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Exhibit 10.3
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EMPLOYMENT AGREEMENT
This is an agreement (the "Agreement") between Ground Round
Restaurants, Inc. (the "Company" or "Ground Round") a New York corporation with
its principal place of business at 00 Xxxxxxxxx Xxxx Xxxxxx Xxxx, Xxxxxxxxx,
Xxxxxxxxxxxxx and Xxxxxxx X. Xxxxxxxx (the "Employee"), with a business address
of 00 Xxxxxxxxx Xxxx Xxxxxx Xxxx, Xxxxxxxxx, Xxxxxxxxxxxxx, effective as of May
15, 1997 (the "Effective Date").
In consideration of the promises and mutual covenants contained herein,
the parties agree as follows:
1. Employment.
From and after the Effective Date, for and during the term, and subject
to the further conditions of this Agreement, Employee shall be employed
in the capacity of Senior Vice President of Operations of Company and
its affiliates and subsidiaries and perform all duties that may
reasonably be required of him as Senior Vice President of Operations or
as may be assigned by the Chairman, President and Chief Executive
Officer (the "Chairman") of the Company. Employee shall report to the
Chairman and shall be subject to his discretion and control.
The location for such employment shall be at the corporate offices of
the Company.
Employee shall devote substantially all of his business time and his
best efforts, business judgment, skill and knowledge exclusively to the
advancement of the business and interests of the Company and to the
ethical discharge of his duties and responsibilities under this
Agreement. Employee shall not engage in any other business activity or
serve in any industry, trade, professional, governmental or academic
position during the term of employment, except for the following:
managing the personal business affairs of Employee; and as may
otherwise be expressly approved in writing in advance by the Chairman.
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2. Term.
Company shall employ Employee for an initial term commencing on the
Effective Date and ending one year from the Effective Date, unless
Employee's employment is sooner terminated pursuant to the provisions
of this Agreement. The initial term shall be automatically extended for
successive one year terms, unless at least 90 days prior to the
expiration of the original or extended term either party shall advise
the other in writing that it wishes to terminate this Agreement as of
the end of the original or that extended term (the original and any
extended term shall hereinafter be collectively referred to as the
"Employment Period").
3. Compensation and Benefits.
(a) Base Salary.
During the Employment Period, the Company shall pay the
Employee base salary (the "Base Salary") at a rate of no less
than Twelve Thousand Five Hundred Dollars ($12,500) per month
(the "Base Rate"), prorated for any partial period. Base
Salary shall be payable in accordance with the payroll
practices of the Company for its executives.
(b) Bonus.
Employee shall be eligible to receive during the term of this
Agreement commencing in the Company's 1997 fiscal year, and
shall be paid within thirty (30) days of the annual audit of
the Company, if the calculations mandate such payment, a bonus
as provided in the Corporate Office Incentive Plan, and
subject to its terms and conditions.
(c) Stock Options.
Employee was previously granted stock options to purchase from
the Company Fifty Thousand (50,000) shares of the Company's
common stock pursuant to the Company's Amended and Restated
1989 Stock Option Plan and the 1992 Equity Incentive Plan (the
"Plans").
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It is understood and agreed that any future stock options
which may be granted shall be governed in accordance with the
terms of the Plans and the rules and regulations of the
Securities and Exchange Commission.
(d) Benefits.
Except as otherwise provided herein, Employee shall be
entitled to receive the fringe benefits normally provided by
the Company to senior executives and in accordance with the
terms of each Plan or document which controls such benefit
(including but not limited to life insurance coverage, medical
and dental insurance, travel and accident insurance, Long-Term
Disability coverage, Executive Health examination on an annual
basis, stock options and other benefits during the term of
this Agreement). Employee shall be entitled to the use of a
company automobile in accordance with the Company's Automobile
Policy from time to time in effect. The Employee's
participation shall be subject to the terms of the applicable
plan documents, generally applicable company policies and
appropriate discretion of the Board or any administrative
committee contemplated by such plans.
