EMPLOYMENT AGREEMENT
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THIS EMPLOYMENT AGREEMENT (the "Agreement") is effective as of July __,
2004 (the "Effective Date") by and between GRILL CONCEPTS, INC., a Delaware
corporation (hereinafter referred to as "Employer" or "Company"), and XXXXXX XXX
(hereinafter referred to as "Employee"), with respect to the following:
A. Employer is in the business of restaurant operation and management,
specifically the operation and management of Daily Grill and The Grill
restaurants. Employer's principal place of business is located at 00000 Xxx
Xxxxxxx Xxxxxxxxx, Xxxxx 000, Xxx Xxxxxxx, Xxxxxxxxxx 00000.
B. Employer desires to employ Employee and Employee desires to be
employed by the Employer pursuant to the terms and subject to the conditions
contained in this Agreement.
C. The parties desire to reduce their agreements to writing.
NOW, THEREFORE, in consideration of the foregoing facts and the mutual
covenants and agreements contained in this Agreement, the parties agree as
follows:
1. EMPLOYMENT. Employer employs Employee as its Chief Financial Officer
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and an Executive Vice President and Employee accepts that position upon the
terms and conditions set forth in this Agreement. Employer shall have the
exclusive right to Employee's services during the term of this Agreement and
Employee shall devote his full time, attention and energies to the performance
of his duties hereunder.
2. DUTIES; LIMITATIONS.
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a. Subject to the powers, authority and responsibilities vested in
the Board of Directors of Employer ("Board"), the Bylaws of Employer and the
limitations set forth below, Employee shall have the authority and
responsibility as the Chief Financial Officer reporting to CEO of the Company,
consistent with the functions of such position as previously established by the
Company, and as same may from time to time during the Term be determined by the
Board.
b. Employee will at all times abide by Employer's personnel policies
and will faithfully, industriously and to the best of his ability, experience
and talents perform all duties required of and from Employee pursuant to this
Agreement's express and implied terms.
c. Such duties shall be rendered at such place or places and at any
time Employer shall in good faith reasonably require.
d. The Employee shall, during the Term, be subject to the same
restrictive covenants as senior executives of the Company with respect to
confidential or proprietary information, trade secrets, works for hire,
non-competition, non-solicitation and non-inducement and, following termination
of this Agreement for whatever reason, be subject to such restrictive covenants
in accordance with their terms to the same extent that senior executives of the
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Company are subject thereto following termination of employment as employees of
the Company. In this regard, Employee agrees to execute such other and further
documents as the Company may reasonably require incidental to such covenants by
Employee. Notwithstanding the above, the above non-compete period shall be valid
as long as employee is paid either base or severance pay by company, as further
defined in this agreement.
e. Employee agrees that during the Term, unless otherwise sooner
modified or terminated in writing by the Company in its sole discretion, he
shall not, in, from or at any location within the United States, directly or
indirectly, as a principal, agent, employee, employer, Employee, stockholder,
partner or in any individual or representative capacity, engage in any business
that competes with the Company, i.e., a business that provides restaurant
services similar to the "The Grill" and/or "Daily Grill" restaurant operations
as well as any restaurant or other business operations actively engaged in by
the Company. It is acknowledged that Employee has a minority ownership interest
in Mezzomondo Trattoria restaurant located in Studio City, California
("Mezzomondo"). Notwithstanding the foregoing, Employee may, without violating
the provisions hereof, (1) retain his existing ownership interest in
"Mezzomondo"; and (2) purchase and hold up to five percent (5%) of any entity
whose shares are publicly traded. If any covenant hereof should be deemed
invalid or unenforceable because of the scope, geographical area or duration, or
any combination thereof, such covenant shall be modified and reformed so that
the scope, geographic area and duration of the covenant is reduced only to the
minimum extent necessary to render the modified covenant valid and enforceable.
f. During the Term, and for a period of two (2) years following the
termination thereof other than for termination based on material breach by the
Company, Employee acknowledges and agrees that he will not, without the express
written consent of the Company, directly or indirectly, do or authorize or
assist any other person in doing any of the following acts:
(i) solicit, entice, persuade or induce any Person (whether or
not under a written contract of employment with the Company) to terminate his or
her employment by the Company or to refrain from entering into, extending or
renewing employment with the Company (upon the same or new terms) or to become
employed by a Person other than the Company; or
(ii) solicit, entice, persuade or induce any person or any Client
(whether or not under a written contract with the Company) to terminate his or
her contract or relationship with the Company or to refrain from entering into,
extending or renewing the same (upon the same or new terms) or enter into a
contract or relationship with a person other than the Company.
