EMPLOYMENT AGREEMENT
This Agreement is entered into effective as of this 1st day of
February, 1998, by and between Lone Star Steakhouse & Saloon, Inc., a
corporation (the "Corporation") and Xxxxxxx X. Xxxxxx ("Employee").
RECITALS
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WHEREAS, the Employee agrees to serve as Chief Operating Officer - Del
Frisco's/Xxxxxxxx'x of the Corporation; and
WHEREAS, Employee is a principal officer of the Corporation and an
integral part of its management; and
WHEREAS, the Corporation desires to engage the services of Employee,
whose experience, knowledge and abilities with respect to the business and
affairs of the Corporation are extremely valuable to the Corporation; and
WHEREAS, the parties hereto desire to enter into this Agreement setting
forth the terms and conditions of the continued employment relationship of the
Corporation and Employee.
NOW THEREFORE, it is agreed as follows:
ARTICLE I
1.1 Term of Employment. The Corporation shall initially employ Employee
for a period of three years from the date hereof (the "Initial Term").
1.2 Extension of Initial Term. Upon expiration of the initial term of
this Agreement, this Agreement shall be extended automatically for successive
terms of one year each, unless either the Corporation or the Employee gives
contrary written notice to the other not later than 90 days prior to the annual
anniversary date thereof.
1.3 Principal Place of Employment. The Corporation acknowledges that
the Employee's principal residence is currently located in Chicago, Illinois.
The Corporation acknowledges and agrees that the Employee shall be employed by
the Corporation at an office to be established by Employee on behalf of the
Corporation in Chicago, Illinois (the "Chicago Office").
Employee may hire a secretary or secretarial services, such salary
terms and other hems and conditions which are acceptable to the Corporation,
which such acceptance will not be unreasonably withheld.
The Corporation shall be responsible to pay or immediately
reimburse Employee for any and all costs and expenses incurred in establishing
and operating the Chicago Office, including without limitation, any and all
costs and expenses arising out of any of the activities and items contemplated
hereby.
ARTICLE II
Duties of the Employee
----------------------
General Duties. Employee shall serve as Chief Operating Officer - Del
Frisco's/Xxxxxxxx'x of the Corporation. In close coordination and cooperation
with the Corporation, Employee shall continue to have the responsibility for the
development of the Corporation's upscale steakhouse restaurant concept with an
average meal check price in excess of $18.00 (the "Division"). Employee shall
continue to be responsible for marketing and growth of the Division. Employee
shall be responsible for the management and day-to-day operations of the
Division. He shall do and perform all services, acts, or things necessary or
advisable to manage and conduct the business of the Corporation consistent with
such position subject to such policies and procedures as may be established by
the Board.
Employee shall: (i) devote his or her entire business time, attention,
and energies to the business of the Corporation, and, (ii) faithfully and
competently perform his duties hereunder; and, Employee shall not, during the
term of this Agreement, engage in any other business activity except as
permitted by Article 8.
ARTICLE III
Compensation
------------
3.1 Salary. For Employee's services Corporation as Chief Operating
Officer - Del Frisco's/Xxxxxxxx'x, Employee shall be paid a salary at the annual
rate of $220,000 (herein referred to as "Salary") payable in twenty-four equal
installments on the first and fifteenth day of each month. On the first day of
each calendar year during the term of this Agreement with the Corporation,
Employee shall be eligible for an increase in Salary based on recommendations
made by the Compensation Committee of the Board.
3.2 Bonus. Employee is eligible to participate in the stock option plan
of the employer and all bonus compensation plans which may be offered from time
to time.
3.3 Bonus. Employee shall be eligible to receive a bonus (the "Bonus"),
which Bonus will be equal to sixty percent (60%) of the Employee's then Salary,
for any annual period hereunder. The Bonus shall be paid at the discretion of
the Corporation. Employee and the Corporation agree to establish mutually and in
good faith within sixty (60) days following the date of this Agreement, goals
and objectives, in writing, for the Employee for each annual period of this
Agreement, which such goals and objective shall be
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described in as measurable and objective standards and criteria as practicable.
In the event that Employee does not fully achieve the goals and objectives upon
which the Bonus is based in any annual period, Employee shall nonetheless be
entitled to receive a proportionate amount of the full amount of the Bonus that
would otherwise have been paid to Employee for such annual period if Employee
had fully achieved the goals and objective. The determination of the
proportionate amount of the Bonus to which Employee shall be entitled shall
correspond to the level, percentage or degree of Employee's achievement of goals
and objective, and shall not be an "all or nothing" test.
