OS RESTAURANT SERVICES, INC. AMENDED AND RESTATED OFFICER EMPLOYMENT AGREEMENT
Exhibit 10.16
OS
RESTAURANT SERVICES, INC.
AMENDED
AND RESTATED OFFICER EMPLOYMENT AGREEMENT
THIS
AMENDED AND RESTATED EMPLOYMENT AGREEMENT (the “Agreement”) is made and entered
into effective May 1, 2002, by and
among A. XXXXXXX XXXXX, III, whose address is 00 Xxxxxx Xxxx, Xxxxxxx Xxxxx, XX
00000
(hereinafter referred to as “Employee”),
OS RESTAURANT SERVICES, INC., a Delaware corporation having its principal office
at 0000 X. Xxxx Xxxxx Xxxxxxxxx, 0xx Xxxxx,
Xxxxx, Xxxxxxx 00000 (hereinafter
referred to as the
“Employer”), OS PRIME, INC., a Florida corporation (“Prime”) and OS PACIFIC,
INC., a Florida corporation (“Pacific”), each having its principal office at
0000 X. Xxxx Xxxxx Xxxxxxxxx, 0xx Xxxxx,
Xxxxx, Xxxxxxx 00000 (Prime and Pacific are sometimes each referred to as a
“Company” and collectively as the “Companies”).
W I T N E
S S E T H:
This
Agreement is made and entered into under the following
circumstances:
A. WHEREAS,
the Companies and the Employer are affiliates of Outback Steakhouse, Inc.
(“OSI”); and
B. WHEREAS,
Prime is a member of Outback/Fleming’s, LLC (the “LLC”) and Pacific is a partner
in Roy’s/Outback Joint Venture (the “Joint Venture”); and
C. WHEREAS,
the Companies, the LLC and the Joint Venture are engaged in the business of
owning and operating premium brand restaurants known as “Xxxxxxx’x Prime
Steakhouse and Wine Bar®” and “Roy’s®” utilizing restaurant operating systems
and trademarks owned by or licensed to the Companies, the LLC and the Joint
Venture; and
D. WHEREAS,
the Companies, the LLC, the Joint Venture and the Employer are parties to that
certain Master Employment Services Agreement (the “Services Agreement”) dated
effective as of January 1, 2001, pursuant to which the Employer agreed to hire
and lease to the Companies operations employees necessary for the operation of
the Companies’, the LLC’s and the Joint Venture’s restaurants; and
E. WHEREAS,
pursuant to the Services Agreement, the Employer desires, on the terms and
conditions stated herein, to employ Employee and lease Employee to the Companies
as Chief Executive Officer of Premium Brands; and
F. WHEREAS,
the Employee desires, on the terms and conditions stated herein, to be employed
by the Employer and leased to the Companies as Chief Executive Officer of
Premium Brands.
NOW,
THEREFORE, in consideration of the foregoing recitals, and of the premises,
covenants, terms and conditions contained herein, the parties hereto agree as
follows:
1. Employment
and Term.
Subject
to earlier termination as provided for in Section
8 hereof,
the Employer hereby employs the Employee, and the Employee hereby accepts
employment with the Employer, to be leased to the Companies as Chief Executive
Officer of Premium Brands of the Companies for a term commencing on May 1,
2002 and
expiring seven (7) years thereafter (“Term of Employment”). Such
Term of Employment shall be automatically renewed for successive renewal terms
of one (1) year
each
unless either party elects not to renew by giving written notice to the other
party not less than sixty (60) days prior to the start of any renewal
term.
2. Representations
and Warranties. The
Employee hereby represents and warrants to the Employer and the Companies that
the Employee (i) is not subject to any written nonsolicitation
or noncompetition agreement affecting the Employee’s employment with the
Employer and the Companies (other than any prior agreement with either of the
Companies or their affiliates), (ii) is not subject to any written
confidentiality or nonuse/nondisclosure agreement affecting the Employee’s
employment with the Employer and the Companies (other than any prior agreement
with either of the Companies or their affiliates), and (iii) has brought to the
Employer and the Companies no trade secrets, confidential business information,
documents, or other personal property of a prior employer.
Notwithstanding
the foregoing, Employee shall also be permitted to participate in customary
civic and professional activities that will not, in the opinion of the Employer,
materially affect Employee’s performance of his duties hereunder. Employee may
continue to serve on the advisory board of companies in which Employee has
invested (with Employer’s prior written consent as required by Secdtion 10 (a))
as long as the business of such companies is not competitive with that of the
Companies, OSI, or any Affiliate of OSI or the Companies. Employee shall not
serve on the board of directors of any other company without the prior consent
of OSI, which shall not be unreasonably withheld.
3. Duties. As
Chief Executive Officer of Premium Brands for the Companies, the Employee
shall:
(a) diligently
and faithfully perform all of the duties and functions as may be assigned to the
Employee in such capacity by the Board of Directors of the Companies and Chief
Executive Officer of OSI; and
(b) not to
create a situation that results in termination for “cause” as that term is
defined in Section
8 hereof.
The Employee shall be required hereunder to devote one hundred percent (100%) of
the Employee’s full business time and effort to the business affairs of the
Employer and the Companies. The Employee shall be responsible for directly
reporting to the Chief Executive Officer of OSI on all matters for which the
Employee is responsible.
