AMENDED AND RESTATED EMPLOYMENT AGREEMENT
EXECUTION
COPY
AMENDED
AND RESTATED
EMPLOYMENT
AGREEMENT
Agreement,
dated as of July 1, 2005 (the “Agreement”), by and between Shells Seafood
Restaurants, Inc., a Delaware corporation with its principal office at 00000
X.
Xxxx Xxxxx Xxxxxxx, Xxxxx 000, Xxxxx, Xxxxxxx 00000 (the "Company"), and
Xxxxxx
X. Xxxxxxxx (the "Executive"), currently residing at 0000 Xxxxxx Xxxx, Xxxxx,
Xxxxxxx 00000.
WHEREAS,
the parties desire to enter into this Agreement in order to assure the Company
of the services of the Executive and to set forth the duties and compensation
of
the Executive, all upon the terms and conditions hereinafter set forth;
and
WHEREAS,
the Executive and the Company are parties to an Employment Agreement dated
July
1, 2003, which agreement has been replaced and superseded in its entirety
by
this Agreement.
NOW,
THEREFORE, in consideration of the foregoing and of the mutual promises,
representations and covenants contained herein, the parties hereto agree
as
follows:
1. Duties.
The
Company shall employ the Executive, and the Executive shall serve as the
Chief
Executive Officer and President of the Company, during the Employment Term
(as
hereinafter defined). During the Employment Term, the Executive shall perform
such duties and functions as the Company's Board of Directors shall from
time to
time determine and the Executive shall comply in the performance of her duties
with the policies, and be subject to the direction, of the Board of Directors
of
the Company. Except as may be expressly otherwise consented to in writing
by the
Board of Directors, the Executive covenants and agrees to and shall devote
her
full working time, attention and efforts toward the performance of her duties
and responsibilities hereunder. The Executive shall not, directly or indirectly,
without the prior written consent of the Company's Board of Directors, as
owner,
partner, joint venturer, stockholder, employee, consultant, corporate officer
or
director, engage or become financially interested in any other duties or
pursuits which interfere with the performance of her duties hereunder, or
which
even if non-interfering, may be inimical or contrary to the best interests
of
the Company. During the Employment Term, the Executive shall reside, on a
full
time basis, in either Hillsborough, Pinellas or Pasco County,
Florida.
2. Term;
Severance.
a. Term.
The
term of this Agreement and the term of employment (the "Employment Term")
of the
Executive shall commence as of July 1, 2005 and continue until June 30, 2007
(the "Termination Date") unless sooner terminated in accordance with the
terms
hereof; provided, however, that the Termination Date (and, consequently,
the
Employment Term) shall be extended automatically for successive one year
periods
unless either party hereto gives the other such party written notice of its
or
her intention not to extend this Agreement, sixty (60) days prior to the
Termination Date (or, if applicable, any anniversary of the Termination
Date).
x. Xxxxxxxxx.
Except
as provided in Section 5(b) hereof, in the event the Company terminates the
Executive's employment for any reason other than cause (as defined in Section
5
hereof), the permanent disability (as defined in Section 6 hereof) of the
Executive, or the death of the Executive, the parties agree that, provided
Executive executes a general release of all claims against the Company, its
officers, directors and affiliates, and abides by all restrictive covenants
of
this Agreement including, without limitation, the provisions relating to
non-competition, non-solicitation and confidentiality, Executive shall be
entitled to receive: (1) as severance pay the then effective base salary
of the
Executive, for a period commencing on any such date of termination and ending
on
the earlier of (i) the one-year anniversary of such date or (ii) the date
upon
which Executive commenced to be employed by another entity or person, in
all
such instances, payable in equal installments in accordance with the Company's
normal salary payment policies, and (2) payment of the Executive’s and
Executive’s eligible dependents’ COBRA continuation health coverage premiums for
the one-year period following the date of termination or, if earlier, until
the
Executive and Executive’s dependents cease to be eligible for such coverage or
until the Executive commences employment with another entity or person. Any
amounts so paid to the Executive pursuant to the provisions of this Section
2(b)
shall be in lieu of any and all other payments due and owing to the Executive
under the terms of this Agreement or otherwise. In the event that the Company
terminates Executive's employment for "cause" (as defined in Section 5 hereof),
or due to the "permanent disability" of the Executive ( as defined in Section
6
hereof) or the death of the Executive, or non-renewal of this Agreement,
the
Executive shall not be entitled to receive any further payment hereunder
other
than for accrued but unpaid compensation and except as may be specifically
otherwise provided in this Section 2(b) or pursuant to any stock option granted
to Executive by the Company.
3. Compensation.
a. Salary.
In each
of the two years of the Employment Term, the Executive shall receive a base
salary at the rate of $300,000 per annum (“Base Salary”), subject to any
increases approved by the Board of Directors or an appropriate committee
thereof. The Executive's Base Salary shall be payable in installments in
accordance with the Company's normal salary payment policies, and shall be
subject to such payroll deductions as are required by law or applicable employee
benefit programs.
b. Bonus.
