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EXHIBIT 10.9
EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") is made and entered into as of
the 30th day of August, 2000 (the "Effective Date"), by and between FFPE, LLC, a
Delaware limited liability company (the "Employer") located at 00000 Xxxxxxxx
Xxxxxxx, Xxx Xxxxx, Xxxxxxxxxx 00000, and Xxxx Xxxxxxxxx (the "Executive"), an
individual whose address is X.X. Xxx 000, Xxxxxxx, Xxxxxxxxxx 00000. In
consideration of the mutual promises made in this Agreement, Employer and
Executive hereby agree as follows:
ARTICLE I
TERM AND PLACE OF EMPLOYMENT
Section 1.1 SPECIFIED PERIOD. Employer hereby employs Executive, and
Executive hereby accepts employment with Employer, for a period of three (3)
years, beginning on the Effective Date and, unless sooner terminated in
accordance with the terms and provisions hereof, terminating on August __, 2003
(which period, as so terminated, shall be referred to as the "Employment Term").
Section 1.2 LOCATION. Unless Executive and Employer agree otherwise,
Executive shall perform the services required hereunder at Employer's offices
located at 00000 Xxxxxxxx Xxxxxxx, Xxx Xxxxx, Xxxxxxxxxx, 00000 or at such other
location as may be designated by Employer, and shall spend such time at
Employer's operating facilities and travelling on business of Employer as
Employer shall from time to time reasonably deem necessary.
ARTICLE II
DUTIES AND OBLIGATIONS OF EXECUTIVE
Section 2.1 GENERAL DUTIES AND SERVICES. During the Employment Term,
Executive shall serve as the CEO of Employer. In such capacity, Executive will
render such services of an executive and administrative nature to Employer, its
divisions and Affiliates (which is defined for purposes of this Agreement to
include any current or future company or other entity controlled by Employer) as
are normally and customarily vested in the office of President/CEO of a
corporation and such other or different duties consistent with Executive's
office as Employer may from time to time assign, subject always to the direct
supervision of the Manager of Employer ("Manager") and the general supervision
of the President and Chief Executive Officer of Sizzler International, Inc. (the
"Sizzler CEO"). Set forth on Schedule B is a list of specific rights of the
Executive, which are not intended to be exclusive. In the performance of such
services, Executive shall at all times (i) faithfully, industriously
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and to the best of his ability, experience and talents perform all of the duties
that may be required of and from him pursuant to the terms and provisions of
this Agreement; and (ii) subject to the direct supervision of the Manager and
the general supervision of the Sizzler CEO, perform all appropriate duties and
responsibilities necessary to the effective and efficient operations of
Employer. Further, Executive agrees to abide by all policies of Employer and
Sizzler and to, from time to time as requested by the Sizzler CEO, execute
commercially reasonable agreements and certifications with respect to
confidentiality, conflict of interest, proprietary information and Sizzler's
code of business conduct. During the first year of this Agreement, Executive
hereby agrees not to grant salary increases, bonuses or other compensation
awards outside of the customary and usual practice associated with the Oscar's
restaurant business; except for stock options which shall be eliminated.
Executive shall not be required to reduce benefits to employees during the first
year. In the second and third years, Executive will submit recommended salary
increases, bonuses and other compensation awards to Manager for its review,
according to the guidelines set by Sizzler for similarly situated employees.
Section 2.2 PROPRIETARY INFORMATION. Executive expressly acknowledges that
his position with the Company is one of the highest trust and confidence both by
reason of his position and by reason of his access to and contact with the trade
secrets and confidential and proprietary business information of Employer.
Accordingly, Executive hereby covenants and agrees as follows with respect to
both the Employment Term and thereafter:
2.2.1 Executive shall use his diligent efforts to protect and
safeguard the trade secrets and confidential and proprietary information of
Employer, including, without limitation, its technical data, records,
compilations of information, processes, inventions, formulae, know how, customer
lists, supplier lists, products, services, business plans, marketing plans, and
opportunities;
2.2.2 Executive shall not disclose any such trade secrets or
confidential and proprietary information to any third party whatsoever; except
for disclosures made in good faith and in furtherance of Employer's interests
during the course of his employment by Employer;
2.2.3 Executive shall not use, directly or indirectly, for his own
benefit or for the benefit of any person other than the Company, any of such
trade secrets or confidential and proprietary information.
Notwithstanding anything to the contrary in this Section 2.2, no
information shall be considered confidential which (i) is or becomes publicly
available or known in the relevant trade or industry other than as a result of
acts by Executive in breach of this Agreement, (ii) is disclosed to Executive by
a third party on a non-confidential
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basis not in breach of any obligation of confidentiality, or (iii) is required
to be disclosed by law.
