Exhibit 10.7
EMPLOYMENT AGREEMENT
Employment Agreement (this "Agreement"), dated as of August
24, 1998, by and between VSI Acquisition II Corporation, a Delaware
corporation (the "Company"), and Xxxx X. Xxx (the "Executive").
The Company and the Executive wish to provide for the terms
of his employment as a senior executive of the Company.
It is therefore agreed as follows:
1. Term. The employment of the Executive under this
Agreement shall commence as of August 24, 1998 (the "Effective Date") and
shall continue through the fifth anniversary of the Effective Date (the
"Term"), subject to earlier termination as provided for in Section 4.
2. Duties; Place of Employment.
(a) During the Term, the Executive shall serve as Chief
Executive Officer of the Company, in which capacity he shall devote all of his
business time, effort and energies to the business of the Company. In
addition, during the Term, the Executive shall be nominated and, when elected,
serve as a member and Chairman of the Board of Directors of the Company (the
"Board"). The Executive shall have such authority and responsibility, and
shall serve in such capacities with the Company's majority-owned subsidiaries
and affiliates, as are consistent with the duties of a senior executive as may
from time to time be assigned to him by the Board.
(b) The principal place of employment of the Executive shall
be within 25 miles of Stamford, Connecticut and shall not be changed without
the Executive's prior written consent; provided, however, the Executive may be
required to travel to South Carolina on a regular basis.
3. Compensation and Benefits.
(a) Base Salary. During the Term, the Company shall pay the
Executive an annual salary of $465,000, payable in accordance with the
Company's salary payment policies governing senior executives.
(b) Bonuses. In the sole discretion of the Board, the
Executive also shall receive such bonus compensation, if any, determined by
the Board, and shall be entitled to participate in any executive bonus plan
that the Board shall establish for the senior executives of the Company.
(c) Expense Reimbursement. The Company shall reimburse the
Executive for ordinary and necessary business expenses incurred by him in the
performance of his duties as an employee of the Company in accordance with the
Company's policies governing reimbursement
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of expenses of senior executives; provided that the Executive accounts to the
Company for such expenses in the manner customarily prescribed by the Company
for its senior executives.
(d) Benefit Plans, Fringe Benefits and Vacation.
(i) During the Term, the Executive shall be
entitled to the coverage or benefits under any and all employee
benefit plans maintained by the Company (including, without
limitation, medical insurance, life insurance, split dollar life
insurance, long-term disability insurance and pension plans, if any)
to the extent permissible under the terms of the plans and to all
fringe benefits for which his status and level of employment qualify
him in accordance with the Company's benefits policies governing
senior executives.
(ii) The Executive shall be entitled to paid
vacations (taken consecutively or in segments), in accordance with
the Company standard vacation policies governing senior executives,
but in no event less than four weeks each calendar year during the
Term. Such vacations shall be taken at times consistent with the
effective discharge of the Executive's duties.
(iii) It is recognized that the services of the
Executive hereunder will require the use of a suitable automobile and
the Company agrees to supply and maintain the same at its expense in
accordance with the Company's policies with respect thereto for
senior executives. The Executive shall be entitled to continue the
use of his current business automobile or to be provided with at
least an equivalent new vehicle at such intervals as apply to other
senior executives of the Company.
(iv) The Executive shall be reimbursed for up to
$10,000 for the fees and expenses related to membership in two clubs
designated by the Executive and such other organizations consistent
with the Company's policies pertaining thereto governing senior
executives.
4. Termination.
(a) Death and Disability. The Executive's employment under
this Agreement shall terminate upon his death. The Company may terminate the
Executive's employment under this Agreement by written notice to the Executive
or his representative if the Executive has a Disability. For purposes of this
agreement, the Executive shall be deemed to have a "Disability" if, for
physical or mental reasons, the Executive is unable to perform the essential
functions of the Executive's duties hereunder in accordance with this
Agreement, for 120 consecutive days, or 180 days during any twelve month
period, as determined in accordance herewith. The Disability of the Executive
shall be determined by a medical doctor selected by agreement of the Company
and the Executive and upon the request of either party by notice to the other.
