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EXHIBIT 10.18
EMPLOYMENT AGREEMENT
This Agreement is made as of September 29, 1999 by and between FAMOUS
DAVE'S OF AMERICA, INC., a Minnesota corporation (the "Company"), and XXXX
XXXXXXXX (the "Executive").
W I T N E S S E T H
WHEREAS, the Company desires to employ Executive in accordance with
the terms and conditions stated in this Agreement; and
WHEREAS, Executive desires to accept that employment pursuant to the
terms and conditions of this Agreement;
NOW, THEREFORE, in consideration of the covenants and agreements
contained herein, the parties hereto agree as follows:
I. EMPLOYMENT
1.1 Employment as Chief Financial Officer. The Company hereby employs
Executive as Chief Financial Officer and Executive accepts such employment
pursuant to the terms of this Agreement. Executive shall report to and take
direction from the Chief Executive Officer of the Company. Executive will
perform those duties which are usual and customary for a Chief Financial Officer
of a restaurant enterprise. Executive shall be employed at the Company's
corporate offices. He shall perform his duties in a manner reasonably expected
of a Chief Financial Officer of a restaurant company.
1.2 Term. Unless terminated by Executive or the Company pursuant to
Article III hereof, Executive's employment pursuant to this Employment Agreement
shall be for a term of two (2) years, such term to commence on November 1, 1999.
II. COMPENSATION, BENEFITS AND PERQUISITES
2.1 Base Salary. During the term and effectiveness of this Agreement,
the Company shall pay Executive an annualized base salary ("Base Salary") at the
annual rate of One Hundred Sixty Five Thousand Dollars ($165,000). The Base
Salary shall be payable in equal installments in the time and manner that other
employees of the Company are compensated. The Company will review the Base
Salary at least annually and may, in its sole discretion, increase it to reflect
performance, appropriate industry guideline data or other factors.
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2.2 Bonus. Executive will receive an annual bonus (the "Base Bonus")
in the amount of up to Thirty percent (30%) of base salary, with a guaranteed
annual bonus for 1999 of $20,000, payable on or about January 1, 2000.
2.3 Relocation Expenses. Executive will be entitled to
reimbursement for the following relocation expenses: (a)
reasonable moving and related expenses not to exceed $15,000;
(b) Temporary living expenses and costs associated with
selling your home not to exceed $35,000; and (c) Two (2) round
trip coach airline tickets per month between Minneapolis and
Seattle until July 1, 2000.
2.4 Vacation. Executive shall be entitled to three (3) weeks' paid
vacation.
2.5 Employee Benefits. Throughout the term of this Agreement,
Executive shall be entitled to the usual and customary benefits and perquisites
which the Company generally provides to its other senior executives under its
applicable plans and policies (including, without limitation, healthcare
coverage and retirement benefits). If the Company adopts a benefit plan,
Executive shall be entitled to the benefits which the Company provides to its
other executives under such plan. Executive shall pay any contributions which
are generally required of executives to receive any such benefits. In addition,
the Company will reimburse you for any COBRA insurance premiums for up to six
months, if applicable.
III. TERMINATION OF EXECUTIVE'S EMPLOYMENT
3.1 Termination of Employment.
(a) Executive's employment under this Agreement may be
terminated by Executive at any time for any reason. This Agreement
shall terminate in its entirety immediately upon the death of
Executive.
(b) Executive's employment under this Agreement may be
terminated by the Company at any time for any reason; provided,
however, that if (i) Executive's employment is terminated by the
Company during the term of this Agreement for a reason or disability
other than for "Cause" as defined in Section 3.2, or (ii) Executive
resigns for "Good Reason" as defined in Section 3.2, Executive shall
receive a severance payment (the "Severance Payment") in the amount of
one year's Base Salary, and shall not receive any additional
compensation or bonuses.
(c) If, during the term of this Agreement, Executive
terminates his employment with the Company following a "Change of
Control" of Company, Executive shall continue to receive his Base
Salary and Bonus, if such change of control and termination occur
during the first year of Executive's employment) for the remaining term
of this Agreement; provided however, that if Executive obtains other
employment during such remaining term, the Company shall receive a
dollar-for-dollar credit against its severance obligation
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hereunder with respect to compensation and benefits received by
Executive in his new employment.
(d) Any termination shall be effective as of the date
specified by the party initiating the termination in a written notice
delivered to the other party, which date shall not be earlier than the
date such notice is delivered to the other party. Except as expressly
provided to the contrary in this section or applicable law, Executive's
rights to pay and benefits shall cease on the date his employment under
this Agreement terminates.
