EMPLOYMENT AGREEMENT
Exhibit 10.1
This
Employment Agreement (the "Agreement"), entered into as of the 1st day of
February 2010, by and between RICK'S CABARET INTERNATIONAL,
INC., a Texas corporation (the "Company"), and XXXXXX XXXXX, an individual
("Executive").
W
I T N E S S E T H:
WHEREAS,
Company desires to employ Executive as provided herein; and
WHEREAS,
Executive desires to accept such employment.
NOW,
THEREFORE, for and in consideration of the mutual covenants and agreements
contained herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1.
Employment. Company
hereby employs Executive and Executive hereby accepts employment with Company
upon the terms and conditions hereinafter set forth.
2.
Duties. Subject to the
power of the Board of Directors of Company to elect and remove officers,
Executive will serve the Company as its Executive Vice President, Director of
Technology and will faithfully and diligently perform the services and
functions relating to such office or otherwise reasonably incident to such
office, provided that all such services and functions will be reasonable and
within Executive's area of expertise. Executive will, during the term of this
Agreement (or any extension thereof), devote his full business time, attention
and skills and best efforts to the promotion of the business of Company. The
foregoing will not be construed as preventing Executive from making investments
in other businesses or enterprises provided that (a) Executive agrees not to
become engaged in any other business activity that interferes with his ability
to discharge his duties and responsibilities to Company and (b) Executive does
not violate any other provision of this Agreement.
3.
Term. Subject to the
terms and conditions hereof, the term of employment of Executive will commence
as of the date hereof (the "Commencement Date") and will end on that date in the
year 2012, unless earlier terminated by either party pursuant to the terms
hereof. The term of this Agreement is referred to herein as the
"Term."
4.
Compensation and Benefits During the Employment Term.
|
(a)
|
Salary. Commencing upon
the date of this Agreement, Executive will be paid an annual base salary
of $200,000.00, payable bi-weekly (the "Salary"). At any time, and from
time to time the Salary may be increased for the remaining portion of the
term if so determined by the Board of Directors of Company after a review
of Executive's performance of his duties
hereunder.
|
|
(b)
|
Bonus. At the sole
discretion of the Board of Directors of Company, it may from time to time
grant performance bonuses to
Executive.
|
|
(c)
|
Expenses. Upon
submission of a detailed statement and reasonable documentation, Company
will reimburse Executive in the same manner as other executive officers
for all reasonable and necessary or appropriate out-of-pocket travel and
other expenses incurred by Executive in rendering services required under
this Agreement.
|
|
(d)
|
Benefits;
Insurance.
|
|
(i)
|
Medical, Dental and
Vision Benefits. During this Agreement, Executive and his
dependents will be entitled to receive such group medical, dental and
vision benefits as Company may provide to its other executives, provided
such coverage is reasonably available, or be reimbursed if Executive is
carrying his own similar
insurance.
|
|
(ii)
|
Benefit Plans.
The Executive will be entitled to participate in any benefit plan or
program of the Company which may currently be in place or implemented in
the future.
|
|
(iii)
|
Other Benefits.
During the Term, Executive will be entitled to receive, in addition to and
not in lieu of base salary, bonus or other compensation, such other
benefits and normal perquisites as Company currently provides or such
additional benefits as Company may provide for its executive officers in
the future.
|
|
(e)
|
Vacation. Executive
will be entitled to two weeks paid vacation each year of this
Agreement.
|
|
5.
|
Confidentiality,
Intellectual Property and Non-Competition.
|
|
(a)
|
Confidentiality. In the
course of the performance of Executive's duties hereunder, Executive
recognizes and acknowledges that Executive may have access to certain
confidential and proprietary information of Company or any of its
affiliates. Without the prior written consent of Company, Executive shall
not disclose any such confidential or proprietary information to any
person or firm, corporation, association, or other entity for any reason
or purpose whatsoever, and shall not use such information, directly or
indirectly, for Executive's own behalf or on behalf of any other party.