ARTICLE IV
Employee Benefits
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4.1 Use of Automobile. The Corporation shall provide, at the option of
Employee, with either the use of an automobile for business and personal use or
a cash allowance of $750. If the car is furnished by the Corporation, the
Corporation shall pay all expenses of operating, maintaining and repairing the
automobile and shall procure and maintain automobile liability insurance in
respect thereof, with such coverage insuring each Employee for bodily injury and
property damage.
4.2 Medical Life and Disability Insurance Benefits. The Corporation
shall provide Employee with the medical, dental, life and disability insurance
benefits in accordance with the established benefit policies of the Corporation.
In addition, the Corporation shall pay or reimburse Employee for payment of
those certain (i) life insurance and (ii) long term disability insurance
policies of Employee in effect as of the date hereof, which such payments in the
aggregate equal approximately $4,700 annually.
4.3 Business Expenses. Employee shall be authorized to incur reasonable
expenses for promoting the business of the Corporation including expenses for
entertainment, travel, and similar items. The Corporation shall reimburse
Employee for all such expenses upon the presentation by Employee, from time to
time, of an itemized account of such expenditures.
4.4 Vacations. Employee shall be entitled to an annual paid vacation
equal to three (3) weeks, effective immediately. The timing of paid vacations
shall be scheduled in a reasonable manner by the Employee.
4.5 Disability. Upon disability (as defined herein) of the Employee,
the Employee shall be entitled to receive an amount equal to 50% of his salary
(in addition to any disability insurance benefits received pursuant to Section
4.2 herein), such amount being paid semi-monthly in twelve equal installments.
4.6 Moving Expenses. If upon joint acceptance by the
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Corporation and the Employee, the Employee shall be relocated, the Corporation
shall pay all related moving expenses of the Employee.
ARTICLE V
Termination
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5.1 Death. Employee's employment hereunder shall be terminated upon the
Employee's death.
5.2 Disability. The Corporation may terminate Employee's employment
hereunder in the event Employee is disabled and such disability continues for
more than 180 days. Disability shall be defined as the inability of Employee to
render the services required of him under this Agreement as a result of physical
or mental incapacity.
5.3 Cause.
(a) The Corporation may terminate Employee's employment hereunder for
Cause. For the purpose of this Agreement, "Cause" shall mean the (i) willful and
intentional failure by Employee to substantially perform his duties hereunder,
other than any failure resulting from Employee's incapacity due to physical or
mental incapacity, or (ii) commission by Employee, in connection with his
employment by the Corporation, of an illegal act or any act (though not illegal)
which is not in the ordinary course of the Employee's responsibilities and which
exposes the Corporation to a significant level of undue liability. For purposes
of this paragraph, no act or failure to act on Employee's part shall be
considered to have met either of the preceding tests unless done or omitted to
be done by Employee not in good faith without a reasonable belief that his
action or omission was in the best interest of the Corporation.
(b) Notwithstanding the foregoing, Employee shall not be deemed to have
been terminated for Cause unless and until there shall have been delivered to
Employee a copy of a resolution, duly adopted by the majority vote of the Board
of Directors.
5.4 Compensation Upon Termination for Cause or Upon Resignation by
Employee. If Employee's employment shall be terminated for Cause or if Employee
shall resign his position with the Corporation, the Corporation shall pay
Employee's compensation only through the last day of Employee's employment by
the Corporation. The Corporation shall then have no further obligation to
Employee under this Agreement.
5.5 Involuntary Termination If:
(i) the Employee is terminated by Corporation at any time
prior to the termination of this Agreement for reasons other
than Cause (as defined herein), (ii) if Corporation gives
notice to the Employee, in accordance with Section
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1.2 herein, that this Agreement will not be renewed;
Employee shall be paid, over the ensuing six (6) month period, a sum
equal to the cash compensation paid to him excluding all bonuses of any
kind by Corporation for the six (6) month period immediately preceding
such termination or non-renewal. Such six (6) month period, as the case
may be, shall begin: (i) on the date of termination in the case of
termination of Employee's employment; and (ii) on the date notice of
non-renewal is given in the case of termination of this Agreement not
accompanied by simultaneous termination of Employee's employment with
the Corporation.
ARTICLE VI
No Obligation to Mitigate Damages; No Effect
on Other Contractual Rights
---------------------------
6.1 No Mitigation. Employee shall not be required to mitigate damages
or the amount of any payment provided for under this Agreement by seeking other
employment or otherwise, nor shall the amount of any payment provided for under
this Agreement be reduced by any compensation earned by Employee as the result
of employment by another employer after Employee's termination or resignation.