Executive shall be eligible for a bonus of up to one hundred percent (100%)
of
her Base Salary on an annual basis, contingent upon the Executive achieving
agreed upon milestones to be determined by the Company’s Board of Directors or
an appropriate committee thereof. All Bonuses, if any, will be paid within
fifteen (15) days of the date that the Company receives its annual audited
financial statements from its independent certified public accountants for
the
then applicable year.
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c. Expenses.
In
addition to the Base Salary provided for in Section 3(a) hereof, the Company
shall reimburse the Executive, upon presentation by the Executive of suitable
documented expense accounts, for any reasonable travel or other out-of-pocket
business expenses incurred by the Executive in rendering the services hereunder
on behalf of the Company and which are incurred pursuant to the Company's
expense reimbursement policies. The Executive shall comply with restrictions
and
shall keep records in compliance with the Company's policy and procedures
related to travel and entertainment expenses, and as may be otherwise required
for tax or accounting purposes.
d. Stock
Option Awards.
(i) As
soon
as practicable following the execution of this Agreement, the Company shall
grant the Executive options to purchase an aggregate of 1,061,535 shares
of the
Company's common stock, $.01 par value per share (the "Common Stock"), at
an
exercise price per share equal to the fair market value of the Common Stock
on
the date of grant, of which (1) 100,000 will be granted pursuant to the
Company’s 2002 Equity Incentive Plan (the “2002 Plan Option”), (2) 58,007 will
be granted pursuant to the Company’s 1996 Employee Stock Option Plan
(collectively with the 2002 Plan Option, the “Plan Options”) and (3) 903,528
will be granted pursuant to the Stock Option Agreement annexed hereto as
Exhibit
A. Except as specifically provided otherwise herein, the Plan Options shall
vest
in two (2) substantially equal annual installments on each of July 1, 2007
and
July 1, 2008, provided that the Executive remains continuously employed by
the
Company through each applicable vesting date.
(ii) Any
shares of Common Stock purchased by Executive through the exercise of options
granted pursuant to Section 3(d)(i) (all such purchased shares being referred
to
herein as the "Option Shares") shall be subject to the rights and transfer
restrictions reserved or imposed by Sections 3(d)(iii) and 3(d)(iv) of this
Agreement.
(iii) The
Company shall have the right to repurchase any Option Shares owned by the
Executive at the time of the termination of her employment with the Company
or
thereafter acquired, if applicable, in all instances in the event the Common
Stock is not then publicly traded. The Company may exercise its right to
repurchase Option Shares by giving written notice of same to the Executive
(or
her legal representative), with a copy as specified in Section 10 hereof,
within
one (1) year following the date on which the Executive's employment with
the
Company is terminated. If the Company exercises its repurchase right, the
purchase and sale of the Option Shares will occur at the Company's principal
office at the time and date specified in the Company's notice, which shall
be
not less than ten (10) days nor more than sixty (60) days after such
exercise.
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(iv) Except
as
otherwise specifically provided herein, no Option Shares may be conveyed,
transferred, encumbered or otherwise disposed of at any time when the Company's
Common Stock is not then publicly traded; provided, however, that upon the
death
of the Executive the Option Shares may be conveyed by will or by the laws
of
descent and distribution, subject, however, to the provisions of this Agreement.
Any certificates for shares covered by this Agreement shall contain a legend
which states that such shares are subject to the transfer and other restrictions
imposed by this Agreement.
(v) In
the
event that the Company exercises its repurchase rights the price payable
by the
Company for the Option Shares will be equal to the product of the fair market
value of the Company in its entirety, and the percent ownership of the Company
represented by the Option Shares ("Fair Market Value"). For this purpose,
the
"Fair Market Value" of Option Shares will be determined as of the date of
exercise by the Company of its repurchase rights hereunder, so long as such
repurchase is consummated within sixty (60) days of exercise. Fair Market
Value
shall be determined by a nationally-recognized, independent accounting firm,
which may be the independent accountants regularly employed by the Company,
appointed by the Board and reasonably acceptable to the Executive (or the
estate
or legal representative of the Executive), in accordance with generally accepted
practices and standards.
(vi) The
Company shall pay the purchase price for the Option Shares repurchased hereunder
in a single sum; provided, however, that in no event shall the Company be
obligated to repurchase any shares to the extent funds are not legally available
therefore under applicable law.
e. Vacations.
The
Executive shall be entitled to up to four weeks of paid vacation in each
calendar year. The Executive shall also be entitled to the same standard
paid
holidays given by the Company to senior executives generally, all as determined
from time to time by the Board of Directors of the Company or an appropriate
committee thereof. No more than one week of vacation time shall cumulate
from
year to year.
f. Automobile.