Section 2.3 OWNERSHIP OF BOOKS, RECORDS AND PAPERS. All records, books,
correspondence, memoranda, notes, files, charts, drawings, specifications,
studies, formulae and other documents relating in any manner whatsoever to
Employer's business operations or those of Sizzler International, Inc. and its
affiliates which come or have heretofore come into Executive's possession shall
remain the exclusive property of Employer and Executive shall deliver all such
materials and property to Employer upon the termination of Executive's
employment hereunder, or at any other time upon the request of Employer.
Section 2.4 CERTAIN REMEDIES OF EMPLOYER. Notwithstanding anything to the
contrary in this Agreement, the covenants set forth in this Article II shall
survive and continue to be binding upon Executive, notwithstanding the
termination of his employment with Employer for any reason whatsoever. The
covenants and agreements set forth in this Article II shall be deemed and
construed as separate agreements, independent of any other covenants, agreements
or provisions set forth in this Agreement. The existence of any claim or cause
of action by the Executive against the Employer, whether predicated on this
Agreement or otherwise, shall not constitute a defense to the enforcement by
Employer of any or all of such independent covenants and agreements. The
Executive acknowledges and agrees that in the event of a breach or threatened
breach of the provisions of this Article II by the Executive, Employer will
suffer irreparable harm which would not be adequately compensated in damages in
an action at law. Accordingly, in addition to such other remedies to which
Employer may be entitled and notwithstanding anything to the contrary herein,
Employer shall be entitled to specific performance and/or injunctive relief.
ARTICLE III
OBLIGATIONS OF EMPLOYER
Section 3.1 GENERAL DESCRIPTION. During the Employment Term, Employer
shall provide Executive with the compensation, incentives, benefits, and
business expense reimbursements specified in this Agreement.
Section 3.2 OFFICE AND STAFF. During the Employment Term, Employer shall
provide Executive with an office, secretarial help, office equipment, supplies,
and other facilities adequate for the performance of his duties.
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ARTICLE IV
COMPENSATION OF EXECUTIVE
Section 4.1 ANNUAL SALARY. As compensation for the services to be
performed pursuant to this Agreement, Executive shall receive a salary at the
rate of $200,000.00 per annum, payable not less than semi-monthly and otherwise
in accordance with Employer's customary practice for its executive officers.
Executive shall be eligible for consideration for such increases in salary and
bonuses and stock options as determined by Manager's Board of Directors, based
upon the amounts made available by the Manager for other similarly situated
employees having similar responsibility.
Section 4.2 TAX WITHHOLDING. Employer shall have the right to deduct or
withhold from the compensation due to Executive under this Agreement any and all
sums required for federal income and Social Security taxes and all state or
local taxes now applicable or that may be enacted and become applicable in the
future.
ARTICLE V
EXECUTIVE BENEFITS
Section 5.1 ANNUAL VACATION. Executive shall be entitled to vacation time
each year with full pay and benefits, consistent with the Employer's policy for
similar executives, as may be in effect from time to time. See Schedule A,
attached hereto, for the current schedule of benefits.
Section 5.2 ILLNESS. Executive shall be entitled to sick leave with full
pay and benefits, consistent with Employer's policy for similar executives as
may be in effect from time to time. See Schedule A.
Section 5.3 AUTOMOBILE ALLOWANCE. During the Employment Term, Employer
shall provide Executive with a monthly automobile allowance consistent with the
Employer's policy for similar executives, as may be in effect from time to time.
See Schedule A.
Section 5.4 MEDICAL AND DISABILITY COVERAGE. During the Employment Term,
Employer agrees that, if and to the extent Employer provides the same to other
executive officers of Employer, Employer will provide Executive with
participation in health, dental or other medical insurance plan, disability
plan, life insurance plan or any other employee benefit plan from time to time
in force on terms no less favorable than those provided to such other executive
officers. See Schedule A.
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ARTICLE VI
BUSINESS EXPENSES
Section 6.1 REIMBURSEMENT OF OTHER BUSINESS EXPENSES.
6.1.1 Employer shall promptly reimburse Executive, in accordance
with Employer's policies from time to time in effect, for all reasonable and
customary business expenses incurred by Executive in connection with the
business of Employer.
6.1.2 Each such expenditure shall be reimbursable only if it is of a
nature qualifying it as a proper deduction on the federal and state income tax
return of Employer.