Employee
shall: (i) devote the Employee’s entire business time, attention, and energies
to the business of the Companies
and the
Employer, (ii) faithfully and competently perform the Employee’s duties
hereunder, and (iii) not create a situation constituting Cause as defined in
Section
8. The
Employee shall not, during the term of this Agreement, engage in any other
business activity; provided,
however, that the
Employee shall be permitted to invest the Employee’s personal assets and manage
the Employee’s personal investment portfolio in such a form and manner as will
not require any business services on Employee’s part to any third party
or
conflict with the provisions of Section
10,
Section
11 or
Section 15 hereof,
or conflict with any published policy of the Employer, the Companies or their
affiliates, including but not limited to the xxxxxxx xxxxxxx policy of OSI or
its affiliates.
Notwithstanding
anything to the contrary herein, the parties acknowledge and agree that the
Employee shall at the request of the Employer, during the term of this
Agreement, serve as an
officer of any subsidiary or affiliate of OSI or the Companies. In such
capacity, Employee shall be responsible generally for all aspects of
such
office. All
terms, conditions, rights and obligations of this Agreement shall be applicable
to Employee’s position in such office as though Employee and the subsidiary or
affiliate of OSI or
the Companies had
separately entered into this Agreement, except that the Employee shall not be
entitled
to any
compensation, vacation, fringe benefits, automobile allowance or other
remuneration of any kind whatsoever from such subsidiary or affiliate of
OSI or
the Companies.
4. Compensation.
(a) Salary. During
the Term of Employment, the Employee shall be entitled to an annual base salary
of Three Hundred Thousand Dollars ($300,000) payable in equal biweekly
installments by the Employer, to be reviewed annually by the
Employer.
(b) Bonuses. During
the Term of Employment, the Companies shall pay to the Employee those certain
bonuses described under the headings “Quarterly Bonus Plan”, “Roy’s Existing
Performance Bonus” and “Equity Buyouts” in that certain letter agreement dated
May 16, 2002, by and between the Employee and OSI.
5. Vacation.
Employee
shall be entitled to three (3) weeks paid vacation (selected by Employee, but
subject to the reasonable business requirements of the Companies and the
Employer as determined by Employee’s supervisor) during each full year during
the Term of Employment. Vacation
granted but not used in any year shall be forfeited at the end of such one-year
period and may not be carried over to any subsequent year.
6. Fringe
Benefits.
In
addition to any other rights the Employee may have hereunder, the Employee shall
also be entitled to receive those fringe benefits, including, but not limited
to, complimentary food, life insurance, medical benefits, etc., if any,
as are provided generally to senior executives of the Companies. Employee shall
be added to the Companies’ Director and Officer insurance and indemnification
policies. The Employee shall not be entitled to any benefits of any kind
provided by the Companies to their employees.
7. Expenses.
Subject
to approval by the Chief Financial Officer of OSI and the Employer and
compliance with the OSI’s and the Employer’s policies, the Employee may incur
reasonable expenses on behalf of and in furtherance of the business of the
Companies and the Employer. Upon approval of such expenses by the Chief
Financial Officer, the Companies or the Employer, as applicable, shall promptly
reimburse the Employee for all such expenses upon presentation by the Employee,
from time to time, of appropriate receipts or vouchers for such expenses that
are sufficient in form and substance to satisfy all federal tax requirements for
the deductibility of such expenses by the Companies or the Employer, as
applicable.
8. Termination.
Notwithstanding
the provisions of Section
1 hereof,
the Term of Employment shall terminate prior to the end of the period of time
specified in Section
1,
immediately upon:
(a) The death
of the Employee; or
(b) The
Employee’s Disability during the Term of Employment. For purposes of this
Agreement, the term “Disability” shall mean the inability of the Employee,
arising out of any medically determinable physical or mental impairment, to
perform the services required of the Employee hereunder for a period of ninety
(90) consecutive days; or
(c) The
existence of Cause. For purposes of this Agreement, the term “Cause” shall be
defined as:
(i) the
conviction of or a plea of guilty by the Employee to a felony;
(ii) willful
misrepresentation of material fact by the Employee in connection with the
performance of his duties hereunder;
(iii) failure
of or refusal on the part of the Employee to substantially perform all of his
duties hereunder, which failure or refusal shall not be cured within fifteen
(15) days following (A) receipt by the Employee of a written notice specifying
the factors or events constituting such failure or refusal, and (B) a reasonable
opportunity for the Employee to correct such deficiencies; or
(iv) other
material breach of this Agreement by the Employee, which breach shall not be
cured within fifteen
(15) days
after written notice thereof to the Employee.
(d) At the
election of the Companies, at any time; or
(e) At the
election of the Companies, upon the sale of a majority ownership interest in
either of the Companies or of substantially all of the assets of either of the
Companies; or
(f) At the
election of the Companies, upon the determination to cease the business
operations of either of the Companies; or
At the
election of the Companies, if the LLC shall have ceased development as such term
is defined in Section 8.1 of the LLC’s Operating Agreement.
For all
purposes of this Agreement, termination for Cause shall be deemed to have
occurred in the event of the Employee’s resignation when, because of existing
facts and circumstances, subsequent termination for Cause can be reasonably
foreseen. Termination shall be effective immediately upon Employee’s death and
in all other cases upon the giving of notice to the Employee.