During
the Employment Term, the Executive shall be entitled to an automobile allowance
of $1,000 per month, plus maintenance, reimbursement for the cost of gasoline
used for daily commutation to work and for business travel (all in accordance
with Section 3(c) hereof), and automobile insurance.
g. Life,
Health and Disability Insurance.
Executive shall be entitled to participate in the Company's health benefit
program and entitled to the same health and disability insurance paid for
by the
Company to senior executives generally, all as determined from time to time
by
the Board of Directors of the Company or an appropriate committee thereof.
The
Company shall use its good faith efforts to obtain and pay the premiums on
a
$500,000 term life insurance policy on the Executive during the term of this
Agreement provided that the Executive can be insured and provided further
that
the premium for such policy shall not exceed $1,000 per year. The life insurance
policy shall be owned by the Company and the beneficiary shall be designated
by
the Executive.
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4. Place
of Performance.
In
connection with her employment by the Company, and except for travel required
for Company business, the Executive shall be based at the principal executive
offices of the Company, presently located in the Tampa, Florida area or,
from
time to time, at the discretion of the Company, at other locations utilized
by
the Company which are located within 100 miles of the Company's present
executive offices.
5. Termination
by the Company or by Executive.
(a) Termination
by the Company.
The
Company may terminate Executive's employment at any time, upon notice by
the
Company to the Executive, for cause or for any other reason which would not
constitute cause. Termination by the Company for "cause" shall mean termination
because of: (a) Executive's refusal to perform, or continual neglect of,
her
duties or obligations hereunder (other than breaches of the covenants set
forth
in Sections 1, 7 and 8 hereof which events are governed by clause (e) below),
in
any such instance which is materially and demonstrably injurious to the Company
and which neglect or failure to act is not remedied within thirty (30) days
after written notice thereof to the Executive by the Company; (b) Executive's
conviction (which, through lapse of time or otherwise, is not subject to
appeal)
of any crime or offense involving money or other property of the Company
or any
of its subsidiaries or which constitutes a felony in the jurisdiction involved,
(c) Executive's performance of any act or her failure to act, for which if
Executive were prosecuted and convicted, would constitute a crime or offense
involving money or property of the Company or any of its subsidiaries, or
which
would constitute a felony in the jurisdiction involved, (d) any attempt by
Executive to secure improperly any personal profit in connection with the
business of the Company or any of its subsidiaries, which individually or
in the
aggregate is materially and demonstrably injurious to the Company and which,
to
the extent such material and demonstrable injury is capable of being cured,
is
not remedied within thirty (30) days after written notice thereof to the
Executive by the Company, (e) any breach by Executive of any of the terms
of
Section 1, 7 or 8 of this Agreement, in any such instance which is materially
and demonstrably injurious to the Company and which breach is not remedied
within thirty (30) days after written notice thereof to the Executive by
the
Company.
(b) Change
in Control.
In the
event that, within six months of a Change in Control of the Company (as later
defined), (i) Executive is terminated without cause or (ii) Executive terminates
her employment with the Company due to (w) a significant diminution in
Executive’s job responsibilities or title or (x) the Executive being required to
relocate outside of the Tampa, Florida market (which shall mean to a location
which is more than 50 miles outside of the city borders of Tampa), and, in
any
such instance, provided the Executive executes a general release of all claims
against the Company, its officers, directors and affiliates and abides by
the
provisions of Sections 7 and 8(a) (iii) and (iv) hereof, then (y) all the
Executive’s unvested stock options will vest immediately, and (z) Executive
shall be entitled to receive (1) a severance payment equal to one year’s then
effective base salary, payable in equal installments commencing from the
date of
the Change in Control, in accordance with the Company’s then general salary
payment policies, and (2) payment of the Executive’s and Executive’s eligible
dependents’ COBRA continuation health coverage premiums for the one-year period
following the date of termination or, if earlier, until the Executive and
Executive’s dependents cease to be eligible for such coverage or until the
Executive commences employment with another entity or person. Such payments,
if
any, shall be in lieu of any amount provided for in Section 2(b) hereof.
For
purposes of this Agreement, a “Change in Control” shall be deemed to have
occurred if (i) there shall be consummated (x) any consolidation or merger
of
the Company in which the Company is not the continuing or surviving corporation
or pursuant to which shares of the Company’s Common Stock, would be converted
into cash, securities or other property, other than a merger of the Company
in
which the holders of the Common Stock immediately prior to the merger have
not
less than 50.1% of the ownership of common stock of the surviving corporation
immediately after the merger, or (y) any sale, lease, exchange or other transfer
(in one transaction or a series of related transactions) of all, or
substantially all, of the assets of the Company, or (ii) the stockholders
of the
Company shall approve any plan or proposal for liquidation or dissolution
of the
Company, or (iii) any person (as such term is used in Section 13(d) and 14(d)(2)
of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) who, at
the time of the execution of this Agreement, does not own 5% or more of the
Company’s outstanding Common Stock, shall become the beneficial owner (within
the meaning of Rule 13d-3 under the Exchange Act) of 35% or more of the
outstanding Common Stock other than pursuant to a plan or arrangement entered
into by such person and the Company, or (iv) during any period of two
consecutive years commencing on the date hereof, individuals who at the
beginning of such period constitute the entire Board of Directors shall cease
for any reason to constitute a majority thereof, unless the election, or
the
nomination for election by the Company’s stockholders, of a majority of the new
directors was approved by a vote of at least two-thirds of the directors
then
still in office who were directors at the beginning of the period.