Executive agrees and affirms that all such information is the sole
property of Company and that at the termination and/or expiration of this
Agreement, at Company's written request, Executive shall promptly return
to Company any and all such information so requested by
Company.
|
The
provisions of this Section 5 shall not, however, prohibit Executive from
disclosing to others or using in any manner information that:
|
(i)
|
has
been published or has become part of the public domain other than by acts,
omissions or fault of
Executive;
|
|
(ii)
|
has
been furnished or made known to Executive by third parties (other than
those acting directly or indirectly for or on behalf of Executive) as a
matter of legal right without restriction on its use or
disclosure;
|
|
(iii)
|
was
in the possession of Executive prior to obtaining such information from
Company in connection with the performance of this Agreement;
or
|
|
(iv)
|
is
required to be disclosed by law.
|
|
(b)
|
Intellectual Property.
It is agreed by the Company and the Executive that all intellectual
property rights and other intangible assets, including, without
limitation, computer code, tradenames, trademarks, servicemarks, corporate
names, logos and any existence or possible combination or derivation of
any and all of the same and any code created by Executive during the term
of this Agreement shall remain the sole property of the
Company.
|
|
(c)
|
Non-Competition.
Executive agrees that he will not, for himself, on behalf of, or in
conjunction with any person, firm, corporation or entity, either as
principal, employee, shareholder, member, director, partner, consultant,
owner or part-owner of any corporation, partnership or any other type of
business entity, directly or indirectly, own, manage, operate, control, be
employed by, participate in, or be connected in any manner with the
ownership, management, operation, or control of (i) any establishment
which has live female nude or semi-nude entertainment or is in any
business similar to or competitive with the female entertainment business
presently conducted by the Company anywhere in the United States within 50
miles of any female entertainment business of the Company or any female
entertainment business of the Company under construction, under contract,
in development or leased by or to the Company, or (ii) any company that
engages in Internet websites for the adult entertainment industry or any
other Internet related activities similar to or competitive with those
presently conducted by the Company for a period of two years (the
“Non-Compete Period”) from the termination of this Agreement. However, in
the event of the termination of Executive's employment pursuant to Section
7(e) or 7(f), the Non-Compete Period shall be six
months.
|
Executive
agrees not to hire, solicit or attempt to solicit for employment by Executive or
any company to which he may be involved, either directly or indirectly, any
party who is an employee or independent contractor of the Company or any entity
which is affiliated with the Company, or any person who was an employee or
independent contractor of the Company or any entity which is affiliated with the
Company within the two year period immediately following the termination of this
Agreement.
Executive
acknowledges that he has carefully read and considered all provisions of this
Agreement and agrees that:
|
(i)
|
Due
to the nature of the Company's business, the foregoing covenants place no
greater restraint upon Executive than is reasonably necessary to protect
the business and goodwill of the
Company;
|
|
(ii)
|
These
covenants protect the legitimate interests of the Company and do not serve
solely to limit the Company's future
competition;
|
|
(iii)
|
This
Agreement is not an invalid or unreasonable restraint of
trade;
|
|
(iv)
|
A
breach of these covenants by Executive would cause irreparable damage to
the Company;
|
|
(v)
|
These
covenants are reasonable in scope and are reasonably necessary to protect
the Company's business and goodwill which the Company has established
through its own expense and effort;
and
|
|
(vi)
|
The
signing of this Agreement is necessary as part of the consummation of the
transactions described in the
preamble.
|
6.
Indemnification. The
Corporation shall to the full extent permitted by law or as set forth in the
Articles of Incorporation and the Bylaws of the Company, indemnify, defend and
hold harmless Executive from and against any and all claims, demands,
liabilities, damages, loses and expenses (including reasonable attorney's fees,
court costs and disbursements) arising out of the performance by him of his
duties hereunder except in the case of his willful misconduct.
7.
