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Exhibit (10)(f)
EMPLOYMENT AGREEMENT
This Agreement made by and between XXXXXX'X RESTAURANTS, INC., an Ohio
corporation, hereinafter referred to as "CORPORATION", and XXXXX X. XXXXX,
hereinafter referred to as "XXXXX", WITNESSETH:
WHEREAS, Xxxxx is the President and Chief Executive Officer of the
Corporation; and
WHEREAS, the Corporation and Xxxxx agree that Xxxxx'x compensation
should be highly variable based upon the Corporation's performance, so that
Xxxxx'x compensation will be substantial if the Corporation attains its
performance goals but if the Corporation fails to reach its performance goals,
his compensation will be significantly below what the chief executive officer of
a comparable company would receive;
WHEREAS, Xxxxx has been employed by the Corporation pursuant to an
employment agreement dated May 8, 1995 which expires on June 3, 2000;
NOW, THEREFORE, in consideration of the mutual agreements herein
contained, the parties do hereby agree upon the terms and conditions of this
Employment Agreement which shall become effective as of June 4, 2000.
1. EMPLOYMENT. The Corporation agrees to employ Xxxxx and Xxxxx agrees
to serve the Corporation upon the terms and conditions hereinafter set forth.
2. TERM. The employment of Xxxxx hereunder shall be for a period of
three (3) fiscal years commencing June 1, 2000 and ending May 31, 2003.
3. DUTIES. Xxxxx agrees to serve the Corporation and any and all of its
subsidiaries and divisions faithfully and to the best of his ability as its
President and Chief Executive Officer under the direction of the Board of
Directors, devoting (except as otherwise permitted in paragraph 6) his entire
business time, energy and skill to such employment and performing from time to
time such other services and acting in such other office or capacity as the
Board of Directors shall request or direct.
4. COMPENSATION.
(a) BASE SALARY. The Corporation agrees to pay Xxxxx during
the first fiscal year of his employment hereunder, as "BASE SALARY" for
his full-time active services as an officer, the sum of Two Hundred
Thirty Thousand Dollars ($230,000.00). Xxxxx'x Base Salary shall be
adjusted at the beginning of the second and third years of this
Agreement to reflect Fifty Percent (50%) of the latest annual change in
the Consumer Price Index for All Urban Consumers ("CPI-U") published by
the U.S. Department of Labor; Bureau of Labor Statistics.
(b) INCENTIVE COMPENSATION. In addition to his Base Salary,
the Corporation shall pay Xxxxx "INCENTIVE COMPENSATION", which shall
consist of Base Incentive Compensation and Incremental Incentive
Compensation (both defined below), for each fiscal year of the
Corporation in which the Pre-Tax Earnings of the Corporation equal or
exceed four percent (4%) of the Corporation's Sales for such year.
"PRE-TAX EARNINGS" and "SALES" shall be the amounts reported to
shareholders in the Corporation's annual report, but Pre-Tax Earnings
shall be computed without reduction for Incentive Compensation.
Xxxxx'x "BASE INCENTIVE COMPENSATION" shall be one
and one-half percent (1-1/2%) of the Corporation's Pre-Tax Earnings.
The amount of the Base Incentive Compensation shall be reduced, if
necessary, so that the Corporation's Pre-Tax Earnings, after reduction
for the Base Incentive Compensation, shall not be less than four
percent (4%) of the Corporation's Sales for such year.
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Exhibit (10)(f)
In addition, if the Pre-Tax Earnings of the
Corporation equal or exceed five percent (5%) of the Corporation's
Sales for such year, the Corporation shall pay Xxxxx "INCREMENTAL
INCENTIVE COMPENSATION", equal to an additional one and one-half
percent (1-1/2%) of the Corporation's Pre-Tax Earnings.
Ninety percent (90%) of the Incentive Compensation
shall be paid in cash and ten percent (10%) shall be paid in shares of
the Corporation's common stock.
