EXHIBIT 4
CONSULTING AGREEMENT
THIS CONSULTING AGREEMENT (this "Agreement") is made as of January 8, 1997,
between FAMILY STEAK HOUSES OF FLORIDA, INC., a Florida corporation (hereinafter
called the "Company") and XXXXXX X. XXXXXX (hereinafter called "Consultant").
BACKGROUND
A. Consultant has ably served the Company as an officer and director for
many years, and is knowledgeable of the Company's business. Consultant has
resigned as an officer of the Company, but remains a member of the Company's
Board of Directors.
B. The Company wishes to retain Consultant as a consultant upon the terms
described in this Agreement, and Consultant wishes to agree to such terms.
TERMS OF AGREEMENT
In consideration of the mutual promises contained in this Agreement and
other consideration, the receipt and sufficiency of which are acknowledged by
each party to this Agreement, the parties agree as follows:
1. Consultancy; Consultancy Period; Termination Date. The Company hereby
retains Consultant as a part-time consultant to serve as an advisor to the
Company and Consultant hereby accepts such consultancy (the "Consultancy") upon
the terms and conditions hereinafter set forth for a period (the "Consulting
Period") beginning on the effective date of this Agreement and ending on the
anniversary date hereof ("Termination Date"), unless earlier terminated.
2. Duties. As requested by the Company, Consultant shall consult with,
advise and directly assist the Company with respect to any and all matters
concerning the business of the Company, exclusively with and through the senior
executives of the Company (the "Senior Executives"), who may be designated from
time to time by the Company, but who are currently the Chief Executive Officer,
Chief Operating Officer and Chief Financial Officer. During the Consultancy
Period, Consultant agrees to deliver to the Company time sheets evidencing the
services furnished to the Company by Consultant and the time devoted to such
services. Such time sheets shall be delivered to the Company as often as Company
may reasonably request, but no less often than monthly. In addition, Consultant
shall keep the Senior Executives otherwise informed of the activities undertaken
by him in such detail and format as the Senior Executives may reasonably
request.
3. Compensation.
3.1 Services Compensation. Subject to Paragraphs 3.2, 3.3 and 3.4 hereof,
the Company agrees to compensate Consultant as follows (the "Services
Compensation"):
(a) The Company shall pay Consultant an annual fee of Thirteen
Thousand Five Hundred Dollars ($13,500) (pro rated in the case of any
partial year) for his services during the Consulting Period, such annual
fee to be payable in semi-monthly installments.
(b) The Company shall provide Consultant through the term of this
Agreement with comprehensive medical, dental and disability insurance.
3.2 Compensation in the Event of Termination by the Consultant. In the
event Consultant voluntarily terminates the Consultancy prior to the Termination
Date "for cause," the Company shall continue to pay him the Services
Compensation for the balance of the Consulting Period, in full satisfaction of
all claims of Consultant concerning this Agreement. In the event Consultant
voluntarily terminates the Consultancy "without cause," the Company's obligation
to pay Consultant the Services Compensation shall cease. As used in this
Paragraph 3.2, "for cause" shall mean a material breach of any term of this
Agreement by the Company. For purposes of this Paragraph 3.2, if Consultant
voluntarily terminates the Consultancy other than "for cause," such termination
shall be deemed "without cause."
3.3 Compensation in the Event of Termination by the Company. In the event
the Company terminates Consultant's Consultancy "without cause," the Company
shall immediately pay him the Services Compensation for the balance of the
Consultancy Period in a lump sum payment as severance pay in recognition of his
years of service to the Company and in consideration for the performance of his
obligations under this Agreement prior to the date of such termination which
Company and Consultant stipulate are and will be beneficial to the Company in
the operation of its business. Such payment shall be in full satisfaction of all
claims of Consultant concerning this Agreement. In the event the Company
terminates the Consultancy "for cause," the Company's obligations to pay
Consultant the Services Compensation shall cease. As used in this Paragraph 3.3,
"for cause" shall mean:
(a) At the election of the Company, upon the occurrence of gross
negligence, willful misconduct or malfeasance by Consultant in the
performance of his responsibilities hereunder during the course of this
Agreement;
(b) The material breach by Consultant of any term of this Agreement;
or
(c) At the election of the Company, upon the indictment of Consultant
or upon Consultant entering a plea of guilty or nolo contendere to the
alleged commission by Consultant, as a principal, accomplice or accessory,
of a crime involving moral turpitude, or an act of fraud, embezzlement or
dishonesty.