(e) Vacation.
During the Employment Period, Employee shall be entitled to
vacation (prorated for partial calendar years), subject to the
reasonable business needs of the Company and in accordance
with the terms of the Company's Vacation Policy.
(f) Certain Expenses.
The Company shall pay or reimburse the Employee for all
reasonable, customary business expenses incurred or paid by
the Employee in the performance of the duties and
responsibilities of his position and to such reasonable
substantiation and documentation as may be required by the
Company.
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4. Termination of Employment.
(a) Death.
If the Employee dies during the Employment Period, the Company
shall have no further obligations under this Agreement other
than to pay to the Employee's estate Base Salary through the
end of the calendar month of his death and any other bonus or
compensation hereunder in accordance with the applicable
Company plan or policy.
(b) Disability.
The Company may terminate the Employee's employment by written
notice in the event that, for any reason, he becomes disabled,
either physically or psychologically, or is unable to perform
substantially all of his essential duties and responsibilities
under this Agreement for One Hundred Eighty (180) days during
any period of three hundred and sixty-five (365) consecutive
days. In the event of such a termination, the Company shall
have no further obligations under this Agreement other than to
pay to the Employee Base Salary through the end of the
calendar month of his termination and any other bonus or
compensation hereunder in accordance with the applicable
Company plan or policy.
The Employee shall at the request of the Company, submit to a
medical examination by a physician selected by the Company, to
whom the Employee or his duly appointed guardian has no
reasonable objection, to determine whether the Employee is
disabled. Such determination shall be conclusive. If the
Employee fails to submit to such medical examination, the
Company's determination of the Employee's disability shall be
conclusive.
Paragraph 4(b) shall be interpreted and applied in accordance
with the Americans with Disabilities Act, including but not
limited to, the obligation to provide reasonable
accommodations as specified under such Act.
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(c) Termination by the Company for Cause.
The Company may terminate the Employee's employment hereunder
for Cause at any time upon written notice setting forth in
reasonable detail the nature of the Cause. The following, as
determined by the Chairman in his reasonable judgment, will
constitute Cause:
(i) The Employee's refusal to attempt in good
faith to perform his duties and
responsibilities to the Company; a breach of
fiduciary duty; any willful misconduct by the
Employee which injures the Company
(monetarily or otherwise) or the Employee's
gross negligence in the performance of his
duties and responsibilities; or
(ii) fraud, embezzlement or other dishonesty by
the Employee with respect to the Company;
or
(iii) the Employee's conviction of, or plea of nolo
contendere to, a felony or other crime
involving moral turpitude;
(iv) any material breach of this Agreement; and
(v) any form of misconduct as described in the
Company's current Termination Policy under
I.B. 4 of such policy.
Upon termination of the Employee's employment for Cause, the
Company shall have no further obligations under this Agreement
other than to pay to the Employee any Base Salary through the
date of termination, and any other amounts that have been
earned in accordance with the applicable Company policy, but
has not been paid, but specifically excluding any bonus
payment stated in paragraph 3(b).
(d) Termination by the Company Other Than for Cause (Excluding
Change of Control).
The Company may (other than during a Change of
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Control time period as defined below) terminate the Employee's
employment hereunder, other than for Cause, at any time upon
written notice, as defined in the Company's current
Termination Policy. In the event of such termination, the
Company shall do the following:
(i) Pay to Employee his Base Salary in
accordance with the Company's customary
payroll practices for a period of six months
after the date of termination or the period
remaining in the Employment Period,
whichever shall be greater (such greater
period is referred to herein as the
"Severance Period") provided, however, if
Employee shall secure other employment,
the Company shall cease making such
payments as of that time.
