EMPLOYMENT AGREEMENT
This Agreement is entered into effective as of this 20TH day of APRIL,
1995, by and between Lone Star Steakhouse & Saloon, Inc., a corporation (the
"Corporation") and XXXXXXX X. XXXXXX ("Employee").
RECITALS
WHEREAS, the Employee agrees to serve as Senior Vice President -
Operations of the Corporation; and
WHEREAS, Employee is a principal officer of the Corporation and an
integral part of its management; and
WHEREAS, the Corporation desires to engage the services of Employee,
whose experience, knowledge and abilities with respect to the business and
affairs of the Corporation are extremely valuable to the Corporation; and
WHEREAS, the parties hereto desire to enter into this Agreement
setting forth the terms and conditions of the continued employment relationship
of the Corporation and Employee.
NOW THEREFORE, it is agreed as follows:
ARTICLE I
1.1 TERM OF EMPLOYMENT. The Corporation shall initially employ Employee
for a period of three years from the date hereof (the "Initial Term"). Employee
has given notice to his present employer and will commence employment on April
20, 1995.
1.2 PRINCIPAL PLACE OF EMPLOYMENT. The Corporation acknowledges that
the Employee's principal residence is currently located in Chicago, Illinois.
The Corporation acknowledges and agrees that the Employee shall be employed by
the Corporation at an office to be established by Employee on behalf of the
Corporation in Chicago, Illinois (the "Chicago Office").
In connection with the establishment of a Chicago Office, the Employee
shall determine the location of an office in the Chicago metropolitan area, in
Employee's reasonable discretion. The Employee may enter into a lease for said
Chicago Office upon such terms and conditions which are acceptable to the
Corporation, which such acceptance will not be unreasonably withheld.
Employee may hire a secretary or secretarial services, upon such salary
terms and other terms and conditions which are acceptable to the Corporation,
which such acceptance will not be unreasonably withheld.
The Corporation shall be responsible to pay or immediately reimburse
Employee for any and all costs and expenses incurred in establishing and
operating the Chicago Office, including without limitation, any and all costs
and expenses arising out of any of the activities and items contemplated hereby.
1.3 EXTENSION OF INITIAL TERM. Upon expiration of the initial term of
this Agreement, this Agreement shall be extended automatically for successive
terms of one year each, unless either the Corporation or the Employee gives
contrary written notice to the other not later than 90 days prior to the annual
anniversary date thereof.
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ARTICLE II
DUTIES OF THE EMPLOYEE
GENERAL DUTIES. Employee shall serve as Senior Vice President -
Operations of the Corporation. In close coordination and cooperation with the
Corporation, Employee shall have responsibility for the creation and development
of an upscale steakhouse restaurant concept with an average meal check price in
excess of $18.00 (the "Division"). After conception of the Division, Employee
shall be responsible for the implementation of the Division including its
marketing and growth. After initial implementation, Employee shall be
responsible for the management and day-to-day operations of the Division. He
shall do and perform all services, acts, or things necessary or advisable to
manage and conduct the business of the Corporation consistent with such position
subject to such policies and procedures as may be established by the Board.
Employee shall: (i) devote his or her entire business time,
attention, and energies to the business of the Corporation, and, (ii) faithfully
and competently perform his duties hereunder; and, Employee shall not, during
the term of this Agreement, engage in any other business activity except as
permitted by Article 8.
ARTICLE III
COMPENSATION
3.1 SALARY. For Employee's services to the Corporation as Senior
Vice President - Operations, Employee shall initially be paid a salary at the
annual rate of $180,000, (herein referred to as "Salary") payable in twenty-four
equal installments on the first and fifteenth day of each month. On the first
day of each calendar year during the term of this Agreement with the
Corporation, Employee shall be eligible for an increase in Salary based on
recommendations made by the Compensation Committee of the Board.
3.2 STOCK OPTION. Employee shall receive by separate agreement an
option pursuant to the Corporation's Stock Option Plan to purchase 171,000
shares of Common Stock, par value $.01 per share of the Corporation at the
closing price per share of the Corporation's Common Stock as of April 20, 1995,
vesting equally over a three year period.
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3.3 BONUS. Employee shall be eligible to receive a bonus (the
"Bonus"), which Bonus will be equal to sixty percent (60%) of the Employee's
then Salary, for any annual period hereunder. The Bonus shall be paid in the
discretion of the Corporation. Employee and the Corporation agree to establish
mutually and in good faith within sixty (60) days following the date of this
Agreement, goals and objectives, in writing, for the Employee for each annual
period of this Agreement, which such goals and objective shall be described in
as measurable and objective standards and criteria as practicable. In the event
that Employee does not fully achieve the goals and objectives upon which the
Bonus is based in any annual period, Employee shall nonetheless be entitled to
receive a proportionate amount of the full amount of the Bonus that would
otherwise have been paid to Employee for such annual period if Employee had
fully achieved the goals and objective. The determination of the proportionate
amount of the Bonus to which Employee shall be entitled shall correspond to the
level, percentage or degree of Employee's achievement of goals and objective,
and shall not be an "all or nothing" test.