The number of shares allocated to Xxxxx shall be
determined by dividing the amount of Incentive Compensation to be paid
in shares by the Average Value of the Corporation's common shares
during the fiscal year for which the Incentive Compensation has been
earned. The "AVERAGE VALUE" of the Corporation's shares for any fiscal
year shall be the mean between the highest price at which shares were
traded during such year and the lowest price.
Example: In the fiscal year beginning June 4, 2000,
the Corporation has Sales of $165,000,000 and Pre-Tax Earnings (before
calculation of Xxxxx'x Incentive Compensation) of $8,400,000. Since
Pre-Tax Earnings exceed 5% of Sales, Xxxxx has earned both Base and
Incremental Incentive Compensation. Three percent of Pre-Tax Earnings
equals $252,000. Ninety percent or $226,800 is payable in cash. Ten
percent or $25,200 is payable in the Corporation's shares. During the
fiscal year beginning June 4, 2000, the Corporation's shares traded at
a high price of $15 and a low price of $10. The mean price is $12.50
per share. Xxxxx therefore receives an award of 2,016 shares ($25,200
divided by $12.50 per share = 2,016 shares).
If the Pre-Tax Earnings had been $7,425,000
(over 4% of Sales but less than 5%), Xxxxx would have earned Base
Incentive Compensation only. One and one-half percent of Pre-Tax
Earnings equals $111,375. Ninety percent is payable in cash. Ten
percent is payable in the Corporation's shares.
If the Pre-Tax Earnings had been $6,666,000
(over 4% of Sales but less than 5%), Xxxxx would have earned Base
Incentive Compensation only. One and one-half percent of Pre-Tax
Earnings equals $99,990. However, if the Company pays Incentive
Compensation of $99,990, its Pre-Tax Earnings (after reduction for
Incentive Compensation) will fall below 4% of Sales. Therefore, the
Incentive Compensation is reduced to $66,000 (the largest amount which
can be paid so that the Company's Pre-Tax Earnings, after reduction for
Incentive Compensation, are not less than 4% of Sales). Ninety percent
is payable in cash. Ten percent is payable in the Corporation's shares.
The shares granted as Incentive Compensation will not
be registered under the Securities Act of 1933, as amended, and each
stock certificate will bear the following legend or one similar
thereto: "The shares represented by this certificate have been acquired
for investment and have not been registered under the Securities Act of
1933. The shares may not be sold or transferred in the absence of such
registration or an exemption therefrom under said Act."
(c) STOCK OPTIONS. In any year in which the Corporation's
Pre-Tax Earnings equal or exceed 4% of Sales, the Corporation shall
award stock options to Xxxxx as follows:
Pre-Tax Earnings
As a Percentage Stock Option
of Sales Available
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At least 4%, but less than 5% 12,500 shares
At least 5%, but less than 6% 25,000 shares
At least 6% 40,000 shares
All stock options shall be awarded under the terms of the Stock Option
Plan of the Corporation in effect at the time the options are awarded.
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Exhibit (10)(f)
(d) DISABILITY COMPENSATION. If Xxxxx becomes Disabled during
the term of this Agreement, including any renewal terms, and is then
employed by the Corporation, the Corporation shall pay Disability
Compensation (defined below) to Xxxxx. "DISABILITY" shall mean a
condition which entitles Xxxxx to receive benefits under the
Corporation's long term disability plan as it exists at the time the
determination of Xxxxx'x Disability is made.
The annual amount of the "DISABILITY COMPENSATION"
shall be Seventy-Five Percent (75%) of Xxxxx'x Average Compensation at
the time he incurs the Disability, reduced by any disability benefits
to which Xxxxx is entitled under disability income plans (including
insurance funded plans) maintained by the Corporation.
"AVERAGE COMPENSATION" means the total compensation,
including Incentive Compensation earned by Xxxxx in the three calendar
years preceding the year in which the Disability occurs; divided by 3.
