EMPLOYMENT AGREEMENT
Exhibit
10.1
THIS
EMPLOYMENT AGREEMENT (the "Agreement") is effective the 1st day of November
2005
by and between Xxxxx Xxxx, Inc., a Delaware corporation with principal offices
at 000 Xxxxxxx Xxxxxx, Xxxxxxxxx Xxxxxxx, Xxx Xxxxxx 00000 (the "Company")
and
Xxxxxxxxxxx X. Xxxxxxxx whose principal residence is 000 Xxxxxxx Xxxx, Xxxxxxxx
Xxxxx, Xxx Xxxxxx 00000-0000. ("Executive"). As used herein, the term “Parties”
shall refer to both the Company and the Executive.
WHEREAS:
A.
The
Company and the Executive acknowledge and agree that prior to the execution
of
this Agreement, the Company employed Executive under certain written and
unwritten agreements, understandings, and arrangements.
B.
The
Company and the Executive acknowledge and agree that each party seeks to
supercede all prior oral and written agreements, understandings, and
arrangements between the Company and the Executive in connection with
Executive's proposed employment by the Company.
C.
The
Company desires to be assured of the association and services of Executive
for
the Company.
D.
Executive is willing and desires to be employed by the Company, and the Company
is willing to employ Executive, upon the terms, covenants and conditions
hereinafter set forth.
NOW
THEREFORE THE PARTIES AGREE AS FOLLOWS:
1.00.
EMPLOYMENT.
The
Company hereby employs Executive, subject to the supervision and direction
of
the Company’s Board of Directors. Executive shall hold the title of Chief
Executive Officer and shall, subject to the control of the Board of Directors,
have general supervision, direction and control of the business and officers
of
the corporation. He shall, to the extent possible, attend: (A) all meetings
of
the Company’s shareholders; and (B) unless otherwise directed by the Board of
Directors, all meetings of the Company’s Board of Directors. He shall serve as a
member of the Company’s Board of Directors and shall serve as a member of each
standing committee of the Board of Directors, including the Executive Committee,
to which he is appointedif any, and shall have the general powers and duties
of
management usually vested in the office of Chief Executive Officer of a
corporation, and shall have such other powers and duties as may be assigned
by
the Board of Directors from time to time and as otherwise provided by the
Company’s By-laws. Executive may, at any time in the future, be appointed as and
hold the position of Chairman of the Board of the Company.
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2.00.
TERM
OF EMPLOYMENT.
The
term of Executive's employment shall be for the five (5) year period commencing
on the earlier of the date at which the Company commences operations of its
first restaurant or the Company’s receipt of an aggregate of at least Two
Million Dollars ($2,000,000) in financing through debt or equity or any
combination thereof (the “Employment Term”). The Parties shall execute a
supplement hereto at such time as the Employment Term commences setting forth
the agreed upon commencement date of the Employment Term.
2.01. MATTER
OF ANNUAL PLAN.
Executive shall, at least annually during the Employment Term, submit to
the
Company’s Board of Directors a written plan (the “Annual Plan”) detailing the
Company’s forward-looking quantitative and qualitative operating and performance
targets to be achieved by the Company (corresponding to the Company’s fiscal
year) and detailing the timing and dates at which these targets are to be
achieved with pro
forma financial
statements (which shall include, in reasonable detail, footnotes showing
the
assumptions used to prepare all said financial statements). The Annual Plan
shall be prepared and submitted by Executive to the Board of Directors at
such
times as the Company’s Board of Directors shall reasonably determine with such
revisions as reasonably required to allow the Board of Directors to review
the
status and the Company’s performance in relation to the targets set forth in the
Annual Plan and the current financial and operating condition of the
Company.
3.00.
SALARY
COMPENSATION, HEALTH INSURANCE, VACATION & REIMBURSEMENT.
The
Company and the Executive agree that the Company shall pay Executive a
salary/compensation, provide health insurance and other benefits, and
reimbursement for allowable expenses:
3.01. SALARY
AND COMPENSATION.
