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EXHIBIT 10.22
EMPLOYMENT AGREEMENT
This Employment Agreement made as of the 31 day of January, 2000,
("Agreement"), by and between Nathan's Famous Services, Inc., a corporation
incorporated under the laws of the State of Delaware, with its principal place
of business at 0000 Xxx Xxxxxxx Xxxx, Xxxxxxxx, Xxx Xxxx 00000 (the "Company"),
and Xxxxxx XxXxx, residing at 00 Xxxxxxx Xxxxx, Xxx Xxxxx, XX 00000 (the
"Executive").
W I T N E S S E T H :
WHEREAS, the Company has determined that it is in its best interests of
the Company to enter into an employment agreement setting forth the obligations
and duties of both the Company and the Executive (this "Agreement"); and
WHEREAS, the Company wishes to assure itself of the continued services of
the Executive for the period hereinafter provided, and Executive is willing to
be employed by the Company for said period, upon the terms and conditions
provided in this Agreement;
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements herein contained, the Company and Executive hereby
agree as follows:
1. Recitals. The foregoing recitals are true and correct and are
incorporated herein by reference thereto.
2. Employment.
The Company hereby agrees to employ Executive, and Executive agrees to be
employed by the Company, on the terms and conditions herein contained, to serve
as its Vice President of Finance, Chief Financial Officer and Secretary.
Executive shall devote substantially all of his business time, energy, skill and
efforts to the performance of his duties hereunder and shall faithfully and
diligently serve the Company. The foregoing shall not prevent Executive from
participating in not-for-profit activities or from managing his passive personal
investments provided that these activities do not materially interfere with
Executive's obligations hereunder.
3. Term of Employment.
Executive's employment under this Agreement shall be for a term commencing
on the date hereof (the "Effective Date") and, subject to earlier termination as
provided in Section 8 below, terminating on the second anniversary of the
Effective Date (the "Employment Term"). Notwithstanding anything else herein,
the provisions of Section 9 hereof shall survive and remain in effect
notwithstanding the termination of the Employment Term.
4. Compensation.
(a) As compensation for his services under this Agreement, the Company
shall pay Executive a salary at the rate of One Hundred Fifty-Five Thousand
Dollars ($155,000) per year (the "Base Salary"), payable in equal installments
(not less frequently than monthly) and subject to withholding in accordance with
the Company's normal payroll practices. The Executive's Base Salary shall be
reviewed annually by the Company.
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(b) In addition to the Base Salary, Executive shall be entitled to
receive bonuses from time-to-time during the Employment Term in such amounts as
may be determined by the Board of Directors of Nathan's Famous, Inc. ("Parent")
in its discretion.
5. Benefits and Fringes.
During the Employment Term, Executive shall be entitled to such benefits
and fringes, if any, as are generally provided from time to time by the Company
and/or Parent to its officers, including any life, medical or dental insurance
plans for the benefit of Executive, and pension, profit-sharing, 401(k) and
other similar plans and on the same terms as so provided. In addition to the
foregoing, Executive shall also be entitled to a car allowance of no more than
$800 per month to be applied to the cost of leasing or purchasing an automobile
of Executive's choice.
6. Expenses.
The Company shall reimburse Executive in accordance with its expense
reimbursement policy as in effect from time to time for all reasonable expenses,
including, without limitation, Executive's professional dues, license fees,
continuing educational courses, professional association membership fees,
airplane travel and other travel expenses (including, without limitation,
repairs, maintenance, insurance and gasoline), incurred by Executive in
connection with the performance of his duties under this Agreement upon the
presentation by Executive of an itemized account of such expenses and
appropriate receipts.
7. Vacation.
During the Employment Term, Executive shall be entitled to vacation in
accordance with the Parent's practices, provided that Executive shall not be
entitled to less than four (4) weeks paid vacation in each full contract year.
Any vacation not taken in any year shall be deemed to be forfeited by the
Executive as of the first day of the succeeding contract year.
8. Termination.
(a) Executive's employment under this Agreement and the Employment
Term shall terminate as follows:
(i) upon the expiration of the Employment Term pursuant to
Section 3.
(ii) automatically on the date of Executive's death.
(iii) Upon written notice given by the Company to the Executive if
Executive is unable to perform his material duties hereunder for 180 days
(whether or not continuous) during any period of 360 consecutive days by reason
of physical or mental disability.
