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EXHIBIT 10-A
EMPLOYMENT AGREEMENT
This Agreement made by and between Xxxxxx'x Restaurants, Inc., an Ohio
corporation, hereinafter referred to as "Corporation", and Xxxx X. Xxxxx,
hereinafter referred to as "Xxxxx", WITNESSETH:
WHEREAS, Xxxxx has been employed by the Corporation pursuant to an
employment agreement dated April 8, 1995 which expires on June 1, 1997 (the
"1995 Employment Agreement");
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 2, 1997.
1. PRIOR AGREEMENT. The 1995 Employment Agreement is hereby cancelled
effective as of June 1, 1997.
2. EMPLOYMENT. The Corporation agrees to employ Xxxxx and Xxxxx agrees
to serve the Corporation upon the terms and conditions hereinafter set forth.
3. TERM. The Term of this Agreement shall be for a period of three (3)
fiscal years commencing June 2, 1997 and shall continue in effect through May
28, 2000.
4. DUTIES. Xxxxx agrees to serve the Corporation and any and all of its
subsidiaries and divisions faithfully and to the best of his ability under the
direction of the Board of Directors, devoting (except as provided in paragraphs
8 and 9) his entire business time, energy and skill to such employment and to
perform from time to time such services and to act in such office or capacity as
the Board of Directors shall request or direct.
5. COMPENSATION.
(a) BASE SALARY. The Corporation agrees to pay Xxxxx during each year
of his employment hereunder as base salary for his full-time active services and
as an officer, the sum of Three Hundred Thousand Dollars ($300,000.00) per annum
payable in equal monthly or other installments in accordance with the general
practice of the Corporation. There shall be no changes in the base salary to
reflect annual changes in the Consumer Price Index.
(b) DEFERRED COMPENSATION. In addition to the compensation provided in
the foregoing subparagraph (a), the Corporation shall pay Xxxxx, if living or to
his widow or his estate, as the case may be, the following sums and upon the
terms and conditions and for the period hereinafter set forth.
(i) In the event of the retirement of Xxxxx under the
provisions of Paragraph 6, the Corporation shall pay to Xxxxx for a
period of ten (10) consecutive years thereafter, a sum equal to the
amount which would have been payable, under Section 5(b)(i) of the
Employment Agreement between Xxxxx and Corporation dated July 20, 1990
(the "1990 Employment Agreement"), had Xxxxx retired on May 26, 1995,
payable on a monthly basis, and if he shall die during said period, it
shall make said monthly payments for the remainder of said period to
his widow, if there be one, and if there be none, it shall make any
remaining payments to such person or persons as Xxxxx shall designate
in writing delivered to the Corporation, and if he shall fail to make
such designation, to his estate. If payments are made to Xxxxx'x widow
and she should die during said period the Corporation shall make any
remaining payments to her estate. The monthly payments
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EXHIBIT 10-A
provided for under this subparagraph shall be adjusted on the first
anniversary date of the commencement of such payments and on each
anniversary date thereafter 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.
(ii) In the event of the death or disability of Xxxxx prior to
retirement as afore provided, or on or before the expiration of this
Agreement (and if renewed, the expiration date of the last renewal),
while in the employ of the Corporation, the Corporation, unless Xxxxx
shall have theretofore willfully violated any of the provisions of this
agreement or any renewal agreement, shall pay to him, if living, for a
period of ten (10) consecutive years thereafter, or to his widow, if
there be one, in the event of his death, a sum equal to the amount
which would have been payable under Section 5(b)(i) of the 1990
Employment Agreement had Xxxxx retired on May 26, 1995, payable on a
monthly basis, such payments to be made to Xxxxx as long as he is
living and to his widow after his death until her death or the
expiration of said period, and if there be no widow, such payments or
the remainder thereof shall be made to such person or persons as Xxxxx
shall designate in writing to the Corporation, and if he fails to make
such designation, to his estate. If payments are made to Xxxxx'x widow
and she should die during said period the Corporation shall make any
remaining payments to her estate. The monthly payments provided for
under this subparagraph shall be adjusted on the first anniversary date
of the commencement of such payments and on each anniversary date
thereafter to reflect fifty percent (50%) of the latest annual change
in the CPI-U as described in subparagraph (b)(i).
(iii) If prior to the expiration of this Agreement (and if
renewed, the expiration of the last renewal agreement) none of the
events set forth in subparagraphs (i) and (ii) above have occurred,
giving rise to the payments therein provided for, and Xxxxx has not
willfully violated any of the provisions of this Agreement (or any
renewal agreement), then the Corporation, upon such expiration, shall
pay to Xxxxx, if living, for a period of ten (10) consecutive years, or
to his widow, if there be one, in the event of his death, or if there
be no widow, to the person or persons designated in writing by Xxxxx to
the Corporation, or in default of such designation, to Xxxxx'x estate,
a sum equal to the amount which would have been payable under Section
5(b)(i) of the 1990 Employment Agreement had Xxxxx retired on May 26,
1995, payable on a monthly basis, commencing with the month following
the expiration of this agreement, or the last renewal agreement, if
renewed. If payments are made to Xxxxx'x widow and she should die
during said period the Corporation shall make any remaining payments to
her estate. The monthly payments provided for under this subparagraph
shall be adjusted on the first anniversary date of the commencement of
such payments and on each anniversary date thereafter to reflect fifty
percent (50%) of the latest annual change in the CPI-U as described in
subparagraph (b)(i). It is understood and agreed that this provision
may be modified in any renewal agreement subject to the agreement
thereon of both of the parties.
