XXXXXX X. XXXXXX
EMPLOYMENT AGREEMENT
This Employment Agreement is made as of the Effective Date of the Merger
described in that certain Agreement and Plan of Merger dated October 14, 1994,
involving Xxxxxxxx'x International, Inc. and IRC Acquisition Corp. and
Innovative Restaurant Concepts, Inc. and certain shareholders of Innovative
Restaurant Concepts, Inc. (the "Merger Agreement") by and between Xxxxxxxx'x
International, Inc., a Delaware corporation (the "Company") and Xxxxxx X. Xxxxxx
(the "Executive").
WHEREAS, the Company believes it to be in its best interest to provide for
continuity of management and to provide protection for its valuable trade
secrets and confidential information; and
WHEREAS, the Company desires to employ the Executive and the Executive is
willing to render his services to the Company on the terms and conditions with
respect to such employment hereinafter set forth.
NOW, THEREFORE, in consideration of premises and the mutual terms and
conditions hereof, the Company and the Executive hereby agree as follows:
1. Employment. The Company hereby employs the Executive and the Executive
hereby accepts employment with the Company, as the President of its Rio Bravo
operating subsidiary, upon the terms and conditions hereinafter set forth.
Addendum A, hereto, further describes the principal duties and responsibilities
of the Executive.
2. Exclusive Services. The Executive shall devote all necessary working
time, ability and attention to the business of the Company during the term of
this Agreement and shall not, directly or indirectly, render any material
services to any business, corporation, or organization whether for compensation
or otherwise, without the prior written consent of the Chief Executive Officer
of the Company.
3. Duties. The Executive is hereby employed by the Company and shall render
his services at the offices of the Company in Marietta, Georgia, unless
otherwise agreed by the Executive. The Executive shall have such authority and
shall perform such duties as are assigned by the Chief Operating Officer of the
Company (the "COO") .
4. Term. This Agreement shall have a term commencing on the date hereof and
ending January 1, 1997, subject to earlier termination as provided in Paragraph
13, below.
5. Compensation. As compensation for his services rendered under this
Agreement, the Executive shall be entitled to receive the following:
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a. Base Salary. The Executive shall initially be paid a base salary of
$154,800 per year, payable in equal bi-weekly installments during the term
of this Agreement, prorated for any partial employment month. Such salary
("Base Salary") shall be reviewed by the Board of Directors of the Company
(the "Board") on January 1 of each year in accordance with the Company's
established criteria.
b. Additional Compensation. The Executive shall be paid such additional
compensation and bonuses as determined each year by the Rio Bravo
Management Bonus Plan as described on Addendum B to this Agreement to be
prepared by the Executive, the COO and the Chief Executive Officer of the
Company prior to the effective date of this Agreement.
6. Benefits. In addition to the compensation to be paid to the Executive
pursuant to Paragraph 5 hereof, the Executive shall further be entitled to
receive the following:
a. Participation in Employee Plans. The Executive shall be entitled to
participate in any health, disability group term life insurance plan, any
pension, retirement or profit sharing plan, or any other fringe benefits
which may be extended generally from time to time to employees of the
Company. Such benefits, in the aggregate, will be of equal or greater value
to the benefits provided to the Executive as an employee of Innovative
Restaurants Concepts, Inc. The Executive shall not be entitled to
participate in any bonus plan other than as set forth in Paragraph 5(b),
above.
b. Disability Salary Continuation. If the Executive becomes disabled
during the term of this Agreement, the Company shall continue to pay the
Executive his Base Salary during the first ninety (90) day period of such
disability and shall continue to pay the Executive, but at the rate of
fifty percent (50%) of his Base Salary, for second ninety (90) day period
of such disability. "Disability" as used herein shall mean any physical,
emotional or mental, injury, illness or incapacity, other than death, which
renders the Executive unable to perform the duties required of him under
this Agreement. The existence of any disability shall be determined to
exist in the sole discretion of the Board which shall not be unreasonably
exercised.
c. Vacation. The Executive shall be entitled to four weeks vacation
with full salary and benefits each year. No cash or other payment will be
due, however, for unused vacation and vacation may not be carried over from
one year to the next.
d. Stock Option. Upon the effective date of this Agreement, the
Executive shall be granted an incentive stock option to purchase 10,000
shares of Common Stock of the Company at a per share price equal to the
closing price of said stock on the Nasdaq Stock Market on the date of
grant. Said option shall have a ten year term and shall be fully vested on
its first anniversary or as otherwise required for incentive stock option
treatment pursuant to the Internal Revenue Code. Employee shall have the
option of substituting a nonqualified stock option for any portion of the
incentive stock option which can not vest on the said first anniversary
date.
