EMPLOYMENT AGREEMENT
Exhibit
10.1
This
Employment Agreement is entered into on November 6, 2007 with an effective
date
of May 31st,
2007
("Agreement"), by and between NATHAN’S FAMOUS, INC., a corporation incorporated
under the laws of the State of Delaware, with its principal place of business
at
0000 Xxx Xxxxxxx Xxxx, Xxxxxxxx, Xxx Xxxx 00000 (the "Company"), and Xxxxxx
X.
Xxxxxx, residing at 0000 Xxxxxxxxx Xxx, Xxxxxx Xxxxx, Xxxxxxx 00000 (the
"Executive").
WITNESSETH
:
WHEREAS,
the Company desires to employ the Executive and to receive certain services
from
him, and the Executive is willing to be employed and to render such services
to
the Company, all upon the terms and subject to the conditions contained
herein.
NOW,
THEREFORE, in consideration of the mutual covenants and agreements contained
herein, and other good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, the parties agree as follows:
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1. Recitals:
The
foregoing recitals are true and correct and are incorporated herein by reference
thereto.
2. Employment.
The
Company hereby agrees to employ Executive, and Executive agrees to be employed
by the Company, on the terms and conditions herein contained, to serve as the
Executive Vice President of the Company and a member of the Board of Directors
of the Company. Executive shall report to Company’s President and Chief
Operating Officer (or such other person as shall be determined by the Board
of
Directors of Company). Executive’s responsibilities shall include the continued
development of Company’s Branded Products Program and its international
franchising program, as well as to render such services in connection with
Company’s (or any of its affiliate’s) business as the Company’s Board of
Directors shall reasonably require from time to time. The Executive shall devote
substantially all of his business time, energy, skill and efforts to the
performance of his duties hereunder and shall faithfully and diligently serve
the Company. The foregoing shall not prevent Executive from participating in
not-for-profit activities or from managing his passive personal investments
provided that these activities do not materially interfere with Executive's
obligations hereunder.
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3. Term
of Employment.
Executive's
employment under this Agreement shall be for a term commencing on May 31, 2007
(the "Effective Date") and, subject to earlier termination as provided in
Section 8 below, terminating on September 30, 2008 (the "Initial Term"). The
Initial Term shall be automatically extended for successive one-year periods
(the "Additional Terms") unless terminated at the end of the Initial Term or
any
Additional Term by either party upon one hundred eighty (180) days’ prior
written notice given to the other party (the Initial Term and any Additional
Terms shall be referred to as the "Employment Term"). Notwithstanding anything
else herein, the provisions of Section 9 hereof shall survive and remain in
effect notwithstanding the termination of the Employment Term.
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4. Compensation.
(a) As
compensation for his services under this Agreement, the Company shall pay
Executive a salary at the rate of Two Hundred Ten Thousand Dollars ($210,000)
per year (the "Base Salary"), payable in equal installments (not less frequently
than monthly) and subject to withholding in accordance with the Company's normal
payroll practices. The Executive's Base Salary shall be reviewed annually by
the
Company and may be increased, but not decreased, in the Company's sole
discretion.
(b) In
addition to the Base Salary, Executive shall participate in any executive bonus
program established by the Company from time to time.
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5. Benefits
and Fringes.
During
the Employment Term, Executive shall be entitled to such benefits and fringes,
if any, as are generally provided from time to time by the Company to its
executive employees of a comparable level, including any life, medical or dental
insurance plans for the benefit of Executive and members of his immediate
family, and pension, profit-sharing, 401(k) and other similar plans and on
the
same terms as so provided. Notwithstanding the foregoing, the Executive shall
be
provided with long-term disability insurance providing for payment of a minimum
monthly benefit of $6,896 and with life insurance, payable to his designated
beneficiary, at least equal to $1,000,000; and provided, further that Executive
shall be provided with an automobile allowance of $1,000 per month during the
Employment Term.
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6. Expenses.
The
Company shall reimburse Executive in accordance with its expense reimbursement
policy as in effect from time to time for all reasonable expenses (including,
without limitation, Executive’s professional dues, license fees, continuing
educational courses, professional association membership fees, airplane travel
and other travel expenses and reasonable expenses related to the repair and
maintenance of the automobile used by him for business purposes) incurred by
Executive in connection with the performance of his duties under this Agreement
upon the presentation by Executive of an itemized account of such expenses
and
appropriate receipts.
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7. Vacation.