(ii) Pay to Employee any other bonus or
compensation hereunder in accordance with
the applicable Company plan or policy; and
(iii) Continue to contribute to the cost of the Employee's
participation in the Company's Continued Benefit
Plans (as hereinafter defined) for a period of six
months after the date of termination or during the
remainder of the Employment Period, whichever shall
be greater, provided, however, if Employee shall
secure other employment, the Company's contribution
to such Continued Benefit Plans shall cease as of
that time.
The Company shall have no other obligations under this
Agreement, unless there is a Change of Control as defined in
paragraph 5(c)(ii), and if such a Change of Control occurs,
the terms and provisions of paragraph 5 of this Agreement
shall control.
(e) Termination by the Executive (Excluding Change of Control).
(i) If the Employee terminates his employment during the
Employment Period (other than during a Change of
Control period as defined below) because the Employee
resigns, the Company shall pay Employee the Base
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Salary through the date of termination and
any other bonus or compensation in
accordance with the applicable Company
plan or policy.
(ii) If the Employee terminates his employment
with the Company for any other reason
(other than during a Change of Control
period as defined below), in addition to its
other rights and remedies, the Company
shall have no further obligations under this
Agreement other than to pay to the
Employee any Base Salary through the date
of termination and any other bonus or
compensation in accordance with the
applicable Company plan or policy.
(f) Stock Options.
Upon termination, death or disability, as such terms are
defined in paragraph 4, the Employee's rights with respect to
any stock options then held shall be governed by the Plan(s)
and/or any applicable documents under which such options were
awarded.
(g) Severance.
Upon any termination, death or disability, Employee waives any
rights Employee may have to receive any applicable Severance
Pay under the Company's Severance Pay Plan, subject to the
terms and conditions of such Plan, and except as otherwise
required by law.
5. Change of Control
The following provisions of this paragraph shall apply only in event of
a Change of Control:
(a) In the event of a Change of Control as defined below and in
consideration of Employee's continued employment with the
Company, the Company will pay Employee as termination
compensation: (x) an amount, determined as provided below, in
the event that within (i) twelve (12) months after a Change of
Control of the Company has
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occurred Employee terminates employment with the Company for
Good Reason, as defined below, within ninety (90) days after
the event which constitutes Good Reason or (ii) twenty four
(24) months after a Change of Control of the Company has
occurred, Employee's employment with the Company is terminated
by the Company for any reason other than Cause, death or
disability (disability being defined as in paragraph 4(b)).
The amount of termination compensation so payable shall be an
amount equal to the product of 2 times the Employee's current
annual Base Salary and, if Employee's Base Salary is hereafter
increased, the Employee's highest annual base salary ("Highest
Base Salary") from time to time hereafter in effect; or (y) an
amount equal to the Employee's Base Salary or Highest Base
Salary, as the case may be, in the event the Employee
terminates employment with the Company for Good Reason within
ninety (90) days after the event which constitutes Good
Reason, at any time after the first anniversary and prior to
the second anniversary of the date on which a Change of
Control of the Company has occurred. The termination
compensation payable pursuant to (x) or (y) above, as the case
may be, is herein referred to as the "Severance Payment".. In
addition to the Severance Payment, the Company shall pay any
bonus due in accordance with paragraph 3(b)(a "Bonus
Payment"), and such bonus shall be pro rated only for that
fiscal year that the Change of Control occurs. The Severance
Payment and any Bonus Payment shall be paid to Employee as
follows: (i) any Bonus Payment and one-half of the Severance
Payment shall be paid within five (5) days after the date of
termination (hereinafter referred to as the "Payment Date") of
Employee's employment (hereinafter referred to as the
"Termination Date"), and (ii) one-half of the Severance
Payment shall be paid in twelve (12) equal monthly
installments commencing on the day that is one month after the
Termination Date (the "Monthly Severance Payments").
(b) In addition:
(i) Any compensation and other amounts
previously deferred by Employee, together
with accrued interest thereon, if any, to
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which Employee is entitled, and any accrued vacation
pay not yet paid by the Company, shall be paid to
Employee on the Payment Date.