ARTICLE IV
EMPLOYEE BENEFITS
4.1 USE OF AUTOMOBILE. The Corporation shall provide, at the option of
Employee, with either the use of an automobile for business and personal use or
a cash allowance of $750. If the car is furnished by the Corporation, the
Corporation shall pay all expenses of operating, maintaining and repairing the
automobile and shall procure and maintain automobile liability insurance in
respect thereof, with such coverage insuring each Employee for bodily injury and
property damage.
4.2 MEDICAL, LIFE AND DISABILITY INSURANCE BENEFITS. The Corporation
shall provide Employee with the medical, dental, life and disability insurance
benefits in accordance with the established benefit policies of the Corporation.
In addition, the Corporation shall pay or reimburse Employee for payment of
those certain (i) life insurance and (ii) long term disability insurance
policies of Employee in effect as of the date hereof, which such payments in the
aggregate equal approximately $4,700 annually.
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4.3 BUSINESS EXPENSES. Employee shall be authorized to incur reasonable
expenses for promoting the business of the Corporation including expenses for
entertainment, travel, and similar items. The Corporation shall reimburse
Employee for all such expenses upon the presentation by Employee, from time to
time, of an itemized account of such expenditures.
4.4 VACATIONS. Employee shall be entitled to an annual paid vacation
equal to three (3) weeks, effective immediately. The timing of paid vacations
shall be scheduled in a reasonable manner by the Employee.
4.5 DISABILITY. Upon disability (as defined herein) of the Employee,
the Employee shall be entitled to receive an amount equal to 50% of his salary
(in addition to any disability insurance benefits received pursuant to Section
4.2 herein), such amount being paid semi-monthly in twenty-four equal
installments.
4.6 MOVING EXPENSES. If upon joint acceptance by the Corporation and
the Employee, the Employee shall be relocated, the Corporation shall pay all
related moving expenses of the Employee.
ARTICLE V
TERMINATION
5.1 DEATH. Employee's employment hereunder shall be terminated upon the
Employee's death.
5.2 DISABILITY. The Corporation may terminate Employee's employment
hereunder in the event Employee is disabled and such disability continues for
more than 180 days. Disability shall be defined as the inability of Employee to
render the services required of him under this Agreement as a result of physical
or mental incapacity.
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5.3 CAUSE.
(a) The Corporation may terminate Employee's employment hereunder
for Cause. For the purpose of this Agreement, "Cause" shall mean the (i) willful
and intentional failure by Employee to substantially perform his duties
hereunder, other than any failure resulting from Employee's incapacity due to
physical or mental incapacity, or (ii) commission by Employee, in connection
with his employment by the Corporation, of an illegal act or any act (though not
illegal) which is not in the ordinary course of the Employee's responsibilities
and which exposes the Corporation to a significant level of undue liability. For
purposes of this paragraph, no act or failure to act on Employee's part shall be
considered to have met either of the preceding tests unless done or omitted to
be done by Employee not in good faith without a reasonable belief that his
action or omission was in the best interest of the Corporation.
(b) Notwithstanding the foregoing, Employee shall not be deemed to have
been terminated for Cause unless and until there shall have been delivered to
Employee a copy of a resolution, duly adopted by the majority vote of the Board
of Directors.
5.4 COMPENSATION UPON TERMINATION FOR CAUSE OR UPON RESIGNATION BY
EMPLOYEE. If Employee's employment shall be terminated for Cause or if Employee
shall resign his position with the Corporation, the Corporation shall pay
Employee's compensation only through the last day of Employee's employment by
the Corporation. The Corporation shall then have no further obligation to
Employee under this Agreement.
5.5 INVOLUNTARY TERMINATION. If:
(i) the Employee is terminated by Corporation at any time prior to
the termination of this Agreement for reasons other than Cause (as
defined herein), (ii) if Corporation gives notice to the Employee,
in accordance with Section 1.2 herein, that this Agreement will not
be renewed; 6
Employee shall be paid, over the ensuing six (6) month period, a sum
equal to the cash compensation paid to him excluding all bonuses of
any kind by Corporation for the six (6) month period immediately
preceding such termination or non-renewal. Such six (6) month
period, as the case may be, shall begin: (i) on the date of
termination in the case of termination of Employee's employment; and
(ii) on the date notice of non-renewal is given in the case of
termination of this Agreement not accompanied by simultaneous
termination of Employee's employment with the Corporation.
ARTICLE VI
No Obligation to Mitigate Damages; No Effect
On Other Contractual Rights
6.1 NO MITIGATION. Employee shall not be required to mitigate damages
or the amount of any payment provided for under this Agreement by seeking other
employment or otherwise, nor shall the amount of any payment provided for under
this Agreement be reduced by any compensation earned by Employee as the result
of employment by another employer after Employee's termination or resignation.