9. Severance.
(a)
General. In the
event of termination of this Agreement pursuant to Section
8, the
Employee or the Employee’s estate, as appropriate, shall be entitled to receive
(in addition to any fringe benefits payable upon death in the case of the
Employee’s death) the base salary provided for herein up to and including the
effective date of termination (the “Termination Effective Date”), prorated on a
daily basis. Except as provided in subsection (b) below, Employee shall not be
entitled to receive any severance compensation.
(b) Severance. In the
event of termination of this Agreement by the Companies pursuant to Section
8(d), Employee
shall receive as severance compensation Employee’s Base Salary provided in
Section
4(a) as of
the Termination Effective Date paid in bi-weekly installments for a period of
one (1) year from the Termination Effective Date.
(c)
Severance
Continuity. Employee
shall not be required to mitigate the amount of severance compensation provided
in Subsection
(b) by
seeking other employment or otherwise nor shall the amount of severance
compensation be reduced by any compensation or other income earned by Employee;
provided, however, the Companies shall be released from any further obligation
to pay severance compensation under Subsection
(b)
immediately upon
Employee’s
violation of any covenant or restriction contained in Section
10, Section 11 or
Section 15.
10. Noncompetition.
(a) During
Term. Except
with the prior written consent of Employer, during the Employee’s employment
with the Employer the Employee shall not, individually or jointly with others,
directly or indirectly, whether for the Employee’s own account or for that of
any other person or entity, engage in or own or hold any ownership interest in
any person or entity engaged in a restaurant business, and the Employee shall
not act as an officer, director, employee, partner, independent contractor,
consultant, principal, agent, proprietor, or in any other capacity for, nor lend
any assistance (financial or otherwise) or cooperation to any such person or
entity.
(b) Post
Term. For a
continuous period of three (3) years commencing on termination of the
Employee’s employment with the Employer, regardless of any termination pursuant
to Section
8 or any
voluntary termination or resignation by the
Employee, the Employee
shall not, individually or jointly with others, directly or indirectly, whether
for the
Employee’s own account or for that of any other person or entity, engage in or
own or hold any ownership interest in any person or entity engaged in a
restaurant business with a theme, décor, menu or style of or featured cuisine
the same as or substantially similar to that of any restaurant owned or operated
by the Employer, the Companies, OSI or any of their affiliates, and (i) for
which Employee served as an officer, director, manager or management committee
member and (ii) that is located or intended to be located anywhere within a
radius of thirty (30) miles of any such restaurant owned or operated by the
Employer, the Companies, OSI or any of their affiliates, or any proposed
restaurant to be owned or operated by any of the foregoing, and Employee shall
not act as an officer, director, employee, partner, independent contractor,
consultant, principal, agent, proprietor, or in any other capacity for, nor lend
any assistance (financial or otherwise) or cooperation to, any such person, or
entity. For purposes of this Section
10(b),
Restaurants owned or operated by the Employer, the Companies or OSI shall
include restaurants operated or owned by an affiliate of the Employer, the
Companies or OSI, any successor entity to the Employer, the Companies or OSI,
and any entity in which the Employer, the Companies, OSI or any of their
affiliates has an interest, including but not limited to, an interest as a
franchisor. The term “proposed restaurant” shall include all locations for which
the Employer, the Companies, OSI, or their franchisees or affiliates is
conducting active, bona fide negotiations to secure a fee or leasehold interest
with the intention of establishing a restaurant thereon.
(c) Limitation.
Notwithstanding subsections
(a) and
(b), it
shall not be a violation of this Section
10 for
Employee to own a one percent (1%) or smaller interest in any corporation
required to file periodic reports with the Securities and Exchange Commission
pursuant to the Securities Exchange Act of 1934, as amended, or successor
statute.
11. Nondisclosure;
Nonsolicitation; Nonpiracy.
Except in
the performance of Employee’s duties hereunder, at no time during the Term of
Employment, or at any time thereafter, shall Employee, individually or jointly
with others, for the benefit of Employee or any third party, publish, disclose,
use, or authorize anyone else to publish, disclose, or use, any secret or
confidential material or information relating to any aspect of the business or
operations of the Employer, the Companies, OSI or their affiliates, including,
without limitation, any secret or confidential information relating to the
business, customers, trade or industrial practices, trade secrets, technology,
recipes or know-how of any of the Employer, the Companies, OSI or their
affiliates. Moreover, during the Employee’s employment with the Companies
and
for two
(2) years thereafter, Employee shall not offer employment to any employee of the
Employer, the Companies, OSI, their franchisees or affiliates, or otherwise
solicit or induce any employee of the Employer, the Companies, OSI, their
franchisees or affiliates to terminate their employment, nor shall Employee act
as an officer, director, employee, partner, independent contractor, consultant,
principal, agent, proprietor, owner or part owner, or in any other capacity, for
any person or entity that solicits or otherwise induces any employee of the
Employer, the Companies, OSI, their franchisees or affiliates to terminate their
employment.
12. Employer
or Companies Property: Employee Duty to Return. All
Employer or Companies products, recipes, product specifications, training
materials, employee selection and testing materials, marketing and advertising
materials, special event, charitable and community activity materials, customer
correspondence, internal memoranda, products and designs, sales information,
project files, price lists, customer and vendor lists, prospectus reports,
customer or vendor information, sales literature, territory printouts, call
books, notebooks, textbooks, and all other like information or products,
including all copies, duplications, replications, and derivatives of such
information or products, now in the possession of Employee or acquired by
Employee while in the employ of the Employer or the Companies, shall be the
exclusive property of the Employer and the Companies and shall be returned to
the Employer or the Companies no later than the date of Employee’s last day of
work with the Employer or the Companies.