(ii) All other amounts accrued or earned by Employee
through the Payment Date and amounts otherwise
then owing under the Company's plans and
policies, excluding payment(s) due under the
Company's Severance Pay Plan (which Employee
shall not participate in) shall be paid to Employee
on the Payment Date, other than benefits due to
Employee under any qualified plan(s) of the
Company, which benefits shall be paid in
accordance with the terms of such plan(s).
(iii) The Company shall pay all reasonable legal
fees and expenses incurred by Employee in
seeking to obtain or enforce any right or
benefit provided by a Change of Control,
regardless of the outcome thereof, but
specifically excluding legal representation for
initiation of a lawsuit and representation
thereafter.
(iv) The Company shall maintain in full force and
effect, for the continued benefit of Employee
and/or Employee's family for one year after
the Termination Date, all medical and dental
insurance plans, disability and life insurance
plans, travel and accident insurance and the
Company's Automobile Policy (collectively,
the "Continued Benefits Plans") in which
Employee was entitled to participate
immediately prior to the Change of Control,
provided that Employee's continued
participation is possible under the general
terms and provisions of such plans and
programs. In the event that Employee's
participation in any such plan or program is
barred, the Company shall arrange to
provide Employee with benefits substantially
similar to those which Employee is entitled
to receive under such plans and programs or
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at the Company's election, pay Employee in cash an
equivalent amount. At the end of the period of
coverage, Employee shall have the option to have
assigned to him at no cost and with no apportionment
of prepaid premiums, any assignable insurance policy
owned by the Company and relating specifically to
Employee.
(v) All outstanding stock options which Employee holds
shall vest immediately upon a Change of Control.
(c) For purposes of this Agreement:
(i) "Exchange Act" means the Securities Exchange
Act of 1934, as amended.
(ii) A "Change of Control" shall be deemed to have taken
place if (a) any "person" (as such term is used in
Sections 13(d) and 14(d)(2) of the Exchange Act) is
or becomes the beneficial owner (within the meaning
of Rule 13d-3 promulgated under the Exchange Act),
directly or indirectly, of securities of the Company
representing 50% or more of the combined voting power
of the Company's then outstanding securities, (b) the
stockholders of the Company shall have approved (i) a
reorganization, merger or consolidation, in each
case, with respect to which persons who were
stockholders of the Company immediately prior to such
reorganization, merger or consolidation do not,
immediately thereafter, own more than 50% of the
combined voting power entitled to vote generally in
the election of directors of the reorganized, merged
or consolidated company's then outstanding voting
securities, or (ii) a sale of all or substantially
all of the assets of the Company, or (c) as the
result of a tender offer, exchange offer, merger,
consolidation, sale of assets or contested election
or any combination of the foregoing transactions (a
"Transaction"), the persons who were directors of the
Company immediately before the Transaction
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shall cease to constitute a majority of the Board of
Directors of the Company or of any parent of or
successor to the Company immediately after the
Transaction occurs; or (d) any person or persons
acting as a group acquire the right, by contract,
agreement, understanding or otherwise, to elect or
designate a majority of the members of the Board of
Directors of the Company or of any parent of the
Company.
(iii) "Cause" is defined in paragraph 4(c) of this
Agreement and shall also be applicable to the Change
of Control section.