6.2 Other Contractual Rights. The provisions of this Agreement, and any
payment provided for hereunder, shall not reduce any amount otherwise payable,
or in any way diminish Employee's existing rights, or rights which would accrue
solely as a result of passage of time under any employee benefit plan or other
contract, plan or arrangement of which Employee is a beneficiary or in which he
participates.
ARTICLE VII
Successors to the Corporation
-----------------------------
7.1 Employee's Successors and Assigns. This Agreement shall inure to
the benefit of and be enforceable by Employee's personal and legal
representatives, executors, administrators, successors, heirs, distributees,
devisees and legatees. If Employee should die while any amounts are still
payable to him hereunder, all such amounts, unless otherwise provided herein,
shall be paid in accordance with the terms of this Agreement to Employee's
devisee, legatee or other designee or, if there be no such designee, to
Employee's estate.
ARTICLE VIII
Restrictions on Employee
------------------------
8.1 Non-Disclosure; Non-Solicitation. Except in the performance of his
duties hereunder, at no time during the Term of Employment, and for eighteen
(18) months after the termination hereof, shall Employee, individually or
jointly with others, for
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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
Corporation, 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 the Corporation. Except in the
performance of his duties hereunder, at no time during the term or six (6)
months thereafter, shall Employee for himself or on behalf of any other person
or entity contact any employee of the Corporation for the purpose of hiring,
diverting or otherwise soliciting the employee.
8.2 Non-Competition. During the Term of Employment and for eighteen
(18) months thereafter if Employee is terminated, pursuant to either Section
5.3, or in the event of any voluntary termination or resignation by Employee,
Employee shall not, individually or jointly with others, directly or indirectly,
whether for his own account or for that of any other person or entity, be
employed by, engage in, own, or hold any ownership interest in any person or
entity engaged in a restaurant business the same as or similar to any restaurant
business of the Corporation without the Corporation's written consent.
ARTICLE IX
Miscellaneous
-------------
9.1 Indemnification. To the full extent permitted by law, the Board
shall authorize the payment of expenses incurred by or shall satisfy judgments
or fines rendered or levied against Employee in any action brought by a
third-party against Employee (whether or not the Corporation is joined as a
party defendant) to impose any liability or penalty on Employee for any act
alleged to have been committed by Employee while employed by the Corporation
unless Employee was acting with gross negligence or willful misconduct. Payments
authorized hereunder shall include amounts paid and expenses incurred in
settling any such action or threatened action.
9.2 Notices. Any notices required or permitted to be given under this
Agreement shall be sufficient if in writing and sent by mail to his residence,
in the case of Employee, or to its principal office, in the case of the
Corporation.
9.3 Waiver of Breach. The waiver by any party hereto of a breach of any
provision of this Agreement shall not operate or be construed as a waiver of any
subsequent breach by any party.
9.4 Amendment. No amendment or modification of this Agreement shall be
deemed effective unless or until executed in writing by the parties hereto.
9.5 Validity. This Agreement, having been executed and
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delivered in the State of Kansas, its validity, interpretation, performance and
enforcement will be governed by the laws of that state.
9.6 Section Headings. Section and other headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.
9.7 Counterpart Execution. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute but one and the same instrument.
9.8 Legal Fees. Except in the event of termination for Cause, and only
in the event a change of control of the Corporation has occurred, the
Corporation shall pay all legal fees and expenses which Employee may incur as a
result of the Corporation's contesting the validity, enforceability or
Employee's interpretation of, or determination under, this Agreement.
9.9 Exclusivity. Specific arrangements referred to in this Agreement
are not intended to exclude Employee's participation in any other benefits
available to executive personnel generally or to preclude other compensation or
benefits as may be authorized by the Board from time to time.
9.10 Partial Invalidity. If any provision in this Agreement is held by
a court of competent jurisdiction to be invalid, void, or unenforceable, the
remaining provisions shall nevertheless continue in full force without being
impaired or invalidated in any way.
IN WITNESS WHEREOF, the Corporation has caused this Agreement to be
executed and its seal affixed hereto by its officers thereunto duly authorized;
and the Employee has executed this Agreement, as of the day and year first above
written.
"CORPORATION" LONE STAR STEAKHOUSE &
Attest SALOON, INC.
By:
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Xxxxxx X. Xxxxx, Secretary Xxxxx X. Xxxxxxx, Chairman and
Chief Executive Officer
Witness "EMPLOYEE"
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Xxxxxxx X. Xxxxxx
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