13. Inventions,
Ideas, Processes, and Designs. All
inventions, ideas, recipes, processes, programs, software, and designs
(including all improvements) (i) conceived or made by Employee during the course
of Employee’s employment with the Employer or the Companies (whether or not
actually conceived during regular business hours) and for a period of six (6)
months subsequent to the termination or expiration of such employment and (ii)
related to the business of the Employer or the Companies, shall be disclosed in
writing promptly to the Employer and the Companies and shall be the sole and
exclusive property of the Employer and the Companies. An invention, idea,
recipe, process, program, software or design (including an improvement) shall be
deemed “related to the business of the Employer or the Companies” if (a) it was
made with equipment, supplies, facilities, or confidential information of the
Employer or the Companies, (b) results from work performed by Employee for the
Employer or the Companies, or (c) pertains to the current business or
demonstrably anticipated research or development work of the Employer or the
Companies. Employee shall cooperate with the Employer and the Companies and
their attorneys in the preparation of patent and copyright applications for such
developments and, upon request, shall promptly assign all such inventions,
ideas, recipes, processes, and designs to the Employer or the Companies. The
decision to file for patent or copyright protection or to maintain such
development as a trade secret shall be in the sole discretion of the Employer
and the Companies, and Employee shall be bound by such decision. Employee shall
provide, on the back of this Employment Agreement, a complete list of all
inventions, ideas, recipes, processes, and designs if any, patented or
unpatented, copyrighted or non-copyrighted, including a brief description, that
the Employee made or conceived prior to Employee’s employment with the Employer
and the Companies and that therefore are excluded form the scope of this
Agreement.
14. Employer’s
and Companies’ Promise to Give Employee Trade Secrets and
Training. In
return for Employee’s agreement not to use or disclose Employer’s or the
Companies’ trade secrets, training, systems and confidential proprietary
business methods, Employer and the Companies unconditionally promise to give
Employee within ninety (90) days of the signing of this contract trade secrets,
specialized training and other confidential proprietary business
methods.
Specifically,
Employer and the Companies unconditionally promise to give Employee one-on-one
training from executives, trainers and senior employees of Employer, the
Companies or their affiliates.
Further,
the training will include training and information concerning procedures and
confidential proprietary methods Employer and the Companies use to obtain and
retain business from their customer base, operations in Employer’s and the
Companies’ home office, marketing and sales techniques, and information
regarding the confidential information listed in Section
13(b) of this
Agreement. Further, after the ninety (90) days, as Employer and the Companies
develop (during Employee’s employment with Employer) additional trade secrets,
employee surveys and analyses, financial data and other confidential proprietary
business methods and overall marketing plans and strategies, Employer and the
Companies promise to continue to provide, on a periodic basis, said confidential
information and additional training and analysis from their executives, trainers
and/or senior employees to Employee for so long as Employee is employed by
Employer as Chief Executive Officer of Premium Brands.
15. Employee’s
Promise Not to Disclose Trade Secrets and Confidential
Information. Employee
understands and agrees that Employer and the Companies will provide unique and
specialized training and confidential information concerning Employer’s and the
Companies’ business operations, including, but not limited to, recipes, product
specifications, restaurant operating techniques and procedures, marketing
techniques and procedures, financial data, processes, vendors and other
information that was developed and maintained at considerable effort and expense
to Employer and the Companies, for the Employer’s and the Companies’ sole and
exclusive use, and which if used by the Employer’s or the Companies’ competitors
would give them an unfair business advantage. Employee believes the
unconditional promise to provide said information is sufficient consideration
for Employee’s promise to adhere to the restrictive covenants of Section
10, Section 11, Section 13 and Section 15 of this
Agreement.
16. Restrictive
Covenants: Consideration; Non-Estoppel; Independent Agreements; and
Non-Executory Agreements.
The
restrictive covenants of
Section 10, Section 11, Section 13 and Section 15 of this
Agreement are given and made by Employee to induce the Employer to employ the
Employee and to enter into this Agreement with the Employee, and Employee hereby
acknowledges that employment with the Employer is sufficient consideration for
these restrictive covenants.
The
restrictive covenants of Section
10, Section 11, Section 13 and Section 15 of this
Agreement shall be construed as agreements independent of any other provision in
this Agreement, and the existence of any claim or cause of action of Employee
against the Employer or the Companies, whether predicated upon this Agreement or
otherwise, shall not constitute a defense to the enforcement of any restrictive
covenant. The Employer and the Companies have fully performed all obligations
entitling them to the restrictive covenants of Section
10, Section 11, Section 13 and Section 15 of this
Agreement, and those restrictive covenants therefore are not executory or
otherwise subject to rejection under the Bankruptcy Code.
The
refusal or failure of the Employer or the Companies to enforce any restrictive
covenant of Section
10, Section 11, Section 13 or Section 15 of this
Agreement (or any similar agreement) against any other employee, agent, or
independent contractor, for any reason, shall not constitute a defense to the
enforcement by the Employer or the Companies of any such restrictive covenant,
nor shall it give rise to any claim or cause of action by Employee against the
Employer or the Companies.