6.1.3 Each such expenditure shall be reimbursable only if Executive
furnishes to Employer adequate records and other documentary evidence required
by federal and state statutes and regulations issued by the appropriate taxing
authorities for the substantiation of each such expenditure as an income tax
deduction.
ARTICLE VII
TERMINATION OF EMPLOYMENT
Section 7.1 TERMINATION FOR CAUSE. Employer shall have the right,
exercisable immediately upon written notice, to terminate Executive's employment
for "Cause."
7.1.1 DEFINITION OF CAUSE. As used herein, "Cause" means any of
the following: (A) illegal use of narcotics; (B) habitual public drunkenness by
Executive which materially and adversely affects Executive's performance under
this Agreement; (C) Executive is convicted by a court of competent jurisdiction,
or pleads "no contest" to, a felony involving moral turpitude; (D) Executive
engages in fraud, embezzlement or any other illegal conduct substantially
detrimental to the business or reputation of Employer, regardless of whether
such conduct is designed to defraud Employer or others; (E) Executive
intentionally imparts material confidential information relating to Employer or
its business to competitors or to other third parties other than in the course
of carrying out Executive's duties; (F) beginning at any time after the fifth
full Fiscal Quarter after the date hereof, the failure of FFPE, LLC's Cumulative
Restaurant EBITDA to be at least equal to 75% of the projected Cumulative
Restaurant EBITDA for such cumulative period following the date hereof as set
forth in the Business Plan, as such terms are defined in the Credit Agreement
dated as of even date herewith; and (G) Executive refuses to perform his duties
hereunder or otherwise breaches any
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xxxxxxxx xxxxxxxx, xxxxxxxx or representation of this Agreement, and, except for
any conduct described in clauses (A) through (E) of this Section 7.1.1, fails to
cure such breach (if such breach is then capable of being cured) within 30
business days following written notice thereof specifying in reasonable detail
the nature of such breach, or if such breach is not capable of being cured in
such time, a cure shall not have been diligently initiated within such 30
business day period.
7.1.2 EFFECT OF TERMINATION. Upon termination in accordance with
this Section 7.1.2, Executive shall be entitled to no further compensation
hereunder other than the Base Salary and other benefits accrued hereunder
through, but not including, the effective date of such termination. Employer's
exercise of its right to terminate for Cause shall be without prejudice to any
other remedy to which it may be entitled at law, in equity or under this
Agreement.
Section 7.2 VOLUNTARY TERMINATION. Executive may terminate his employment
at any time by giving no less than 30 days' written notice to Employer. Upon
termination in accordance with this Section 7.2, Executive shall be entitled to
no further compensation hereunder other than the Base Salary and other benefits
accrued hereunder through, but not including, the effective date of such
termination.
Section 7.3 TERMINATION DUE TO DEATH OR DISABILITY. This Agreement shall
automatically terminate upon the death of Executive. In addition, if any
disability or incapacity of Executive to perform his duties as the result of any
injury, sickness or physical, mental or emotional condition continues for a
period of 60 consecutive days or a total of 90 days in any 12-month period,
Employer may terminate Executive's employment upon written notice to Executive.
Upon termination in accordance with this Section 8(c), Executive (or Executive's
estate, as the case may be) shall be entitled to (i) no further compensation
hereunder other than the Base Salary and other benefits accrued hereunder
through, but not including, the date of death or, in the case of disability, the
date disability is determined as set forth above.
Section 7.4 EXCLUSIVE REMEDY. The payments contemplated by this Agreement
shall constitute Executive's exclusive and sole remedy for any claim for
payments or wages that Executive might otherwise have against Employer under
this Agreement which, but for Executive's termination of employment by Employer
hereunder, might otherwise be due and payable by Employer to Executive.
Executive covenants not to assert or pursue any such remedies, other than an
action to enforce the payments due to Executive under this Agreement.
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ARTICLE VIII
GENERAL PROVISIONS
Section 8.1 NOTICES. Any notices to be given under this Agreement by
either party to the other shall be in writing and may be transmitted by personal
delivery or by mail, registered or certified, postage prepaid with return
receipt requested. Mailed notices shall be addressed to the parties at the
addresses appearing in the introductory paragraph of this Agreement, but each
party may change that address by written notice in accordance with this Section
8.01. Notices delivered personally shall be deemed communicated as of the date
of actual receipt; mailed notices shall be deemed communicated as of three (3)
days after the date of mailing.
