EXHIBIT 10.27
EMPLOYMENT AGREEMENT
AGREEMENT dated as of this 1st day of April, 2006, (the "Effective Date") by and
between BENIHANA INC., a Delaware corporation (the "Company"), and TAKA
YOSHIMOTO (the "Executive").
R E C I T A L
The Executive has for many years been employed by the Company and by its
predecessor, Benihana National Corp. as its Executive Vice President -
Operations. The Company and the Executive desire to enter into a new employment
agreement which will set forth the terms and conditions upon which the Executive
shall serve in the employ of the Company and upon which the Company shall
compensate the Executive and to replace and supercede the Employment Agreement
between the parties hereto dated as of April 1, 2006.
NOW, THEREFORE, in consideration of the mutual covenants herein contained, it is
hereby agreed by and between the Company and Executive as follows:
1. ENGAGEMENT AND TERM. The Company hereby employs Executive and Executive
hereby accepts such employment by the Company on the terms and conditions set
forth herein, for a period commencing on the Effective Date of this Agreement
and ending, unless sooner terminated in accordance with the provisions of
Section 5 hereof, on March 31, 2009 (the "Employment Period").
2. SCOPE OF DUTIES. Executive shall be employed by the Company as its Executive
Vice President - Operations. In such capacities, the Executive shall have such
authority, powers and duties customarily attendant upon such offices. If elected
or appointed, Executive shall also serve, without additional compensation, in
one or more offices and, if and when elected, as a director of the Company or
any subsidiary or affiliate of the Company, provided that his duties and
responsibilities are not inconsistent with those pertaining to his position as
stated above. Executive shall faithfully devote his full business time and
efforts so as to advance the best interests of the Company. During the
Employment Period, Executive shall not be engaged in any other business
activity, whether or not such business activity is pursued for profit or other
pecuniary advantage, unless same is only incidental and is in no way, directly
or indirectly, competitive with, or opposed to the best interests of the
Company.
3. COMPENSATION.
3.1 Basic Compensation. In respect of services to be performed by the Executive
during the Employment Period, the Company agrees to pay the Executive an annual
salary of one hundred eighty-seven thousand, two hundred nine Dollars ($187,209)
("Basic Compensation"), payable in accordance with the Company's customary
payroll practices for executive employees.
3.2 Cost of Living Adjustments. The Basic Compensation shall be increased by an
amount established by reference to the "Consumer Price Index for Urban Wage
Earners and Clerical Workers, New York, New York- Northern New Jersey area
published by the Bureau of Labor Statistics of the United States Department of
Labor (the "Consumer Price Index"). The base period shall be the month ended
December 31, 2005 (the "Base Period"). If the Consumer Price Index for the month
of December in any year, commencing in 2006, is greater than the Consumer Price
Index for the Base Period, Basic Compensation shall be increased, commencing on
April 1 of the next following year, to the amount obtained by multiplying Basic
Compensation by a fraction, the numerator of which is the Consumer Price Index
for the month of December of the year in which such determination is being made
and the denominator of which is the Consumer Price Index for the Base Period.
3.3 Discretionary Increases. The Executive shall also be entitled to such
additional increments and bonuses as shall be determined from time to time by
the Board of Directors of the Company.
3.3 Other Benefits.
(a) Executive shall be entitled to participate, at Company's expense, in the
major medical health insurance plan, and all other health, insurance or other
benefit plans applicable generally to executive officers of the Company.
(b) During the Employment Period, Executive will be entitled to paid vacations
and holidays consistent with the Company's policy applicable to executives
generally. All vacations shall be scheduled at the mutual convenience of the
Company and the Executive.
4. TERMINATION OF EMPLOYMENT. The provisions of Section 1 of this Agreement
notwithstanding, the Company may terminate this Agreement and Executive's
employment hereunder in the manner and for the causes hereinafter set forth, in
which event the Company shall be under no further obligation to Executive other
than as specifically provided herein:
4.1 If Executive is absent from work or otherwise substantially unable to assume
his normal duties for a period of sixty (60) successive days or an aggregate of
ninety (90) business days during any consecutive twelve-month period during the
Employment Period because of physical or mental disability, accident, illness,
or any other cause other
than vacation or approved leave of absence, the Company may thereupon, or any
time thereafter while such absence or disability still exists, terminate the
employment of Executive hereunder upon ten (10) days' written notice to
Executive.