17. Reasonableness
of Restrictions; Reformation; Enforcement. The
parties hereto recognize and acknowledge that the geographical and time
limitations contained in Section
10, Section 11, Section 13 and Section 15 hereof
are reasonable and properly required for the adequate protection of the
Companies’ and the Employer’s interests. Employee acknowledges that the
Companies is the owner or the licensee of the Xxxxxxx’x Prime Steakhouse and
Wine Bar® and Roy’s® trademarks, and the owner or the licensee of the Xxxxxxx’x
Prime Steakhouse and Wine Bar® and Roy’s® restaurant operating systems and will
provide to Employee training in and confidential information concerning the
Xxxxxxx’x Prime
Steakhouse
and Wine Bar® and Roy’s® restaurant operating systems in reliance on the
covenants contained in Section
10, Section 11, Section 13 and Section 15 hereof.
It is agreed by the parties hereto that if any portion of the restrictions
contained in Section
10, Section 11, Section 13 or Section 15 are held
to be unreasonable, arbitrary, or against public policy, then the restrictions
shall be considered divisible, both as to the time and to the geographical area,
with each month of the specified period being deemed a separate period of time
and each radius mile of the restricted territory being deemed a separate
geographical area, so that the lesser period of time or geographical area shall
remain effective so long as the same is not unreasonable, arbitrary, or against
public policy. The parties hereto agree that in the event any court of competent
jurisdiction determines the specified period or the specified geographical area
of the restricted territory to be unreasonable, arbitrary, or against public
policy, a lesser time period or geographical area that is determined to be
reasonable, nonarbitrary, and not against public policy may be enforced against
Employee. If Employee shall violate any of the covenants contained herein and if
any court action is instituted by the Companies or the Employer to prevent or
enjoin such violation, then the period of time during which the Employee’s
business activities shall be restricted, as provided in this Agreement, shall be
lengthened by a period of time equal to the period between the date of the
Employee’s breach of the terms or covenants contained in this Agreement and the
date on which the decree of the court disposing of the issues upon the merits
shall become final and not subject to further appeal.
In the
event it is necessary for the Companies or the Employer to initiate legal
proceedings to enforce, interpret or construe any of the covenants contained in
Section
10, Section 11, Section 13 or Section 15 hereof,
the prevailing party in such proceedings shall be entitled to receive from the
non-prevailing party, in addition to all other remedies, all costs, including
reasonable attorneys’ fees, of such proceedings including appellate
proceedings.
18. Specific
Performance.
Employee
agrees that a breach of any of the covenants contained in Section
10, Section 11, Section 13 or Section 15 hereof
will cause irreparable injury to the Companies and the Employer for which the
remedy at law will be inadequate and would be difficult to ascertain and
therefore, in the event of the breach or threatened breach of any such
covenants, the Companies and the Employer shall be entitled, in addition to any
other rights and remedies they may have at law or in equity, to obtain an
injunction to restrain Employee from any threatened or actual activities in
violation of any such covenants. Employee hereby consents and agrees that
temporary and permanent injunctive relief may be granted in any proceedings that
might be brought to enforce any such covenants without the necessity of proof of
actual damages, and in the event the Companies or the Employer does apply for
such an injunction, Employee shall not raise as a defense thereto that the
Companies or the Employer has an adequate remedy at law.
19. Restriction
on Transfer.
The
parties acknowledge that AWA III STEAKHOUSES, INC., a California corporation
(“AWA”) is the owner of a membership interest in the LLC (“LLC Interest”).
Employee is the majority shareholder of AWA. Employee acknowledges that he is
familiar with, and has agreed to, the restrictions on transfer, purchase options
and rights of first refusal concerning the LLC Interests that are provided in
the Operating Agreement of the LLC. Employee and AWA hereby covenant and agree
that Employee and/or AWA shall not nor will Employee permit AWA to: sell,
assign, convey, give, transfer, pledge, hypothecate or otherwise alienate,
dispose of or encumber, voluntarily or by operation of law, any LLC Interest or
capital stock of AWA, now owned or hereafter acquired, or any right, title or
interest therein, during the period of the purchase options and right of first
refusal contained in the Operating Agreement of the LLC or in this Employment
Agreement.
20. Purchase
and Put Options.
(a) Purchase
Option. In the
event Employee’s employment with Employer is terminated (i) pursuant to
Section
8(c) (Cause),
or (ii) by Employee ceasing or resigning his employment, then, in either such
event Prime shall have the exclusive right and option to purchase all LLC
Interests now owned or hereafter acquired by Employee or AWA upon the terms and
conditions (“Purchase Option”) listed in Subsection
(c)
hereof.
(b) Put
Option. In the
event Employee’s employment with the LLC is terminated by the LLC pursuant to
Section
8(d), then,
in such event, AWA shall have the right and option to require Prime to purchase
all LLC Interests now owned or hereafter acquired by Employee or AWA, upon the
terms and conditions (“Put Option”) listed in Subsection
(c)
hereof.
(c) Terms
and Conditions.
(i) The
Purchase Option or Put Option may be exercised by Prime or AWA, as applicable,
at any time during a ninety (90) day period commenc-ing upon the termination of
Employee’s employment with the Employer as described in Subsections
(a) and (b)
above.
