EXHIBIT 10.23
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement"), dated February 1, 1997,
is made by and between Rudy's Restaurant Group, Inc., a Nevada
corporation. and its subsidiaries (the "Company") and Xxxxx X.
Xxxxxxxx (the "Executive").
RECITAL:
The Company needs to retain capable, experienced senior executive
personnel and wishes to assure both itself and the Executive of
continuity of management to continue to expand its business and
prosper. The Executive, through her prior performance has
demonstrated that she is the type of capable, experienced senior
executive personnel needed by the Company
The Executive is willing to make her services available to the
Company on the terms and conditions hereinafter set forth.
AGREEMENT:
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, it is agreed by and between the Company and the
Executive:
1. EMPLOYMENT
1.1 Term. The Company will continue to employ the Executive, and
the Executive agrees to continue to serve the Company, for the
THREE (3) YEAR period commencing February 1, 1997 and ending on
January 31, 2000, the "Initial Term." On February 1, 2000, and on
the last day of each January thereafter, the term of the
Executive's employment will be automatically extended one (1)
additional year unless, at least sixty (60) days prior to each
January 31, the Company will have delivered to the Executive or
the Executive will have delivered written notice to the Company
that the term of the Executive's employment hereunder will not be
extended. The Initial Term, together with any annual extensions,
is hereinafter referred to as the "Term"
1.2 Position And Duties.
(a) The Executive shall serve as Chief Operating Officer, Chief
Financial Officer and Treasurer of the Company and shall have
such responsibilities, duties and authorities as may be
reasonably assigned to the Executive by the Company's Board of
Directors.
(b) The Executive agrees to serve as an executive and officer,
and, if nominated and elected, as a director, of the Company and
its subsidiaries provided they indemnify the Executive for
serving in any such capacities on a basis no less favorable than
is currently provided by the Company's Bylaws.
1.3 Place Of Performance. The Executive will be based at the
principal executive offices of the Company except for required
travel on the Company's business to an extent consistent with
present business travel obligations.
2.COMPENSATION AND RELATED MATTERS
2.1 Base Salary. Commencing February 1, 1997 the Company will
pay to the Executive an annual "Base Salary" of $100,000 per
annum, payable according to the Company's customary payroll
practices. This Base Salary shall be increased annually following
normal business practices of the Company but in no event less
than in an amount sufficient to reflect any increase in the
Consumer Price Index for "All Urban Consumers," in Miami,
Florida, as published by the U. S. Bureau of Labor Statistics for
the preceding 12-month period and, if so increased, will not,
during the term of this Agreement, be decreased. Compensation of
the Executive by salary payments shall not be deemed exclusive
and shall not prevent the Executive from participating in any
other compensation or benefit plan of the Company.
2.2 Expenses.
(a) The Executive will be entitled to receive prompt
reimbursement for all reasonable expenses incurred by the
Executive in the performance of her duties, including all
expenses of travel and living expenses while away from home in
the service of the Company, if such expenses are incurred and
accounted for in accordance with the policies and procedures then
presently established by the Company. The Company shall pay all
expenses related to the Executive's required continuing education
necessary to retain the Executive's status as a Florida Certified
Public Accountant.
(b) The Executive shall receive an allowance of $500 per month
for automobile and incidental business expenses including
Executive's portable telephone and office at home expenses.
2.3 Other Benefits. The Executive will be entitled to
participate in all employee benefit plans and arrangements
available to other employees of the Company on the same terms and
conditions as granted to other employees. Such plans and
arrangements may include, without limitation, any pension and
retirement plan and arrangement, supplemental pension and
retirement plan and arrangement, stock option plans, employee
stock ownership plan, life insurance and health-and-accident
plans and arrangements, medical insurance plan, disability plan,
sick pay plan and vacation plan. The Company shall not make any
changes in such plans or arrangements that would adversely affect
the Executive's rights or benefits thereunder, unless such change
occurs pursuant to a program applicable to all executives of the
Company and does not result in a proportionately greater
reduction in the rights of or benefits of the Executive as
compared with any other executive of the Company. The Executive
shall be entitled to participate in or receive benefits under any
employee benefit plan or arrangement made available by the
Company in the future to its executives and key management
employees, subject to and on a basis consistent with the terms,
conditions and overall administration of such plans and
arrangements. Nothing paid to the Executive under any plan or
arrangement presently in effect or made available in the future
shall be deemed to be in lieu of the Base Salary payable to the
Executive.
