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EXHIBIT 10.1
AGREEMENT AND RELEASE
This AGREEMENT AND RELEASE is entered into as of October 1, 1997
between Jenny Craig, Inc., a Delaware corporation ("JCI"), and C. Joseph LaBonte
("LaBonte") with reference to the following facts:
A. LaBonte has been employed by JCI and JCI's subsidiaries pursuant to
his Employment Agreement with JCI, dated April 11, 1994, as President and Chief
Executive Officer.
B. LaBonte has submitted his resignation as an officer and director
effective as of the date hereof.
C. JCI has accepted LaBonte's resignation and the parties have agreed
to a severance package as set forth below.
NOW, THEREFORE, based upon the foregoing facts and in consideration of
the full and faithful performance of the agreements contained herein, the
parties agree as follows:
1. Reference herein to "JCI" shall also include JCI's
subsidiaries, affiliated corporations and divisions, and their respective
officers, directors, shareholders, agents, employees, attorneys, successors and
assigns. Reference herein to "LaBonte" shall include his heirs, executors,
administrators, agents, successors and assigns.
2. JCI and LaBonte agree to the following payments and
accommodations:
2.1 A severance payment of an amount equal to
LaBonte's base gross monthly salary under
his Employment Agreement, less withholding
taxes and any appropriately authorized
deductions, to be paid to LaBonte in regular
semi-monthly installments through December
31, 1998.
2.2 LaBonte will be entitled to exercise options
to acquire 1,000,000 shares (less options
previously exercised) of common stock of
Jenny Craig, Inc. pursuant to the terms and
conditions of his present Stock Option
Agreement, dated April 11, 1994, including
the "Termination of Options" (Section 3) and
the "Acceleration of Exercisability"
(Section 4) applicable to termination of his
employment by the Company without cause.
2.3 LaBonte will be paid the amount, if any, of
Annual Bonus due pursuant to Section 3.3 of
his Employment Agreement, for the fiscal
year ending June 30, 1998.
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2.4 LaBonte's medical and dental coverages will
continue through December 31, 1998 and
LaBonte will then be offered the opportunity
to purchase such extended medical COBRA
benefits as are mandated.
2.5 LaBonte will be paid, concurrently herewith,
for all unused vacation time accrued as of
the date hereof.
2.6 LaBonte will be paid a monthly temporary
office and secretarial allowance of $2,000
per month for the months of October through
December, 1997.
3. Effective January 2, 1998, the obligation evidenced by
LaBonte's Promissory Note with respect to the $1.5 million Employee Loan made to
LaBonte pursuant to Section 4.2 of his Employment Agreement shall be deemed
satisfied in full on the express condition that, between the date hereof and
January 2, 1998, LaBonte is not in default under the provisions of Section 4
hereof. The original Promissory Note and Deed of Trust evidencing and securing
such Employee Loan, together with a fully executed and notarized Substitution of
Trustee and Reconveyance of such Deed of Trust, shall be deposited with William
D. Gould, Esq. concurrently with the execution hereof. If the Employee Loan has
been satisfied as above set forth, William D. Gould, Esq. is hereby irrevocably
authorized and instructed, at any time on or after January 2, 1998, to mark such
Promissory Note "Canceled," and to deliver to LaBonte such original Promissory
Note and Deed of Trust, together with the original Substitution of Trustee and
Reconveyance.
4. Each and all of the provisions of Section 11 of LaBonte's
Employment Agreement with respect to confidential and proprietary information,
non-solicitation of JCI employees and other matters referred to in said Section
11, are incorporated by reference with the same effect as if fully set forth
herein.
5. Except as to the payments, duties and obligations set forth
in this AGREEMENT AND RELEASE, and except as to LaBonte's rights to
indemnification as provided in Article Ninth of JCI's Restated Certificate of
Incorporation, JCI on the one hand, and LaBonte on the other hand, mutually
release each other of and from any and all claims, rights, actions, causes of
action, liabilities and other obligations of any type, nature or description,
whether known or unknown, arising out of or in any way related, directly or
indirectly, to LaBonte's employment by JCI or the termination of such
employment. Without limiting the generality of the foregoing, LaBonte
acknowledges and agrees that this release shall operate as a complete bar to any
litigation, charges, complaints, grievances or demands arising under Title VII
of the Civil rights Act of 1964, the Age Discrimination in Employment Act, the
California Fair Employment and Housing Act, the Employee Retirement Income
Security Act, and the Worker Adjustment Restraining and Notification Act.
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The parties acknowledge that they are each familiar with the
provisions of Section 1542 of the California Civil Code, which provides as
follows:
"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE
CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE
TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE
MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR."
Being aware of said Code section, each of the parties expressly waives and
relinquishes any rights or benefits such party may have thereunder, as well as
under any other state or federal statutes or common law principles of similar
effect.
The parties each represent and warrant that they have not and
will not assign any rights or claims released hereunder.
6. Except as and to the extent required by law or compelled by
legal process, the parties agree not to publicize or circulate information
regarding the existence or the terms and conditions of this AGREEMENT AND
RELEASE, and further agree not to make any statement or take any action which
will, or may, bring into disrepute, harm, inconvenience, embarrass or otherwise
be against the best interests of the other party.
7. The obligations of the parties under this AGREEMENT AND
RELEASE shall be binding upon and inure to the benefit of, respectively, LaBonte
and his heirs, executors, legal representatives and assigns, and JCI and its
successors and assigns.
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8. This AGREEMENT AND RELEASE represents the entire agreement
of the parties and may be amended only by a writing signed by each of them, and
shall be governed by and construed in accordance with the laws of the State of
California.
LABONTE, BY HIS SIGNATURE BELOW, ACKNOWLEDGES THAT HE HAS READ
AND THAT HE THOROUGHLY UNDERSTANDS THE TERMS OF THIS AGREEMENT
AND RELEASE; AND THAT HE VOLUNTARILY ENTERS INTO IT WITHOUT
RESERVATION OF ANY TYPE REGARDING ITS TERMS, PAYMENTS, DUTIES
OR OBLIGATIONS AFTER CONSULTATION WITH COUNSEL OF HIS CHOICE.
JENNY CRAIG, INC.
By: /s/SIDNEY CRAIG, CEO
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/s/C.JOSEPH LABONTE
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C. Joseph LaBonte
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