Section 8.2 ATTORNEYS' FEES AND COSTS. In the event of any litigation,
arbitration or other dispute arising as a result of or by reason of this
Agreement, the prevailing party in any such litigation, arbitration or other
dispute shall be entitled to, in addition to any other damages assessed, its
reasonable attorneys' fees, and all other costs and expenses incurred in
connection with settling or resolving such dispute. The attorneys' fees which
the prevailing party is entitled to recover shall include fees for prosecuting
or defending any appeal and shall be awarded for any supplemental proceedings
until the final judgment is satisfied in full. In addition to the foregoing
award of attorneys' fees to prevailing party, the prevailing party in any
lawsuit or arbitration proceeding on this Agreement shall be entitled to its
reasonable attorneys' fees incurred in any post judgment proceedings to collect
or enforce the judgment. This attorneys' fees provision is separate and several
and shall survive the merger of this Agreement into any judgment.
Section 8.3 ENTIRE AGREEMENT. This Agreement supersedes any and all other
agreements, either oral or in writing, between the parties hereto with respect
to the terms and conditions of Employer's employment of Executive by Employer
and contains all of the covenants and agreements between the parties with
respect to the terms and conditions of that employment. Each party to this
Agreement acknowledges that no representation, inducement, promise, or
agreement, oral or otherwise, relating to the terms and conditions of
Executive's employment has been made by any party, or anyone acting on behalf of
any party, which are not embodied in this Agreement, and that no other
agreement, statement, or promise relating to such subject matter not contained
in this Agreement shall be valid or binding on either party.
Section 8.4 MODIFICATIONS. Any modification of this Agreement will be
effective only if it is in writing and signed by the party to be charged.
Section 8.5 EFFECT OF WAIVER. The failure of either party to insist on
strict compliance with any of the terms, covenants, or conditions of this
Agreement by the
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other party shall not be deemed a waiver of that term, covenant, or condition,
nor shall any waiver or relinquishment of any right or power at any one time or
times be deemed a waiver or relinquishment of that right or power for all or any
other times.
Section 8.6 PARTIAL INVALIDITY. If any provision in this Agreement is held
by a court of competent jurisdiction or pursuant to an arbitration conducted
pursuant to Section 8.9 of this Agreement to be invalid, void, or unenforceable,
the remaining provisions hereof shall nevertheless continue in full force
without being impaired or invalidated in any way.
Section 8.7 GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of California applicable to
contracts made and to be performed entirely within the state of California
except with regard to California's choice of law principles.
Section 8.8 SUMS DUE DECEASED EXECUTIVE. If Executive dies prior to the
expiration of the term of his employment, any sums that may be due him from
Employer under this Agreement as of the date of death shall be paid to
Executive's executors, administrators, heirs, personal representatives,
successors, and assigns.
Section 8.9 ARBITRATION OF DISPUTES. Except only as otherwise provided
below, either party hereto may require the arbitration of any dispute arising
under or in connection with this Agreement. Such party may initiate and require
arbitration by giving notice to the other party specifying the matter to be
arbitrated. If legal action is already pending on any matter concerning which
the notice is given, the notice shall not be effective unless given by the
defendant therein and given before the expiration of twenty (20) days after
service of process on the person giving the notice. Except as provided to the
contrary in these provisions on arbitration, the arbitration shall be in
conformity with and subject to applicable rules and procedures of the American
Arbitration Association (or any successor thereto). If the American Arbitration
Association is not then in existence and there is no successor, or if for any
reason the American Arbitration Association fails or refuses to act, the
arbitration shall be in conformity with and subject to the provisions of
applicable California statutes (if any) relating to arbitration at the time of
the notice. The arbitrators shall be bound by this Agreement. Pleadings in any
action pending on the same matter shall, if arbitration is required as
aforesaid, be deemed amended to limit the issues to those contemplated by the
rules prescribed above. Each party shall pay the costs of arbitration, including
arbitrator's fees, as awarded by the arbitrator(s). The number and selection of
arbitrator(s) shall be in accordance with the rules prescribed above, except
that (a) each arbitrator selected shall be neutral and familiar with the
principal subject matter of the issues to be arbitrated, (b) the testimony of
witnesses shall be given under oath, and (c) depositions and other discovery may
be ordered by the arbitrator(s). Notwithstanding anything to the contrary in
this Section 8.9, the parties hereto shall
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have the right at all times to resort to any court of competent jurisdiction to
seek and obtain any equitable, extraordinary and/or other remedies to which they
may be entitled but which would be beyond the authority of the arbitrators
hereunder to grant.
