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EXHIBIT 10.2
EMPLOYMENT CONTRACT
EMPLOYMENT CONTRACT, dated as of October 1, 1995, between EATERIES,
INC., an Oklahoma corporation (the "COMPANY"), and XXXXX X. XXXXX, an Oklahoma
resident ("XXXXX").
XXXXX currently serves as the Vice President-Operations of the Company
under a year to year Employment Contract dated January 1, 1993 and extended to
December 31, 1995;
The Company desires to enter into a three (3) year Employment Contract
with XXXXX to be effective on January 1, 1996 in substitution of his existing
year to year Employment Agreement and XXXXX desires to accept such Employment
Contract in accordance with the terms and conditions hereinafter set forth.
NOW THEREFORE, XXXXX and the Company, in consideration of the mutual
covenants and promises herein contained do hereby agree as follow:
1. Term. The Company shall employ XXXXX, and XXXXX shall serve
as the Vice President-Operations of the Company, on the terms and conditions of
this Employment Contract for a three (3) year term commencing January 1, 1996,
and ending December 31, 1998, unless extended or terminated earlier as
hereinafter provided. The initial three (3) year Term of this Employment
Contract shall be automatically extended for one (1) additional calendar year
on the 31st day of each December during Term hereof unless XXXXX is given
written notice by the Compensation Committee of the Board of Directors of the
Company sixty (60) days prior to the 31st day of December that the Term is not
to be thus automatically extended for one (1) additional year. If thus
extended each year, then on January 1st of each year, this Employment Contract
shall have three (3) years remaining to the Term hereof.
2. Duties and Services. During the Term hereof XXXXX shall be
employed in the business of the Company as Vice President-Operations and shall
perform such services diligently, faithfully and consistent with the
responsibilities of such positions. In performance of his duties XXXXX shall
report to the Board of Directors of the Company. XXXXX shall be available to
travel as the needs of the business require.
3. Compensation.
(a) Salary. As a compensation for his services
hereunder, the Company shall pay XXXXX, during the Term, a salary
payable in equal bi-weekly installments at the annual rate of
$140,000.00, subject to annual re-evaluation by the Compensation
Committee of the Board of Directors of the Company. The annual
re-evaluation shall be based in part upon the attainment of corporate
objectives mutually agreed upon by XXXXX and the Board of Directors of
the Company. Nothing contained herein shall preclude XXXXX from
participating in future executive bonus plans, pension or profit
sharing, deferred compensation, stock
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option, or other employee benefit plans of the Company, if he meets
the eligibility requirements therefor.
(b) Options. As additional compensation XXXXX has been
granted nonqualified options of Eateries, Inc. XXXXX shall be
entitled to additional grants of nonqualified stock options of
Eateries, Inc. upon approval of the Compensation Committee of the
Board of Directors of the Company.
4. Expenses and Vacation. XXXXX shall be entitled to
reimbursement for reasonable travel and other out-of-pocket expenses
necessarily incurred in the performance of his duties hereunder, upon
submission and approval of written statements and bills in accordance with the
then regular policies and procedures of the Company. XXXXX shall be entitled
to a car allowance payable in equal bi-weekly installments of $235.00
commencing January 1, 1996. XXXXX shall be entitled to reasonable vacations in
accordance with the then regular policies and procedures of the Company
governing executives.
5. Representations and Warranties of XXXXX. XXXXX represents and
warrants to the Company that (a) he is under no contractual or other
restriction or obligation which is inconsistent with the execution of this
Contract, the performance of his duties hereunder, or the other rights of the
Company hereunder and (b) he is under no physical or mental disability that
would hinder his performance of duties under this Employment Contract.
6. Confidential Information. All trade secrets, or other
proprietary or confidential information which XXXXX may now possess, may obtain
during or after the Term hereof, or may create prior to the end of the period
XXXXX is employed by the Company under this Contract or otherwise relating to
the business of the Company or its affiliates shall not be published,
disclosed, or made accessible by him to any other person, firm, or corporation
either during or after the termination of his employment or used by him except
during the Term hereof in the business and for the benefit of the Company.
XXXXX shall return all tangible evidence of such trade secrets, or other
proprietary or confidential information to the Company prior to or at the
termination of his employment. "Trade secrets" shall include, but not be
limited to recipes developed or utilized by the Company, as well as methods of
operations developed and utilized by the Company.
Additionally, during the Term hereof, XXXXX shall not acquire,
directly or indirectly, any interest in any restaurants with concepts similar
to Company restaurants, unless specifically authorized by the Board or
Directors of the Company in writing. Notwithstanding the foregoing, XXXXX
shall not be prevented from owning any securities of any competitor of the
Company which are regularly traded on any national securities exchange or in
the over-the-counter market; provided, that the same shall not result in XXXXX
and his immediate family owning, legally or beneficially, at any time, ten
percent (10%) or more of the voting securities of any such company. In the
event that the provisions of this section should ever be deemed to exceed the
time, geographic or occupational limitations permitted by applicable law, then
such provisions shall be reformed to the maximum time, geographic, or
occupational limitations permitted by applicable law.