4.2 In the event of the death of Executive, this Agreement shall immediately
terminate on the date thereof.
4.3 If Executive materially breaches or violates any material term of his
employment hereunder, or commits any criminal act or an act of dishonesty or
moral turpitude, in the reasonable judgment of the Company's Board of Directors,
then the Company may, in addition to other rights and remedies available at law
or equity, immediately terminate this Agreement upon written notice to Executive
with the date of such notice being the termination date and such termination
being deemed for "cause."
4.4 In the event Executive's employment shall be terminated by reason of the
provisions of Section 4.2 or 4.3, then in such event, the Company shall pay to
Executive, if living, or other person or persons as Executive may from time to
time designate in writing as the beneficiary of such payment a sum, equal to the
basic compensation in effect at the time which such death or disability
occurred, such payment to continue for three months after such death or
disability.
5. DISCLOSURE OF CONFIDENTIAL INFORMATION AND COVENANT NOT TO COMPETE. Executive
acknowledges that the Company possesses confidential information, know-how,
customer lists, purchasing, merchandising and selling techniques and strategies,
and other information used in its operations of which Executive will obtain
knowledge, and that the Company will suffer serious and irreparable damage and
harm if this confidential information were disclosed to any other party or if
Executive used this information to compete against the Company. Accordingly,
Executive hereby agrees that except as required by Executive's duties to the
Company, Executive without the consent of the Company's Board of Directors,
shall not at any time during or after the term of this contract disclose or use
any secret or confidential information of the Company, including, without
limitation, such business opportunities, customer lists, trade secrets,
formulas, techniques and methods of which Executive shall become informed during
his employment, whether learned by him as an Executive of the Company, as a
member of its Board of Directors or otherwise, and whether or not developed by
the Executive, unless such information shall be or become public knowledge other
than as a result of the Executive's direct or indirect disclosure of the same.
Executive further agrees that for a period of one year following the termination
of Executive's employment, the Company, except as a result of the breach by the
Company of any material term or condition hereof, Executive will not, directly
or indirectly, alone or with others, individually or through or by a corporate
or other business entity in which he may be interested as a partner,
shareholder, joint venturer, officer or director or otherwise, engage in the
United States in "any business which is competitive with that of the Company or
any of its subsidiaries" as hereinafter defined, provided, however, that the
foregoing shall not be deemed to prevent the ownership by Executive of up to
five percent of any class of securities of any corporation which is regularly
traded on any stock exchange or over-the-counter market. For the purpose of this
Agreement, a business activity competitive with the business of the Company or
any of its subsidiaries, shall include only (i) the operation or franchise of
restaurants selling Japanese, or other oriental food, or restaurants of a type
then being operated by the Company, or any of its subsidiaries; and (ii) the
sale at wholesale or retail of oriental food products.
6. REIMBURSEMENT OF EXPENSES; USE OF AUTOMOBILE.
6.1. The Company shall further pay directly, or reimburse the Executive, for all
other reasonable and necessary expenses and disbursements incurred by him for
and on behalf of the Company in the performance of his duties during the
Employment Period upon submission of vouchers or other evidence thereof in
accordance with the Company's usual policies of expense reimbursement.
6.2. In addition to the reimbursement described in Section 6.1, Executive shall
receive an allowance of $300.00 per month for automobile expenses, including
lease costs or purchase price, gasoline, oil and garaging.
7. CHANGE IN CONTROL.
7.1. In the event at any time after the Effective Date, a majority of the Board
of Directors is composed of persons who are not "Continuing Directors", as
hereinafter defined, which event is defined to mean a "Change in Control",
Executive shall have the option, to be exercised by written notice to the
Company, to resign as an employee and terminate this Agreement, effective as of
such date specified in the notice of exercise and immediately upon such
termination to receive payment of a sum equal to the product of (A) the Basic
Compensation in effect on the date of such termination multiplied (B) by the
number of years (both full and partial) remaining in the term hereof had such
termination not occurred. The payment to be made upon the exercise of the option
by the Executive in accordance with the provisions of the preceding sentence is
defined as the "Severance Payment". The Severance Payment shall be made to
Executive not later than twenty (20) days after the date designated by the
Executive as the date upon which Executive's resignation as an employee and
termination of his Employment is to be effective. The Severance Payment shall
constitute liquidated damages and not a penalty, and Executive shall not be
obligated to seek employment to mitigate his damages; nor shall any compensation
the Executive receives from any party subsequent to such termination be an
offset to the amount of the Severance Payment.