g. Employee acknowledges and agrees that all developments, including
inventions, whether patentable or otherwise, trade secrets, restaurant designs,
recipes, discoveries, improvements, trademarks, trade names, ideas and writings
(including but not limited to operating manuals and policies) which either
directly or indirectly relate to the business of the Company or any of its
affiliates (the "Developments") which Employee, either by himself or in
conjunction with any other person or persons, shall conceive, make, develop,
acquire or acquire knowledge of during his employment with the Company (whether
during the Term or thereafter) shall become the sole and exclusive property of
the Company. Employee hereby assigns, transfers and conveys, and agrees to so
assign, transfer and convey to the
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Company, all of his right, title and interest in and to any and all such
Developments and to disclose fully as soon as practicable, in writing, all such
Developments to the Company. At any time and from time to time, upon the request
and at the expense of the Company, Employee agrees he will execute and deliver
any and all instruments, documents and papers, give evidence and do any and all
other acts which, in the opinion of counsel for the Company, are or may be
necessary or desirable to document such transfer or to enable the Company to
file and prosecute applications for and to acquire, maintain and enforce any and
all patents, trademark registrations or copyrights under United States or
foreign law with respect to any such Developments or to obtain any extension,
validation, reissue, continuance or renewal of any such patent, trademark or
copyright. The Company will be responsible for the preparation of any such
instruments, documents and papers and for the prosecution of any such
proceedings and will reimburse Employee for all reasonable expenses incurred by
him in compliance with the provisions hereof.
h. Employee understands and agrees that any breach of provisions e,
f, or g above would cause irreparable harm, which irreparable harm may not be
compensable entirely with monetary damages. Employee agrees that injunctive
relief is an appropriate remedy for any breach of this paragraph. Employee
further agrees that such injunctive relief shall be in addition to and not in
limitation of any monetary relief or other remedies or rights available under
applicable law, in equity or under this Agreement.
i. The Employee agrees that so long as the Employee is engaged by
the Company, the Employee shall comply with all laws, regulations and rules
applicable to the conduct of the Company's business.
j. The Employee represents, warrants and covenants that the Employee
is not a party to or bound by any employment, consultant, non-competition,
non-solicitation or confidentiality agreement or any other agreement which would
in any manner conflict or interfere with the Employee's ability to lawfully
fulfill the Employee's duties under this Agreement.
For purposes herein, Person shall mean any individual, partnership,
corporation, trust, joint venture, governmental agency, unincorporated
association or other entity. For purposes herein, Client shall mean any person
which the Company has conducted business with during the Term.
3. TERM.
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a. Employee's employment shall be for a period of one (1) year,
commencing as of the Effective Date, subject, however, to prior termination by
the parties' mutual agreement or as otherwise provided for herein (the "Term").
b. Notwithstanding the foregoing provisions of this paragraph, in
the event Employee claims that Employer has materially changed the authority or
responsibility of Employee as its Chief Financial Officer from such authority
and responsibility as described in paragraph 2 hereof (a "Material Change"),
Employee may notify Employer in writing indicating the areas in which Employee
believes Employer has materially changed such authority and
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responsibility (the "Notice"). In the event such Employee's claim of a Material
Change (a "Claim") has not been resolved between Employer and Employee within
thirty (30) days from Employer's receipt of such Notice, Employee's Claim shall
be resolved in the following manner: Employer and Employee shall each designate
one person to act as arbitrator of such claim; these two arbitrators shall
mutually agree upon a third person to serve as the third arbitrator of such
Claim. These three arbitrators shall meet as soon as possible to determine
whether or not there has been a Material Change. The determination of at least a
majority or the Arbitrators shall be required for a finding that there had been
a Material Change and the decision of these Arbitrators shall be binding and
final as to such Claim between Employer and Employee. Such Arbitrators shall
promptly give written notice of their decision to Employer and Employee. In the
event the Arbitrators' decision is that there has been a Material Change,
Employee shall be entitled to terminate his Employment hereunder and be
thereafter entitled to receive as his severance the severance as defined in
paragraph 7; same shall be paid to Employee in installments in accordance with
Company's regular payroll practices This severance payment shall be in full
settlement of Employee's Claim hereunder. The cost of such arbitrators shall be
advanced equally by Employer and Employee: provided in the event a Material
Change is found by the arbitrators, the arbitrators' fees advanced by Employee
shall be reimbursed by the Employer; in the event no Material Change is found by
the arbitrators, the arbitrator's fees advanced by Employer shall be reimbursed
by Employee.