In
consideration of Executive=s
services to the Company:
(A)
ANNUAL
SALARY.
During
the first year of the Employment Term, Executive shall be paid a monthly
salary
of Ten Thousand Dollars ($10,000) per month (the “Annual Salary”) (payable in
two equal bi-weekly installments with a first installment to be paid on or
before the fifteenth day of each month and a second installment to be paid
on or
before the last business day of each month. The Annual Salary shall be subject
to review by the Board or a committee thereof (e.g. compensation committee,
if
existing) and may be adjusted or increased after the first year of the
Employment Term (by resolutions adopted by the Company’s Board of Directors) but
in no event shall Executive’s salary be increased by less than Ten Thousand
Dollars ($10,000) per year for any period following the first year of the
Employment Term. Executive shall be entitled to receive a bonus over and
above
his Annual Salary for each year of the Employment Term which bonus shall
be at
the discretion of the Board or a committee thereof responsible for oversight
of
executive compensation.
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3.02.
HEALTH
INSURANCE, OTHER BENEFITS & VACATION.
In
addition to the compensation to be paid Executive as provided by Section
3.01,
Executive shall be entitled to all other benefits of employment as established
from time to time and provided to the other management of the Company or
its
affiliates. In addition:
(A)
HEALTH
INSURANCE AND OTHER BENEFITS.
The
Company shall provide full health and major medical insurance coverage for
Executive and Executive’s spouse and minor children with such coverage limits as
the Company may establish for its executive management employees. Executive
shall be eligible to participate in and receive benefits under all other
benefit
plans and other fringe benefits that the Company may adopt or provide to
its
employees generally as well as to its executive management employees or as
required by U.S. Department of Labor regulations, federal laws, and applicable
state laws, in any case to the extent that Executive is then eligible to
participate in uch benefit plan or fringe benefit.
(B)
PAID
VACATION.
The
Executive shall be entitled to two (2) weeks of vacation (with payment at
Executive's then existing compensation) during the first year of the Employment
Term; and three (3) weeks of vacation (with payment at Executive's then existing
compensation) during each of the second, third, fourth, and fifth years of
the
Employment Term. Any vacation time not used by Executive shall accrue to
the
extent that Executive does not utilize such vacation periods during the
Employment Term year in question. Further, Executive shall be entitled to
receive payment of salary and a continuation of such other benefits of
employment as required by U.S. Department of Labor regulations, federal laws,
and applicable state laws during such vacation periods. In addition, Executive
shall be entitled to such personal days and sick leave days in each year
of the
Employment Term as are determined by the Company from time to time.
3.03.
REIMBURSEMENT.
Executive shall be reimbursed for all reasonable "out-of-pocket" business
expenses, including, but not limited to, travel and related expenses incurred
in
connection with the performance of his duties under this Agreement so long
as:
(A) such expenses constitute business deductions from taxable income for
the
Company and are excludable from taxable income to the Executive under the
governing laws and regulations of the Internal Revenue Code (provided, however,
that Executive shall be entitled to full reimbursement in any case where
the
Internal Revenue Service may, under Section 274(n) of the Internal Revenue
Code,
disallow to the Company any meals and entertainment expenses); and (B) to
the
extent such expenses do not exceed the amounts allocable for such expenses
in
budgets that are approved from time to time by the Company unless subsequently
approved and/or ratified. The reimbursement of Executive's business expenses
shall be upon monthly, or an earlier date as necessary, presentation to the
Company of valid receipts and other appropriate documentation for such
expenses.
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3.04
OTHER
COMPENSATION.
The
Company’s Board of Directors may also award Executive compensation in the form
of stock, options, or other property or rights as the Board of Directors
approves by duly adopted resolutions during or in respect of his employment
hereunder.
4.00.
SCOPE
OF DUTIES.
The
scope of Executive's duties to the Company include the following:
4.01.
ASSIGNMENT
OF DUTIES.
Executive shall have such duties as may be assigned to him from time to time
by
the Company’s Board of Directors as well as those which are generally held by
the Chief Executive Officer of other companies, as assigned to him from time
to
time by the Company’s Board of Directors and as provided by the Company’s
By-laws.