(ii) The
Purchase Option or Put Option shall be exercised by giving written notice
thereof (“Option Notice”) in accordance with the notice provisions hereof. The
date of mailing of the Option Notice shall be the date of exercise. The Option
Notice shall specify a date and a place for closing of the purchase, which date
shall not be more than sixty (60) days after the date of exercise, subject to
extension for determination of final purchase price.
(iii) The
effective date of the purchase pursuant to the Purchase Option or Put Option
shall be the date of termination of the Employee’s employment with the Employer
(the “Termination Date”) and AWA’s right to distributions from the LLC shall
cease on the Termination Date.
(iv) The
purchase price to be paid by Prime for the LLC Interests purchased shall be
calculated as follows:
(A) the
initial purchase price shall be equal to the LLC’s annualized after tax net
income with respect to all Xxxxxxx’x Prime Steakhouse restaurants owned by the
LLC (“Restaurants”) and open for eighteen (18) months or more on the date of
exercise of the option, for the twelve (12) months immediately preceding
exercise of the purchase or put option, calculated in accordance with generally
accepted accounting principals (“GAAP”) (assuming a tax rate equal to OSI’s tax
rate) multiplied by the percentage ownership in the LLC represented by LLC
Interest purchased by Prime and multiplied by seventy five percent (75%) of
OSI’s pro forma price/earnings multiple for the twelve (12) months immediately
following the exercise of the purchase or put option; provided, however, the
purchase price shall not be less than five (5) times the LLC’s annualized
earnings before interest, taxes, depreciation and amortization with respect to
all Restaurants open for eighteen (18) months or more, for the twelve (12)
months immediately preceding the exercise of the purchase or put option,
calculated in accordance with GAAP, multiplied by the percentage of ownership in
the LLC represented by the LLC Interest purchased; and
(B) the
final purchase price shall be equal to the LLC’s annualized after tax net
income, with respect to any of the LLC’s Restaurants opened for business prior
to the date of exercise of the Option, but open for less than eighteen (18)
months on the date of exercise of the option, for the twelve (12) months
immediately preceding the Valuation Date (as defined below), calculated in
accordance with GAAP (assuming a tax rate equal to OSI’s tax rate) multiplied by
the percentage of ownership in the LLC represented by the LLC Interest purchased
by Prime and multiplied by seventy five percent (75%) of OSI’s pro forma
price/earnings multiple for the twelve (12) months immediately following the
Valuation Date; provided, however, the purchase price shall not be less than
five (5) times the LLC’s annualized earnings before interest, taxes,
depreciation and amortization with respect to any of the LLC’s Restaurant opened
for business prior to the date of exercise of the option, but open for less than
eighteen (18) months on the date of exercise of the option, for the twelve (12)
months immediately preceding the Valuation Date, calculated in accordance with
GAAP, multiplied by the percentage of ownership in the LLC represented by the
LLC Interest purchased. For the purposes hereof, the “Valuation Date” shall be
the date on which the LLC’s last Restaurant, that was open on the date of
exercise of the option, has been open for eighteen (18) months.
(C) In
determining OSI’s pro forma price/earnings multiple for the following twelve
months, (i) OSI’s price shall be equal to the weighted average (based on volume)
of OSI’s common stock closing price on the NASDAQ National Market System for the
thirty (30) trading days immediately preceding exercise of the purchase or put
option or the Valuation Date, as applicable, and (ii) OSI’s earnings for the
twelve months following exercise of the purchase or put option or the Valuation
Date, as applicable, shall be equal to the consensus earnings per share estimate
for such period as reported by First Call. No purchase price shall be paid for
any Restaurant opened for business after the date of exercise of the
option.
(v) At the
closing of any purchase pursuant to this Section
20, Prime
shall deliver the purchase price to AWA in immediately available funds. Employee
and AWA shall execute and deliver to Prime such documents, affidavits and
instruments of conveyance as are necessary, in the opinion of legal counsel for
Prime, to transfer, convey and validly vest in Prime good, marketable and
absolute title to all of the LLC Interest free and clear of any lien, claim,
pledge, security interest, equities or other encumbrance or interest of any kind
or character whatsoever. All documentary stamps and other costs shall be paid
equally by Prime and Employee.
21. Right
of First Refusal.
If, at
any time after (A) the expiration or termination of Employee’s employment with
the Employer and (B) expiration or termination of the Purchase Option and Put
Option contained in Section
20 hereof,
Employee or AWA desires to transfer any LLC Interest, Employee and AWA shall,
prior to any such transfer, give Prime written notice of such desire (“Transfer
Notice”), which Transfer Notice shall specify the LLC Interest to be
transferred, the identity of the proposed transferee, the purchase price of the
LLC Interest to be transferred and the terms for payment of said purchase price
(“Purchase Price”). Any purported Transfer Notice that does not comply with the
requirements of this Section
21 shall be
null and void and of no effect hereunder. Upon receipt of a proper
Transfer
Notice, Prime shall have the right to acquire Employee’s and AWA’s entire LLC
Interest or such portion of the LLC Interest as is specified in the Transfer
Notice, on terms identical to the Purchase Price or proportionately identical if
Prime elects to purchase the entire LLC Interest. In the event the Purchase
Price contains terms that Prime cannot reasonably duplicate, Prime shall have
the right to substitute the reasonable cash equivalent
thereof.