Termination. This
Agreement and the employment relationship created hereby will terminate (i) upon
the death or disability of Executive under Section 7(a) or 7(b); (ii) with cause
under Section 7(c); (iii) without cause by Executive under Section 7(d); (iv)
for good reason under Section 7(e); or (v) without cause by the Company under
Section 7(f).
|
(a)
|
Disability. The Company
shall have the right to terminate the employment of the Executive under
this Agreement for disability in the event Executive suffers an injury,
illness, or incapacity of such character as to substantially disable him
from performing his duties without reasonable accommodation by the Company
hereunder for a period of more than one hundred eighty (180) consecutive
days upon the Company giving at least thirty (30) days written notice of
termination.
|
|
(b)
|
Death. This Agreement
will terminate on the Death of the
Executive.
|
|
(c)
|
With Cause. The Company
may terminate this Agreement at any time because of (i) Executive's
material breach of any term of the Agreement, (ii) the determination by
the Board of Directors in the exercise of its reasonable judgment that
Executive has committed an act or acts constituting a felony or other
crime involving moral turpitude, dishonesty or theft or fraud; or (iii)
Executive's gross negligence in the performance of his duties hereunder,
provided, in each case, however, that the Company shall not terminate this
Agreement pursuant to this Section 7(c) unless the Company shall first
have delivered to the Executive, a notice which specifically identifies
such breach or misconduct and the executive shall not have cured the same
within fifteen (15) days after receipt of such
notice.
|
|
(d)
|
Without Cause by
Executive. Executive may terminate this Agreement without
cause.
|
|
(e)
|
Good Reason. The
Executive may terminate his employment for "Good Reason"
if:
|
|
(i)
|
he
is assigned, without his express written consent, any duties materially
inconsistent with his positions, duties, responsibilities, or status with
the Company as of the date hereof, or a change in his reporting
responsibilities or titles as in effect as of the date hereof; provided,
however, that Executive must provide the Company with written notice of
his dispute of such re-assignment of duties or change in his reporting
responsibilities under this Section 7(e)(i) and give the Company
opportunity to cure such inconsistency. If such dispute is not resolved
within thirty (30) days, the Company shall submit such dispute to
arbitration under Section 14.
|
|
(ii)
|
his
compensation is reduced;
|
|
(iii)
|
the
Company does not pay any material amount of compensation due hereunder and
then fails either to pay such amount within the ten (10) day notice period
required for termination hereunder or to contest in good faith such
notice. Further, if such contest is not resolved within thirty (30) days,
the Company shall submit such dispute to arbitration under Section
14.
|
|
(f)
|
Without Cause by the
Company. The Company may terminate this Agreement without
cause.
|
|
8.
|
Obligations of Company upon
Termination.
|
|
(a)
|
In
the event of the termination of Executive's employment pursuant to Section
7 (a), (b), (c) or (d), Executive will be entitled only to the
compensation earned by him hereunder as of the date of such termination
(plus life insurance or disability benefits if applicable and provided for
pursuant to Section 4(c)).
|
|
(b)
|
In
the event of the termination of Executive’s employment pursuant to Section
7 (e) or (f), Executive will be entitled to receive in one lump sum
payment the full remaining amount under the Term of this Agreement to
which he would have been entitled had this Agreement not been
terminated.
|
9.
Waiver of Breach. The
waiver by any party hereto of a breach of any provision of this Agreement will
not operate or be construed as a waiver of any subsequent breach by any
party.
10.
Costs. If any action at
law or in equity is necessary to enforce or interpret the terms of this
Agreement, the prevailing party will be entitled to reasonable attorney's fees,
costs and necessary disbursements in addition to any other relief to which he or
it may be entitled.
11.
Notices. Any notices,
consents, demands, requests, approvals and other communications to be given
under this Agreement by either party to the other will be deemed to have been
duly given if given in writing and personally delivered or within two days if
sent by mail, registered or certified, postage prepaid with return receipt
requested, as follows:
|
If
to Company:
|
Rick's
Cabaret International, Inc.
|
00000
Xxxxxx Xxxx
Xxxxxxx,
Xxxxx 00000
Attention:
Xxxx Xxxxxx, President
|
If
to Executive:
|
Xxxxxx
Xxxxx
|
00000
Xxxxxxxxxxx Xxxx
Xxxxxxx,
Xxxxx 00000
Notices
delivered personally will be deemed communicated as of actual
receipt.