4.02
PERFORMANCE
REVIEW.
The
Company’s Board of Directors or committee thereof responsible for the oversight
of executive compensation shall, on an annual basis but no later than fifteen
(30) days from the close of each year of employment during the Employment
Term,
review Executive’s performance in light of the Company’s goals and objectives
and Executive’s achievement of the Company’s Annual Plan.
5.00.
EXECUTIVE’S
OTHER BUSINESS INTERESTS.
The
Company agrees that Executive shall have the right to undertake any other
business activities that do not conflict, directly or indirectly, with the
current and future anticipated business of the Company.
5.01.
FIDUCIARY
DUTIES OF EXECUTIVE.
Executive hereby agrees to promote and develop all business opportunities
that
come to his attention relating to current or anticipated future business
of the
Company, in a manner consistent with the best interests of the Company and
with
his duties under this Agreement. Should Executive discover a business
opportunity while in the employ of the Company using the Company's resources
that does not relate to the current or anticipated future business of the
Company, he shall have the right to personally pursue any said opportunity,
provided, however, that such opportunity does not conflict with the duties
owed
by Executive to the Company under this Agreement or as provided by the Delaware
General Corporation Law.
6.00.
TERMINATION
OF EMPLOYMENT.
If the
Executive becomes physically or mentally disabled for a period exceeding
sixty
(60) consecutive days while employed by the Company, the Company’s obligations
to pay Executive’s compensation pursuant to Section 3.01 shall continue for the
remainder of the Employment Term. In the event of Executive’s death, the
Company's obligation to pay the Executive's compensation pursuant to Section
3.01 of this Agreement shall continue for a period of one (1) year following
the
death of Executive; provided further that if Executive’s death occurs during his
employment with the Company after the fifth (5th)
year of
his employment, the Company’s obligation to pay the Executive’s compensation
pursuant hereto shall continue for a period of two (2) years following such
death and if Executive’s death occurs during his employment with the Company
after his tenth year of employment, the Company’s obligation to pay the
Executive’s compensation pursuant hereto shall continue for a period of three
(3) years following such death. In addition, the Company shall pay Executive’s
heirs all amounts that may be due Executive for vacation as provided by Section
3.04 of this Agreement. Further, the parties hereto agree that:
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6.01.
EXECUTIVE'S
CURRENT CAPABILITIES.
The
parties acknowledge and agree that the Executive is physically and mentally
capable of performing the duties required by this Agreement and that any
physical or mental disabilities that he may have at the present time are
not
deemed by the Company to be disabling, as defined in this Agreement, as such
disabilities may presently exist and affect the Executive's mental and physical
condition.
6.02.
DEFINITION
OF DISABILITY.
The
Executive shall be considered to be "disabled" for purposes of this Section
6.00, if, in the judgment of a licensed physician selected by the Board of
Directors of the Company, subject to the Executive's reasonable approval,
the
Executive is unable to perform his customary duties under this Agreement
because
of a physical or mental impairment. This determination by said physician
shall
be binding and conclusive for all purposes.
7.00.
TERMINATION
FOR CAUSE.
Subject
to the provisions of this Section 7.00, the Company may terminate this Agreement
at any time upon sixty (60) days prior written notice, for "Cause." The term
"Cause" as used herein shall mean:
7.01.
The
intentional failure of the Executive to materially discharge or perform his
duties and obligations under this Agreement;
7.02.
The
refusal of Executive to materially implement or adhere to lawful reasonable
policies or directives of the Company's Board of Directors;
7.03.
Illegal conduct or gross misconduct, in either case that is willful and that
has
a materially adverse impact on the Company's business and/or reputation and
standing in the community;
7.04.
Intentional conduct that is in material violation of the Executive's fiduciary
responsibilities to the Company; or
7.05.
Fraudulent conduct in connection with the business affairs of the
Company.
