EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") is effective as of December 14,
1999 (the "Effective Date"), by CHECKERS DRIVE-IN RESTAURANTS, INC., a Florida
corporation ("Checkers"), and Xxxxxx Xxxxxx, an individual (the "Executive").
Checkers is sometimes referred to herein singularly as the "Company". In
consideration of the mutual covenants and agreements set forth herein, the
parties hereto agree as follows:
l. Employment and Duties. Subject to the terms and conditions of this
Agreement, the Company employs the Executive to serve in an executive and
managerial capacity as the Chief Executive Officer, and the Executive accepts
such employment and agrees to perform such reasonable responsibilities and
duties commensurate with the aforesaid position, as directed by the Board of
Directors of the Company or as set forth in the Articles of Incorporation and/or
the Bylaws of the Company, for all locations in which the Company has offices or
stores. In addition, the Board of Directors of the Company, or any appropriate
committee of such Board, shall recommend to the shareholders of the Company that
the Executive be elected to serve as a director on the Board of the Company for
each year during the Term (as defined below). The Executive agrees to devote his
full time efforts to his employment duties at Checkers
2. Term. The term of employment under this Agreement shall be for a
period of two (2) years (the "Term") commencing on the Effective Date, subject
to termination pursuant to Section 4, below. This Agreement shall automatically
be renewed each year for an additional one (1) year term unless the Company
notifies the Executive that it is terminating this Agreement prior to December
14th of the preceeding year.
3. COMPENSATION.
3.1 ANNUAL SALARY. During the Term of this Agreement, the
Company shall pay Executive an aggregate minimum base annual salary, before
deducting all applicable withholdings, of Two Hundred Thousand Dollars
($200,000) per year (the "Base Salary"), payable at the times and in the manner
dictated by the Company's standard payroll policies.
3.2. OTHER COMPENSATION AND BENEFITS. During the Term, as
additional compensation, the Executive shall be entitled to participate in and
receive the following:
(a) INCENTIVE BONUS. The Executive shall be entitled to
participate in the Company's Incentive Bonus Plan, pursuant to which the
Executive shall be entitled to earn up to a maximum of thirty five percent (35%)
of his Base Salary (the "Incentive Bonus"). The Incentive Bonus will be based on
the Executive's achievement of certain performance criteria determined in good
faith by the Company's Boards of Directors. The Incentive Bonus if any, shall be
pro-rated for any partial employment period. Any Incentive Bonus due for a given
year of the term shall be paid no later than April 15th of the following year.
(b) BENEFITS. Executive shall be entitled to choose to
participate in and receive all benefits under the Checker's employee benefit
plans or programs (including, without limitation, medical, dental, disability,
and group life), any retirement savings plans or programs (including, without
limitation, employee stock purchase plans), and such other perquisites of office
as Checkers may, from time to time and in their sole discretion, make available
generally to employees of similar rank as Executive, subject to such eligibility
provisions as may be in effect from time to time.
(c) STOCK OPTIONS. Checkers hereby grants to the
Executive, options to purchase 100,000 shares of Checkers Common Stock, in
accordance with and pursuant to the terms of the Checkers Stock Option Plan (the
"Plan"). The exercise price for such options shall be the closing price on the
Effective Date of Checkers Common Stock publicly traded on NASDAQ, as stated in
the Wall Street Journal. The above described options shall all be vested in
their entirety upon the Effective date of this agreement.
3.3. VACATION. Executive will be entitled to paid vacation
time in accordance with the Company's personnel policies and procedures made
available to the Company's executive employees of similar rank, as the same may
change from time to time, or as otherwise determined by the Board of Directors
of the Company. In addition, Executive shall be entitled to such holidays
consistent with the Company's standard policies or as the Company's Board of
Directors may approve.
3.4 EXPENSE REIMBURSEMENT. In addition to the compensation
and benefits provided herein, the Company shall, upon receipt and approval of
appropriate documentation, reimburse Executive each month for his reasonable
travel, lodging, entertainment, promotion and other ordinary and necessary
business expenses. The arrangement set forth in this Section 3.4 is intended to
constitute an accountable plan within the meaning of Section 162 of the Internal
Revenue Code, as amended (the "Code") and the accompanying regulations, and the
Executive agrees to comply with all reasonable guidelines established by the
Company from time to time to meet the requirements of Section 162 of the Code
and the accompanying regulations.