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7. Reimbursement of Expenses. Subject to such rules and procedures as from
time to time are specified by the Company, the Company shall reimburse the
Executive on a monthly basis for reasonable business expenses necessarily
incurred in the performance of his duties under this Agreement.
8. Confidentiality/Trade Secrets. The Executive acknowledges that his
position with the Company is one of the highest trust and confidence both by
reason of his position and by reason of his access to and contact with the trade
secrets and confidential and proprietary business information of the Company.
Both during the term of this Agreement and thereafter, the Executive covenants
and agrees as follows:
a. he Shall use his best efforts and exercise utmost diligence to
protect and safeguard the trade secrets and confidential and proprietary
information of the Company including but not limited to the identity of its
customers and suppliers, its arrangements with customers and suppliers, and
its technical and financial data, records, compilations of information,
processes, recipes and specifications relating to its customers, suppliers,
products and services;
b. he shall not disclose any of such trade secrets and confidential and
proprietary information, except as may be required in the course of his
employment with the Company or by law; and
c. he shall not use, directly or indirectly, for his own benefit or for
the benefit of another, any of such trade secrets and confidential and
proprietary information.
All files, records, documents, drawings, specifications, memoranda, notes,
or other documents relating to the business of the Company, whether prepared by
the Executive or otherwise coming into his possession, shall be the exclusive
property of the Company and shall be delivered to the Company and not retained
by the Executive upon termination of his employment for any reason whatsoever or
any other time upon request of the COO.
9. Discoveries. The Executive covenants and agrees that he will fully
inform the Company of and disclose to the Company all inventions, designs,
improvements, discoveries and processes ("Discoveries") which he has now or may
hereafter have during his employment with the Company and which pertain or
relate to the business of the Company or to any experimental work, products,
services or processes of the Company in progress or planned for the future,
whether conceived by the Executive alone or with others, and whether or not
conceived during regular working hours or in conjunction with the use of any
Company assets. All such Discoveries shall be the exclusive property of the
Company whether or not patent or trademark applications are filed thereon. The
Executive shall assist the Company, at any time during or after his employment,
in obtaining patents on all such Discoveries deemed patentable by the Company
and shall execute all documents and do all things necessary to obtain letters
patent, vest the Company with full and exclusive title thereto, and protect the
same against infringement by others. If such assistance takes place after his
employment is terminated the Executive shall be paid by the Company at a
reasonable rate for any time actually spent in rendering such assistance at the
request of the Company.
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10. Noncompetition. Taking into consideration the nature, scope and volume
of the Company's operations, the Executive agrees that during the period of his
employment, and for a period of one (1) year immediately following any
termination of his employment, whether voluntary or involuntary, he will not,
within the United States or any other country in which the Company, directly or
indirectly, owns, operates or franchises restaurants, directly or indirectly,
own, manage, operate, control, or be employed by, participate in, or be
connected in any matter with the ownership (other than ownership of securities
of publicly held corporations of which Executive owns less than 2% of any class
of outstanding securities), management, operation, or control of any business
engaged in the casual dining restaurant industry (meaning restaurants with a per
guest average guest check of under $15.00), or in any other segment of the
restaurant industry in which the Company may become involved after the date
hereof and prior to the date of any termination of employment.
11. Nonsolicitation. The Executive agrees that during the period of his
employment and for a period of two (2) years immediately following any
termination of his employment, whether voluntary or involuntary, he will not,
either directly or indirectly, for himself or for any third party, solicit,
induce, recruit, or cause another person in the employ of the Company to
terminate his/her employment for the purpose of joining, associating or becoming
employed with any business or activity which is engaged in the casual dining
restaurant industry or any other segment of the restaurant industry in which the
Company may become involved after the date hereof and prior to the date of any
termination of employment. The Company and the Executive specifically
acknowledge and agree that the foregoing covenants of the Executive in Sections
10 and 11 are reasonable in content and scope and are given by the Executive for
adequate consideration.