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(c) Termination
by the Executive.
The
Executive may terminate her employment with the Company at any time, upon
notice
by the Executive to the Company.
6. Death;
Disability.
If the
Executive shall die or become "permanently disabled" during the term of this
Agreement, this Agreement and all benefits hereunder shall terminate, except
that such termination shall not affect any vested rights which the Executive
may
have at the time of her death pursuant to any insurance or other death benefit
plans or arrangements of the Company, which rights shall continue to be governed
by the provisions of such plans and agreements. For the purposes of this
Agreement, the Executive shall be deemed to be "permanently disabled" if,
during
the term hereof, because of ill health, physical or mental disability, or
for
other causes beyond the Executive's control, the Executive shall have been
unable, or unwilling, to perform the essential functions of her job hereunder
for ninety (90) consecutive days or for a total period of one hundred twenty
(120) days in any twelve month period during the term of this Agreement,
whether
consecutive or not. Notwithstanding anything to the contrary contained herein,
during any period that the Executive fails to perform the essential functions
of
her job hereunder as a result of her disability (but prior to the termination
of
this Agreement as a result of such disability), (i) the Executive shall continue
to receive her full salary at the rate then in effect and all benefits provided
herein, provided that payments made to the Executive pursuant to this Section
6
shall be reduced by the sum of the amounts, if any, payable to the Executive
at
or prior to the time of any such payment under any disability benefit insurance,
plan or program of, or provided by, the Company and (ii) the Company shall
have
the right to hire any other individual or individuals to perform such duties
and
functions as the Company shall desire, including those duties heretofore
performed by the Executive.
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7. Protection
of Confidential Information.
a.
Confidential
Information.
The
Executive acknowledges that her employment by the Company will, throughout
the
term of this Agreement, bring her in contact with many confidential affairs
of
the Company not readily available to the public, and plans for future
developments. In recognition of the foregoing, the Executive covenants and
agrees that she will not, directly or indirectly, use or intentionally disclose
or permit to be known to anyone outside of the Company any confidential matters
of the Company, except with the Company's prior written consent or as required
by court order, law or subpoena, or other legal compulsion to disclose, with
appropriate confidentiality obligations, or when reasonably necessary during
Executive’s employment by the Company for the Executive to perform her job
duties hereunder. In the event that Executive shall be required by legal
process
to disclose any confidential matter, Executive shall give the Company ten
days
(or, if not reasonably possible, such lesser number of days as is reasonably
possible) prior written notice prior to such disclosure.
b. Company
Property.
All
information and documents relating to the Company shall be the exclusive
property of the Company and the Executive shall use commercially reasonable
best
efforts to prevent any publication or disclosure thereof. Upon termination
of
the Executive's employment with the Company, all documents, records, reports,
writings and other similar documents containing confidential information,
including copies thereof, and any other Company property then in the Executive's
possession or control shall be returned and left with the Company.
c. Company
Policy.
The
Executive will execute the Company’s Annual Questionnaire Relating to Conflicts
of Interest, Xxxxxxx Xxxxxxx, Questionable Payments, Political Contributions,
Violations of Law and Confidentiality, all the terms and provisions of which
are
incorporated herein as if fully set forth herein.
8.
Covenant
Not To Compete; Non-Solicitation.
a. Covenant
Not to Compete.