The Disability Compensation shall be paid to Xxxxx
monthly while he is alive, for a period of 120 months, provided that
Xxxxx has not willfully violated any of the provisions of this
Agreement. Xxxxx'x Disability Compensation shall be adjusted on each
anniversary of the commencement of payments to reflect Seventy-Five
Percent (75%) of the latest annual change in the CPI-U.
5. RESTRICTIVE COVENANTS. Xxxxx agrees that during the term of this
Agreement, or of any renewal thereof, he will not directly or indirectly render
any services of an advisory nature or otherwise to, become employed by, or
participate in, any business which is competitive with any of the businesses of
the Corporation, its subsidiaries or divisions, without the prior written
consent of the Corporation; provided, however, that nothing herein shall
prohibit Xxxxx from:
(a) owning and operating the franchise known as Xxxxxx New
Richmond Big Boy, Inc.;
(b) Operating or otherwise providing services to any other
franchisee of Corporation.
(c) owning stock or other securities, or serving as a director
or officer of a corporation conducting a business referred to in
subparagraph (a);
(d) owning stock or other securities of competitors which are
sold in a public market and which comprise less than five percent (5%)
of the total outstanding stock of such corporation.
6. BINDING EFFECT. This Agreement shall be binding upon and inure to
the benefit of any Successor of the Corporation and any such Successor shall be
deemed substituted for the Corporation under the terms of this Agreement. A
"SUCCESSOR" of the Corporation shall include any person, firm, corporation or
other business entity which at any time, whether by merger, purchase or
otherwise, acquires all or substantially all of the capital stock, assets or
business of the Corporation.
7. CHANGE IN CONTROL. Xxxxx and the Corporation have previously entered
into an Agreement granting Xxxxx certain rights in the event of a "Change in
Control" of the Corporation (as defined in such Agreement). Xxxxx and the
Corporation hereby reaffirm such agreement and confirm that its provisions are
in addition to this Agreement and control in the event of a conflict with this
Agreement.
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Exhibit (10)(f)
IN WITNESS WHEREOF, Xxxxxx'x Restaurants, Inc. has caused this
Agreement to be executed in its corporate name by Xxxxxx X. Xxxxxxxx, its Vice
President of Human Resources, thereunto duly authorized by its Board of
Directors, and Xxxxx X. Xxxxx has hereunto set his hand on the date set forth
below.
DATED: March 31, 2000 /s/ Xxxxx X. Xxxxx
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Xxxxx X. Xxxxx
XXXXXX'X RESTAURANTS, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
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Xxxxxx X. Xxxxxxxx
Vice President of Human Resources
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Exhibit (10)(f)
AMENDMENT TO EMPLOYMENT AGREEMENT
This is an Amendment to the Employment Agreement between Xxxxxx'x
Restaurants, Inc., ("Corporation"), and Xxxxx X. Xxxxx, ("Xxxxx") which was
effective on June 4, 2000. The purpose of this Amendment is to correct the
Agreement to conform it with the actual practice of the parties. This Amendment
is effective as of June 4, 2000.
The term "Sales", as defined in Section 4(b) of the Agreement
is corrected as follows:
"Sales" shall be the amount of Total Revenue reported to the
shareholders in the Corporation's annual report.
The term "Pre-Tax Earnings" as defined in Section 4(b) of the
Agreement remains unchanged.
IN WITNESS WHEREOF, Xxxxxx'x Restaurants, Inc. has caused this
Amendment to be executed in its corporate name by Xxxxxxx X. Xxxxxx, its
V.P.H.R., thereunto duly authorized by its Board of Directors, and Xxxxx X.
Xxxxx has hereunto set his hand on the date set forth below.
DATED: August 29, 2000 /s/ Xxxxx X. Xxxxx
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Xxxxx X. Xxxxx
XXXXXX'X RESTAURANTS, INC.
By: /s/ Xxxxxxx X. Xxxxxx
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