(a) Prime
shall exercise the right of first refusal provided herein by mailing written
notice thereof (“Election Notice”) to Employee and AWA within thirty (30) days
of the date of receipt of the Transfer Notice, stating whether Prime has elected
to purchase the entire LLC Interest of Employee and AWA or such portion as was
specified in the Transfer Notice, if less. In the event Prime- fails to mail the
Election Notice to Employee within said thirty (30) day period, Prime’s rights
under this Section 21 shall
lapse [except as provided in Subsection (b)].
(b) The
closing for any purchase hereunder shall be consummated and closed on a date and
at a place designated by Prime in a notice (“Closing Notice”) to AWA, provided
such consummation and closing date shall occur within sixty (60) days from the
date of mailing of the Election Notice. At such closing, Employee and AWA shall
execute and deliver all documents and instruments as are necessary and
appropriate, in the opinion of counsel for Prime, to effectuate the transfer of
the LLC Interest to Prime in accordance with the terms of the Transfer Notice
and Prime shall deliver the Purchase Price to AWA hereunder in immediately
available funds. In the event Employee has any outstanding debts to Prime, such
debts, including any accrued interest, shall be repaid from the Purchase Price
at closing. In the event Prime does not elect pursuant to the provisions herein
to exercise its rights specified herein, or in the event the closing for any
purchase pursuant to the provisions herein does not occur within the time limits
specified herein, then AWA shall be free to transfer the exact portion of its
LLC Interest as was specified in the Transfer Notice to the person or entity
identified in the Transfer Notice in exchange for the exact Purchase Price as
was specified in the Transfer Notice, provided, however, that the closing and
consummation of such transfer shall occur within one hundred thirty (130) days
after the date of mailing of the Transfer Notice. In the event such transfer is
not so closed and consummated within such period, the purchase option granted to
Prime herein shall again be exer-cisable and Employee shall make no Transfer of
any portion of his Interest, or any right, title or interest therein, until he
has again complied with all terms and provisions of this Section 21.
22. Assignability.
This
Agreement and the rights and duties created hereunder, shall not be assignable
or delegable by Employee. The Employer and the Companies shall have the right,
without Employee’s knowledge or consent, to assign this Agreement, in whole or
in part and any or all of the rights and duties hereunder, including but not
limited to the restrictive covenants of Section
10, Section 11, Section 13, Section 15 and
Section
16 hereof
to any person, including but not limited to any affiliate of the Employer, the
Companies, any affiliate of the Companies, or any successor to the Companies’
interest in the Xxxxxxx’x Prime Steakhouse and Wine Bar® and Roy’s® restaurants,
and Employee shall be bound by such assignment. Any assignee or successor may
enforce any restrictive covenant of this Agreement.
23. Effect
of Termination.
The
termination of this Agreement, for whatever reason, or the expiration of this
Agreement shall not extinguish those obligations of Employee specified in
Section
10, Section 11, Section 13, Section 15 and
Section
16 hereof.
The restrictive covenants of Section
10, Section 11, Section 13, Section 15 and
Section
16 shall
survive the termination or expiration of this Agreement. The termination or
expiration of this Agreement shall extinguish the right of any party to bring an
action, either in law or in equity, for breach of this Agreement by any other
party.
24. Captions;
Terms.
The
captions of this Agreement are for convenience only, and shall not be construed
to limit, define, or modify the substantive terms hereof.
25. Acknowledgments.
Employee hereby acknowledges that the Employee has been provided with a copy of
this Agreement for review prior to signing it, that the Employee has been given
the opportunity to have this Agreement reviewed by Employee’s attorney prior to
signing it, that the Employee understands the purposes and effects of this
Agreement, and that the Employee has been given a signed copy of this Agreement
for Employee’s own records.
26. Notices.
All
notices or other communications provided for herein to be given or sent to a
party by the other party shall be deemed validly given or sent if in writing and
mailed, postage prepaid, by certified United States mail, return receipt
requested, addressed to the parties at their addresses hereinabove set forth.
Any party may give notice to the other party at any time, by the method
specified above, of a change in the address at which, or the person to whom,
notice is to be addressed.
27. Severability.
Each
section, subsection, and lesser Section of this Agreement constitutes a separate
and distinct undertaking, covenant, or provision hereof. In the event that any
provision of this Agreement shall be determined to be invalid or unenforceable,
such provision shall be deemed limited by construction in scope and effect to
the minimum extent necessary to render the same valid and enforceable, and, in
the event such a limiting construction is impossible, such invalid or
unenforceable provision shall be deemed severed from this Agreement, but every
other provision of this Agreement shall remain in full force and
effect.
28. Waiver.
The
failure of a party to enforce any term, provision, or condition of this
Agreement at any time or times shall not be deemed a waiver of that term,
provision, or condition for the future, nor shall any specific waiver of a term,
provision, or condition at one time be deemed a waiver of such term, provision,
or condition for any future time or times.
29. Parties.
This
Agreement shall be binding upon, and shall inure to the benefit of, the parties
hereto and their legal representatives, and proper successors or assigns, as the
case may be.
30. Governing
Law.
The
validity, interpretation, and performance of this Agreement shall be governed by
the laws of the State of Florida without giving effect to the principles of
comity or conflicts of laws thereof.
31. Consent
to Personal Jurisdiction and Venue.