The
Executive agrees that during her employment by the Company (which shall be
deemed to include the period during which the Executive is receiving any
severance payments, as set forth in Section 2 hereof) and for the twenty-four
months immediately following the Employment Term (including any extensions
thereof, as provided herein), the Executive shall not either directly or
indirectly, (i) whether by establishing a new business or by joining an existing
one, and whether as a principal, employee, stockholder, officer, director,
broker, agent, consultant, corporate officer, licensor or in any other capacity,
compete with the Company or any of its affiliates in the seafood segment
of the
restaurant business or become associated with a business enterprise which
competes with any business operation of the Company or its affiliates in
the
seafood segment of the restaurant business, or any business operation of
the
Company or its affiliates in the seafood segment of the restaurant business
planned and known by the Executive prior to the Executive's termination of
employment, in the State of Florida and any other geographical areas in which
the Company then has market presence; provided, however, that if the Company
terminates Executive's employment without cause (as defined in Section 5
hereof), Executive shall not be subject to the provisions of this Section
8;
(ii) divert business from the Company or its affiliates or solicit, accept
or
procure business from, divert the business of, or attempt to convert to other
methods of using the same or similar services or products as are provided
by the
Company or its affiliates , any customer of the Company or its affiliates;
(iii)
interfere, in any manner, with the Company's or its affiliates’ customer and
vendor/supplier relationships; or (iv) solicit for employment, employ or
otherwise engage the services of, any employee or agent of the Company or
its
affiliates, or any person who was an employee or agent of the Company or
its
affiliates within the six months immediately preceding the cessation of
Executive's employment with the Company. A restaurant shall be deemed to
be in
the seafood segment of the restaurant business if it holds itself out as
primarily a purveyor of seafood by means of the use of the term “seafood",
"fish" or other term traditionally associated with a food source which comes
from the ocean waters (or any variation on any of the foregoing) in its name
or
in its advertising.
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b. Divisibility.
The
Executive and the Company intend that this covenant not to compete shall
be
construed as a series of separate covenants, one for each county and each
product line. If, in any judicial proceeding, a court shall refuse to enforce
any one or more of the separate covenants deemed included in subsection (a)
of
this Section 8, then such unenforceable covenant shall be deemed severed
from
this Agreement for the purposes of such judicial proceeding to the extent
necessary to permit the remaining separate covenants to be
enforced.
c. Reasonableness.
The
Executive acknowledges that the territorial and time limitations set forth
in
this Section 8 are reasonable and properly required for the adequate protection
of the business of the Company and its subsidiaries and affiliates. In the
event
any such territorial or time limitation is deemed to be unreasonable by a
court
of competent jurisdiction, the Executive agrees to the reduction of the
territorial or time limitation to the area or period which such court deems
reasonable.
d. Independent
Obligation.
The
existence of any claim or cause of action by the Executive against the Company
shall not constitute a defense to the enforcement by the Company of the
foregoing restrictive covenants, but such claim or cause of action shall
be
litigated separately.
9. Successors;
Binding Agreement.
This
Agreement and all rights of the Executive hereunder shall inure to the benefit
of, and shall be enforceable by, the Executive's personal or legal
representatives, executors, administrators, successors, heirs, distributees,
devisees and legatees. If the Executive should die while any amount would
still
be payable to her hereunder if she had continued to live, all such amounts,
unless otherwise provided herein, shall be paid in accordance with the terms
of
this Agreement to the Executive's devisee, legatee or other designee or,
if
there be no such designee, to the Executive's estate. This Agreement shall
bind
any successors, purchasers, subsidiaries, affiliates and assigns of the
Company.
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10. Notice.
For the
purposes of this Agreement, notices, demands and all other communications
provided for in the Agreement shall be in writing and shall be deemed to
have
been duly given when delivered against receipt therefore or three days after
being mailed by United States certified mail, return receipt requested, postage
prepaid, addressed as follows:
| If to the Executive: |
Xxxxxx
Xxxxxxxx
|
0000
Xxxxxx Xxxx
Xxxxx,
XX
00000
| With a copy to: |
Xxxxxx
X. XxXxxxx
|
Xxxx
Xxxxxxx P.C.
0000
X
Xxxxxx, XX
Xxxxx
0000
Xxxxxxxxxx,
XX 00000-0000
| If to the Company: |
Shells
Seafood Restaurant, Inc.
|
00000
X.
Xxxx Xxxxx Xxxxxxx, Xxxxx 000
Xxxxx,
Xxxxxxx 00000
| With a copy to: |
Xxxxxxx
X. Xxxxxxxx, Esq.
|
Fulbright
& Xxxxxxxx L.L.P.
000
Xxxxx
Xxxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
or
to
such other address as either party may have furnished to the other in writing
in
accordance herewith, except that notice of change of address shall be effective
only upon receipt.
11. Miscellaneous.
No
provisions of this Agreement may be modified, waived or discharged unless
such
waiver, modification or discharge is agreed to in writing and signed by the
Executive and such officers of the Company as may be specifically designated
by
its Board of Directors. No waiver by either party hereto at any time of any
breach by the other party hereto of, or compliance with, any condition or
provision of this Agreement to be performed by such other party shall be
deemed
a waiver of similar or dissimilar provisions or conditions at the same or
at any
prior or subsequent time.
12. Validity.
The
invalidity or unenforceability of any provision or provisions of this Agreement
shall not affect the validity or enforceability of any other provision of
this
Agreement, which shall remain in full force and effect.
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13. Entire
Agreement.