7.2 "Continuing Directors" shall mean (i) the directors of the Company at the
close of business on the date hereof,
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and (ii) any person who was or is recommended to (A) succeed a Continuing
Director or (B) become a director as a result of an increase in the size of the
Board, in each case, by a majority of the Continuing Directors then on the
Board.
7.3 If during the term hereof Executive owns any options to purchase securities
of the Company which securities are publicly traded and which options were
granted to him in connection with his service as an employee, officer or
director of the Company, the Executive shall have the right at any time after a
"Change in Control" to cause the Company to repurchase such options from him at
a purchase price equal to the difference between (i) the closing price of the
appropriate security of the Company (if traded on the New York or American Stock
Exchange or quoted in the NASDAQ National Market) or the average between the
closing bid and asked prices (if traded on the over-the-counter market) on the
date immediately prior to the date on which Executive exercises such right and
(ii) the exercise price of such option; provided however, that in no fiscal year
of the Company shall the aggregate purchase price of such options exceed five
percent (5%) of the total stockholders equity (net worth) of the Company as
shown on its audited financial statements for the fiscal year immediately
preceding the year in which such right is exercised. Such right shall be
exercised by Executive giving the Company written notice thereof and the
purchase and sale shall be consummated not more than ten (10) business days
after receipt by the Company of the notice of exercise.
8. TERMINATION OF EMPLOYMENT WITHOUT CAUSE. Upon any termination of the
Executive's employment without cause, the Executive shall be entitled to receive
an amount computed in the same manner as the Severance Payment not later than 20
days after any such termination. This payment shall constitute liquidated
damages and not a penalty, and Executive shall not be obligated to seek
employment to mitigate his damages; nor shall any compensation the Executive
receives from any party subsequent to such termination be an offset to the
amount of such payment.
9. MISCELLANEOUS PROVISIONS.
9.1 Section headings are for convenience only and shall not be deemed to govern,
limit, modify or supersede the provisions of this Agreement.
9.2 This Agreement is entered into in the State of Florida and shall be governed
pursuant to the laws of the State of Florida. If any provision of this Agreement
shall be held by a court of competent jurisdiction to be invalid, illegal or
unenforceable, the remaining provisions hereof shall continue to be fully
effective.
9.3 This Agreement contains the entire agreement of the parties regarding this
subject matter. There are no contemporaneous oral agreements, and all prior
understandings, agreements, negotiations and representations are merged herein.
This Agreement replaces and supercedes the Prior Agreement.
9.4 This Agreement may be modified only by means of a writing signed by the
party to be charged with such modification.
9.5 Notices or other communications required or permitted to be given hereunder
shall be in writing and shall be deemed duly given upon receipt by the party to
whom sent at the respective addresses set forth below or to such other address
as any party shall hereafter designate to the other in writing delivered in
accordance herewith:
IF TO THE COMPANY:
Benihana Inc.
0000 XX 00xx Xxxxxxx
Xxxxx, Xxxxxxx 00000-0000
IF TO EXECUTIVE:
Taka Yoshimoto
0000 X.X. 000xx Xxxxxx - #000
Xxxxx, Xxxxxxx 00000
9.6 This Agreement shall inure to the benefit of, and shall be binding upon, the
Company, its successors and assigns, including, without limitation, any entity
that may acquire all or substantially all of the Company's assets and business
or into which the Company may be consolidated or merged. This Agreement may not
be assigned by Executive.
9.7 This Agreement may be executed in separate counterparts, each of which shall
constitute the original hereof.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties have set their hands as of the date first above
written.
BENIHANA INC.
By: /S/ XXXX X. XXXXXXXX
--------------------
Name: Xxxx X. Xxxxxxxx
Title: President
/S/ TAKA YOSHIMOTO
--------------------------
Taka Yoshimoto
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