4. TERMINATION.
4.1 FOR CAUSE. Notwithstanding any other provisions to the
contrary contained herein, the Company may terminate this Agreement immediately
for cause upon written notice to the Executive, in which event the Company shall
be obligated to pay the Executive that portion of the Base Salary and the
Incentive Bonus, if any, due him through the date of termination. For purposes
of this Agreement, "cause" shall mean: (a) material default or other material
breach by Executive of Executive's obligations hereunder; (b) the willful and
habitual failure by Executive to perform the duties that Executive is required
to perform under this Agreement or the Company's corporate policies, provided
such corporate policies have previously been delivered to Executive; or (c)
misconduct, dishonesty, insubordination, or other act by Executive that in any
way has a direct, substantial and adverse effect on either Company's reputation
or it's respective relationships with it's customers or employees, including,
without limitation, (i) use of alcohol or illegal drugs such as
2
to interfere with the Executive's obligations hereunder, (ii) conviction of a
felony or of any crime involving moral turpitude or theft, and (iii) material
failure by Executive to comply with applicable laws or governmental regulations
pertaining to Executive's employment hereunder.
4.2 WITHOUT CAUSE. Notwithstanding any other provisions to the
contrary contained herein, the Company, on the one hand, and the Executive, on
the other hand, may terminate this Agreement immediately without cause by giving
written notice to the other. If the Company terminates this Agreement under this
Section 4.2, it shall continue to pay the Executive for a period of six months
from the date of termination if the Executive was terminated within the first
year from the Effective Date of the Agreement or through the balance of the
unexpired Term if the Executive was terminated one year or more after the
effective date of this Agreement. The amount payable to the Executive hereunder
shall be paid to the Executive in lump sum or as otherwise directed by the
Executive. If the Executive terminates this Agreement under this Section 4.2,
the Executive agrees that he will also terminate his position as a director of
the company and the Company shall only be obligated to pay to the Executive the
Base Salary due him through the date of termination.
4.3 DISABILITY. Notwithstanding any other provisions to the
contrary contained herein, if the Executive fails to perform his duties
hereunder on account of illness or other incapacity for a period of six (6)
consecutive months, the Company shall have the right upon written notice to the
Executive to terminate this Agreement, without further obligation, by paying
Executive (1) an amount equal to six months of his base salary or (2) the Base
Salary for the remainder of the Term of this Agreement, whichever is less, in a
lump sum or as otherwise directed by Executive.
4.4 DEATH. Notwithstanding any other provisions to the
contrary contained herein, if the Executive dies during the Term of this
Agreement, this Agreement shall terminate immediately, and the Executive's legal
representatives or designated beneficiary shall be entitled to receive the Base
Salary to the date of Executive's death in a lump sum or as otherwise directed
by Executive's legal representatives or designated beneficiary, whichever the
case may be.
4.5 TERMINATION BY THE COMPANY FOLLOWING CHANGE OF CONTROL. In
the event of a Change of Control (as defined below) of the Company, the Company
shall require any Successor (as defined below) to assume and agree to perform
this Agreement in the same manner and to the same extent that such Company would
be required to perform if the Change of Control had not occurred. Upon the
assumption of this Agreement by the Successor, and its agreement to perform the
duties and obligations of such Company hereunder, that Company shall be released
from any further liability under this Agreement. As used herein, a "Change of
Control" of the Company shall mean the acquisition by a "Successor," whether
directly or indirectly, by purchase, merger, consolidation or otherwise, of all
or substantially all of the common stock, business and/or assets of such
Company; provided, however, that a Change of Control shall not be deemed to have
occurred as a result of an increased ownership interest of the Company by Xxxx
Xxxxxxx Enterprises, Inc. or
3
Fidelity National Financial, Inc., or any of their respective affiliates, or a
transfer of any such ownership interests by any such entity to any of its
affiliates.
4.6 EFFECT OF TERMINATION. Termination for any cause shall not
constitute a waiver of the Company's rights under this Agreement as specified in
Section 6 nor a release of Executive from any obligation hereunder except his
obligation to perform his day-to-day duties as an Executive.
5. NON-DELEGATION OF EXECUTIVE'S RIGHTS. The obligations, rights and
benefits of Executive hereunder are personal and may not be assigned or
transferred in any manner whatsoever, nor are such obligations, rights or
benefits subject to involuntary alienation, assignment or transfer.
6. COVENANTS OF EXECUTIVE.
6.1 CONFIDENTIALITY. Executive acknowledges that in his
capacity as an Executive of the Company he will occupy a position of trust and
confidence, and he further acknowledges that he will have access to and learn
substantial information about the Company and its respective operations that is
confidential or not generally known in the industry including, without
limitation, information that relates to purchasing, sales, customers, marketing,
such Company's financial position and financing arrangements. Executive agrees
that all such information is proprietary or confidential or constitutes trade
secrets and is the sole property of the Company. Accordingly, during the
Executive's employment by the Company and for a period of two (2) years
thereafter, Executive will keep confidential, and will not without the Company's
permission reproduce, copy or disclose to any other person or firm, any such
information or any documents or information relating to the Company's methods,
processes, customers, accounts, analyses, systems, charts, programs, procedures,
correspondence, or records, or any other documents used or owned by the Company,
nor will Executive advise, discuss with or in any way assist any other person or
firm in obtaining or learning about any of the items described in this section,
either alone or with others, outside the scope of his duties and
responsibilities with the Company unless otherwise required by law or court
ordered subpoena.