(d) "Good Reason" means:
(i) The assignment to Employee of any duties
materially inconsistent in any respect with
Employee's position of Senior Vice President
of Operations, or Employee's authority,
duties or responsibilities as in effect on the
date of the Change of Control, or any other
action by the Company which results in a
diminution in such position, authority, duties
or responsibilities, excluding for this purpose
an isolated, insubstantial and inadvertent
action not taken in bad faith and which is
remedied by the Company promptly after
receipt of notice from Employee;
(ii) Any reduction of Employee's base salary or
the failure by the Company to provide
Employee with an incentive compensation
program, welfare benefits, retirement
benefits and other benefits which in the
aggregate are no less favorable than the
benefits to which Employee was entitled
prior to the Change of Control;
(iii) The Company's requiring Employee to be based at any
office or location more than fifty (50) miles from
the location at which Employee is employed on the
date of the Change of Control, except for travel
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reasonably required in the performance of Employee's
responsibilities, or the Company's requiring Employee
to move his current Massachusetts residence more than
fifty (50) miles from the location of Employee's
current Massachusetts residence at which Employee
resides on the date of the Change of Control;
(e) (i) Anything in this Agreement to the contrary
notwithstanding, in the event it shall be
determined that any payment or distribution
by the Company to Employee or for his
benefit (whether paid or payable or
distributed or distributable pursuant to the
terms of this Agreement or otherwise) (a
"Payment"), would be nondeductible by the
Company for Federal income tax purposes
because of Section 280G of the Internal
Revenue Code of 1986, as amended (the
"Code"), then the aggregate present value
of amounts payable or distributable to
Employee or for his benefit pursuant to this
Agreement (such payments or distributions
pursuant to this Agreement are hereinafter
referred to as "Agreement Payments") shall
be reduced to the Reduced Amount. The
"Reduced Amount" shall be an amount
expressed in present value which maximizes
the aggregate present value of Agreement
Payments without causing any Payment to
be nondeductible by the Company because
of Section 280G of the Code. For purposes
of paragraphs 5(e)(i)(ii)(iii), present value
shall be determined in accordance with
Section 280G(d)(4) of the Code.
(ii) All determinations required to be made under
paragraphs 5(e)(i)(ii)(iii) shall be made by the
Company's then independent certified accountants,
which shall provide detailed supporting calculations
both to the Company and Employee within fifteen (15)
business days of the Termination Date, or such
earlier
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time as is requested by the Company, and a written
opinion to Employee at Employer's cost that Employee
has substantial authority not to report any Excise
Tax on Employee's federal income tax return with
respect to the Payments. Any such determination by
the Company's then independent certified accountants
shall be binding upon the Company and Employee.
Employee shall determine which and how much of the
Payments shall be eliminated or reduced consistent
with the requirements of paragraphs 5(e)(i)(ii)(iii),
provided that, if Employee does not make such
determination within ten business days of the receipt
of the calculations made by the Company's then
independent certified accountants, the Company shall
elect which and how much of the Payments shall be
eliminated or reduced consistent with the
requirements of paragraphs 5(e)(i)(ii)(iii) and shall
notify Employee promptly of such election. Within
five business days thereafter, the Company shall pay
to or distribute to Employee or for Employee's
benefit such amounts as are then due to Employee
under this Agreement. For purposes of paragraphs
5(e)(i)(ii)(iii), "Excise Tax" shall mean the excise
tax imposed by Section 4999 of the Code or any
interest or penalties with respect to such excise
tax.
(iii) As a result of the uncertainty in the
application of Section 280G of the Code at
the time of the initial determination by the
Company's then certified independent
accountants hereunder, it is possible that
Payments will have been made by the
Company which should not have been made
("Overpayment") or that additional
Payments which will not have been made by
the Company could have been made
("Underpayment"), in each case, consistent
with the calculations required to be made
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hereunder. In the event that the Company's then
certified independent accountants, based upon the
assertion of a deficiency by the Internal Revenue
Service against Employee which the Company's then
certified independent accountants believes has a high
probability of success determines that an Overpayment
has been made, any such Overpayment paid or
distributed by the Company to Employee or for
Employee's benefit shall be treated for all purposes
as a loan ab initio to Employee which Employee shall
repay to the Company together with interest at the
applicable federal rate provided for in Section
7872(f)(2) of the Code; provided, however, that no
such loan shall be deemed to have been made and no
amount shall be payable by Employee to the Company if
and to the extent such deemed loan and payment would
not either reduce the amount on which Employee is
subject to tax under Section 1 and Section 4999 of
the Code or generate a refund of such taxes. In the
event that the Company's then certified independent
accountants, based upon controlling precedent or
other substantial authority, determines that an
Underpayment has occurred, any such Underpayment
shall be promptly paid by the Company to Employee or
for Employee's benefit together with interest at the
applicable federal rate provided for in Section
7872(f)(2) of the Code.
