Exhibit 10.1
SEPARATION AGREEMENT AND
GENERAL RELEASE
This SEPARATION AGREEMENT AND
GENERAL RELEASE (“Agreement”) is made and entered into
by and among Michael W. Patrick (“Patrick”) and Carmike
Cinemas, Inc. (the “Company”) and the Company’s
former and current employees, partners, members, managers,
supervisors, attorneys, investors, agents, officers, directors, and
affiliates, including parent companies, subsidiaries, employee
benefit plans, and divisions (collectively, with the Company, the
“Releasees”).
W I T N E S S E T
H
WHEREAS , Patrick was employed with the Company as its
Chief Executive Officer pursuant to an Employment Agreement dated
January 31, 2002, as amended December 31, 2008 (the
“Employment Agreement”);
WHEREAS, Patrick has resigned his employment with the
Company and all offices he holds with the Company effective
January 19, 2009 (the “Separation
Date”);
WHEREAS, Patrick has resigned as Chairman and as a member
of the Board of Directors;
WHEREAS, the Company has agreed to provide Patrick with
certain severance payments and benefits to which he would not
otherwise be entitled, as provided in this Agreement;
and
WHEREAS , Patrick and the Releasees want to settle fully
and finally all differences, disputes and potential disputes
between them arising out of Patrick’s employment and
termination of employment with the Company, and to cancel and
supersede the Employment Agreement;
NOW, THEREFORE,
in consideration of the premises and
mutual promises herein contained, it is agreed as
follows:
1.
Consideration . Provided that Patrick satisfies the
conditions of this Agreement (including Sections 5, 6, 7, 8, 9 and
10 below), the Company will provide Patrick the following
consideration (the “Consideration”):
A.
Severance. The Company shall pay to Patrick the gross lump
sum of $5,000,000 (the “Severance”), subject to
applicable withholdings and other amounts required by law to be
withheld. The Severance shall become due and payable six months and
one day after Patrick’s “separation from service”
(within the meaning of Section 409A of the Internal Revenue
Code — a “Separation from Service”);
B.
Welfare Benefits. The Company shall continue to maintain
health, medical, dental, and group life coverage for Patrick
through January 31, 2012, subject to the terms and conditions
of the Company’s applicable plans, as amended from time to
time. Patrick shall pay 100% of the cost of such coverage, and the
Company shall reimburse Patrick for the Company’s portion of
such cost as soon as practicable after Patrick pays such cost.
Should the Company determine that it cannot continue to provide
Patrick with coverage under its applicable plan(s), the Company
shall reimburse Patrick for reasonable premiums actually incurred
by him to purchase comparable coverage;
C. Death
Benefit . Should Patrick die on or before January 31,
2012, the Company shall pay to Patrick’s surviving spouse (or
such other person as Patrick may designate to the Company in
writing) the sum of $850,000, paid in equal monthly installments
over a period of twelve (12) months; and
D.
Perquisites. The Company shall transfer to Patrick the title
to the current Company vehicle used by Patrick as soon as
practicable following the Effective Date, and Patrick shall
thereafter be responsible for all costs and liabilities related to
such vehicle. The Company shall further continue to pay for
Patrick’s current club memberships that were paid for by the
Company prior to the Separation Date through December 31,
2009. The Company shall no longer reimburse Patrick for health,
medical or dental expenses incurred by Patrick or Patrick’s
family or dependents that are not otherwise covered by the
Company’s health, medical, or dental plans.
E.
Acknowledgements. Patrick acknowledges and agrees that the
Consideration encompasses and is in lieu of and in full
satisfaction of any and all other payments which Patrick is owed,
is potentially owed, or claims to be owed to him by the Company, or
any benefit plan or trust maintained by the Company, whether
arising under the Employment Agreement or otherwise (except for any
arising under the Stock Grant Certificate, the Option Certificate,
or the balance under Patrick’s Deferred Compensation
Agreement and Trust Agreement (each as identified in
Section 14 hereof)) as of the Separation Date (as adjusted for
earnings and losses through the date(s) such deferred compensation
is distributed) including, without limitation, any other salary,
severance, benefits, bonuses, deferred compensation, equity
compensation, vacation pay, pay, sick pay or other paid time off.
For the avoidance of doubt, there shall be no deferred compensation
contribution by the Company of any sort with respect to any of the
Consideration.
2.
Releases and Covenants Not to Sue.
A.