6.2 COMPETITIVE ACTIVITIES DURING EMPLOYMENT. Executive agrees
that during his employment by the Company, he will devote substantially all his
business time and effort to and give undivided loyalty to the Company. Executive
will not, during his employment by the Company, engage in any way whatsoever,
directly or indirectly, in any business that is competitive with the Company,
nor solicit, or in any other manner work for or assist any business which is
competitive with the Company. During his employment by the Company, Executive
will undertake no planning for or organization of any business activity
competitive with the work he performs as an executive of the Company, and
Executive will not, during his employment by the Company, combine or conspire
with any other employee of the Company or any other person for the purpose of
organizing any such competitive business activity.
4
6.3 REMEDY FOR BREACH. Executive acknowledges that the Company
will be irrevocably damaged if all of the provisions of this Section 6 are not
specifically enforced. Accordingly, the Executive agrees that, in addition to
any other relief to which the Company may be entitled, the Company will be
entitled to seek and obtain injunctive relief from a court of competent
jurisdiction for the purpose of restraining the Executive from any actual or
threatened breach of this Section 6. The Executive's obligations under this
Section 6 shall survive the Executive's termination of employment with the
Company for the periods of time specified in this Section 6.
7. RETURN OF DOCUMENTS. Upon termination of this Agreement, Executive
shall return immediately to the Company all records and documents of or
pertaining to the Company and shall not make or retain any copy or extract of
any such record or document.
8. IMPROVEMENTS AND INVENTIONS. Any and all improvements or inventions
which Executive may conceive, make or participate in during the period of his
employment shall be the sole and exclusive property of the Company. Executive
will, whenever requested by the Company during the period of his employment,
execute and deliver any and all documents which the Company shall deem
appropriate in order to apply for and obtain patents for improvements or
inventions or in order to assign and convey to the Company the sole and
exclusive right, title and interest in and to such improvements, inventions,
patents or applications.
9. MISCELLANEOUS.
9.1 ENTIRE AGREEMENT; AMENDMENT. This Agreement constitutes
the entire agreement between the parties with respect to Executive's employment
with the Company and supersedes any and all prior or contemporaneous agreements
or understandings, whether oral or written, relating to the such employment.
This Agreement may be amended, modified, supplemented, or changed only by a
written document signed by all parties to this Agreement.
9.2 DISPUTES AND GRIEVANCES. The Executive agrees that the
exclusive forum for any dispute or grievance arising from or relating to this
Agreement or the Executive's employment at the company, shall be governed by the
Company's "Fast Track Resolution Program", a copy of which will be made
available to the Executive
9.3 NOTICES. Any notice, request, or instruction to be given
hereunder shall be in writing and shall be deemed given when personally
delivered or three (3) days after being sent by United States certified mail,
postage prepaid, with return receipt requested, to the parties at their
respective addresses set forth below:
5
To Checkers:
Checkers Drive-In Restaurants, Inc.
00000 00xx Xxxxxx Xxxxx, Xxxxxxxx 0
Xxxxxxxxxx, Xxxxxxx 00000
Attn: Xxxxxxx X. Xxxxx, XX
To Executive:
Xxxxxx X. Xxxxxx
00000 Xxxxxxx Xxxxx
Xxxxx 000
Xxxxx, XX 00000
9.6 WAIVER. The failure of a party to insist upon strict
adherence to any term of this Agreement on any occasion shall not be considered
a waiver thereof or deprive that party of the right thereafter to insist upon
strict adherence to that term or any other term of this Agreement.
9.7 ASSIGNMENT. This Agreement shall be binding upon and inure
to the benefit of the parties and their permitted assigns. Neither this
Agreement nor any of the rights of the parties hereunder may be transferred or
assigned by either party, except that if there is a Change of Control of the
Company and the Successor assumes, either expressly or by operation of law, such
Company's obligations under this Agreement, then the Company shall assign its
rights and obligations hereunder to such Successor subject to the terms of
Section 4.5 of this Agreement. Any assignment or transfer in violation of this
Section 9.7 shall be void.
9.8 CAPTIONS AND HEADINGS. The captions and headings are for
convenience of reference only and shall not be used to construe the terms or
meaning of any provisions of this Agreement.
6
IN WITNESS WHEREOF the parties have executed this Employment Agreement as of the
date set forth above.
CHECKERS:
CHECKERS DRIVE-IN RESTAURANTS,
INC., a Florida corporation
By: /s/ XXXXXXX X. XXXXX, XX
-------------------------
Its: Chairman of the Board
---------------------
EXECUTIVE:
/s/ XXXXXX X. XXXXXX
--------------------
Xxxxxx X. Xxxxxx
7