(iv) Upon written notice by the Company to the Executive for
Cause. Cause shall mean (A) the Executive's conviction of a felony involving
moral turpitude (after exhaustion or lapse of all rights of appeal); (B) willful
refusal to perform his duties as any of Vice President of Finance, Chief
Financial Officer and Secretary of the Company, which is not remedied promptly
after receipt by the Executive of written notice from the Company specifying the
details thereof; and (C) Executive's dishonesty in the performance of his
duties. Upon a termination for Cause, Executive (and his representative) shall
be given the opportunity to appear before the Board of Directors of the Company
(the "Board") to explain why the Executive believes that Cause did not occur.
Such appearance shall be scheduled on no less than twenty (20)
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and no more than forty (40) days written notice to Executive. In the event the
Board agrees with the Executive, which shall be a determination made in its sole
discretion, the Executive shall be retroactively reinstated in his position. The
removal pending such Board meeting shall not be deemed Good Reason under (vi)
below.
(v) Upon written notice by the Company without Cause.
(vi) Upon the voluntary resignation of the Executive without Good
Reason upon sixty (60) days prior written notice to the Company (which the
Company may in its sole discretion make effective earlier).
(vii) Upon the written resignation of the Executive for Good Reason
stating with specificity the details of the Good Reason, if the stated Good
Reason is not cured within thirty (30) days of the giving of such notice. "Good
Reason" shall mean (A) relocation of the Executive's office, or materially
change the location at which Executive is required to perform his duties, from
within the Territory, (B) any material reduction in his authority, duties or
responsibilities or (C) any other material breach of any provision of this
Agreement by the Company. For purposes hereof, "Territory" shall mean within
sixty miles of Westbury, New York.
(b) Upon any termination of the Employment Term, Executive shall be
entitled to receive any unpaid salary and accrued vacation through his date of
termination and any benefits under any benefit plan in accordance with the terms
of said plan. In addition, (i) if the termination is pursuant to (a)(v) or
(a)(vii) above, Executive shall receive (without a duty to mitigate) severance
pay in a lump sum equal to the amount of Executive's Base Salary in effect at
the time of termination for the period from the date of termination to the
second anniversary of the Effective Date. Such lump sum severance payment shall
be paid within thirty (30) days after the date of termination. In the event
termination is pursuant to (a)(iii) alone, Executive shall receive in monthly
payments for one (1) year thereafter Executive's Base Salary in effect at the
time of termination reduced by any disability benefits or worker's compensation
salary replacement he receives from any program sponsored or made available by
the Company or a governmental entity. In the event of termination other than
pursuant to (a)(ii), (a)(iv) or (a)(vi), to the extent the Executive or his
dependents are eligible for COBRA coverage, the Company shall pay the cost of
such coverage for the maximum period permitted under federal law. The Company
shall have no other obligations to the Executive.
9. Confidential Information and Non-Competition.
(a) Executive acknowledges that as a result of his employment by the
Company, Executive will obtain secret and confidential information as to the
Company and its affiliated entities, that the Company and its affiliated
entities will suffer substantial damage, which would be difficult to ascertain,
if Executive shall enter into Competition (as defined below) with the Company or
any of its affiliated entities and that because of the nature of the information
that will be known to Executive it is necessary for the Company and its
affiliated entities to be protected by the prohibition against Competition set
forth herein, as well as the confidentiality restrictions set forth herein.
Executive acknowledges that the provisions of this Agreement are reasonable and
necessary for the protection of the business of the Company and its affiliated
entities and that part of the compensation paid under this Agreement is in
consideration for the agreements in this Section 9.
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(b) Competition shall mean:
(i) participating, directly or indirectly, as an individual
proprietor, partner, stockholder, officer, employee, director, joint venturer,
investor, lender, consultant or in any capacity whatsoever in the State of New
York in a business in competition with the quick-service restaurant business
conducted by the Company or its affiliated entities during the Employment Term;
provided, however, that such prohibited participation shall not include: (A) the
mere ownership of not more than one percent (1%) of the total outstanding stock
of a publicly held company; (B) the performance of services for any enterprise
to the extent such services are not performed, directly or indirectly, for a
business in the aforesaid Competition; or (C) any activity engaged in with the
prior written approval of the Board.
(ii) recruiting, soliciting or inducing any nonclerical employee or
employees of the Company or its affiliated entities to terminate their
employment with, or otherwise cease their relationship with, the Company or its
affiliated entities or hiring or assisting another person or entity to hire any
nonclerical employee of the Company or its affiliated entities. Notwithstanding
the foregoing, if requested by an entity with which Executive is not affiliated,
Executive may serve as a reference for any person who at the time of the request
is not an employee of the Company or any of its affiliated entities.