4. COMPENSATION AND BENEFITS. Employee shall receive compensation and
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benefits for services rendered by Employee during the Term as set forth on
Schedule A attached hereto and made a part hereof. Any vacation time set forth
on Schedule A will be earned by Employee ratably during each employment year,
and upon this Agreement's termination, the salary applicable to any unearned
vacation time which has been utilized by Employee is an indebtedness of Employee
to Employer which is due and payable upon the termination date. Conversely, any
accrued but unpaid vacation time will be paid by Employer to Employee upon the
termination date. Employee, upon the expiration of the Term, provided this
Agreement is not terminated early, shall not receive any additional salary from
Employer because of Employee's failure to utilize all or any portion of his
allotted vacation time. If this Agreement is terminated due to Employee's death
or permanent disability or at Employer's or Employee's election, Employee (or
Employee's estate) is entitled to compensation for any of Employee's earned but
unused vacation time.
5. TERMINATION. This Agreement shall terminate upon the occurrence of any
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of the following:
a. The expiration of the Term or extended term hereof (subject to
paragraph 7).
b. The mutual written consent of the parties hereto.
c. The death of Employee.
d. The permanent disability of Employee; Employee shall be deemed to
be permanently disabled for the purposes hereof, if (i) in the mutual opinion of
two (2) licensed
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physicians, one selected by Employer and one by Employee, he is physically or
mentally unable to perform his duties hereunder and (ii) such incapacity shall
continue for a period of ninety (90) days in the aggregate during any one
hundred and eighty (180) day period during the Term. If the two (2) physicians
are unable to agree, they shall select a third licensed physician not affiliated
with either physician, whose decision will be final and binding.
e. For Cause, at the option of Employer, as provided in paragraph 6
below.
f. By Employee pursuant to the provisions of paragraph 3b.
Nothing contained in this paragraph 5 shall be construed, however, to
abrogate the payment by Employer to Employee or Employee's personal
representative or heirs, as the case may be, of any benefits or compensation
which had accrued and was due to Employee prior to termination of this
Agreement. However, upon such termination, all obligations of Employer shall
cease immediately, except that the Employee shall receive all Base Salary, bonus
(except if terminated for "cause") and benefits earned or accrued through and
including the date of such termination, and any expenses properly incurred by
Employee but not yet reimbursed.
6. TERMINATION FOR CAUSE.
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a. Employer shall have the right, at its sole election, to terminate
Employee's employment hereunder at any time during the Term for cause ("cause
herein") which, for purposes of this Agreement, shall be constituted by any of
the following events:
(i) any material failure by the Employee to perform the
Employee's duties under this Agreement or to perform specific directives of the
Company which are consistent with the scope and nature of the Employee's duties
and responsibilities as set forth herein (following a 30 day written notice to
correct such action);
(ii) any intentional act of fraud or embezzlement by the Employee
or the Employee's admission or conviction (including a plea of nolo contendre)
of a felony or of any crime involving moral turpitude, fraud, embezzlement or
misrepresentation;
(iii) any gross negligence or willful misconduct of the Employee
resulting in a material loss to the Employer or any of its affiliates, or
material damage to the reputation of the Employer or any of its affiliates;
(iv) excessive use of alcohol or drugs while performing his job
duties hereunder; and
(v) any other material breach of this Agreement.
b. The exercise of the right of the Employer to terminate this
Agreement pursuant to this Section 6 shall not abrogate the rights or remedies
of the Employer in respect of the breach giving rise to such termination.
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c. If the Employer terminates the Employee's employment for Cause,
all obligations of the Employer hereunder shall cease immediately, except that
the Employee shall be entitled to Base Salary and benefits actually earned or
accrued through and including the date of such termination and any expenses
properly incurred by the Employee but not yet reimbursed.
7. SEVERANCE. In the event that (1) the Company, in its discretion elects
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not to renew this Agreement for at least an additional twelve month period
following expiration of the Term (the "Extended Term") at a base salary during
such Extended Term at least equal to that set forth in Schedule A hereto (the
"Extended Term Base Salary"), and (2) provided the Employee has fully performed
all his obligations hereunder during the Term, has not been terminated for Cause
as provided for hereunder, and contingent upon receipt by the Company of a valid
and fully effective release of any and all Employee claims against the Company
and related parties with respect to all matters arising out of Employee's
employment by the Company (same to be of form and content satisfactory to
Company's counsel), Employee shall then receive the following severance
payments:
The Company shall continue to pay Employee his Base Salary as set
forth on Schedule A for a period of six (6) months following the expiration of
the Term. This amount shall be paid to Employee in installments in accordance
with the Company's regular payroll practices.
