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Exhibit
10.5
RELEASE AND CONSULTING
SERVICES AGREEMENT
This Release and Consulting
Services Agreement (hereinafter “Agreement”) is entered
into as of the 15 th day
of June, 2007, by and between ANTHONY J. RHEAD (hereinafter
referred to as “Rhead “) and CARMIKE CINEMAS,
INC. (hereinafter referred to as “Carmike”), and
arises out of the resignation of Rhead as Senior Vice President
Entertainment/Digital. In consideration of the material promises
contained herein, the parties agree as follows:
1. RESIGNATION OF
EMPLOYMENT. Rhead hereby voluntarily resigns as an employee
and officer of Carmike, as well as in each other capacity in which
he served Carmike and the entitles listed on Exhibit A attached
hereto, effective as of the 15 th day
of June, 2007 (the “Resignation Date”).
Contemporaneously with the signing of this Agreement, Rhead is
signing and delivering to the Board of Directors of Carmike (and
each of the entities listed on Exhibit A) a notice of resignation
in the form attached hereto as Exhibit B indicating his resignation
as an officer of the entitles listed on Exhibit A hereto effective
as of the Resignation Date. It is agreed that as of the Resignation
Date, Rhead has no further privileges, duties, or obligations to
Carmike, except as described in this Agreement.
2. SEVERANCE
PACKAGE. In consideration of the promises and releases made
by Rhead contained herein, Carmike agrees to provide Rhead with a
Severance Package consisting of the following:
(a) In exchange for
Consulting Services as hereinafter set forth, Carmike will pay
Rhead his regular base salary at his current rate of pay from the
Resignation Date through and including December 31, 2007, less
any amounts required to be withheld under applicable laws and
regulations, which will be paid according to Carmike’s
regular payday schedule from the next payday following the
Resignation Date to December 31, 2007. Rhead will remain on
the Carmike major medical plan for this period.
(b) Provided Rhead complies
with the provisions of Section 4 hereof, on December 31,
2007 Carmike will transfer to Rhead the 2006 Lexus LS430 (VIN #
JTHBN36F865047276) that he was permitted to use during his
employment with Carmike.
(c) The payments and benefits
provided to Rhead in this Section 2 shall be subject to all
applicable income tax or other withholding required by applicable
federal, state or local law.
(d) Notwithstanding the
release contained in Section 3 of this Agreement, it is
understood by all parties that Rhead does not release any claims
that may arise under the terms of this Agreement or after the
effective date of this Agreement. It is also agreed and understood
that Rhead does not forfeit or release his
claims to any funds held in his account
in Carmike’s Deferred Compensation Plan. Rhead also does not
release any claim he may have to indemnification pursuant to the
terms of Carmike’s bylaws.
3. GENERAL RELEASE BY
RHEAD. In exchange for the payments and benefits described
in Section 2 of this Agreement, Rhead hereby voluntarily,
irrevocably, fully, and completely RELEASES, ACQUITS, AND FOREVER
DISCHARGES Carmike (including its current and former owners,
shareholders, predecessors, successors, assigns, agents, directors,
officers, employees, representatives, attorneys, insurers,
subsidiaries, divisions, affiliates, and related business entities)
from any and all claims, complaints, liabilities, obligations,
promises, agreements, controversies, damages, actions, causes of
action, suits, rights, demands, costs, losses, debts, and expenses
of any nature whatsoever (whether known or unknown) which Rhead
ever had, may have, or now has arising from or related to, directly
or indirectly, Rhead ‘s employment with Carmike or the
termination of Rhead ‘s employment with Carmike, or other
events accrued as of the date of execution of this Agreement,
including, but not limited to:
(a) Violations of Title VII
of the Civil Rights Act of 1964, the Age Discrimination in
Employment Act, the Fair Labor Standards Act, the Civil Rights Act
of 1991, the Americans With Disabilities Act, the Equal Pay Act,
the Civil Rights Act of 1866, 42 U.S.C. § 1981, the Family and
Medical Leave Act, the Consolidated Omnibus Budget Reconciliation
Act of 1985, or the Employee Retirement Income Security Act;
and
(b) Violations of any other
federal or state statute or regulation or local ordinance;
and
(c) Claims for lost or unpaid
wages, compensation, or other benefits claims under state law,
defamation, intentional infliction of emotional distress, negligent
infliction of emotional distress, bad faith action, slander,
assault, battery, wrongful or constructive discharge, negligent
hiring, retention and/or supervision, fraud, misrepresentation,
conversion, tortious interference with property, negligent
investigation; and
(d) Any claims to benefits
under any and all bonus, severance, workforce reduction, early
retirement, outplacement, or any other similar plan sponsored by
Carmike which Rhead ever had or now has or may in the future have;
and
(e) Any other claims arising
in tort or contract under state law.