With
the exception of the terms and conditions of the benefit and compensation
plans
applicable to the Executive, this Agreement sets forth the entire agreement
and
understanding of the parties hereto in respect of the subject matter contained
herein, and supersedes all prior agreements, promises, covenants, arrangements,
communications, representations or warranties, whether oral or written, by
any
officer, employee or representative of any party hereto or any predecessor
of
any party hereto.
14. Non-Assignability.
This
Agreement is entered into in consideration of the personal qualities of the
Executive and may not be, nor may any right or interest hereunder be, assigned
by her without the prior written consent of Company. It is expressly understood
and agreed that this Agreement, and the rights accruing and obligations owed
to
the Company hereunder, and the obligations to be performed by the Company
hereunder, may be assigned by the Company to any of its successors or
assigns.
15. Equitable
Relief.
The
Executive recognizes that the services to be rendered by her hereunder are
of a
special, unique, extraordinary and intellectual character involving skill
of the
highest order and giving them peculiar value, the loss of which cannot be
adequately compensated for in damages. In the event of a breach of this
Agreement by the Executive, the Company shall be entitled to injunctive relief
or any other legal or equitable remedies. The remedies provided in this
Agreement shall be deemed cumulative and the exercise of one shall not preclude
the exercise of any other remedy at law or in equity for the same event or
any
other event.
16. Indemnification;
Litigation Expenses.
(a) Indemnification.
In
addition to any indemnification obligations the Company has or may have toward
the Executive under applicable law, the Company shall indemnify the Executive
for any and all costs, expenses, awards, claims, judgments, attorneys' fees
or
any other damage or injury to the Executive for the Executive's actual or
alleged actions or failure to act during her employment with the Company,
in all
instances in a manner consistent with this Agreement and as permitted by
applicable law, including the Executive's employment or serving at the request
of the Company as an officer or director of a subsidiary or affiliate of
the
Company.
(b) Litigation
Expenses.
In the
event of litigation in connection with or concerning the interpretation,
breach
of enforcement of this Agreement, the prevailing party shall be entitled
to
recover all costs and expenses incurred by such party in connection therewith,
including reasonable attorneys fees.
17.
Choice
of Law.
This
Agreement is to be governed by and interpreted under the laws of the State
of
Florida without regard to its conflict of laws principles.
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18. Representations
And Agreements of the Executive.
The
Executive represents and warrants that she is free to enter into this Agreement
and to perform the duties required hereunder, and that there are no employment
contracts or understandings, restrictive covenants or other restrictions,
whether written or oral, preventing the performance of her duties hereunder.
The
Executive agrees to submit to a medical examination and to cooperate and
supply
such other information and documents as may be required by any insurance
company
in connection with the Executive's inclusion in any insurance or fringe benefit
plan or program as the Company shall be required hereunder or shall determine
from time to time to obtain, or in connection with, in the Company's sole
discretion, the Company's obtaining life insurance for its benefit on the
life
of the Executive.
19. Survival.
The
termination of the Executive's employment hereunder shall not affect the
enforceability of Sections 2, 3, 5, 7, 8, 9, 15, 16, 17 and 18
hereof.
20. Section
409A.
Notwithstanding anything herein to the contrary, to the extent that amounts
payable pursuant to Section 2(b) or 5(b) of this Agreement would be subject
to
the additional 20% tax imposed under Section 409A of the Internal Revenue
Code
of 1986, as amended (the “409 Affected Amount”), the Company shall pay to the
Executive that portion of the 409A Affected Amount otherwise due after the
latest date that it could be paid and still qualify for the “short term
deferral” exception under Prop. Treas. Reg. Section 1.409A-1(b)(4) (or any
successor thereto) in a single lump sum no later than the latest possible
date
permitted under the “short term deferral” exception that would avoid such
additional 20% tax.
21. Counterparts.
This
Agreement may be executed in one or more counterparts, each of which shall
be
deemed to be an original but all of which together shall constitute one and
the
same instrument.
22. Headings.
The
Section headings appearing in this Agreement are for the purposes of easy
reference and shall not be considered a part of this Agreement or in any
way
modify, demand or affect its provisions.
23. Amendment
and Restatement.
This
Agreement amends, supersedes and replaces in its entirety the existing
employment agreement dated July 1, 2003 between the Company and the Executive,
which prior agreement shall be null and void from and after the execution
of
this Agreement.
[SIGNATURE
PAGE TO FOLLOW]
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IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day
and year first written above.
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SHELLS
SEAFOOD RESTAURANTS, INC.
By:
/s/
Xxxxxx
X.
Xxxxxxx
Name:
Xxxxxx X. Xxxxxxx
Title:
Chairman of the Board of Directors
/s/
Xxxxxx X.
Xxxxxxxx
Xxxxxx
X. Xxxxxxxx
|
[SIGNATURE
PAGE TO THE SHELLS-XXXXXXXX EMPLOYMENT AGREEMENT]
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EXHIBIT
A
STOCK
OPTION AGREEMENT, made as of the ___ day of ___________, 2005, by and between
Shells Seafood Restaurants, Inc., a Delaware corporation (the “Company”), and
Xxxxxx X. Xxxxxxxx (the “Executive”).
