideration for the mutual promises contained herein, the Employee
agrees not to directly or indirectly divulge, publish, communicate, use to the
detriment of the Company, use for the benefit of any person, firm, corporation,
or business or misuse in any way any such proprietary and confidential
information and/or trade secrets either during or subsequent to employment with
the Company, whether or not conceived, originated, discovered or developed in
whole or in part by Employee.
(e). Availability of Injunctive Relief. The parties
acknowledge that compliance with the covenants in Sections 10(a)(c) and (d) is
necessary to protect the business, goodwill and proprietary interests of the
Company. The parties further agree that the remedy at law for breach of any of
the provisions of such covenants is inadequate and that the Company shall be
entitled, in addition to other such remedies as it may have, to injunctive
relief for any breach or threatened breach of Sections 10(a)(c) and (d) without
proof of any actual damages that may have been or may be caused to the Company
by such breach or threatened breach.
(f) Exclusion. Notwithstanding the foregoing, nothing
contained in this Section 10 is intended nor shall it be construed to prevent,
limit or impair Executive's ability to engage in any business, enterprise or
investment in which Executive is engaged as of the Effective Date or in which
Executive first engages during the term of this Agreement with the express
approval of the Board.
11. Successors. (a) This Agreement is personal to the Executive.
Without the prior written consent of the Company it shall not be assignable by
the Executive otherwise than by will or the laws of descent and distribution.
This Agreement shall inure to the benefit of and be enforceable by the
Executive's legal representatives.
11
12
(b) This Agreement shall inure to the benefit of and be
binding upon the Company and its successors and assigns.
(c) The Company will require any successor (whether
direct or indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company to assume
expressly and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform it if no such succession
had taken place.
12. Miscellaneous. (a) This Agreement shall be governed by and
construed in accordance with the laws of the State of Indiana, without reference
to principles of conflict of laws thereunder. The captions of this Agreement are
not part of the provisions hereof and shall not have any force or effect. This
Agreement may not be amended or modified otherwise than by a written agreement
executed by the parties hereto or their respective successors and legal
representatives.
(b) All notices and other communications hereunder shall
be in writing and shall be given by facsimile transmission, hand delivery to the
other party or by registered or certified mail, return receipt requested,
postage prepaid, addressed as follows:
If to the Executive:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
If to the Company:
▇▇▇▇ ▇. ▇▇▇▇▇
Executive Vice President and General Counsel
Quality Dining, Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notice and communications shall be effective
when actually received by the addressee.
(c) The invalidity or unenforceability of any provision
of this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement.
(d) The Company may withhold from any amounts payable
under this Agreement such federal, state or local taxes as shall be required to
be withheld pursuant to any applicable law or regulation.
(e) The Executive's failure to insist upon strict
compliance with any provision hereof shall not be deemed to be a waiver of such
provision or any other provision thereof.
12
13
(f) This Agreement contains the entire understanding of
the Company and the Executive with respect to the subject matter hereof.
IN WITNESS WHEREOF, the Executive and the Company have each caused this
Agreement to be executed in their name and on their behalf on the date first
above written.
QUALITY DINING, INC.
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------------
By: ▇▇▇▇ ▇. ▇▇▇▇▇
Its: Executive Vice President and
General Counsel
EXECUTIVE
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
---------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
13