2.4 Vacations and Holidays. The Executive shall be entitled to
four (4) weeks paid vacation per year. Three (3) weeks of such
vacation must be taken during the year in which earned and shall
not be paid in lieu of taking nor carry over to the next
succeeding year. The remaining (fourth) week will be paid if not
taken. The Executive shall be entitled to all paid holidays given
by the Company to its executives.
2.5 Performance Bonus. Commencing with the Company's 1997 fiscal
year (beginning September 30, 1996) and during each employment
period in which Executive is employed by the Company for the
entire period, Executive shall, in addition to Base Salary, be
eligible to receive an annual bonus (the "Bonus") of up to forty
percent (40%) of her then current Base Salary. The Bonus shall be
computed as three percent (3%) of the Company's audited earnings
before all executive bonuses and income taxes exceeding
$2,000,000. The Bonus shall be paid within thirty (30) days of
the filing of the Company's Form 10-K (or 10-KSB, as applicable).
3. TERMINATION
The Executive's employment hereunder may be properly terminated
without any breach of this Agreement only under the following
circumstances:
3.1 Death. The Executive's employment hereunder shall terminate
on the last day of the third month after her death.
3.2 Disability. If, because of the Executive's incapacity due to
physical or mental illness, the Executive shall have been absent
from her duties on a full-time basis for the entire period of six
(6) consecutive months, the Company may terminate the Executive's
employment hereunder. If payments under any disability policy
provided to the Executive by the Company commence before the
expiration of said six-month period, then upon commencement of
such disability payments, this Agreement shall terminate and the
Company shall cease all payments hereunder.
If terminated under this Section, at the end of the fiscal year
following such termination, Executive will be entitled to a
Bonus, computed as provided in Section 2.5 above and prorated
according to the portion of the year employed.
3.3 Cause. For purposes of this Agreement, the Company shall
have "Cause" to terminate the Executive's employment hereunder
upon the occurrence of: (i) any action or omission of the
Executive which is a willful and material breach of this
Agreement that is not cured or to which diligent attempts to cure
have not commenced within thirty (30) business days after receipt
by the Executive of notice, as discussed below; (ii) fraud,
embezzlement or misappropriation against the Company; (iii) the
willful commission by the Executive of any act of dishonesty or
breach of fiduciary duty relating to the Company; or (iv) the
conviction of the Executive for any criminal act that is a
felony. No act on the Executive's part shall be considered
"willful" unless done, or omitted to be done, by her not in good
faith and without reasonable belief that her action or omission
was in the best interests of the Company.
Notwithstanding the foregoing, the Executive shall not be deemed
to have been terminated for Cause without: (i) reasonable written
notice to the Executive setting forth the reason(s) for the
Company's intention to terminate for Cause; (ii) an opportunity
for the Executive to cure the breach or, with her counsel, to be
heard before the Board of Directors of the Company to refute any
determination of Cause specified in such notice; and (iii)
delivery to the Executive of a Notice of Termination from the
Board of Directors of the Company finding that in the good faith
opinion of the Board of Directors of the Company the Executive
was guilty of conduct set forth above and specifying the
particulars thereof in detail.
3.4 Termination Upon Change in Control. Upon the termination of
the Executive's employment (other than for Cause) within 180 days
after the occurrence of a "Change in Control," as hereinafter
defined, the Company shall pay the Executive within 10 days of
such termination a lump sum payment equal to the greater of
(i)(a) 30 months' Base Salary at the rate prevailing at the time
of such Change in Control or (b) the Executive's Base Salary due
for the remaining term of this Agreement, plus (ii) an amount
equal to two (2) times the most recent Bonus paid to the
Executive.
For purposes of this Agreement, a Change in Control shall mean:
(i) The acquisition (other than by the Company) at any time by
any person, entity or "group," within the meaning of Section
13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, of
beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of 50% or more of either the
then outstanding shares of Common Stock or the combined voting
power of the Company's then outstanding voting securities
entitled to vote generally in the election of directors; or
(ii) Approval by the shareholders of the Company of (a) a
reorganization, merger or consolidation with respect to which
persons who were the shareholders of the Company immediately
before such reorganization, merger or consolidation do not,
immediately thereafter, own more than 50% of the combined voting
power entitled to vote generally in the election of directors of
the reorganized, merged or consolidated company's then
outstanding voting securities; (b) a liquidation or dissolution
of the Company; or (c) the sale of all or substantially all of
the assets of the Company.
Executive shall not be required to mitigate the amount of any
payment or benefit provided for in this Section by seeking other
employment or otherwise, nor shall the amount of any payment or
benefit provided for in this Section be reduced by any
compensation earned by Executive after her termination by the
Company without Cause or by the Executive for Good Reason, as
defined below.