6.2 OTHER CONTRACTUAL RIGHTS. The provisions of this Agreement, and any
payment provided for hereunder, shall not reduce any amount otherwise payable,
or in any way diminish Employee's existing rights, or rights which would accrue
solely as a result of passage of time under any employee benefit plan or other
contract, plan or arrangement of which Employee is a beneficiary or in which he
participates.
ARTICLE VII
SUCCESSORS TO THE CORPORATION
7.1 EMPLOYEE'S SUCCESSORS AND ASSIGNS. This Agreement shall inure to
the benefit of and be enforceable by Employee's personal and legal
representatives, executors, administrators, successors, heirs, distributees,
devisees and legatees. If Employee should die while any amounts are still
payable to him hereunder, all such amounts, unless otherwise provided herein,
shall be paid in accordance with the terms of this Agreement to Employee's
devisee, legatee or other designee or, if there be no such designee, to
Employee's estate.
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ARTICLE VIII
RESTRICTIONS ON EMPLOYEE
8.1 NON-DISCLOSURE; NON-SOLICITATION. Except in the performance of his
duties hereunder, at no time during the Term of Employment , and for eighteen
(18) months after the termination hereof, shall Employee, individually or
jointly with others, for the benefit of Employee or any third party, publish,
disclose, use, or authorize anyone else to publish, disclose, or use, any secret
or confidential material or information relating to any aspect of the business
or operations of the Corporation, including, without limitation, any secret or
confidential information relating to the business, customers, trade or
industrial practices, trade secrets, technology, recipes or know-how of the
Corporation. Except in the performance of his duties hereunder, at no time
during the term or six (6) months thereafter, shall Employee for himself or on
behalf of any other person or entity contact any employee of the Corporation for
the purpose of hiring, diverting or otherwise soliciting the employee.
8.2 NON-COMPETITION. During the Term of Employment and for eighteen
(18) months thereafter, if Employee is terminated, pursuant to either Section
5.3, or in the event of any voluntary termination or resignation by Employee,
Employee shall not, individually or jointly with others, directly or indirectly,
whether for his own account or for that of any other person or entity, own or
hold any ownership interest in any person or entity engaged in a restaurant
business the same as or similar to any restaurant business of the Corporation
without the Corporation's written consent.
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ARTICLE IX
MISCELLANEOUS
9.1 INDEMNIFICATION. To the full extent permitted by law, the Board
shall authorize the payment of expenses incurred by or shall satisfy judgments
or fines rendered or levied against Employee in any action brought by a
third-party against Employee (whether or not the Corporation is joined as a
party defendant) to impose any liability or penalty on Employee for any act
alleged to have been committed by Employee while employed by the Corporation
unless Employee was acting with gross negligence or willful misconduct. Payments
authorized hereunder shall include amounts paid and expenses incurred in
settling any such action or threatened action.
9.2 NOTICES. Any notices required or permitted to be given under this
Agreement shall be sufficient if in writing and sent by mail to his residence,
in the case of Employee, or to its principal office, in the case of the
Corporation.
9.3 WAIVER OF BREACH. The waiver by any party hereto of a breach of any
provision of this Agreement shall not operate or be construed as a waiver of any
subsequent breach by any party.
9.4 AMENDMENT. No amendment or modification of this Agreement shall be
deemed effective unless or until executed in writing by the parties hereto.
9.5 VALIDITY. This Agreement, having been executed and delivered in the
State of Kansas, its validity, interpretation, performance and enforcement will
be governed by the laws of that state.
9.6 SECTION HEADINGS. Section and other headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.
9.7 COUNTERPART EXECUTION. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute but one and the same instrument.
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9.8 LEGAL FEES. Except in the event of termination for Cause, and
only in the event a change of control of the Corporation has occurred, the
Corporation shall pay all legal fees and expenses which Employee may incur as a
result of the Corporation's contesting the validity, enforceability or
Employee's interpretation of, or determination under, this Agreement.
9.9 EXCLUSIVITY. Specific arrangements referred to in this Agreement
are not intended to exclude Employee's participation in any other benefits
available to executive personnel generally or to preclude other compensation or
benefits as may be authorized by the Board from time to time.
9.10 PARTIAL INVALIDITY. If any provision in this Agreement is held by
a court of competent jurisdiction to be invalid, void, or unenforceable, the
remaining provisions shall nevertheless continue in full force without being
impaired or invalidated in any way.
IN WITNESS WHEREOF, the Corporation has caused this Agreement to be
executed and its seal affixed hereto by its officers thereunto duly authorized;
and the Employee has executed this Agreement, as of the day and year first above
written.
"CORPORATION" LONE STAR STEAKHOUSE &
SALOON, INC.
By /s/ Xxxxx X. Xxxxxxx
-------------------------------------
Xxxxx X. Xxxxxxx, Chairman of
the Board, President and
Chief Executive Officer
ATTEST:
/s/ Xxxxxx X. Xxxxx
--------------------------
Xxxxxx X. Xxxxx, Secretary
/s/ Xxxxxxx X. Xxxxxx
"EMPLOYEE" ------------------------------------
Xxxxxxx X. Xxxxxx
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