At any time during the payment of the deferred compensation described
in paragraph 5(b)(i), (ii) or (iii), the person then entitled to receive monthly
payments shall have the right to convert such monthly payments to a single lump
sum payment. Such right shall be exercised by notice in writing delivered to the
Corporation. The amount of such single lump sum shall be the then present value
of all remaining payments determined without regard to any future cost of living
adjustments, discounted using the "Applicable Federal Rate" which is appropriate
for the remaining term of the deferred compensation, as determined by the
Internal Revenue Service pursuant to Section 1274 of the Internal Revenue Code.
Payment of the single lump sum to the person then entitled to receive monthly
payments and such person's receipt therefore, shall extinguish all further
obligations of the Corporation to pay deferred compensation under this Agreement
as well
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EXHIBIT 10-A
as the rights of all vested and contingent successor beneficiaries of such
deferred compensation provisions.
6. RETIREMENT. Xxxxx may elect to retire at any time.
7. DISABILITY. For the purposes of subparagraph (b)(ii) of Paragraph 5
above, the obligations of the Corporation to make the payments upon the
disability of Xxxxx shall not become effective unless and until all the
following conditions are met:
(a) Xxxxx shall become physically or mentally incapable
(excluding temporary absences due to ordinary illnesses) of properly
performing the services required of him in accordance with his
obligations under Paragraph 4 hereof or similar provisions of any
renewal agreement.
(b) Such incapacity shall exist or be reasonably expected to
exist for more than ninety (90) days in the aggregate during any period
of twelve (12) consecutive months.
(c) Either Xxxxx or the Corporation shall have given the other
thirty (30) days' written notice of his or its intention to terminate
the active employment of Xxxxx because of such disability.
8. PART TIME EMPLOYMENT. Xxxxx may reduce the scope of his employment
from full time to "part time" upon written notice to the Corporation. Part time
shall mean three days or less per week devoted to the business of the
Corporation. Xxxxx'x compensation during any period of part time employment
shall be fifty percent (50%) of the base salary to which he would otherwise be
entitled.
9. CESSATION OF EMPLOYMENT. Xxxxx agrees that upon cessation of his
employment by reason of the expiration of this Agreement (and if renewed, of the
last renewal agreement), or his retirement as herein provided, or because of his
mental or physical disability, and during the period for which monthly payments
are provided in Paragraph 5, he will, while not prevented from so doing because
of such disability, serve the Corporation for a period of seven (7) years in an
advisory and consultative capacity and in the performance of special, important
assignments relating to the business, and that he will be available for such
purposes at such times and places as shall be reasonable, and the Corporation
agrees to pay Xxxxx for such services a consultant's fee of One Hundred Thousand
Dollars ($100,000.00) per annum, payable in equal monthly or other installments,
in accordance with the general practice of the Corporation. Xxxxx further agrees
to act as a Director and/or Officer of the Corporation, as the Corporation may,
from time to time, request, all without further compensation, except that Xxxxx,
while serving as a member of the Board of Directors, shall be paid fees and
shall be reimbursed for his expenses as in the case of other Directors who are
not full time active employees of the Corporation.
10. RESTRICTIVE COVENANTS. Xxxxx agrees that during the term of this
Agreement, or of any renewal thereof, and during the further period for which
monthly payments to him are provided for herein, he will not, directly or
indirectly, render any services of an advisory nature or otherwise to, or become
employed by or participate in, any business competitive with any of the business
of the Corporation or of its subsidiaries or its divisions, without the prior
written consent of the Corporation; provided, however, that nothing herein shall
prohibit Xxxxx from:
(i) Rendering services or otherwise becoming employed or
participating or engaging in any business which shall be related in any
way to the Corporation, such as, but not limited to, a franchisee;
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EXHIBIT 10-A
(ii) Owning stock or other securities or being a director or
officer of a corporation conducting a business referred to in
subparagraph (i) and subject to the limitations set forth therein;
(iii) Owning stock or other securities of competitors which
are relatively insubstantial to the total outstanding stock of such
corporation.
11. 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. As
used in this Agreement, the term "successor" 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.
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 Xxxx X. Xxxxx has hereunto set his hand on the date set forth
below.
DATED: May 16, 1997 /s/ XXXX X. XXXXX
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Xxxx X. Xxxxx
XXXXXX'X RESTAURANTS, INC.
By /s/ XXXXXX X. XXXXXXXX
---------------------------------
Xxxxxx X. Xxxxxxxx
Vice President of Human Resources
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