1. Grant
of Option.
The
Company hereby grants to the Executive an option (the “Option”) to purchase
903,528 shares
of
the Company’s common stock, $.01 par value per share (the “Common Stock”), at a
purchase price per share of $____.
2. Term
of Option.
Unless
sooner terminated as provided herein, this Option shall expire on July 1,
2012.
3. Vesting
of Option.
This
Option shall become vested and exercisable with respect to 353,845 shares
of
Common Stock on December 31, 2005, with respect to an additional 274,842
shares
of Common Stock on July 1, 2007 and with respect to the remaining 274,841
shares
on July 1, 2008, subject to the Executive remaining in the continuous employment
or other service with the Company through each applicable vesting date.
Notwithstanding the preceding sentence, in the event that, within six (6)
months
of a Change in Control of the Company (as defined in the Amended and Restated
Employment Agreement dated as of July 1, 2005 between the Executive and the
Company (the “Employment Agreement”)), (i) the Executive is terminated without
Cause (as defined in the Employment Agreement) or (ii) the Executive terminates
her employment with the Company due to (w) a significant diminution in the
Executive’s job responsibilities or title or (x) the Executive being required to
relocate outside of the Tampa, Florida market (which shall mean to a location
which is more than 50 miles outside of the city borders of Tampa), and, in
any
such instance, provided the Executive executes a general release of all claims
against the Company, its officers, directors and affiliates and abides by
the
provisions of Sections 7 and 8(a) (iii) and (iv) of the Employment Agreement,
then this Option shall immediately become vested and exercisable, all in
accordance with Section 5(b) of the Employment Agreement.
4. Termination
of Employment.
(a) Termination
by Reason of Death or Permanent Disability.
If the
Executive’s employment with the Company is terminated due to her death or
permanent disability (as defined in Section 6 of the Employment Agreement),
then: (i) that portion of this Option that is vested and exercisable on the
date
of termination shall remain exercisable by the Executive (or, in the event
of
death, the Executive’s beneficiary) during the one year period following the
date of termination but in no event after expiration of the stated term hereof
and, to the extent not exercised during such period, shall thereupon terminate,
provided that, in the event of a termination due to permanent disability,
if the
Executive dies during such one-year period, then the Executive’s beneficiary may
exercise this Option, to the extent vested and exercisable by the Executive
immediately prior to her death, for a period of one year following the date
of
death but in no event after expiration of the stated term hereof, and (ii)
that
portion of this Option that is not vested and exercisable on the date of
termination shall thereupon terminate.
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(b) Termination
for Cause.
If the
Executive’s employment is terminated by the Company for Cause, then this Option
(whether or not then vested and exercisable) shall immediately terminate
and
cease to be exercisable.
(c) Other
Termination.
If the
Executive’s employment with the Company terminates for any other reason (other
than those described in Section 5(a) or 5(b) above) or no reason, then: (i)
that
portion of this Option that is vested and exercisable on the date of termination
shall remain exercisable by the Executive during the ninety (90) day period
following the date of termination but in no event after expiration of the
stated
term hereof and, to the extent not exercised during such period, shall thereupon
terminate, and (ii) that portion of this Option that is not vested and
exercisable on the date of termination shall thereupon terminate.
5. Method
of Exercise.
To the
extent vested and exercisable in accordance herewith, this Option may be
exercised in whole or in part by delivering to the Secretary of the Company
(a)
a written notice specifying the number of shares to be purchased, and (b)
payment in full of the exercise price, together with the amount, if any,
deemed
necessary by the Company to enable it to satisfy any tax withholding obligations
with respect to the exercise (unless other arrangements, acceptable to the
Company, are made for the satisfaction of such withholding obligation). The
exercise price shall be payable in cash, bank or certified check or such
other
methods permitted by the Compensation Committee of the Company’s Board of
Directors (the “Committee”) from time to time, including, without limitation,
pursuant to a cashless exercise procedure approved by the Committee. The
Committee may (in its sole discretion) permit all or part of the exercise
price
to be paid with shares of Common Stock which, if acquired through the Company,
have been owned by the Executive for at least six (6) months (or such lesser
or
greater period deemed necessary by the Company to avoid the imposition of
adverse accounting consequences to the Company) free and clear of any liens
or
encumbrances.
6. Rights
as a Stockholder.
No
shares of Common Stock shall be issued hereunder until full payment for such
shares has been made and any other exercise conditions have been fully
satisfied. The Executive shall have no rights as a stockholder with respect
to
any shares covered by this Option until the date such shares are reflected
as
having been issued to the Executive on the Company’s records. Except as
otherwise specifically provided herein, no adjustment shall be made for
dividends or distributions or the granting of other rights for which the
record
date is prior to the date such shares are issued.