The
existence of “cause” shall be determined in good faith by the Company’s Board of
Directors. The Company’s Board of Directors shall provide written notification
to the Executive of its determination of the circumstances constituting any
of
sub-sections 7.01 through 7.05 above in such reasonable detail as to allow
Executive to know and appreciate the acts or activities which gave rise to
said
determination. If the basis for the Board’s determination of “cause” is curable,
Executive shall have not more than five (5) business days to effect a cure
of
such “cause” or implement curative actions provided that the same are thereafter
effected on a diligent basis. If the basis for such “cause” is not timely cured
or is of a nature which is not curable, Executive shall not be deemed terminated
pursuant to this Section 7.00 until such time as the Board has adopted a
resolution, by the affirmative vote of not less than a majority of the then
existing Board members (exclusive of the Executive if he is, at that time
a
member of the Board) for such termination, at a meeting of the Board held
specifically for that purpose and at which the Executive shall have had an
opportunity, together with counsel of his choice, to be heard by the Board.
The
resolution adopted by the Board authorizing the termination of Executive
under
this Section shall set forth in detail the conduct and any related particulars
upon which said termination was based.
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8.00.
TERMINATION
WITHOUT CAUSE.
The
Company may not terminate this Employment Agreement without cause for any
reason
prior to the termination date of the Employment Term. If the Executive's
employment is terminated pursuant to this Section, the Executive shall be
entitled to payment of all compensation due Executive under Section 3.01
for the
then remaining Employment Term of this Agreement together with payment of
all
health insurance, vacation, and all other benefits provided in Sections 3.02.,
3.03., and 3.04., of this Agreement. Payment of all said amounts shall be
due
and delivered to Executive within ten (10) days of any said
termination.
9.00.
NORMAL
TERMINATION.
This
Agreement shall be terminated if the parties mutually agree in writing to
terminate the term of Executive's employment or Executive's employment is
otherwise terminated in accordance with this Agreement.
10.00.
TERMINATION
BY THE EXECUTIVE.
10.01.
GENERAL.
The
Executive shall have the right to terminate this Agreement at any time. The
Executive agrees to provide the Company with thirty (30) days prior written
notice of any such termination. Except as set forth below, the Company's
obligation to pay the Executive's salary compensation pursuant to Section
3.01.
shall cease as of the date of termination per this Section 10.01. Executive
shall be entitled to all compensation, benefits and perquisites accrued and
unpaid through the date of such termination.
10.02.
TERMINATION
FOR GOOD REASON.
Notwithstanding the foregoing, in the event that the Executive resigns for
Good
Reason (as defined below), the Company shall be obligated to fulfill its
obligations to pay Executive’s compensation for the remaining portion of
Executive’s Employment Term as provided by Section 8.00. of this Agreement. As
used herein for purposes of this Agreement, "Good Reason" shall mean: (i)
failure by the Company to pay the Executive's salary other than as provided
or
permitted herein, or (ii) a reduction in Executive's benefits, except for
a
reduction which is applicable to all participants in such plans, or (iii)
a
request by the Company to the Executive to take or to refrain from taking
some
action which would result in a violation of law or regulation by the Company
or
the Executive, (iv) failure of the Company to comply with any of the terms
and
conditions of this Agreement, (v) the assignment to Executive of any duties
inconsistent in any respect with Section 1.00 of this Agreement or any other
action that results in the dimunition in Executive’s position, authority, duties
or responsibilities, other than an isolated, inadvertent action by the Company
not aken in bad faith, and (vi) the Company requiring the Executive to relocate
outside of the area of his employment without his prior consent. Unless the
Executive provides written notification of his intention to resign within
twenty
(20) business days after the Executive knows or has reason to know of the
occurrence of any such event constituting Good Reason, the Executive shall
be
deemed to have consented thereto and such event shall no longer constitute
Good
Reason for purposes of this Agreement. If the Executive provides such written
notice to the Company shall have twenty (20) business days from the date
of
receipt of such notice to effect a cure of the event described therein and,
upon
cure thereof by the Company to the reasonable satisfaction of the Executive,
such event shall no longer constitute Good Reason for purposes of this
Agreement.