(f) Employee shall not be required to mitigate the amount of
any Payment provided for in this paragraph 5 by seeking
other employment or otherwise, nor shall the amount of
any Payment provided for in this paragraph 5 be reduced
by any compensation earned by Employee as the result of
employment by another employer after the Termination
Date, or otherwise except that Employee shall not be
entitled to continue to participate in a Continued Benefits
Plan to the extent that Employee is eligible to participate
in a benefits plan of another employer that is
substantially similar to such Continued Benefits Plan, as
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to type and coverage, during the one year period following the
Termination Date. The Company's obligation to make the
Payments provided for in this paragraph 5 and otherwise to
perform its obligations hereunder shall not be affected by any
set-off, counterclaim, recoupment, defense or other claim,
right or action which it may have against Employee or others.
Notwithstanding anything to the contrary contained herein, in
the event that the Company makes a good faith determination
that Employee has breached the non-compete provisions
contained in paragraph 8 hereof, in addition to any of its
other rights and remedies, the Company shall have the right to
set-off and withhold any remaining Monthly Severance Payments.
(g) The failure by Employee to set forth in any notice of
termination of employment any fact or circumstances which
contributes to a showing of Good Reason shall not waive any of
Employee's rights hereunder or preclude Employee from
asserting such fact or circumstance in enforcing Employee's
rights hereunder.
(h) If a Change of Control occurs, the terms and provisions of
paragraph 5 of this Agreement governing the payments to be
made shall control in lieu of any provisions elsewhere in the
Employment Agreement.
(i) The Company will require any successor (whether direct
or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all of the business and/or
assets of the Company to expressly assume and agree to
perform according to this paragraph 5 in the same
manner and to the same extent that the Company would
be required to perform it if no such succession had taken
place. As used in this paragraph 5, "Company" shall
mean the Company as hereinbefore defined and any
successor to its business and/or assets as aforesaid
which assumes and agrees to perform this Agreement by
operation of law, or otherwise.
(k) Nothing in this paragraph 5 shall prevent or limit
Employee from any continuing or future participation in
any benefit, incentive or other plan or program (excluding
the Company's Severance Pay Plan) provided by the
Company and for which Employee may qualify. Amounts
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which are vested benefits or which Employee is otherwise
entitled to receive under any plan or program of the Company
at or subsequent to any Change of Control shall be payable in
accordance with such plan or program.
6. D & O Liability Insurance.
The Employee shall be covered in his capacity as an officer of the
Company under the Company's directors and officers liability insurance
policy. The cost of such coverage shall be borne by the Company.
7. Nondisclosure.
During the Employment Period, the Employee may become aware of
information which is nonpublic, confidential or proprietary in nature
with respect to the Company or with respect to other companies,
persons, entities, ventures or business opportunities in which the
Company has, or, if it were disclosed to the Company, the Company might
have, an interest ("Confidential Information"). During the Employment
Period and thereafter, all Confidential Information will be kept
strictly confidential by the Employee and the Employee shall not: (a)
copy, reproduce, distribute or disclose any Confidential Information to
any third party except in the course of his employment by the Company;
(b) use any Confidential Information for any purpose other than in
connection with his employment by the Company; or (c) use any
Confidential Information in any way that is detrimental to the Company.