12.
Entire Agreement. This
Agreement and the agreements contemplated hereby constitute the entire agreement
of the parties regarding the subject matter hereof, and supersede all prior
agreements and understanding, both written and oral, among the parties, or any
of them, with respect to the subject matter hereof.
13.
Severability. If any
provision of this Agreement is held to be illegal, invalid or unenforceable
under present or future laws effective during this Agreement, such provision
will be fully severable and this Agreement will be construed and enforced as if
such illegal, invalid or unenforceable provision never comprised a part hereof;
and the remaining provisions hereof will remain in full force and effect and
will not be affected by the illegal, invalid or unenforceable provision or by
its severance herefrom. Furthermore, in lieu of such illegal, invalid or
unenforceable provision there will be added automatically as part of this
Agreement a provision as similar in its terms to such illegal, invalid or
unenforceable provision as may be possible and be legal, valid and
enforceable.
14.
Arbitration. If a
dispute should arise regarding this Agreement the parties agree that all claims,
disputes, controversies, differences or other matters in question arising out of
this relationship shall be settled finally, completely and conclusively by
arbitration in Houston, Texas in accordance with the Commercial Arbitration
Rules of the American Arbitration Association (the "Rules"). The governing law
of this Agreement shall be the substantive law of the State of Texas, without
giving effect to conflict of laws. A decision of the arbitrator shall be final,
conclusive and binding on the Company and Executive. Any arbitration held in
accordance with this paragraph shall be private and confidential and no person
shall be entitled to attend the hearings except the arbitrator, Executive,
Executive's attorneys, a representative of the Company, the Company's attorneys,
and advisors to or witnesses for any party. The matters submitted to
arbitration, the hearings and proceedings and the arbitration award shall be
kept and maintained in the strictest confidence by Executive and the Company and
shall not be discussed, disclosed or communicated to any persons except as may
be required for the preparation of expert testimony. On request of any party,
the record of the proceeding shall be sealed and may not be disclosed except
insofar, and only insofar, as may be necessary to enforce the award of the
arbitrator and any judgment enforcing an award. The prevailing party shall be
entitled to recover reasonable and necessary attorneys' fees and costs from the
non-prevailing party and the determination of such fees and costs and the award
thereof shall be included in the claims to be resolved by the arbitrator
hereunder.
15.
Captions. The captions
in this Agreement are for convenience of reference only and will not limit or
otherwise affect any of the terms or provisions hereof.
16.
Gender and Number. When
the context requires, the gender of all words used herein will include the
masculine, feminine and neuter and the number of all words will include the
singular and plural.
17.
Execution. This
Agreement may be executed in two or more counterparts, all of which when taken
together shall be considered one and the same agreement and shall become
effective when counterparts have been signed by each party and delivered to the
other party, it being understood that both parties need not sign the same
counterpart. In the event that any signature is delivered by facsimile
transmission or by e-mail delivery of a “.pdf” format data file, such signature
shall create a valid and binding obligation of the party executing (or on whose
behalf such signature is executed) with the same force and effect as if such
facsimile or “.pdf” signature page were an original thereof.
IN
WITNESS WHEREOF, the parties hereto have duly executed this Agreement effective
as of the day and year first above written.
|
COMPANY:
|
||
|
RICK'S
CABARET INTERNATIONAL, INC.
|
||
|
By:
|
/s/ Xxxx Xxxxxx
|
|
|
Xxxx
Xxxxxx,
|
||
|
President
and Chief Executive Officer
|
||
|
EXECUTIVE:
|
||
|
By:
|
/s/ Xxxxxx Xxxxx
|
|
|
Xxxxxx
Xxxxx
|
||
Employment Agreement - Page
7