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11.00.
EFFECT
TO TERMINATION.
Upon
the termination of his employment pursuant to this agreement by the Company
for
any reason whatsoever, Executive’s rights under this Agreement shall be as
otherwise provided by this Agreement.
12.00.
PROPRIETARY
INFORMATION.
12.01.
RETURN
OF PROPRIETARY INFORMATION.
Upon
termination of this Agreement for any reason, Executive shall, within thirty
(30) days, turn over to the Company any "Proprietary Information," as defined
below. Executive shall have no right to retain any copies of any material
qualifying as Proprietary Information unless the same is deemed necessary
for
the protection of Executive=s
rights
under this Agreement.
12.02.
PROPRIETARY
INFORMATION DEFINED.
For
purposes of this Agreement, "Proprietary Information" means and includes
the
following: (1) any written, typed or printed lists or other materials
identifying the business, products, or strategy conducted by or on behalf
of the
Company; (2) any vendor or customer lists, customer purchasing information
or
data, or data identifying one or more of the Company=s
existing or prospective vendors; (3) any and all data or information involving
the techniques, programs, methods or contracts employed by the Company in
the
conduct of its business; (4) any lists, documents, manuals, records, forms,
or
other materials created and used by the Company in the conduct of its business;
(5) any descriptive materials describing the methods and procedures employed
by
the Company in the conduct of its business; and (6) any other secret or
confidential information concerning the Company's business, affairs or
technology. The term "list", "document", or their equivalent, as used in
this
Section, are not limited to a physical writing or compilation, but also include
computer software and any and all information whatsoever regarding the subject
matter in the "list" or "document" whether or not such compilation has been
reduced to writing. Notwithstanding the foregoing, Proprietary Information
shall
cease to be protected hereunder once it has become part of the public domain,
or
upon the written agreement of the Company.
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13.00.
TERMINATION
OF PRIOR AGREEMENTS.
This
Agreement terminates and supersedes any and all prior agreements and
understandings between the Parties with respect to employment or with respect
to
the compensation of the Executive by the Company. Further, this Agreement
supercedes and replaces the understanding entered into between the Parties
and
the Parties acknowledge and agree that the understanding is terminated by
mutual
agreement of the parties.
14.00.
ASSIGNMENT.
This
Agreement is personal in nature and the Executive shall not, without the
prior
written consent of the Company, assign or transfer this Agreement or any
rights
or obligations hereunder; provided, however, that in the event of the merger,
consolidation or transfer or sale of all or substantially all of the assets
of
the Company with or to any other individual or entity, this Agreement shall,
subject to the provisions hereof, be binding upon and inure to the benefit
of
such successor and such successor shall discharge and perform all the promises,
covenants, duties, and obligations of the Company hereunder. The Company
shall
have the right, but not the obligation, to freely assign its obligations,
provided, however, that any such assignee has the financial wherewithal and
capability of performing all of the covenants and obligations and honoring
all
of the commitments of the Company hereunder, and further, that the assignee
acknowledges that the Executive is the Chief Executive Officer of the Company
or
such assignee, as the case may be, and as such, his duties and responsibilities
and level of authority will remain the same subsequent to any such assignment
by
the Company.
15.00.
NOTICE.
Any
notice under this Agreement must be in writing, may be telecopied, sent by
24-hour express guaranteed courier, or hand-delivered, or may be served by
depositing the same in the United States mail, addressed to the party to
be
notified, postage-prepaid and registered or certified with a return receipt
requested. The addresses of the parties for the receipt of notice shall be
as
stated in the first paragraph of the first page of this Agreement. Each notice
given by registered or certified mail shall be deemed delivered and effective
on
the date of delivery as shown on the return receipt, and each notice delivered
in any other manner shall be deemed to be effective as of the time of actual
delivery thereof. Each party may change its address for notice by giving
notice
thereof in the manner specified above.
16.00.
GOVERNING
LAW.