If the Company and the Executive cannot agree on the selection of a medical
doctor, each of them will select a medical doctor and the two medical doctors
will select a third medical doctor who shall determine whether the Executive
has a Disability. The determination of such medical doctor shall be binding on
both parties. The Executive shall submit to a reasonable number of
examinations by the medical doctor making the determination of Disability. If
the Executive is
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not legally competent, the Executive's legal guardian or duly authorized
attorney-in-fact shall act in the Executive's stead for the purposes of
submitting the Executive to the examinations and for all other purposes
hereunder.
(b) Termination by the Company for Cause. The Company may
terminate the Executive's employment under this Agreement for Cause by written
notice to the Executive. "Cause" shall mean termination by action of at least
a majority of the members of the Board (excluding the Executive) upon (i) the
Executive's breach of Section 6 of this Agreement; (ii) the Executive's
material breach of any other provision of this Agreement; (iii) the
Executive's willful failure to adhere to any written Company policy if the
Executive has been given written notice and a reasonable opportunity to comply
with such policy or cure his failure to comply; (iv) serious wilful misconduct
by the Executive in connection with his employment; or (v) the commission of a
felony or the equivalent thereof or a misdemeanor including moral turpitude.
Such action shall take place at a meeting duly called and held upon at least
15 days' prior written notice to the Executive specifying the particulars of
the action or inaction alleged to constitute "Cause" (and at which meeting the
Executive and his counsel were entitled to be present and given reasonable
opportunity to be heard). Action or inaction by that Executive shall not be
considered "willful" unless done or omitted by him intentionally and not in
good faith and without his reasonable belief that his action or inaction was
in the best interests of the Company, and shall not include failure to act by
reason of total or partial incapacity due to physical or mental illness.
(c) Termination by the Company Without Cause. The Company
may terminate the Executive's employment under this Agreement at any time by
written notice to the Executive, whether or not in accordance with Section
4(a) or 4(b).
(d) Termination by the Executive for Good Reason. The
Executive may terminate his employment under this Agreement for "Good Reason"
by written notice to the Company within a reasonable period following the
event giving rise to such Good Reason; provided, however, that the Company
shall have the right to cure the action that constitutes "Good Reason" within
five business days of the date of such notice. For purposes of this Agreement,
"Good Reason" shall mean: (i) the Company's material breach of this Agreement;
(ii) the assignment of the Executive, without his consent, to a position,
responsibilities or duties of a materially lesser status or degree of
responsibility than his position, responsibilities or duties at the Effective
Date; provided, that the Executive has agreed to relinquish the title of Chief
Executive Officer of the Company on January 1, 2001; (iii) the Company's
breach of Section 3(b); or (iv) the failure to elect the Executive to serve as
a member and Chairman of the Board.
5. Consequences of Termination.
(a) Cause or Absence of Good Reason. If the Executive's
employment under this Agreement is terminated (i) by the Company pursuant to
Section 4(b) or (ii) by the Executive other than pursuant to Section 4(d), the
Executive shall not thereafter be entitled to receive any salary, bonus or
other payments or benefits under this Agreement, other than the payments
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pursuant to Section 3(a) of salary earned, accrued vacation and the
reimbursement pursuant to Section 3(c) of expenses incurred, in each case,
through the date of termination.
(b) Death or Disability. If the Executive's employment under
this Agreement is terminated pursuant to Section 4(a) due to his death or
Disability, the Executive shall not thereafter be entitled to receive any
salary, bonus or other payments or benefits under this Agreement, other than
the following: (a) payments pursuant to Section 3(a) of salary earned, accrued
vacation and the reimbursement pursuant to Section 3(c) of expenses incurred,
in each case, through the date of termination and (b) an amount equal to the
Executive's one year's base salary at the annual rate in effect on the date of
his death or Disability. In addition, if the Executive's employment is
terminated due to his death, the Company shall continue to provide, for a
period of one year from the date of the Executive's death, the Executive's
spouse and minor children with medical, hospitalization and dental insurance
comparable to that provided by the Company prior to such termination.