Provided, however, that in the case of any such material breach the Company
shall give Consultant (a) notice of the existence of and facts regarding such
breach, (b) provided that such
breach is capable of being cured, a 5-day opportunity to cure. For purposes of
this Paragraph 3.3, any termination of the Consultancy by the Company other than
"for cause" shall be deemed "without cause."
3.4 Death. This Agreement shall terminate upon the death of Consultant. In
the event the Consultancy is terminated by reason of Consultant's death, the
Company's obligation to pay the Services Compensation shall cease effective as
of the last day of the month of the date of such death.
4. Stock Option. This Agreement shall not have any effect on the stock
options heretofore granted to Consultant by the Company. For purposes of such
stock options, and for those purposes only, Consultant shall continue to be
regarded as an "employee" of the Company for the duration of the Consultancy
Period.
5. Confidential Information.
5.1 Non-Disclosure. Except as otherwise authorized in writing by a Senior
Executive, Consultant agrees that he will not disclose to any third parties
confidential and/or proprietary information relating to the corporate affairs,
business, operations, assets, financial condition or prospects of the Company,
including without limitation, information with respect to the Company's present
and prospective products or concepts then in development, systems, customers,
employees, agents, and sales and marketing methods and results. The provisions
of this Paragraph 5.1 shall survive the termination of the Consultancy and of
this Agreement.
5.2 Limiting Access. Consultant acknowledges that the Company may establish
procedures to limit his access to information relating to certain of the
Company's legal or other affairs, including such affairs as to which Consultant
may have, or be deemed to have, a conflict of interest. Consultant agrees to
comply with any such procedures that are communicated to him in writing.
6. Expenses. If such expenses are specifically pre-approved by the Company
in writing, the Company agrees to reimburse Consultant, in accordance with
normal Company policies and procedures relating to substantiation, for travel,
entertainment and similar Company-related business expenses incurred in
connection with the Consultancy.
7. Intellectual Property. Consultant represents and agrees that he has no
(and, to the extent that the issue might be resolved otherwise, hereby releases
all) direct and indirect right, title, or interest in or to any intellectual
property, including, without limit, all patents, copyrights and trademarks and
all ideas, systems, programs or discoveries whether or not patentable or
copyrightable or eligible for trademark registration and whether or not so
patented, copyrighted or registered (collectively "Intellectual Property") in
which his interest arose or might be deemed to have arisen in connection with
his past or future relationship with the Company, all such Intellectual Property
being the property of the Company.
8. Independent Contractor. Consultant shall not be considered an employee
or agent of the Company (except for the sole purpose provided in Section 4
hereof), nor shall he have authority to bind the Company, without the prior
written authorization of a Senior Executive.
9. Non-Compete; Non-Interference.
9.1 Non-Competition. Consultant agrees that he will not, for a period
commencing on the date of this Agreement and ending two (2) years after the
Termination Date (the "Non-Competition Period"), without the prior written
consent of the Company, directly or indirectly, whether as principal, agent,
officer, director, partner, employee, independent contractor, consultant,
stockholder, licensor, or otherwise alone or in association with any other
person, firm, corporation or other business organization, carry on or be
engaged, concerned or take part in, or render services or advice to, or own,
share in securities of any person, firm, or corporation engaged in any
Competitive Business in which the Company is at the time either actively
conducting, or actively seeking to expand, its business; provided, however, that
ownership of two (2) percent or less of the outstanding voting securities of a
publicly held corporation shall not be deemed a violation of the foregoing. As
used herein, Competitive Business means the family steakhouse or family
cafeteria style restaurant business located or to be located within Nassau,
Baker, Clay, Xxxxx, or St. Xxxxx Counties, Florida, and shall not include fast
food or full service restaurants.