8. EXPENSES. Employee shall be entitled to reimbursement for all of
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Employee's reasonable and necessary expenses in connection with Employee's
duties hereunder, in accordance with Employer's usual practice. In addition,
Employee shall be reimbursed his actual out of pocket costs incurred incidental
to his relocation (and that of his immediate family) to Los Angeles, California
to commence his employment hereunder, provide such relocation costs shall not
exceed $25,000. This reimbursement is exclusive of the interim reimbursements
for Gay to travel to and from Dallas until his relocation with his family, which
Gay agrees to try and minimize such expense (roundtrip airfares approximately
$250, bring his own car to LA from Dallas at the beginning of his employment
etc).
9. NOTICE. Whenever provision is made in this Agreement for the giving,
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service or delivery of any notice, statement or other instrument, notice shall
be in writing and shall be deemed to have been duly given, served and delivered,
either upon personal delivery, or if mailed, proper postage paid by United
States registered or certified mail, addressed to the party entitled to receive
the same at that address as set forth below, or to any other mailing address as
the parties may by written notice designate:
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If to Employer: Grill Concepts, Inc.
00000 Xxx Xxxxxxx Xxxxxxxxx, Xxxxx 000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxxx Xxxxxx, President
with copy to: Herzog, Fisher, Xxxxxxx & Xxxxx
0000 Xxxxxxxx Xxxxxxxxx
Xxxxxxx Xxxxx, XX 00000-0000
Attn: Xxxxxxx X. Xxxxxxx, Esq.
If to Employee: Xxxxxx Xxx
0000 Xxxxx Xxxxxx Xxx
Xxxxxx, Xxxxx 00000
10. SUCCESSORS AND ASSIGNS. The rights and obligations of the parties
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under this Agreement shall inure to the benefit of and shall be binding upon the
successors and assigns of such parties; provided, however, that this Agreement
is personal to Employee and neither this Agreement nor the Employee's rights or
obligations hereunder may be assigned. Employer may assign all or part of its
rights hereunder to any subsidiary or parent company of Employer, in which case
services of Employee hereunder shall be rendered to such assignee.
11. SURVIVORSHIP OF BENEFITS. Subject to Paragraph 9, this Agreement shall
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bind and inure to the benefit of the respective parties, their executors,
administrators, heirs, successors, assigns and transferees.
12. SEVERABILITY. The invalidity or unenforceability of any provision of
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this Agreement shall not affect the validity or enforceability of any other
provision.
13. GOVERNING LAW. This Agreement shall be construed in accordance with
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and governed by California law.
14. ENTIRE AGREEMENT.
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a. This Agreement contains the parties' sole and entire agreement
and shall supersede any and all other agreements between them.
b. The parties acknowledge and agree that neither has made any
representations with respect to the subject matter of this Agreement, or any
representation inducing the execution and delivery of this Agreement, except as
specifically set forth in this Agreement. Each acknowledges it has relied on its
own judgment in entering into this Agreement.
c. The parties further acknowledge that any statements or
representations that may have been made by either of them to the other are void
and of no effect, and that neither has relied on any statements or
representations in connection with its, or his dealings with the other.
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15. NO MODIFICATIONS OR WAIVERS. No waiver or modification of this
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Agreement, or of any covenant, condition, or limit contained in this Agreement,
shall be valid unless made in writing and duly executed by the party to be
charged. No evidence of any waiver or modification shall be offered or received
in evidence in any proceeding, arbitration, or litigation between the parties
arising out of or affecting this Agreement, or the parties' rights or
obligations, unless the waiver or modification is in writing and duly executed.
16. COUNTERPARTS. This Agreement may be executed in one or more
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counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same Agreement.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
as of the day and year first above written.
Employer: GRILL CONCEPTS, INC., A DELAWARE CORPORATION
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By:_______________________________________
Xxxxxx Xxxxxx, President
Employee: By:_______________________________________
-------- XXXXXX XXX
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SCHEDULE A
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1. Compensation During Term
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a. Base Salary. For all the services rendered by Employee hereunder,
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the Company shall pay Employee an annual salary of $203,724.80 per year for the
Term, (the "Base Salary" herein), less withholding required by law or agreed to
by Employee, payable semi-monthly.
b. In addition to the Base Salary, Employee shall receive a an
option to purchase 50,000 shares of the Company's Common Stock pursuant to the
terms of the Company's Stock Option Plan. Employee acknowledges receipt of a
copy of such Plan and agrees to be bound by the terms thereof, including without
limitation, the vesting schedule for such Options.
c. Employee shall also be entitled to participate in the Company's
Bonus Plan and be eligible there under to receive a Bonus thereunder to a
maximum of twenty-five (25) percent of his Base Salary.
2. Compensation during Extended Term (if any)
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a. Extended Term Base Salary shall equal the Base Salary set forth
in a. above plus an increase equal to increase, if any, in the Consumer Price
Index (CPI) between the Effective Date and the first day of the Extended Term
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