12. Remedies for Breach of Covenants of the Executive. The covenants set
forth in Paragraphs 8, 9, 10 and 11 of this Agreement shall be deemed and
construed as separate agreements independent of any other provisions of this
Agreement and any other agreement between the Company and the Executive. The
existence of any claim or cause of action by the Executive against the Company,
whether predicated on this Agreement or otherwise, shall not constitute a
defense to the enforcement by the Company of any or all of such covenants. It is
expressly agreed that the remedy at law for the breach of any such covenant is
inadequate and injunctive relief shall be available to prevent the breach or any
threatened breach thereof.
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13. Termination.
a. The Company may terminate this Agreement and the Executive's
employment hereunder (a "Termination") at any time, with or without cause.
The Executive may resign upon 30 days written notice to the Company and may
terminate this Agreement and his employment hereunder for cause at any
time. In the event of Termination by the Company, the effective date
thereof shall be stated in a written notice to the Executive, which shall
not be earlier than 10 days from the date such notice is delivered to the
Executive.
b. In the event the Company effects a Termination without cause, the
Executive shall be entitled to receive any bonus amounts as may be payable
pursuant to the terms of any written plans in which the Executive was a
participant prior to the effective date of the Termination, accrued but
unpaid salary, and shall additionally continue to receive his base salary
hereunder for a 12 month period following the effective date of such
termination, and only the provisions of Paragraphs 8, 9, 11, 12, 14, 15, 16
and 17 shall survive the Termination.
c. The following shall constitute "cause":
(i) The Employee is charged with the commission of a criminal
offense constituting a felony or involving dishonesty, deceit or moral
turpitude, and the charge is not dismissed within 30 business days; or
(ii) The Employee breaches any material provision of this Agreement
or any duty owed by him to the Company after receipt of written notice
and a failure by the Executive to cure such breach within 10 days; or
(iii) The Employee dies or becomes permanently disabled from
continuing to provide the level of service required under this
Agreement.
d. The provisions of Paragraphs 8, 9, 10, 11, 12, 14, 15, 16 and 17
shall survive any Termination by the Company for cause.
e. The Executive shall have cause to effect a Termination in the event
the Company breaches its obligations to pay any salary, benefit or bonus
due hereunder, and upon any such Termination, the Executive shall be
entitled to a lump sum payment equal to his then current base salary and
the provisions of Paragraphs 8, 9, 11, 12, 14, 15, 16 and 17 shall survive
the Termination. No Termination may be effected by the Executive for cause
unless he shall be delivered written notice to the Company of the breach
and the Company shall not have cured such breach within 10 days thereafter.
f. Upon the effective date of any Termination by the Company for cause,
or upon the resignation of the Executive, the Executive shall only be
entitled to receive his salary through such date and any bonus amounts as
may be payable pursuant to the terms of any written plans in which the
Executive was a participant immediately prior to the effective date of the
Termination.
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14. Termination After Change in Control. In the event of a Change in
Control, as defined below, any Termination of Executive's employment with the
Company within the 12 month period following such Change in Control, whether by
Executive or by the Company and whether with or without cause, the following
shall occur:
a. The provisions of Paragraph 10 and 11 shall not apply and shall be
void;
b. The Executive shall continue to receive his salary under Section
5.a. above through the end of the eighteenth month following the month in
which such Change in Control occurred;
c. The Executive shall be entitled to continuation of coverage for
eighteen (18) months (beginning with the month subsequent to the effective
date of the Change in Control) under all Company paid or partially paid
health, disability, or group life insurance plans or any retirement,
pension, or profit sharing plans, in each case at such level as had been
available to the Executive immediately prior to the Change in Control; and
d. Any unvested portion of all stock options held by the Executive as
of the day immediately preceding the effective date of such Termination
under this Section 14 shall immediately vest and become exercisable and,
for purposes of such options, such Termination shall be deemed to be a
Termination by the Company not for cause.
15. Definitions Related to Change of Control.
a. "Change of Control" means any one of the following: (i) Continuing
Directors no longer constitute at least 2/3 of the Board of Directors; (ii)
any person or group of persons (as defined in Rule 13d-5 under the
Securities Exchange Act of 1934), together with its affiliates, become the
beneficial owner, directly or indirectly, of 30% or more of the Company's
then outstanding Common Stock or 30% or more of the voting power of the
Company's then outstanding securities entitled generally to vote for the
election of the Company's Directors; (iii) the approval by the Company's
stockholders of the merger or consolidation of the Company with any other
corporation, the sale of substantially all of the assets of the Company or
the liquidation or dissolution of the Company, unless, in the case of a
merger or consolidation, the then Continuing Directors in office
immediately prior to such merger or consolidation will constitute at least
2/3 of the Board of Directors of the surviving corporation of such merger
or consolidation and any parent (as such term is defined in Rule 12b-2
under the Securities Exchange Act of 1934) of such corporation; or (iv) at
least 2/3 of the then Continuing Directors in office immediately prior to
any other action proposed to be taken by the Company's stockholders or by
the Company's Board of Directors determine that such proposed action, if
taken, would constitute a change of control of the Company and such action
is taken.