3.5 Termination Without Cause. The Company shall have the right
to terminate the Executive's employment for any reason other than
for death, disability or Cause upon thirty (30) days written
notice to the Executive; provided, however, that the Company
shall pay to the Executive any unpaid Base Salary through the
effective date of termination specified in such notice plus
eighteen (18) months' Base Salary at the rate prevailing at such
termination. The Executive shall not be entitled to any payment
under this Section if either the Company or the Executive gives
notice of its or her intention not to renew this Agreement in
accordance with Section 1.1 hereof.
Notwithstanding the foregoing, if a Change in Control occurs
within one year either before or following a Termination Without
Cause as herein provided, the Executive shall be deemed to have
been terminated upon a Change in Control and shall be entitled to
receive the payments set forth in Section 3.4 above.
3.6 Resignation. The Executive may resign for "Good Reason."
For purposes of this Agreement, Good Reason shall mean:
(i) a Change in Control of the Company,
(ii) a failure by the Company to comply with any material
provision of this Agreement which has not been cured within
thirty (30) days after written notice of such noncompliance has
been given by the Executive to the Company;
(iii) assignment to the Executive of any duties inconsistent
with, or a significant change in the nature or scope of the
Executive's authorities, duties or responsibilities, as compared
to those authorities, duties and responsibilities held by the
Executive as of the date hereof and as reasonably increased from
time to time;
(iv) failure by the Company to obtain from any Successor (Section
5.4) affirmative written evidence of the assumption by the
Successor of the Company's obligation to perform this Agreement;
(v) a reduction in total remuneration (including fringe benefits,
unless any such fringe benefit is withdrawn from all other
executives of the Company);
(vi) a relocation of the Executive's principal place of
employment to a location outside of Dade or Broward County;
(vii) the performance of any other act by the Company which is
designed to prevent and does prevent the Executive from properly
performing the authorities, duties and responsibilities of her
employment.
The Executive's resignation for Good Reason entitles the
Executive to payment by the Company of eighteen (18) months' Base
Salary then in effect; provided that if the Executive resigns as
a result of (i) or (iv) above the Executive shall be due amounts
as provided in Section 3.4.
In the event the Executive resigns pursuant to (i) or (iv) of
this Section, Executive will be entitled to a Bonus, computed as
provided in Section 2.5 above and prorated according to the
portion of the year employed.
4.RESTRICTIVE COVENANTS
4.1 Non-Compete.
(a) The Executive shall not, while employed by the Company,
directly or indirectly engage in or have any interest in any
business activity that directly or indirectly engages in
competition with the Company; provided, however, that the
Executive may hold and/or acquire, solely as an investment,
shares of capital stock or other securities of any company traded
on any national securities exchange or regularly quoted in the
over-the-counter market, so long as the Executive does not
control or acquire a controlling interest in more than 5% of any
class of capital stock of such corporation.
(b) If the Executive is terminated for Cause or voluntarily
resigns without Good Reason, the Executive shall not, for thirty
(30) months following such termination or resignation, engage in
any business activity which is in direct competition with the
Company; provided, that the Executive shall not be bound by this
Section if the Term of this Agreement is not extended as provided
in Section 1.1.
For purposes of this Agreement, a business activity competitive
with the Company shall include only the operation of restaurants
selling Japanese or other oriental food.
4.2 Nondisclosure. The Executive shall not divulge, communicate,
use to the detriment of the Company or for the benefit of any
other person or persons, or misuse in any way, any "Confidential
Information" pertaining to the business of the Company. For
purposes of this Agreement, Confidential Information means
information, including but not limited to information concerning
the Company's financial condition, technology, customers,
recipes, methods of doing business, marketing and promotion,
disclosed to the Executive or known by the Executive as a
consequence of or through her employment, including information
conceived, originated or developed by the Executive, not
generally known about the Company or its business.
Notwithstanding the foregoing, nothing herein shall be deemed to
restrict the Executive from disclosing Confidential Information
to the extent required by law.
5.MISCELLANEOUS PROVISIONS
5.1 Governing Law. This Agreement is entered into in the State of
Florida and shall be governed pursuant to the laws of the State
of Florida. If any provision of this Agreement shall be held by a
court of competent jurisdiction to be invalid, illegal or
unenforceable, the remaining provisions shall continue to be
fully effective.
5.2 Entire Agreement. This Agreement contains the entire
agreement regarding this subject. This Agreement may be modified
only by means of a written instrument that specifically refers to
this Agreement and that which both the Company and the Executive
sign.