Confidential Information shall not include information which the
Employee can demonstrate: (a) is or becomes generally available to the
public other than by breach by the Employee of his agreement herein;
(b) is required to be disclosed by the Employee after due notice to the
Company, pursuant to obligations under law, regulation or court order;
or (c) was prior to the Effective Date, or thereafter becomes, known to
the Employee on a nonconfidential basis.
Upon termination of the Employee's employment, he shall immediately
return at Company's expense or destroy on request of Company's Counsel
all Confidential Information, including all notes, copies,
reproductions, summaries, analyses, or extracts thereof, then in his
possession. Such return or destruction shall not abrogate the
continuing obligations of the Employee under this Agreement.
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In the event that the Employee is requested or required (by
interrogatories, request for information or documents, subpoena, civil
investigative demand or similar process) to disclose any Confidential
Information, he shall provide the Company with prompt written notice so
that it may seek a protective order or other appropriate remedy. In the
event such protection or other remedy is not obtained, the Employee
shall furnish only that portion of the Confidential Information which
he is advised by counsel agreed to by Company and Employee, at
Company's expense, is legally required and shall exercise best efforts
to obtain assurance that confidential treatment will be accorded to
such Confidential Information, but in no event shall Employee be
required to withhold such Confidential Information if incarceration of
Employee may result.
The Employee agrees that until the expiration of two (2) years from the
date of termination of his employment by the Company, regardless of the
reason for termination, he will not without the prior written approval
of the Company (i) in any manner acquire, agree to acquire or make any
proposal to acquire, directly or indirectly, any securities, assets or
property of the Company or any of its subsidiaries, whether such
agreement or proposal is with the Employee or with a third party, other
than shares of common stock he is entitled to acquire under the terms
of this Agreement or the Stock Option Plan or Equity Incentive Plan, or
by inheritance, (ii) propose to enter into, directly or indirectly, any
merger or other business combination involving the Company or any of
its subsidiaries, (iii) make, or in any way participate, directly or
indirectly, in any "solicitation" or "proxies" (as such terms are used
in the proxy rules of the Securities and Exchange Commission) to vote,
or seek to advise or influence any person with respect to the voting
of, any voting securities of the Company or any of its subsidiaries,
(iv) form, join or in any way participate in a "group" (within the
meaning of Section 13(d)(3) of the Securities Exchange Act of 1934)
with respect to any voting securities of the Company or any of its
subsidiaries, (v) otherwise act, alone or in concert with others, to
seek to control or influence the management, Board of Directors or
policies of the Company, (vi) disclose any intention, plan or
arrangement inconsistent with the foregoing or (vii) advise, encourage,
provide assistance (including financial assistance) to or hold
discussions with any other persons in connection with any of the
foregoing. Employee may vote any stock owned by Employee, either
directly or indirectly, in any manner Employee chooses, as long as such
voting right does not violate any securities laws.
The Employee hereby acknowledges that he is aware that the
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securities laws prohibit any person who has material, nonpublic
information concerning the Company from purchasing or selling
securities of the Company or from communicating such information to any
other person under circumstances in which it is reasonably foreseeable
that such person is likely to purchase or sell securities.
The obligations of the Employee stated in this paragraph shall, except
where expressly limited as to time, continue without limit as to time
and without regard to the employment status of the Employee.
8. Non-Compete Provision.
Upon termination of this Agreement for any reason, Employee agrees that
he will not, for a period of one (1) year following any such
termination, except in the event of Employee's termination pursuant to
paragraph 4(d) hereof, in which case, Employee agrees that he will not
throughout the Severance Period, either directly or indirectly, as a
director, officer, employee, agent, consultant, or owner, in whole or
in part, engage in any related activities which are competitive with
the Company's (or its subsidiaries) full-service restaurant operations
within geographic proximity to the Company operations or its
subsidiaries. Employee acknowledges that the remedy at law available to
the Employer and its subsidiaries for a breach or threatened breach of
this paragraph would be inadequate and, therefore, Employee agrees that
in addition to any remedies at law, in the event of any such breach or
threatened breach, the Employer and/or its subsidiaries shall be
entitled to obtain equitable relief or injunctive relief to enforce the
provisions of this paragraph. Ownership of less than five (5%) percent
of any class of publicly-traded securities shall not be deemed a breach
of this paragraph.