7. Nontransferability.
The
Option is not assignable or transferable other than to a beneficiary designated
to receive this Option upon the Executive’s death in a manner acceptable to the
Company or by will or the laws of descent and distribution, and this Option
shall be exercisable during the lifetime of the Executive only by the Executive
(or, in the event of the Executive’s incapacity, the Executive’s legal
representative or guardian). Any attempt by the Executive or any other person
claiming against, through or under the Executive to cause this Option or
any
part of it to be transferred or assigned in any manner and for any purpose
shall
be null and void and without effect upon the Company, the Executive or any
other
person.
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8. Adjustments
Upon Changes in Capitalization.
Upon
any increase, reduction, or change or exchange of the Common Stock for a
different number or kind of shares or other securities, cash or property
by
reason of a reclassification, recapitalization, merger, consolidation,
reorganization, issuance of warrants or rights, stock dividend, stock split
or
reverse stock split, combination or exchange of shares, repurchase of shares,
change in corporate structure or otherwise, or any other corporate action,
such
as declaration of a special dividend, that affects the capitalization of
the
Company (a “Change in Capitalization”), an equitable substitution or adjustment
may be made in the kind, number and/or exercise price of shares or other
property subject to this Option, as may be determined by the Committee, in
its
sole discretion. Such other equitable substitutions or adjustments shall
be made
as may be determined by the Committee, in its sole discretion. Without limiting
the generality of the foregoing, in connection with a Change in Capitalization,
the Committee may provide, in its sole discretion, for the cancellation of
this
Option (i) in exchange for payment in cash or other property equal to the
Fair
Market Value of the shares of Common Stock covered by this Option (whether
or
not otherwise vested or exercisable), reduced by the aggregate exercise price
of
this Option, or (ii) for no consideration, in the case (and to the extent)
this
Option is not otherwise then vested or exercisable. In the event of any
adjustment in the number of shares covered by this Option pursuant to the
provisions hereof, any fractional shares resulting from such adjustment shall
be
disregarded, and this Option shall cover only the number of full shares
resulting from the adjustment. All adjustments under this Section 8 shall
be
made by the Committee, and its determination as to what adjustments shall
be
made, and the extent thereof, shall be final, binding and conclusive. For
purposes hereof, “Fair Market Value” on any date shall be equal to the closing
sale price per share as published by a national securities exchange on which
shares of the Common Stock are traded on such date or, if there is no sale
of
Common Stock on such date, the average of the bid and asked prices on such
exchange at the closing of trading on such date or, if shares of the Common
Stock are not listed on a national securities exchange on such date, the
closing
price or, if none, the average of the bid and asked prices in the over the
counter market at the close of trading on such date, or if the Common Stock
is
not traded on a national securities exchange or the over the counter market,
the
fair market value of a share of the Common Stock on such date as determined
in
good faith by the Committee.
9. No
Employment Rights.
Nothing
contained in this Agreement shall confer upon the Executive any right with
respect to the continuation of the Executive’s employment with the Company, or
interfere in any way with the right of the Company at any time to terminate
such
employment or to increase or decrease, or otherwise adjust, the other terms
and
conditions of the Executive’s employment with the Company.
10. Compliance
with Law.
Shares
of Common Stock shall not be issued pursuant to the exercise of this Option
unless such exercise and the issuance and delivery of such shares pursuant
thereto shall comply with all relevant provisions of law, including, without
limitation, the Securities Act of 1933, as amended, the Securities Exchange
Act
of 1934, as amended, and the requirements of any stock exchange or market
upon
which the Common Stock may then be listed, and shall be further subject to
the
approval of counsel for the Company with respect to such compliance. The
Committee may require each person acquiring shares of Common Stock to represent
to and agree with the Company in writing that such person is acquiring the
shares without a view to distribution thereof. All certificates for shares
of
Common Stock delivered hereunder shall be subject to such stock-transfer
orders
and other restrictions as the Committee may deem advisable under the rules,
regulations, and other requirements of the Securities and Exchange Commission,
any stock exchange or market upon which the Common Stock may then be listed,
and
any applicable federal or state securities law. The Committee may cause a
legend
or legends to be placed on any such certificates to make appropriate reference
to such restrictions.
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11. Miscellaneous.
This
Agreement shall be governed by and construed in accordance with the laws
of the
State of Delaware, without regard to its principles of conflict of laws.
This
Agreement constitutes the entire agreement between the parties with respect
to
the subject matter hereof and may not be amended other than by a written
instrument executed by the parties hereto.
IN
WITNESS WHEREOF, this Agreement has been executed as of the date first above
written.
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SHELLS
SEAFOOD RESTAURANTS, INC.
By:
___________________________________
Name:
Title:
_________________________________
Xxxxxx
X. Xxxxxxxx
|
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