General Release by Patrick. As a material inducement of the
Company to enter into this Agreement, Patrick hereby irrevocably
and unconditionally releases, acquits, and forever discharges the
Releasees from any and all charges, complaints, claims,
liabilities, obligations, promises, agreements, controversies,
damages, actions, causes of action, suits, rights, demands, costs,
losses, debts and expenses (including attorneys’ fees and
costs actually incurred) of any nature whatsoever, known or
unknown, suspected or unsuspected, fixed or contingent, including,
but not limited to, any claims for compensatory damages, special
damages, punitive damages, or any other form of compensation from
the Releasees or any of them, or based upon any contract, covenant
of good faith and fair dealing, or any tort, or any federal, state,
or other governmental statute, regulation, ordinance or common law,
including, without limitation claims for unpaid wages, vacation
pay, or other fringe benefits; breach of any covenant of good faith
and fair dealing; breach of an express or implied contract;
violation of any other legal, equitable or contractual duty arising
under the laws of any state or locality, or the laws of the United
States, including, without limitation, Title VII of the Civil
Rights Act of 1964, as amended, 42 U.S.C. § 2000e, et
seq. ; 42 U.S.C. § 1981; Executive Order 11246, 30 Fed.
Reg. 12319; 42 U.S.C. § 1985(3); the Rehabilitation Act
of 1973, as amended, 29 U.S.C. § 701, et seq. ;
the Americans with Disabilities Act, 42 U.S.C. § 12101,
et seq. ; the Family and Medical Leave Act, 29 U.S.C.
§ 2601, et seq. ; the Employment Retirement
Income Security Act of 1974, as amended, 29 U.S.C. § 1001,
et seq. ; the Fair Labor Standards Act, 29 U.S.C.
§ 201, et seq. ; and the Sarbanes-Oxley Act
of 2002, 18 U.S.C. § 1514A, et seq. , which
Patrick now has, owns or holds, or claims to have, own or
hold,
- 2 -
which Patrick at any time heretofore had, owned
or held, or claimed to have, against each or any of the Releasees,
including claims arising under the Employment Agreement, or any
other agreement or plan whatsoever, whether oral or written.
Patrick represents, acknowledges and agrees that he has been
provided with all leave to which he may have been entitled under
the Family and Medical Leave Act. Patrick hereby covenants and
agrees, to the fullest extent permitted by law, not to sue, file
any grievance, complaint or arbitration, commence, or permit to be
commenced or filed, any litigation, administrative charge, or other
proceeding against any of the Releasees as described herein, with
respect to any matter whatsoever, including, but not limited to,
any matter arising from or relating to the terms and conditions of
his employment with the Company, the termination of his employment
with the Company, and any other actions taken by the Company
concerning Patrick up to the time of the Effective Date.
B.
Release of Claims under the ADEA . In addition to the
foregoing, Patrick hereby knowingly and voluntarily releases and
discharges the Releasees, collectively, separately and severally,
from and for any and all liability, claims, allegations, and causes
of action arising under the Age Discrimination in Employment Act of
1967, as amended (“ADEA”), which he and/or his heirs,
administrators, executors, personal representatives, beneficiaries,
and assigns may have or claim to have against the Releasees.
Notwithstanding any other provision or section of this Agreement,
Patrick does not hereby waive any rights or claims under the ADEA
that may arise after the date on which the Agreement is signed by
him.
Patrick hereby acknowledges and
represents that (i) he has been given a period of at least
twenty-one (21) days to consider the terms of this Agreement,
(ii) the Company has advised (or hereby advises) Patrick in
writing to consult with an attorney prior to executing this
Agreement, and (iii) Patrick has received valuable and good
consideration to which he is otherwise not entitled in exchange for
his execution of this Agreement. Patrick and the Company
acknowledge and agree that any revisions made to this Agreement
after it was initially delivered to Patrick were either not
material or were requested by Patrick, and expressly agree that
such changes do not re-start the 21-day consideration period
described above.
The parties hereby acknowledge this
Agreement shall not become effective or enforceable until the
eighth (8th) day after it is executed by Patrick (the
“Effective Date”) and that Patrick may revoke this
Agreement at any time before the Effective Date.
In the event Patrick revokes, he
shall notify the Company in writing to its designated agent for
this purpose no later than the last day of the revocation period.
Such notice shall be delivered to the Company by national overnight
delivery service such as Federal Express or United Parcel Service,
the receipt of which shall be tracked by the delivery service, and
addressed as follows:
Carmike Cinemas, Inc.
1301 First Avenue
Columbus, Georgia 31901
Attn: General Counsel
C.