9.2 Non-Interference. Consultant agrees that during the Non-Competition
Period, he will not, without the prior written consent of the Company, directly
or indirectly and whether for his own account or for the account of any other
person, firm, corporation or other business organization, interfere with the
Company's business relationship with its franchisor, its lenders, or any
customer or employee, hire or retain as an employee, consultant or advisor any
person who was an employee of, or consultant or advisor to, the Company at any
time during the eighteen (18) month period preceding the date of such
employment, hiring or retention, nor will he solicit, or in any manner
encourage, any such employee, consultant or advisor of the Company to leave the
employ of the Company.
10. Remedies. Each party shall be entitled to all remedies allowed at law
and at equity in the event of any breach of this Agreement by the other party.
Without prejudice to any rights and remedies otherwise available to the Company,
the Company shall be entitled to, and Consultant will not oppose the granting
of, equitable relief by way of injunction or decree of specific performance in
the event of any breach of Paragraphs 5 or 8 of this Agreement.
11. Binding Effect; Assignment. This Agreement shall inure to the benefit
of, and shall be binding upon, the company and Consultant and their respective
successors, assigns, heirs and legal representatives. Insofar as Consultant is
concerned, this Agreement, being personal, cannot be assigned without the
Company's consent.
12. Severability. The provisions of this Agreement are severable and if any
provision of this Agreement shall be invalid or unenforceable to any extent or
in any application, then the remainder of such provision and this Agreement,
except to such extent or in such application, shall not be affected thereby, and
each and every provision of this Agreement shall be valid and enforceable to the
fullest extent and in the broadest application permitted by law.
13. Amendments and Waivers. This Agreement may not be modified or amended
except by an instrument or instruments in writing signed by the party against
whom enforcement of any such modification or amendment is sought. Either the
Company or Consultant may, by an instrument in writing, waive compliance by the
other party with any term or provision of this Agreement on the part of such
other party hereto to be performed or complied with. The waiver by any party
hereto of a breach of any term or provision of this Agreement shall not be
construed as a waiver of any subsequent breach.
14. Notice. Any notice, demand, approval or other communication which may
be or is required to be given under this Agreement shall be in writing and shall
be deemed to have been given on the earlier of the day actually received or on
the close of business on the fifth business day next following the day when
deposited in the United States mail, postage prepaid, registered or certified,
addressed to the Company or Consultant at their respective addresses set forth
below or such other address as such party may specify by notice given pursuant
to this Section 14:
If to Consultant:
Xxxxxx X. Xxxxxx
----------------
Jacksonville, Florida
If to the Company:
Family Steak Houses of Florida, Inc.
0000 Xxxxxxx Xxxxxxxxx
Xxxxxxx Xxxxx, Xxxxxxx 00000
Attn: President and Chief Executive Officer
with a copy to:
G. Xxxx Xxxxxx, Esquire
Xxxxxxx Xxxxx & Xxxxxx, P.A.
0000 Xxxxxxx Xxxxxx
00 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxx 00000
15. Section and Other Headings. The section and other headings contained in
this Agreement are for reference purposes only and shall not be deemed to be a
part of this Agreement or to affect the meaning or interpretation of this
Agreement.
16. Entire Agreement. This Agreement is the entire agreement between the
Company and Consultant pertaining to the subject matter hereof and supersedes
all prior agreements and understandings, oral or written, between the Company
and Consultant with respect to the subject matter hereof.
17. Counterparts. This Agreement maybe executed in any number of
counterparts and each of such counterparts shall for all purposes be deemed an
original, and all such counterparts shall together constitute but one and the
same instrument.
18. Governing Law. This Agreement shall be construed and governed in
accordance with the law of the State of Florida, applicable to agreements made
and to be performed wholly within such jurisdiction.
19. Further Assurances. Each of the parties hereto shall, from time to time
at the request of the other, and without further consideration, execute and
deliver such other instruments and take such other actions as may be required to
confer to the requesting party and his or its assignees the benefits
contemplated by this Agreement.
IN WITNESS WHEREOF, the Company and Consultant have executed this Agreement
as of the date first above written.
FAMILY STEAK HOUSES OF FLORIDA, INC., a
Florida corporation
By:/s/Xxxxx X. Xxxxxxxxx, Xx.
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Xxxxx X. Xxxxxxxxx, Xx.
President and Chief Executive Officer