(c) Other Terminations. If the Executive's employment under
this Agreement is terminated (i) by the Company pursuant to Section 4(c) or
(ii) by the Executive pursuant to Section 4(d), the Executive shall not
thereafter be entitled to receive any salary, bonus or other payments or
benefits under this Agreement, other than the following: (a) payments pursuant
to Section 3(a) of salary for the balance of the Term at the annual rate in
effect immediately prior to such termination; (b) reimbursement pursuant to
Section 3(c) of expenses incurred through the date of termination; (c)
benefits pursuant to Section 3(d)(i) for the earlier of the balance of the
Term and the date the Executive receives comparable coverage from a subsequent
employer to the extent permissible under the terms of the plans providing such
benefits; (d) accrued vacation; and (e) assignment of title to any life
insurance policy covering the life of the Executive after which time the
Executive shall be fully responsible for all costs of such policy due and
payable after the Term (and provided that, in the event such policy is a
"split dollar" policy or otherwise evidences an ownership interest by the
Company, the Company shall be entitled to recover its interest therein before
any such assignment is effective).
(d) Mitigation. The Executive shall have no duty or
obligation to seek or accept other employment under this Agreement and shall
not be required to mitigate the amount of any cash payments or benefits
provided for by this Agreement by seeking or accepting employment.
6. Certain Restrictions.
(a) Confidentiality. The Executive acknowledges that he has
acquired and will acquire information respecting the business and affairs of
the Company, its subsidiaries and affiliates that is non-public, confidential
and/or proprietary in nature ("Confidential Information"). Accordingly, the
Executive shall keep confidential and not disclose to any person or use
(except as required in the conduct of the business of the Company in the
ordinary course and consistent with past practice) all such Confidential
Information, except as required by law (provided prior written notice thereof
is given by the Executive to the Company) or with the Company's written
consent, unless such information is known generally to the public or the trade
(through sources other than the Executive's unauthorized disclosure). Upon
termination of his
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employment for any reason, the Executive shall deliver to the Company all
Confidential Information (in any form, including, but not limited to,
electronic media) in his possession or subject to his control that belongs to
the Company.
(b) Competitive Activity.
(i) During the period of his employment hereunder
and for two years thereafter, Executive agrees that, without the
prior written consent of the Company, (A) he will not, directly or
indirectly, either as principal, manager, agent, consultant, officer,
stockholder, partner, investor, lender or employee or in any other
capacity, carry on, be engaged in or have any financial interest in,
any business which is in competition with the business of the Company
or any of its affiliates and (B) he shall not, on his own behalf or
on behalf of any person, firm or company, directly or indirectly,
solicit or offer employment to any person who has been employed by
the Company or any of its affiliates at any time during the 12 months
immediately preceding such solicitation.
(ii) For purposes of this Section 6(b), a business
shall be deemed to be in competition with the Company and its
affiliates if it is involved in the sale or provision of dining
services or vending services at stadiums, ballparks, convention
centers, concert halls, theaters, seaports, golf courses, arenas,
race tracks, parks, bandstands, or other recreational venues.
(iii) Executive and the Company agree that this
covenant not to compete is a reasonable covenant under the
circumstances, and further agree that if in the opinion of any court
of competent jurisdiction such restraint is not reasonable in any
respect, such court shall have the right, power and authority to
excise or modify such provision or provisions of this covenant as to
the court shall appear not reasonable and to enforce the remainder of
the covenant contained in this Section 6(b) would irreparably injure
the Company. Accordingly, Executive agrees that the Company may, in
addition to pursuing any other remedies it may have in law or in
equity, cease making any payments otherwise required by this
Agreement and obtain an injunction against Executive from any court
having jurisdiction over the matter restraining any further violation
of this Agreement by Executive.
(iv) Nothing in this Section 6(b) shall prohibit
the Executive from acquiring or holding not more than five percent
(5%) of any class of publicly traded securities of any business.
7. Miscellaneous.
(a) Notices. Any notice or other communication made or given
in connection with this Agreement shall be in writing and shall be deemed to
have been duly given when delivered in person, sent by nationally recognized
overnight courier service or mailed by registered mail, return receipt
requested, to a party at his or its address set forth below or at such other
address as a party may specify by notice to the other in accordance herewith:
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To the Executive:
Xxxx X. Xxx
00 Xxxxx Xxxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
To the Company:
VSI Acquisition II Corporation
000 Xxxx Xxxxx Xxxxxx
Xxxxxxxxxxx, XX 00000
Attention: General Counsel
Notices on behalf of a party may be signed and sent by an attorney for that
party.