During
the Employment Term, Executive shall be entitled to vacation in accordance
with
the Company's practices, provided that Executive shall be entitled to not less
than four (4) weeks paid vacation in each full contract year. Any vacation
not
taken in any year shall be deemed to be forfeited by the Executive as of October
1 of the succeeding year.
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8. Termination.
(a) Executive's
employment under this Agreement and the Employment Term shall terminate as
follows:
(i) automatically
on the date of Executive's death.
(ii) Upon
written notice given by the Company to the Executive if Executive is unable
to
perform his material duties hereunder for 180 days (whether or not continuous)
during any period of 360 consecutive days by reason of physical or mental
disability.
(iii) Upon
written notice by the Company to the Executive for Cause. Cause shall mean
(A)
the Executive's conviction of a felony involving moral turpitude (after
exhaustion or lapse of all rights of appeal); (B) willful refusal to perform
his
duties as Executive Vice President or director of the Company and as otherwise
set forth in Section 2 hereof, which is not remedied promptly after receipt
by
the Executive of written notice from the Company specifying the details thereof;
and (C) Executive's dishonesty in the performance of his duties. Upon a
termination for Cause, Executive (and his representative) shall be given the
opportunity to appear before the Board of Directors of the Company (the “Board”)
to explain why the Executive believes that Cause did not occur. Such appearance
shall be scheduled on no less than twenty (20) and no more than forty (40)
days
written notice to Executive. In the event the Board agrees with the Executive,
which shall be a determination made in its sole discretion, the Executive shall
be retroactively reinstated in his position. The removal pending such Board
meeting shall not be deemed Good Reason under (vi) below.
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(iv) Upon
written notice by the Company without Cause.
(v) Upon
the
voluntary resignation of the Executive without Good Reason upon sixty (60)
days
prior written notice to the Company (which the Company may in its sole
discretion make effective earlier).
(vi) Upon
the
written resignation of the Executive for Good Reason stating with specificity
the details of the Good Reason, if the stated Good Reason is not cured within
thirty (30) days of the giving of such notice. "Good Reason" shall mean (A)
relocation of the Executive's office, or materially change the location at
which
Executive is required to perform his duties, from within the Territory, (B)
any
material reduction in his authority, duties or responsibilities or (C) any
other
material breach of any provision of this Agreement by the Company. For purposes
hereof, "Territory" shall mean Broward, Miami-Dade and Palm Beach Counties,
Florida.
(vii) Upon
written notice of non-renewal by the Company or Executive pursuant to Section
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hereof.
(b) Upon
any
termination of the Employment Term Executive shall be entitled to receive any
unpaid salary and accrued vacation through his date of termination and any
benefits under any benefit plan in accordance with the terms of said plan.
In
addition, (i) if the termination is pursuant to (a)(iv) or (a)(vi) above,
Executive shall receive (without a duty to mitigate) severance pay in a lump
sum
equal to three (3) times the amount of Executive’s Base Salary in effect at the
time of termination, and (ii) if termination is by the Company pursuant to
(a)(vii) above, Executive shall receive (without a duty to mitigate) severance
pay in a lump sum equal to Executive’s Base Salary in effect at the time of
termination. Such lump sum severance payments shall be paid within thirty (30)
and fifteen (15) days, respectively, after the date of termination. In the
event
termination is pursuant to (a)(ii) alone, Executive shall receive in monthly
payments for one (1) year thereafter Executive’s Base Salary in effect at the
time of termination reduced by any disability benefits or worker's compensation
salary replacement he receives from any program sponsored or made available
by
the Company or a governmental entity. In the event of termination other than
pursuant to (a)(i), (a)(iii) or (a)(v), to the extent the Executive or his
dependents are eligible for COBRA coverage, the Company shall pay the cost
of
such coverage for the maximum period permitted under federal law. The Company
shall have no other obligations to the Executive.
9. Confidential
Information and Non-Competition.
(a) Executive
acknowledges that as a result of his employment by the Company, Executive will
obtain secret and confidential information as to the Company and its affiliated
entities, that the Company and its affiliated entities will suffer substantial
damage, which would be difficult to ascertain, if Executive shall enter into
Competition (as defined below) with the Company or any of its affiliated
entities and that because of the nature of the information that will be known
to
Executive it is necessary for the Company and its affiliated entities to be
protected by the prohibition against Competition set forth herein, as well
as
the confidentiality restrictions set forth herein. Executive acknowledges that
the provisions of this Agreement are reasonable and necessary for the protection
of the business of the Company and its affiliated entities and that part of
the
compensation paid under this Agreement is in consideration for the agreements
in
this Section 9.