Employee
hereby consents to personal jurisdiction and venue, for any action brought by
the Employer or the Companies arising out of a breach or threatened breach of
this Agreement or out of the relationship established by this Agreement,
exclusively in the United States District Court for the Middle District of
Florida, Tampa Division, or in the Circuit Court in and for Hillsborough County,
Florida; Employee hereby agrees that any action brought by Employee, alone or in
combination with others, against the Employer or the Companies, whether arising
out of this Agreement or otherwise, shall be brought exclusively in the United
States District Court for the Middle District of Florida, Tampa Division, or in
the Circuit Court in and for Hillsborough County, Florida.
32. Affiliate.
Whenever
used in this Agreement, the term “affiliate” shall mean, with respect to any
entity, all persons or entities (i) controlled by the entity, (ii) that control
the entity, or (iii) that are under common control with the
entity.
33. Cooperation.
Employee shall cooperate fully with all reasonable requests for information and
participation by the Employer or the Companies, their agents, or their
attorneys, in prosecuting or defending claims, suits, and disputes brought on
behalf of or against one or both of them and in which Employee is involved or
about which Employee has knowledge.
34. Amendments. No
change, modification, or termination of any of the terms, provisions, or
conditions of this Agreement shall be effective unless made in writing and
signed or initialed by all signatories to this Agreement.
35. WAIVER
OF JURY TRIAL.
ALL
PARTIES TO THIS AGREEMENT KNOW AND UNDERSTAND THAT THEY HAVE A CONSTITUTIONAL
RIGHT TO A JURY TRIAL. THE PARTIES ACKNOWLEDGE THAT ANY DISPUTE OR CONTROVERSY
THAT MAY ARISE OUT OF THIS AGREEMENT WILL INVOLVE COMPLICATED AND DIFFICULT
FACTUAL AND LEGAL ISSUES.
THE
PARTIES HEREBY WAIVE ANY RIGHT TO TRIAL BY JURY IN ANY PROCEEDING ARISING OUT OF
OR RELATING TO THIS AGREEMENT OR ANY OF THE CONTEMPLATED TRANSACTIONS, WHETHER
NOW EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT, TORT OR
OTHERWISE. THE PARTIES AGREE THAT ANY OF THEM MAY FILE A COPY OF THIS PARAGRAPH
WITH ANY COURT AS WRITTEN EVIDENCE OF THE KNOWING, VOLUNTARY AND BARGAINED-FOR
AGREEMENT AMONG THE PARTIES IRREVOCABLY TO WAIVE TRIAL BY JURY AND THAT ANY
PROCEEDING WHATSOEVER BETWEEN THEM RELATING TO THIS AGREEMENT OR ANY OF THE
CONTEMPLATED TRANSACTIONS SHALL INSTEAD BE TRIED IN A COURT OF COMPETENT
JURISDICTION BY A JUDGE SITTING WITHOUT A JURY.
THE
PARTIES INTEND THIS WAIVER OF THE RIGHT TO A JURY TRIAL BE AS BROAD AS POSSIBLE.
BY THEIR SIGNATURES BELOW, THE PARTIES PROMISE, WARRANT AND REPRESENT THAT THEY
WILL NOT PLEAD FOR, REQUEST OR OTHERWISE SEEK TO HAVE A JURY TO RESOLVE ANY AND
ALL DISPUTES THAT MAY ARISE BY, BETWEEN OR AMONG THEM.
36. Entire
Agreement; Counterparts.
This
Agreement and the agreements referred to herein constitute the entire agreement
between the parties hereto concerning the subject matter hereof, and supersede
all prior memoranda, correspondence, conversations, negotiations and agreements.
This Agreement may be executed in several identical counterparts that together
shall constitute but one and the same Agreement.
IN
WITNESS WHEREOF, the undersigned have executed this Agreement as of the date
first written above.
|
“EMPLOYEE” |
|||
|
_____________________________ |
________________________________ |
||
|
Witness |
A.
XXXXXXX XXXXX, III |
||
|
_____________________________ |
|||
|
Witness |
|||
|
“EMPLOYER” |
|||
|
Attest: |
OS
RESTAURANT SERVICES, INC.,
Delaware corporation |
||
|
By:____________________________ |
By:____________________________ |
||
|
XXXXXX X. XXXXX, Secretary |
XXXXXX X. XXXXXXX,
Senior
Vice President |
||
|
“COMPANIES” |
|||
|
Attest: |
OS
PRIME, INC., a Florida corporation |
||
|
By:____________________________ |
By:____________________________ |
||
|
XXXXXX X. XXXXX, Secretary |
XXXXXX X. XXXXXXX,
Senior
Vice President |
||
|
Attest: |
OS
PACIFIC, INC., a Florida corporation |
||
|
By:____________________________ |
By:____________________________ |
||
|
XXXXXX X. XXXXX, Secretary |
XXXXXX X. XXXXXXX,
Senior
Vice President |
||
JOINDER
OF AWA
AWA III
Steakhouses, Inc., a California corporation (“AWA”) hereby agrees to be bound
by, perform and comply with all restrictions, agreements, covenants and
obligations applicable to AWA contained in Section
13, Section 14 and Section 15 of this
Agreement.
|
Attest: |
AWA
III STEAKHOUSES, INC. |
||
|
By:____________________________ |
By:____________________________ |
||
|
Secretary |
A. Xxxxxxx Xxxxx III, President |
||