(b) Entire Agreement; Amendment. This Agreement supersedes
all prior agreements between the parties with respect to its subject matter
and is intended (with the documents referred to herein) as a complete and
exclusive statement of the terms of the agreement between the parties with
respect thereto and cannot be changed or terminated orally.
(c) Waiver. The failure of a party to insist upon strict
adherence to any term of this Agreement on any occasion shall not be
considered a waiver or deprive that party of the right thereafter to insist
upon strict adherence to that term or any other term of this Agreement.
Any waiver must be in writing.
(d) Indemnification. The Executive shall be entitled to be
indemnified for acting as an officer and director in accordance with the
Company's Certificate of Incorporation and By-Laws. The Company agrees
specifically that it shall maintain provisions in its Certificate of
Incorporation and By-laws relating to exculpation or indemnification of
officers and directors thereof (unless required by law) such that the
Executive shall continue to be entitled to such exculpation and
indemnification as was in effect immediately prior to the date hereof under
the Certificate of Incorporation and By-Laws of Service America Corporation
(or any equally favorable arrangement) to the fullest extent permitted under
the laws of the applicable jurisdiction of incorporation. The Company also
shall maintain directors and officers liability insurance coverage for the
Executive which coverage shall be on terms and in amounts at least as
favorable to such Executive as they were under insurance maintained by Service
America Corporation immediately prior to the date herein.
(e) Assignment. Except as otherwise provided in this
paragraph, this Agreement shall inure to the benefit of, and be binding upon,
the parties hereto and their respective heirs, representatives, successors and
permitted assigns.
(f) Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be considered an original, but all of
which together shall constitute the same instrument.
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(g) Captions. The captions in this Agreement are for
convenience of reference only and shall not be given any effect in the
interpretation of this Agreement.
(h) Governing Law. This Agreement shall, in accordance with
Section 51 1401 of the General Obligation Law of the State of New York, be
governed by the laws of the State of New York, without regard to any conflicts
of laws principles thereof that would call for the application of the laws of
any other jurisdiction.
(i) Arbitration. Any and all disputes or controversies
arising out of or relating to this Agreement, other than claims brought
pursuant to Section 6, shall be resolved by arbitration at the American
Arbitration Association (the "AAA") at its New York City offices before a
panel of three arbitrators under the then existing rules of the AAA. The
parties agree that in any such arbitration, the arbitrators shall not have the
power to reform or modify this Agreement in any way and to that extent their
powers are so limited. The determination of the arbitrators shall be final and
binding on the parties and judgment on it may be entered in any court of
competent jurisdiction. The prevailing party in arbitration in connection with
the enforcement of this Agreement shall be entitled to recover from the other
party all reasonable out-of-pocket costs and disbursements and any and all
charges that may be made in the cost of the arbitration and the fees of the
arbitrator or any other enforcement thereof.
(j) Waiver of Jury Trial. THE PARTIES HERETO HEREBY WAIVE A
JURY TRIAL IN ANY LITIGATION WITH RESPECT TO THIS AGREEMENT.
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IN WITNESS WHEREOF, the parties have executed and delivered
this Agreement as of the date first written above.
VSI ACQUISITION II CORPORATION
By:
--------------------------
Name:
Title:
--------------------------
Xxxx X. Xxx
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IN WITNESS WHEREOF, the parties have executed and delivered
this Agreement as of the date first written above.
VSI ACQUISITION II CORPORATION
By: /s/ Xxxxx Xxxxxxx
-----------------------------
Name: Xxxxx Xxxxxxx
Title: Director
----------------------------
Xxxx X. Xxx
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IN WITNESS WHEREOF, the parties have executed and delivered
this Agreement as of the date first written above.
VSI ACQUISITION II CORPORATION
By:
--------------------------
Name:
Title:
/s/ Xxxx X. Xxx
--------------------------
Xxxx X. Xxx
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