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(b) Competition
shall mean:
(i) participating,
directly or indirectly, as an individual proprietor, partner, stockholder,
officer, employee, director, joint venturer, investor, lender, consultant or
in
any capacity whatsoever (A) in the State of Florida or New York in a business
in
competition with the quick-service restaurant business or (B) in the United
States, in a business in competition with the business of selling food products
to the foodservice industry, in each case as conducted by the Company, its
affiliated entities or its licensees during the Employment Term; provided,
however, that such prohibited participation shall not include: (x) the mere
ownership of not more than one percent (1%) of the total outstanding stock
of a
publicly held company; (y) the performance of services for any enterprise to
the
extent such services are not performed, directly or indirectly, for a business
in the aforesaid Competition; or (z) any activity engaged in with the prior
written approval of the Board.
(ii) recruiting,
soliciting or inducing any nonclerical employee or employees of the Company
or
its affiliated entities to terminate their employment with, or otherwise cease
their relationship with, the Company or its affiliated entities or hiring or
assisting another person or entity to hire any nonclerical employee of the
Company or its affiliated entities. Notwithstanding the foregoing, if requested
by an entity with which Executive is not affiliated, Executive may serve as
a
reference for any person who at the time of the request is not an employee
of
the Company or any of its affiliated entities.
If
any
restriction set forth in above items (i) and/or (ii) is found by any court
of
competent jurisdiction, or an arbitrator, to be unenforceable because it extends
for too long a period of time or over too great a range of activities or in
too
broad a geographic area, it shall be interpreted to extend over the maximum
period of time, range of activities or geographic area as to which it may be
enforceable.
(c) During
and after the Employment Term, Executive shall hold in a fiduciary capacity
for
the benefit of the Company and its affiliated entities all secret or
confidential information, knowledge or data relating to the Company and its
affiliated entities, and their respective businesses, including any confidential
information as to customers or vendors of the Company or its affiliated
entities, (i) obtained by Executive during his employment by the Company or
its
affiliated entities; and (ii) not otherwise public knowledge or known within
the
Company's or its affiliated entities’ industries. Executive shall not, without
prior written consent of the Company, unless compelled pursuant to the order
of
a court or other governmental or legal body having jurisdiction over such
matter, communicate or divulge any such information, knowledge or data to anyone
other than the Company and those designated by it. In the event Executive is
compelled by order of a court or other governmental or legal body to communicate
or divulge any such information, knowledge or data to anyone other than the
Company and those designated by it, Executive shall promptly notify the Company
of any such order and shall cooperate fully with the Company in protecting
such
information to the extent possible under applicable law.
(d) Upon
termination of Executive's employment with the Company, or at any other time
as
the Company may request, Executive will promptly deliver to the Company all
documents which Executive may possess or have under his direction or control
(whether prepared by the Company, an affiliated entity, Executive or a third
party) relating to the Company or its affiliated entities or any of their
respective businesses or properties.
(e) During
the Employment Term and for a period of one (1) year following termination
thereof (except for termination pursuant to Section 8(a)(iv) or (vi)), Executive
shall not enter into Competition with the Company or any of its affiliated
entities.
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(f) In
the
event of a breach or potential breach of this Section 9, Executive acknowledges
that the Company and its affiliated entities will be caused irreparable injury
and that money damages may not be an adequate remedy and agree that the
affiliated entities shall be entitled to injunctive relief (in addition to
its
other remedies at law) to have the provisions of this Section 9
enforced.
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10. Executive
Representation.
Executive
represents and warrants that he is under no contractual or other limitation
from
entering into this Agreement and performing his obligations
hereunder.
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11. Indemnification
The
Executive shall be entitled to be indemnified by the Company for his actions
as
an officer, director, employee, agent or fiduciary of the Company or its
affiliated entities to the fullest extent permitted by applicable law and shall,
to the extent the Company does not or is unable as a result of a conflict
between the parties to undertake his defense, have reasonable legal fees
(including, but not limited to, a retainer fee) and other reasonable expenses
paid to him in advance of final disposition of a proceeding, provided that
he
has actually incurred such expenses and he executes an undertaking to repay
such
amounts if, and to the extent, required to do so by applicable law. The Company
shall cover the Executive under any directors’ and officers’ liability insurance
policy to the same extent as its other senior officers.
12. Intentionally
omitted.
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13. Change
of Control.