NOTICE: By initialing in the space below you are agreeing, except only to
the extent provided to the contrary above, to have any dispute arising out of
the matters included in the "arbitration of disputes" provision decided by
neutral arbitration and you are giving up any rights you might possess to have
the dispute litigated in a court or jury trial. By initialing in the space below
you are giving up your judicial rights to discovery and appeal, unless such
rights are specifically included in the "arbitration of disputes" provision. If
you refuse to submit to arbitration after agreeing to this provision you may be
compelled to arbitrate under the authority of the applicable state statute. Your
agreement to this arbitration provision is voluntary.
We have read and understand the foregoing and, except as otherwise
permitted above, agree to submit disputes arising out of the matters included in
the "arbitration of disputes" provision to neutral arbitration.
Initials: /s/ XXXX XXXXXXXXX /s/ XXXX XXXXXXXXX
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Employer Executive
Section 8.10 WAIVER OF JURY TRIAL. With respect to any dispute arising
under or in connection with this Agreement, as to which neither party hereto
invokes the right to arbitration hereinabove provided, or as to which legal
action nevertheless occurs, each party hereto hereby irrevocably waives all
rights it may have to demand a jury trial. This waiver is knowingly,
intentionally, and voluntarily made by the parties hereto and each party
acknowledges that neither the other party hereto nor any person acting on behalf
of the other party has made any representation of fact to induce this waiver of
trial by jury or in any way to modify or nullify its effect. The parties hereto
each further acknowledge that they have been represented (or have had the
opportunity to be represented) in the signing of this Agreement and in the
making of this waiver by independent legal counsel, selected of its own free
will, and that it has had the opportunity to discuss this waiver with counsel.
The parties hereto each further acknowledges that it has read and understands
the meaning and ramifications of this waiver provision.
Initials: /s/ XXXX XXXXXXXXX /s/ XXXX XXXXXXXXX
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Employer Executive
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Section 8.11 UNDERSTANDING OF AGREEMENT. Executive states that he has
carefully read this Agreement, that he has had sufficient time and opportunity
to consider its terms and to obtain legal advice, if desired, that he fully
understands its final and binding effect, that the only promises made to him to
sign this Agreement are those stated above, and that he is signing this
Agreement voluntarily.
Executed as of August 30, 2000.
EMPLOYER: EXECUTIVE:
FFPE, LLC
a Delaware limited liability company
/s/ XXXX XXXXXXXXX /s/ XXXX XXXXXXXXX
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Xxxx Xxxxxxxxx, CEO Xxxx Xxxxxxxxx
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CHIEF EXECUTIVE OFFICER
XXXX XXXXXXXXX
Annual Base Salary: $200,000 (biweekly payroll)
Bonus Potential: 20% of base salary, paid quarterly
Vacation: Per Vacation Policy
(5 days after 1 year of service; 10 days
after 2 years of service; 1 additional day
after each additional year of service; caps
at 15 days per year)
Illness: Per Sick Leave Policy
(5 paid sick days per year)
Auto Allowance: Monthly taxable auto allowance of $500
Medical/Dental: Company paid for executive and dependents
Life Insurance: $50,000 coverage for executive company paid
Long Term Disability: Company paid
401(k): Per plan; match 10%
Flexible Spending
Account (Sect 125): Per Plan
Schedule A
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SCHEDULE B TO THE
EMPLOYMENT AGREEMENT OF XXXX XXXXXXXXX
Pursuant to Section 2.1 of the Employment Agreement and by way of example
and not by way of limitation upon Xxxx Xxxxxxxxx'x authority as Chief Executive
Officer, during the Employment Term and without the permission of Xxxx
Xxxxxxxxx, there shall be:
1. No change in the price of food, products or any change in the level
of services offered by FFPE, LLC;
2. No reduction in the personnel of FFPE, LLC either in the aggregate
or on a restaurant by restaurant basis;
3. No change in the food, product lines and services offered by FFPE,
LLC;
4. No reduction in the number of new restaurants to be opened pursuant
to the Business Plan so long as FFPE, LLC is entitled to request drawdowns under
the Credit Agreement dated May 23, 2000, between Sizzler International, Inc.,
S&C Company, Inc., and FFPE, LLC.
Nothing set forth above shall restrict or limit the power or authority of
the Board of Directors of Sizzler International, Inc. to determine and establish
limits on the authority of Xxxx Xxxxxxxxx comparable to those imposed on other
divisional presidents and chief executive officers; provided, however, that Xxxx
Xxxxxxxxx shall be entitled to request consideration of any decision made by the
Chief Executive Officer of Sizzler to make any change or take any action
specified in Items 1 through 4 above, which action or change has been made
without Xxxx Xxxxxxxxx'x consent.
Schedule B