3.2 Definitions. For purposes of this Article III,
(a) "Cause" shall mean only the following: (i) commission of a
felony; (ii) theft or embezzlement of Company property or commission of
similar acts involving moral turpitude; or (iii) the failure by
Executive to substantially perform his material duties under this
Agreement (excluding nonperformance resulting from Executive's
disability) which failure is not cured within 30 days after written
notice from the Chairman of the Company specifying the act of
nonperformance or within such longer period (but no longer than 90 days
in any event) as is reasonably required to cure such nonperformance.
(b) "Good Reason" shall mean only the following: (i) Executive
has been demoted; or (ii) Executive has incurred a substantial
reduction in his authority or responsibility.
(c) "Change of Control" shall mean the occurrence of any of
the following events:
(i) any person or group of persons becomes the
beneficial owner of thirty-five percent (35%) or more of any
equity security of the Company entitled to vote for the
election of directors;
(ii) a majority of the members of the board of
directors of the Company is replaced within the period of less
than two (2) years by directors not nominated and approved by
the board of directors; or
(iii) the stockholders of the Company approve an
agreement to sell or otherwise dispose of all or substantially
all of the Company's assets (including a plan of liquidation).
3.3 Disability. If Executive has become disabled such that he
cannot perform the essential functions of his job with or without reasonable
accommodation, and the disability has continued for a period of more than 90
days, the Company may, in its discretion, terminate his employment under this
Agreement. Upon any such termination for disability, Executive shall be entitled
to such disability, medical, life insurance, and other benefits as may be
provided generally for disabled employees of the Company during the period he
remains disabled.
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3.4 Notice. Executive must provide the Company with at least 30 days'
written notice if Executive desires to terminate his employment under this
Agreement.
IV. CONFIDENTIALITY
4.1 Prohibitions Against Use. Both parties to this Agreement
acknowledge and agree that during the term of this Agreement they may have
access to various trade secrets and confidential business information
("Confidential Information") of each other. Each party agrees that it shall use
such Confidential Information solely in connection with his obligations under
this Agreement and shall maintain in strictest confidence and shall not disclose
any such Confidential Information, directly or indirectly or use such
information in any other way during the term of this Agreement or for a period
of one (1) year after the termination of this Agreement. The parties further
agree to take all reasonable steps necessary to preserve and protect the
Confidential Information. The provisions of this Section shall be equally
applicable to each parties' officers, directors, agents or employees. The
provisions of this Section shall not apply to information which (i) was in
possession of a party prior to receipt from the other party, or (ii) is or
becomes generally available to the public other than as a result of a disclosure
by a party, its directors, officers, employees, agents or advisors, or (iii)
becomes available to a party from a third party having the right to make such
disclosure.
4.2 Remedies. Executive acknowledges that the Company's remedy at law
for any breach or threatened breach by Executive of Section 4.1 will be
inadequate. Therefore, the Company shall be entitled to injunctive and other
equitable relief restraining Executive from violating those requirements, in
addition to any other remedies that may be available to the Company under this
Agreement or applicable law.
V. NON-COMPETITION
5.1 Agreement Not to Compete. Executive agrees that, on or before the
date which is two (2) years after the date Executive's employment under this
Agreement terminates, he will not, unless he receives the prior approval of the
Company, directly or indirectly engage in any of the following actions:
(a) Own an interest in (except as provided below), manage,
operate, join, control, lend money or render financial or other
assistance to, or participate in or be connected with, as an officer,
employee, partner, stockholder, consultant or otherwise, any entity
whose primary business is the retail sale of barbequed food. However,
nothing in this subsection (a) shall preclude Executive from holding
(i) less than one percent of the outstanding capital stock of any
corporation required to file periodic reports with the Securities and
Exchange Commission under Section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended, the securities of which are listed on
any securities exchange, quoted on the National Association of
Securities Dealers Automated Quotation System or traded in the
over-the-counter market, or (ii) holding an interest in the restaurant
concepts which Executive was involved with in the last three (3) years.
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(b) Intentionally solicit, endeavor to entice away from the
Company, or otherwise interfere with the relationship of the Company,
any person who is employed by or otherwise engaged to perform services
for the Company (including, but not limited to, any independent sales
representatives or organizations), whether for Executive's own account
or for the account of any other individual, partnership, firm,
corporation or other business organization.