Upon
a
“Change of Control” (as defined below) of the Company, the Company shall pay
Executive, within thirty (30) days of such event, a lump sum equal to three
(3)
times the amount of his Base Salary in effect at the time of such event,
together with a pro rata portion of the bonus accrued through the date of such
Change of Control. As used herein “Change of Control” means (a) a change in
control as such term is presently defined in Regulation 240.12b-2 under the
Securities Exchange Act of 1934 ("Exchange Act"); or (b) if any "person" (as
such term is used in Section 13(d) and 14(d) of the Exchange Act) (other than
any "person" who on the date of this Agreement is a director or officer of
the
Company), becomes the "beneficial owner" (as defined in Rule 13(d)-3 under
the
Exchange Act), directly or indirectly, of securities of the Company representing
twenty (20%) percent of the voting power of the Company’s then outstanding
securities; or (c) if during any period of two (2) consecutive years during
the
term of Executive's employment, individuals who at the beginning of such period
constitute the Board of Directors of the Company cease for any reason to
constitute at least a majority thereof.
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14. Entire
Agreement; Modification.
This
Agreement constitutes the full and complete understanding of the parties hereto
and will supersede all prior agreements and understandings, oral or written,
with respect to the subject matter hereof between the Executive and the Company
and its current and prior subsidiaries and affiliates. Each party to this
Agreement acknowledges that no representations, inducements, promises or
agreements, oral or otherwise, have been made by either party, or anyone acting
on behalf of either party, which are not embodied herein and that no other
agreement, statement or promise not contained in this Agreement shall be valid
or binding. This Agreement may not be modified or amended except by an
instrument in writing signed by the party against whom or which enforcement
may
be sought.
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15. Severability.
Any
term
or provision of this Agreement which is invalid or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such invalidity or unenforceability without rendering invalid or unenforceable
thc remaining terms and provisions of this Agreement or affecting the validity
or enforceability of any of the terms of provisions of this Agreement in any
other jurisdiction.
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16. Waiver
of Breach.
The
waiver by any party of a breach of any provisions of this Agreement, which
waiver must be in writing to be effective, shall not operate as or be construed
as a waiver of any subsequent breach.
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17. Notices.
All
notices hereunder shall be in writing and shall be deemed to have been duly
given when delivered by hand, or one day after sending by express mail or other
"overnight mail service," or three days after sending by certified or registered
mail, postage prepaid, return receipt requested. Notice shall be sent as
follows: if to Executive, to the address as listed in the Company's records;
and
if to the Company, to the Company at its office as set forth at the head of
this
Agreement, to the attention of its Vice President and Chief Financial Officer.
Either party may change the notice address by notice given as
aforesaid.
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18. Assignability;
Binding Effect.
This
Agreement shall be binding upon and inure to the benefit of Executive and
Executive's legal representatives, heirs and distributees, and shall be binding
upon and inure to the benefit of the Company, its successors and assigns. This
Agreement may not be assigned by the Executive. This Agreement may not be
assigned by the Company except in connection with a merger or a sale by the
Company of all or substantially all of its assets and then only provided the
assignee specifically assumes in writing all of the Company's obligations
hereunder.
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19. Governing
Law.
(a) All
issues pertaining to the validity, construction, execution and performance
of
this Agreement shall be construed and governed in accordance with the laws
of
the State of New York, without giving effect to the conflict or choice of law
provisions thereof.
(b) Any
dispute or controversy with regard to this Agreement, other than injunctive
relief pursuant to Section 9, shall be settled by arbitration in New York,
New
York before the American Arbitration Association ("AAA") in accordance with
the
Rules of Commercial Arbitration of the AAA. The decision of the arbitrators
shall be final and binding upon the parties hereto and may be entered in any
court having jurisdiction. The Company shall advance all of the Executive’s
expenses (including, without limitation, reasonable counsel fees) incurred
in
connection with such arbitration, provided that Executive shall repay the same
in the event he is not, to any extent, the prevailing party.
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20. Headings.
The
headings in this Agreement are intended solely for convenience of reference
and
shall be given no effect in the construction or interpretation of this
Agreement.
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21. Counterparts.
This
Agreement may be executed in several counterparts, each of which shall be deemed
to be an original but all of which together shall constitute one and the same
instrument.
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IN
WITNESS WHEREOF, the Company has caused this Agreement to be duly executed
by an
authorized officer and Executive has hereunto set his hand as of the date first
set forth above.
| NATHAN’S FAMOUS, INC. | ||
| |
|
|
| By: | /s/ Xxxx Xxxxxx | |
|
Name: Xxxx Xxxxxx |
||
| Title: C.E.O. | ||
| /s/ Xxxxxx X. Xxxxxx | ||
|
Xxxxxx X. Xxxxxx |
||
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