General Release by the Company. As a material inducement of
Patrick to enter into this Agreement, the Company hereby
irrevocably and unconditionally releases, acquits, and forever
discharges Patrick from any and all charges, complaints, claims,
liabilities, obligations,
- 3 -
promises, agreements, controversies, damages,
actions, causes of action, suits, rights, demands, costs, losses,
debts and expenses (including attorneys’ fees and costs
actually incurred) of any nature whatsoever, known or unknown,
suspected or unsuspected, fixed or contingent, including, but not
limited to, any claims for compensatory damages, special damages,
punitive damages, or any other form of compensation from Patrick,
or based upon any contract, covenant of good faith and fair
dealing, or any tort, or any federal, state, or other governmental
statute, regulation, ordinance or common law, including, without
limitation claims asserting violation of any legal, equitable or
contractual duty arising under the laws of any state or locality,
or the laws of the United States, which the Company now has, owns
or holds, or claims to have, own or hold, which the Company at any
time heretofore had, owned or held, or claimed to have, against
Patrick. The Company hereby covenants and agrees, to the fullest
extent permitted by law, not to sue, file any grievance, complaint
or arbitration, commence, or permit to be commenced or filed, any
litigation, administrative charge, or other proceeding against
Patrick as described herein, with respect to any matter whatsoever,
including, but not limited to, all actions taken by Patrick
concerning the Company up to the time of the Effective
Date.
3. Denial
of Liability or Wrongful Conduct . This Agreement shall not in
any way be construed as an admission by the Company or Patrick that
they have acted wrongfully with respect to each other or any other
person, or that the Company or Patrick have any rights whatsoever
against each other.
4. No
Pending Claims . The Company and Patrick represent that they
have not filed, nor assigned to others the right to file, nor are
there pending any complaints, charges or lawsuits against the
Releasees or Patrick (as applicable) with any governmental agency
or any court, and that the Company shall not file against Patrick,
and Patrick shall not file any claims against the Releasees with
any governmental agency or any court at any time hereafter for
actions taken up to and including the Effective Date with respect
to matters released by this Agreement. Patrick agrees that he will
not seek or be entitled to any personal or representative monetary
recovery in any proceeding of any nature arising out of any of the
matters released above.
5. Board
Memberships. Patrick agrees to immediately resign from the
Board of Directors (and all positions or offices related thereto)
effective as of the Effective Date. Patrick agrees not to accept
re-election to the Board for a period of three (3) years
following the Effective Date.
6.
Non-Disparagement. Except as otherwise required by law,
Patrick acknowledges and agrees that he shall not make any
statement, written or verbal, to any person or entity, including in
any forum or media, or take any action, in disparagement of the
Company or any of the other Releasees, including, but not limited
to, negative references to the Company’s or a
Releasee’s services, policy, partners, directors, officers,
managers, members, or employees, or take any other action that may
disparage the Company or a Releasee to the general public and/or
the Company’s or Releasee’s employees, clients,
suppliers, and/or business partners. Except as otherwise required
by law, the Company acknowledges and agrees that the independent
members of its Board of Directors shall not make any statement,
written or verbal, to any person or entity, including in any forum
or media, or take any action, in disparagement of
Patrick.
- 4 -
7.
Nondisclosure, Non-Competition and
Non-Solicitation.
A.
Confidentiality. Patrick agrees to and shall hold in
confidence all Trade Secrets and all Confidential Information (each
as defined below) and will not, either directly or indirectly, use,
sell, lend, lease, distribute, license, give, transfer, assign,
show, disclose, disseminate, reproduce, copy, appropriate, or
otherwise communicate any Trade Secrets or Confidential Information
to any person or entity, without the prior written consent of the
Company. Patrick’s obligation of non-disclosure as set forth
herein with regard to each item constituting all or any portion of
a Trade Secret shall continue for so long as such item continues to
constitute a Trade Secret under applicable law, and with regard to
any Confidential Information, for a period of three (3) years
after the Separation Date.
“Confidential
Information” means data or other information relating to the
business of the Company or a Releasee (other than Trade Secrets)
that is or has been disclosed to Patrick or of which Patrick became
aware as a consequence of or through Patrick’s relationship
with the Company or a Releasee and which has value to the Company
or a Releasee, is not generally known to the Company’s or the
Releasee’s competitors (as applicable. Confidential
Information includes, without limitation, information in any form
or media (including documents, records, agreements, drafts, and
email) regarding the Company’s or a Releasee’s
officers, directors, employees, members, managers, customers or
actively sought prospective customers, investors and investments or
actively sought investors and investments, suppliers,
manufacturers, and distributors gained by Patrick as a result of
Patrick’s relationship with the Company or the Releasees (or
any of them) that is not publicly known. Confidential Information
shall not include any data or information that has been voluntarily
disclosed to the public by the Company or a Releasee (except where
such public disclosure has been made by Patrick without
authorization) or that has been independently developed and
disclosed by others, or that otherwise enters the public domain
through lawful means.
“Trade Secrets” means
information protectable as a trade secret under applicable law,
inclu