If the scope of the restrictions in this section are determined by a court of
competent jurisdiction to be too broad to permit enforcement of such
restrictions to their full extent, then such restrictions shall be construed or
rewritten (blue-lined) so as to be enforceable to the maximum extent permitted
by law, and Executive hereby consents, to the extent he may lawfully do so, to
the judicial modification of the scope of such restrictions in any proceeding
brought to enforce them.
5.2 Remedies. Executive acknowledges that the Company's remedy at law
for any breach or threatened breach by Executive of Section 5.1 will be
inadequate. Therefore, the Company shall be entitled to injunctive and other
equitable relief restraining Executive from violating those requirements, in
addition to any other remedies that may be available to the Company under this
Agreement or applicable law.
VI. STOCK OPTION AGREEMENT
Contemporaneously herewith and in connection with this Agreement, the
parties hereto have entered into a Stock Option Agreement, pursuant to which the
Company granted to Executive the right and option (the "Option") to purchase up
to Eighty-Five Thousand (85,000) shares of the Company's common stock, subject
to the terms, conditions and exercise price set forth in the form of Stock
Option Agreement attached hereto as Exhibit A.
VII. MISCELLANEOUS
7.1 Amendment. This Agreement may be amended only in writing, signed by
both parties.
7.2 Entire Agreement. This Agreement contains the entire understanding
of the parties with regard to all matters contained herein. There are no other
agreements, conditions or representations, oral or written, expressed or
implied, with regard thereto. This Agreement supersedes any prior agreements
relating to the employment of Executive by the Company.
7.3 Assignment. This Agreement shall be binding upon, and shall inure
to the benefit of, the parties and their respective successors, assigns, heirs
and personal representatives and any entity with which the Company may merge or
consolidate or to which the Company may sell substantially all of its assets.
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7.4 Notices. Any notice required to be given under this Agreement shall
be in writing and shall be delivered either in person or by certified or
registered mail, return receipt requested. Any notice by mail shall be addressed
as follows:
If to the Company, to:
Famous Dave's of America, Inc.
0000 Xxxxxxx Xxxxx
Xxxx Xxxxxxx, XX 00000
Attention: Chief Executive Officer
If to Executive, to:
Xxxx Xxxxxxxx
00000 XX 00xx Xxxxxx
Xxxxxxx, XX 00000
or to such other addresses as either party may designate in writing to the other
party from time to time.
7.5 Waiver of Breach. Any waiver by either party of compliance with any
provision of this Agreement by the other party shall not operate or be construed
as a waiver of any other provision of this Agreement, or of any subsequent
breach by such party of a provision of this Agreement.
7.6 Severability. If any one or more of the provisions (or portions
thereof) of this Agreement shall for any reason be held by a final determination
of a court of competent jurisdiction to be invalid, illegal, or unenforceable in
any respect, such invalidity, illegality or unenforceability shall not affect
any other provisions (or portions of the provisions) of this Agreement, and the
invalid, illegal or unenforceable provisions shall be deemed replaced by a
provision that is valid, legal and enforceable and that comes closest to
expressing the intention of the parties hereto.
7.7 Governing Law. This Agreement shall be interpreted and enforced in
accordance with the laws of the State of Minnesota, without giving effect to
conflict of law principles.
7.8 Arbitration. Any controversy or claim arising out of or relating to
this Agreement or the breach of this Agreement shall be settled by arbitration
in accordance with the Commercial Arbitration Rules of the American Arbitration
Association, and a judgment upon the award rendered by the arbitrator(s) may be
entered in any court having jurisdiction. The arbitration award shall be subject
to review only in the manner provided in the Uniform Arbitration Act as adopted
in Chapter 572, Minnesota Statutes, as the Act is amended at the time of
submission of the issue to arbitration. The arbitrator(s) shall have the
authority to award the prevailing party its costs and reasonable attorney's fees
which shall be paid by the non-prevailing party. In the event the parties hereto
agree
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that it is necessary to litigate any dispute hereunder in a court, the
non-prevailing party shall pay the prevailing party its costs and reasonable
attorney's fees.
IN WITNESS WHEREOF, the parties have executed this Agreement effective
as of the date set forth above.
FAMOUS DAVE'S OF AMERICA, INC.
By: /s/ Xxxxxx X. X'Xxxx
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Its: President
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/s/ Xxxx Xxxxxxxx
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XXXX XXXXXXXX