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7. Termination. Notwithstanding anything herein contained, if on
or after the date hereof and prior to the end of the Term hereof,
(a) either (i) XXXXX shall be physically or mentally
incapacitated or disabled or otherwise unable fully to discharge his
duties hereunder for a period of six (6) months, (ii) XXXXX shall be
convicted of a felony crime by a court of last resort, (iii) XXXXX
shall commit any act or omit to take any action in bad faith and to
the substantial detriment of the Company, or (iv) XXXXX shall breach
any term of this Contract and such breach shall directly cause a
material adverse impact upon the Company and he shall fail to cure and
correct such breach within ten (10) days after notice to XXXXX by the
Company of the same, or such longer period as may be necessary with
due diligence to cure such breach then, and in each case, the Company
shall have the right to give notice of termination of XXXXX'x services
hereunder as of a date (not earlier than ten (10) days from such
notice in the case of items (ii), (iii) or (iv) and not earlier than
six (6) months from such notice in the case of item (i) to be
specified in such notice and this Agreement shall terminate on the
date so specified; or
(b) XXXXX shall die, then this Employment Contract shall
terminate on the date of XXXXX'x death,
Whereupon XXXXX or his estate, as the case may be, shall be entitled
to receive only his salary at the rate provided in Section 3 to the date on
which termination shall take effect. In the event of XXXXX'x death, his estate
or designated beneficiary shall receive, in addition to the foregoing amount,
an amount equal to two (2) year's salary payable by the Company upon receipt of
the life insurance proceeds of XXXXX'x key man insurance policy, if any and if
not sufficient then within ninety (90) days of XXXXX'x death.
8. Merger, Et Cetera. In the event of a future disposition of
(or including) the properties and business of the Company, substantially as an
entirety, by merger, consolidation, sale of assets, or otherwise, then the
Company may elect:
(a) To assign this Contract and all of its rights and
obligations hereunder to the acquiring of surviving entity; provided
that such entity shall be capable of assuming and performing and shall
assume in writing and perform all of the obligations of the Company
hereunder; provided further that the Company (in the event and so long
as it remains in business as an independent going enterprise) shall
remain liable for the performance of its obligations hereunder in the
event of an unjustified failure of the acquiring entity to perform its
obligations under this Contract; and provided finally that the duties
assigned XXXXX are commensurate with those held prior to the merger
and that a relocation of more than 50 miles from the city limits of
the City of Oklahoma City, is not required to fulfill such duties; or
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(b) In addition to its other rights of termination, to
terminate this Contract upon at least thirty (30) days' written notice
by paying XXXXX one (1) year's salary and car allowance at the rate
provided in Section 3 and 4 on the date which such termination shall
take effect.
9. Liquidation Damages. The parties hereto covenant and agree
that, in the event the Company shall breach the terms of this Employment
Contract or the Contract shall terminate under Section 8 (b), it shall pay to
XXXXX, as liquidated damages for such breach or termination, an amount equal to
that which would have been received by him under Section 3(a) and 4 for then
remaining Term of this Employment Contract, plus reasonable attorneys' fees, if
any. Such amount shall be promptly paid upon a determination of breach or
termination, but in no event later than thirty (30) days after such
determination.
10. Survival. The covenants, agreements, representation, and
warranties contained in or made pursuant to this Employment Contract shall
survive XXXXX'x termination of employment, irrespective of any investigation
made by or on behalf of any party.
11. Modification. This Employment Contract sets forth the entire
understanding of the parties with respect to the subject matter hereof, and may
be modified only by a written instrument duly executed by each party.
12. Notices. Any notice or other communication required or
permitted to be given hereunder shall be in writing and shall be mailed by
certified mail, return receipt requested, or delivered against receipt, to the
party to whom it is to be given at the then address of such party (or to such
other address as the party shall have furnished in writing). Notice to the
estate of XXXXX shall be sufficient if addressed to XXXXX as provided in this
Section 12. Any notice or other communication given by certified mail shall be
deemed given at the time of certification thereof, except for a notice changing
a party's address which shall be deemed given at the time of receipt thereof.
13. Waiver. Any waiver by either party of a breach of any
provision of this Contract shall not operate as or be construed to be a waiver
of any other breach of such provision or of any breach of any provision in this
Contract. The failure of a party to insist upon strict adherence to any term
of this Contract on one or more occasions shall not be considered a waiver or
deprive that party of the right hereafter to insist upon strict adherence to
that term or any other term of this Contract. Any waiver must be in writing
and signed by the parties.
14. Binding Effect. XXXXX'x rights and obligations under this
Contract shall not be transferable by assignment or otherwise, such rights
shall not be subject to commutation, encumbrance, or the claims of XXXXX'x
creditors, and any attempt to do any of the foregoing shall be void. The
provisions of this Contract shall be binding upon and inure to the benefit of
XXXXX and his heirs and personal representatives, and shall be binding upon and
inure to the benefit of the Company and its successors and those who are its
assigns.
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15. No Third Party Beneficiaries. This Employment Contract does
not create, and shall not be construed as creating, any rights enforceable by
any person not a party to this Employment Contract (except as provided in
Section 14).
16. Headings. The headings in this Employment Contract are solely
for the convenience of reference and shall be given no effect in the
construction or interpretation of this Contract.
17. Counterparts: Governing Law. This Employment Contract may be
executed in any number of counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument. It shall be governed by and construed in accordance with the laws
of the State of Oklahoma, without given effect to the conflict of laws.
IN WITNESS WHEREOF, the parties have duly executed this Employment
Contract as of the date first above written.
"COMPANY"
EATERIES, INC., an Oklahoma corporation
By: /s/
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President
"XXXXX"
/s/
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XXXXX X. XXXXX
As approved by a vote of the Compensation Committee of the Board of Directors
of Eateries, Inc. on September 7, 1995.
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