9. Payments.
The Company shall have the right to cause all payments pursuant to this
Agreement to be made by The Ground Round, Inc. ("TGRI") and to cause
TGRI to provide all benefits required hereunder, which benefits shall
be those normally provided by TGRI to senior executives of TGRI or the
Company.
10. Withholding.
All payments made by the Company under this Agreement shall be reduced
by any tax or other amounts required to be withheld by the Company
under applicable law.
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11. Assignment.
Except as provided in this paragraph, neither the Company nor the
Employee may make any assignment of this Agreement or any interest
herein, by operation of law or otherwise, without the prior written
consent of the other. The Company may without the consent of the
Employee assign its rights and obligations under this Agreement to any
wholly-owned subsidiary of the Company or to any corporation or other
business entity into which the Company has merged or with which it has
consolidated or which has acquired substantially all of the Company's
assets, provided that no such assignment shall relieve the Company of
its obligations under this Agreement. This Agreement shall inure to the
benefit of and be binding upon the Company and the Employee, their
respective successors, executors, administrators, heirs and permitted
assigns.
12. Conflicting Agreement.
The Employee hereby represents and warrants that the execution of this
Agreement and the performance of the obligations hereunder will not
breach or be in conflict with any other agreement to which Employee is
a party or is bound and that Employee is not now subject to any
covenants against competition or similar covenants that would affect
the performance of Employee's obligations hereunder.
13. Entire Agreement.
This Agreement constitutes the entire agreement between the parties and
supersedes all prior communications, agreements, representations and
understandings, written or oral, express or implied, with respect to
the terms and conditions of the Employee's employment.
14. Amendment.
This Agreement may be amended or modified only by a written instrument
signed by the Employee and by such officer as may be specifically
designated and authorized by the Board.
15. Governing Law.
This is a Massachusetts contract and shall be construed and enforced
under and be governed in all respects by the law of the Commonwealth of
Massachusetts without regard to principles of conflicts of laws.
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16. Notice.
For purposes of this Agreement, notices and all other communications
provided for in the Agreement shall be in writing and shall be deemed
to have been duly given when delivered by hand, telecopied (receipt
acknowledged) or mailed by United States registered mail, return
receipt requested, postage prepaid, addressed to the respective
addresses set forth on the first page of this Agreement, provided that
all notices to Company shall be directed to the attention of the
Chairman with a copy to the Secretary of Company, or to such other
address as either party may have furnished to the other in writing in
accordance herewith, except that notices of change of address shall be
effective only upon receipt.
17. Validity,
The invalidity or unenforceability of any provision of this Agreement
shall not affect the validity or enforceability of any other provision
of this Agreement, which shall remain in full force and effect. No
waiver by either party hereto at any time of any breach by the other
party hereto of, or compliance with, any condition or provision of this
Agreement to be performed by such other party shall be deemed a waiver
of similar or dissimilar provisions or conditions at the time or at any
prior or subsequent time. The provisions of paragraph 7 shall survive
the termination or expiration of this Agreement regardless of the
reasons therefor. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all
of which together will constitute one and the same instrument.
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IN WITNESS WHEREOF, this Agreement has been executed as a sealed
instrument by the Company, by its duly authorized representative, and by the
Employee, as of the date first above written.
GROUND ROUND RESTAURANTS, INC.
By: /s/ Xxxxxx X. Xxxxxxx
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Xxxxxx X. Xxxxxxx
Chairman, President and
Chief Executive Officer
XXXXXXX X. XXXXXXXX
/s/ XXXXXXX X. XXXXXXXX
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