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b. "Continuing Director" means any individual who either (i) was a
member of the Company's Board of Directors on the date hereof, or (ii) was
designated (before initial election as a Director) as a Continuing Director
by a majority of the then Continuing Directors.
16. Arbitration of Disputes. Any dispute or claim arising out of or
relating to this Agreement or any termination of the Executive's employment
shall be settled by arbitration in the greater Kansas City metropolitan area in
accordance with the then current rules of the American Arbitration Association,
and judgment upon any award rendered therein may be entered in any court having
proper jurisdiction. Each party shall bear its costs of any arbitration,
including the expenses and attorneys' fees incurred by it related thereto,
including any actions taken to appeal or enforce the judgment rendered therein,
unless the Employee is the prevailing party, in which case the Company will
reimburse the Employee for his reasonable legal fees and expenses.
17. Mitigation. The Executive shall have no duty to attempt to mitigate the
level of benefits payable by the Company to him hereunder and the Company shall
not be entitled to set off against the amounts payable hereunder any amounts
received by the Executive from any other source, including any subsequent
employer.
18. Notices. Any notices to be given hereunder by either party to the other
may be effected either by personal delivery in writing or by mail, registered or
certified, postage prepaid, with return receipt requested. Mailed notices shall
be addressed as follows:
a. If to the Company:
Xxxxxxxx'x International, Inc.
0000 Xxxx 000xx Xxxxx 000 Xxxxxxxx Xxxx,
Xxxxxx 00000 Attn: General Counsel
b. If to the Executive:
Xxxxxx X. Xxxxxx
000 Xxxxxxxxx Xxxxx
Xxxxxxxx, XX 00000
Either party may change its address for notice by giving notice in
accordance with the terms of this Paragraph 18.
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19. General Provisions.
a. Law Governing. This Agreement shall be governed by and construed in
accordance with the laws of the State of Kansas.
b. Invalid Provisions. If any provision of this Agreement is held to be
illegal, invalid, or unenforceable, such provision shall be fully severable
and this Agreement shall be construed and enforced as if such illegal,
invalid, or unenforceable provision had never comprised a part hereof; and
the remaining provisions hereof shall remain in full force and effect and
shall not be affected by the illegal, invalid, or unenforceable provision
or by its severance herefrom. Furthermore, in lieu of such illegal,
invalid, or unenforceable provision there shall be added automatically as a
part of this Agreement a provision as similar in terms to such illegal,
invalid, or unenforceable provision as may be possible and still be legal,
valid or enforceable.
c. Entire Agreement. This Agreement sets forth the entire understanding
of the parties and supersedes all prior agreements or understandings,
whether written or oral, with respect to the subject matter hereof. No
terms, conditions, warranties, other than those contained herein, and no
amendments or modifications hereto shall be binding unless made in writing
and signed by the parties hereto.
d. Binding Effect. This Agreement shall extend to and be binding upon
and inure to the benefit to the parties hereto, their respective heirs,
representatives, successors and assigns. This Agreement may not be assigned
by the Executive.
e. Waiver. The waiver by either party hereto of a breach of any term or
provision of this Agreement shall not operate or be construed as a waiver
of a subsequent breach of the same provision by any party or of the breach
of any other term or provision of this Agreement.
f. Titles. Titles of the paragraphs herein are used solely for
convenience and shall not be used for interpretation or construing any
provision of this Agreement.
g. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but which together
shall constitute one and the same instrument.
h. Failure to Consummate Merger. If the Merger described in the Merger
Agreement shall fail to become effective on or before March 24, 1995, this
Agreement shall be null and void with neither party having any obligation
under any of the foregoing terms and provisions.
IN WITNESS WHEREOF, the Company and the Executive have executed this
Agreement as of the date and year first above written above.
EXECUTIVE: XXXXXXXX'X INTERNATIONAL, INC.
By:
Xxxxxx X. Xxxxxx Xxx X. Xxxxxx, Xx.
Title: Chairman and C.E.O.
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