In addition, Rhead
acknowledges that this Agreement constitutes a full SETTLEMENT,
ACCORD AND SATISFACTION of all claims covered by the release
provisions of this paragraph. Notwithstanding the foregoing, it is
understood by all
parties that Rhead does not release any
claims that may arise under the terms of this Agreement or after
the effective date of this Agreement.
4. CONSULTING
SERVICES. During the period commencing on the Resignation
Date and ending on December 31, 2007 (the “Consulting
Period), Rhead agrees to be available to serve, and to serve, in
the capacity of an independent consultant to Carmike. As a
consultant to Carmike, Rhead agrees to be available to assist
Carmike with such matters related to the business of Carmike as
shall be mutually agreed to from time to time by Rhead and the COO
of Carmike, including but not limited to digital issues. Rhead
specifically agrees to contact the COO by telephone or email on
Monday and Thursday of each week during the Consulting Period to
discuss such digital issues. During the Consulting Period, Rhead
shall perform the consulting services as an independent contractor
and not as an employee of Carmike. Carmike will not exercise
direction or control over Rhead in the performance of the
consulting services. Rhead shall act solely in an advisory
capacity, and in consequence shall not hold himself out as an
officer or an employee of Carmike, and (unless otherwise instructed
or authorized in writing) Rhead shall not have an authority to act
for Carmike or make any decisions or commitments for or on behalf
of Carmike.
Carmike agrees to reimburse
Rhead for any reasonable and necessary expenses Rhead incurs in
performing services for Carmike during the Consulting Period so
long as such expenses are documented in writing and are submitted
to Carmike for reimbursement within thirty (30) days of the
date the expense is incurred.
5. BUSINESS PROTECTION
COVENANTS.
Definitions. For
purposes of this Agreement, the following terms shall have the
following meanings:
(a) “Confidential
Information” shall mean valuable, non-public, competitively
sensitive data and information relating to the Carmike’s
business that is not generally known by or readily available to
Carmike’s competitors. Confidential Information does not
include any information that comes into the public domain without
any action by Rhead .
(b) “Trade
Secret” shall mean information, including a formula, pattern,
compilation, program, device, method, technique, or process that:
(a) derives independent economic value, actual or potential,
from not being generally known to, and not being readily
ascertainable by proper means by, other persons who can obtain
economic value from its disclosure or use; and (b) is the
subject of efforts that are reasonable under the circumstances to
maintain its secrecy.
(c) “Competing
Business” shall mean any business (other than Carmike) that,
directly or indirectly, engages in the distribution and the
exhibition of motion pictures.
(d) “Competitive
Position” shall mean (A) Rhead ‘s direct or
indirect equity ownership (excluding ownership of less than one
percent (1%) of the outstanding common stock of any publicly
held corporation) or control of any portion of any Competing
Business; (B) Rhead serving as a director; officer;
consultant, lender, joint venturer, partner, agent, or advisor of
or to any Competing Business; or (C) any employment
arrangement or independent contractor agreement between Rhead and
any Competing Business whereby Rhead is required to perform
services for the Competing Business which are substantially similar
to those that Rhead performed for Carmike.
(e) “Restricted
Territory” shall mean the thirty-seven (37) states of
the United States in which Carmike is operating as of the Effective
Date. A list of these states is attached hereto as Exhibit C. This
Restricted Territory is intended to be co-extensive with the actual
geographic areas for which Rhead performed services for Carmike as
an employee and for which he will provide services to Carmike as a
consultant under this Agreement.
Rhead h
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