5.3 Notice. Notices or other communications required shall be in
writing and shall be deemed duly given upon receipt by the party
to whom sent at the respective addresses set forth below or to
such other address as any party shall hereafter designate to the
other in writing:
If to the Executive: Xxxxx X. Xxxxxxxx
0000 X. X. 00 Xxx
Xxxxx, XX 00000
If to the Company: Rudy's Restaurant Group, Inc.
00000 Xxxxxxxx Xxxx., Xxxxx 000
Xxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxx,
President
5.4 Successors; Binding Agreement.
(a) The Company will require any Successor, by agreement to
expressly assume and agree to perform this Agreement in the same
manner and to the same extent that the Company would be required
to perform if no such succession had taken place.
For purposes of this Agreement, Successor shall mean any person
(as such term is defined in Section 13(d) and 14(d) of the
Securities Exchange Act of 1934) who (i) directly or indirectly,
in one or more transactions, succeeds by purchase, merger,
consolidation or otherwise, to 50% or more of the business and/or
assets of the Company, or (ii) acquires, in one or more
transactions, direct of indirect control, or otherwise becomes
the "beneficial owner" (as defined in Rule 13D-3 of the
Securities Exchange Act of 1934) of thirty (30%) percent or more
of the combined voting power of the Company's then outstanding
securities.
Failure of the Company to obtain such agreement before the
effectiveness of any such succession shall be a breach of this
Agreement and shall entitle the Executive to terminate her
employment for Good Reason, except that for purposes of
implementing the foregoing, the date on which any such succession
becomes effective shall be deemed the date of termination.
(b) This Agreement and all rights of the Executive hereunder
shall inure to the benefit of and be enforceable by the
Executive's personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and
legatees. If the Executive should die while any amounts would
still be payable to her hereunder if she had continued to live,
all such amounts, unless otherwise provided herein, shall be paid
according to the terms of this Agreement to the Executive's
devisee, legatee, or other designee or, if there be no such
designee, to the Executive's estate.
5.5 Arbitration. Any dispute or controversy arising under or
about this Agreement shall be settled exclusively by binding
arbitration, conducted before a panel of three arbitrators, in
Miami, Florida following the rules of the American Arbitration
Association then in effect. Judgment may be entered on the
arbitrators' award in any court having jurisdiction. All costs of
such arbitration, including without limitation, filing fees and
arbitrators' compensation, and all reasonable attorneys' fees and
costs incurred by both the Company and the Executive in
connection with such arbitration or with the judicial enforcement
of any award, shall be borne exclusively by the Company. The
Company shall pay the Executive for all costs of arbitration as
the Executive incurs such costs. The Company shall bear such
obligation without regard to the eventual disposition of any
arbitration, despite the Executive not being deemed to be the
"prevailing party." Further, the unconditional obligation of the
Company to pay the Executive's attorneys' fees and costs as they
accrue shall be immediately enforceable by temporary, preliminary
and/or permanent injunctive relief issued by a court of competent
jurisdiction, notwithstanding the obligation of the parties to
arbitrate all other disputes arising under this Agreement. In no
event shall attorneys' fees and costs be considered a credit or
set off against any award received by the Executive.
5.6 Indemnification.
(a) To the fullest extent permitted by law and the Company's
Articles of Incorporation and Bylaws (as in effect on the date
hereof), the Company shall indemnify the Executive and hold her
harmless for any acts or decisions ("indemnified Acts") made by
her while performing services for the Company. This
indemnification shall include, but not be limited to,
indemnification for all of the Executive's attorneys' fees and
costs (including paralegal fees) incurred in connection with the
defense of such Indemnified Acts and in connection with any
related appeal including the cost of court settlements.
(b) The rights of the Executive under this Agreement shall be in
addition to any other rights the Executive may have. To the
extent that a change in the law of the State of Nevada (whether
by statute or judicial decision) permits greater indemnification
by agreement than would be afforded currently under the Company's
Articles of Incorporation or Bylaws, to the fullest extent
permitted by law, it is the intent of the parties that the
Executive shall enjoy by this Agreement the greater benefits so
afforded by such change immediately upon the occurrence of such
change without further action by the Company or the Executive.
IN WITNESS WHEREOF, the parties have executed this Agreement as
of the date and year first above written.
RUDY'S RESTAURANT GROUP, INC.
By: /s/ XXXXXXX X. XXXXXXX
-------------------------
Name: XXXXXXX X. XXXXXXX
Title: PRESIDENT
Attest:
By: /s/ XXXXX X. XXXXXXXX
EXECUTIVE:
/s/ XXXXX X. XXXXXXXX
--------------------------
XXXXX X. XXXXXXXX