This
Agreement and the documents referenced herein and the legal relations thus
created between the parties hereto shall be governed by and construed under
and
in accordance with the laws of the State of Delaware as if this Agreement
were
executed and fully performed in the State of Delaware.
17.00.
ENTIRE
AGREEMENT.
This
Agreement embodies the entire agreement of the parties respecting the matters
within its scope and this Agreement replaces and supersedes all prior oral
or
written agreements and understandings between the Company and Executive.
This
Agreement may be modified only in writing signed by both parties.
18.00.
WAIVER.
Failure
to insist upon strict compliance with any of the terms, covenants or conditions
hereof shall not be deemed a waiver of such term, covenant or condition,
nor
shall any waiver or relinquishment of, or failure to insist upon strict
compliance with, any right power hereunder at any one time or
times.
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19.00.
ARBITRATION.
All
claims, disputes and other matters in question between the parties concerning
or
arising out of the employment relationship, this Agreement and/or the
termination of this Agreement shall be decided by arbitration in or about
Bergen
County, New Jersey in accordance with the rules of the American Arbitration
Association, unless the parties mutually agree otherwise. The award by the
arbitrator shall be final, and judgment may be entered upon it in accordance
with applicable law in any State or Federal court having jurisdiction
thereof.
20.00.
ATTORNEY'S
FEES.
The
Executive and the Company agree that in any arbitration or legal proceedings
arising out of, relating to, or interpreting this Agreement, each party shall
pay his or its own legal fees and expenses except that the prevailing party
in
any such dispute, whether by legal proceedings or otherwise, shall be reimbursed
immediately for all reasonable attorney’s fees and other costs and expenses by
the other Party to the dispute.
21.00.
INDEPENDENT
COUNSEL.
Each of
the Parties to this Agreement acknowledges and agrees that it has had the
opportunity to be represented by independent counsel of its own choice in
connection with the negotiation and execution of this Agreement.
22.00.
CAPTIONS.
The
captions by which the sections and subsections of this Agreement are identified
are for convenience only and shall have no effect whatsoever upon its
interpretation.
23.00.
COUNTERPARTS.
This
Agreement may be executed in any number of counterparts.
24.00.
SEVERABILITY
& SURVIVAL.
In the
event that a court of competent jurisdiction determines that any portion
of this
Agreement is in violation of any law, statute or public policy, then the
Parties
shall negotiate in good faith to restructure such violative portion so as
to
make the same lawful , enforceable and practical to the extent possible,
and
only to the extent that the Parties are unable, after such reasonable, good
faith efforts, to reach and acceptable compromise for modifying such violative
provision shall such portion of this Agreement which violates such statute
or
public policy be stricken. All portions of this Agreement shall modify the
stricken terms as narrowly as possible to give as much effect as possible
to the
intentions of the parties under this Agreement. The representations contained
in
this Agreement shall survive and continue for a period of five (5) years
after
the date of this Agreement.
25.00.
SUCCESSORS.
In
addition to Section 14.00 of this Agreement, the parties agree that the
provisions of this Agreement shall be deemed to obligate, extend to, and
inure
to the benefit of the successors and permitted assignees, transferees, grantees,
and indemnitees of each of the Parties to this Agreement.
26.00.
EQUITABLE
REMEDIES.
The
Company and Executive agree that in the event of a breach of this Agreement,
the
prevailing Party shall be entitled to equitable remedies in addition to any
other remedies said Party would be entitled to receive at law.
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IN
WITNESS WHEREOF,
the
Company has caused this Agreement to be executed by its duly authorized officer,
and the Executive has hereunto executed this Agreement, effective the first
day
written above.
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THE
COMPANY:
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| |
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| By: | /s/ Xxxxxx X. Xxxxxxxx | |
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Xxxxxx X. Xxxxxxxx, |
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|
Chairman
of the Board
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THE
EXECUTIVE:
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| |
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| By: | /s/ Xxxxxxxxxxx X. Xxxxxxxx | |
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Xxxxxxxxxxx X. Xxxxxxxx |
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[SIGNATURE
PAGE: EMPLOYMENT AGREEMENT: 11-01-05]
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