If any restriction set forth in above items (i) and/or (ii) is found by any
court of competent jurisdiction, or an arbitrator, to be unenforceable because
it extends for too long a period of time or over too great a range of activities
or in too broad a geographic area, it shall be interpreted to extend over the
maximum period of time, range of activities or geographic area as to which it
may be enforceable.
(c) During and after the Employment Term, Executive shall hold in a
fiduciary capacity for the benefit of the Company and its affiliated entities
all secret or confidential information, knowledge or data relating to the
Company and its affiliated entities, and their respective businesses, including
any confidential information as to customers or vendors of the Company or its
affiliated entities, (i) obtained by Executive during his employment by the
Company or its affiliated entities; and (ii) not otherwise public knowledge or
known within the Company's or its affiliated entities' industries. Executive
shall not, without prior written consent of the Company, unless compelled
pursuant to the order of a court or other governmental or legal body having
jurisdiction over such matter, communicate or divulge any such information,
knowledge or data to anyone other than the Company and those designated by it.
In the event Executive is compelled by order of a court or other governmental or
legal body to communicate or divulge any such information, knowledge or data to
anyone other than the Company and those designated by it, Executive shall
promptly notify the Company of any such order and shall cooperate fully with the
Company in protecting such information to the extent possible under applicable
law.
(d) Upon termination of Executive's employment with the Company, or at
any other time as the Company may request, Executive will promptly deliver to
the Company all documents which Executive may possess or have under his
direction or control (whether prepared by the Company, an affiliated entity,
Executive or a third party) relating to the Company or its affiliated entities
or any of their respective businesses or properties.
(e) During the Employment Term and for a period of one (1) year
following termination thereof (except for termination pursuant to Section
8(a)(iv) or (vi)), Executive shall not enter into Competition with the Company
or any of its affiliated entities.
(f) In the event of a breach or potential breach of this Section 9,
Executive acknowledges that the Company and its affiliated entities will be
caused irreparable injury and that money damages may not
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be an adequate remedy and agree that the affiliated entities shall be entitled
to injunctive relief (in addition to its other remedies at law) to have the
provisions of this Section 9 enforced.
10. Executive Representation.
Executive represents and warrants that he is under no contractual or other
limitation from entering into this Agreement and performing his obligations
hereunder.
11. Indemnification
The Executive shall be entitled to be indemnified by the Company for his
actions as an officer, director, employee, agent or fiduciary of the Company or
its affiliated entities to the fullest extent permitted by applicable law and
shall, to the extent the Company does not or is unable as a result of a conflict
between the parties to undertake his defense, have reasonable legal fees
(including, but not limited to, a retainer fee) and other reasonable expenses
paid to him in advance of final disposition of a proceeding, provided that he
has actually incurred such expenses and he executes an undertaking to repay such
amounts if, and to the extent, required to do so by applicable law. The Company
shall cover the Executive under any directors' and officers' liability insurance
policy to the same extent as its other senior officers.
12. Change of Control.
Upon a "Change of Control" (as defined below) of the Company or Parent,
the Company shall pay Executive, within thirty (30) days of such event, a lump
sum equal to three (3) times the amount of his Base Salary in effect at the time
of such event, together with a pro rata portion of any bonus accrued through the
date of such Change of Control. As used herein "Change of Control" means (a) a
change in control as such term is presently defined in Regulation 240.12b-2
under the Securities Exchange Act of 1934 ("Exchange Act"); or (b) if any
"person" (as such term is used in Section 13(d) and 14(d) of the Exchange Act)
in either the case of the Company or Parent (other than the Parent or any
"person" who on the date of this Agreement is a director or officer of the
Parent or Company, as the case may be), becomes the "beneficial owner" (as
defined in Rule 13(d)-3 under the Exchange Act), directly or indirectly, of
securities of the Company or Parent, as the case may be, representing twenty
(20%) percent of the voting power of the Company's or Parent's then outstanding
securities, as the case may be; or (c) if during any period of two (2)
consecutive years during the term of Executive's employment, individuals who at
the beginning of such period constitute the Board of Directors of either the
Company or Parent cease for any reason to constitute at least a majority
thereof.
13. Entire Agreement; Modification.
This Agreement constitutes the full and complete understanding of the
parties hereto and will supersede all prior agreements and understandings, oral
or written, with respect to the subject matter hereof. Each party to this
Agreement acknowledges that no representations, inducements, promises or
agreements, oral or otherwise, have been made by either party, or anyone acting
on behalf of either party, which are not embodied herein and that no other
agreement, statement or promise not contained in this Agreement shall be valid
or binding. This Agreement may not be modified or amended except by an
instrument in writing signed by the party against whom or which enforcement may
be sought.
14. Severability.
Any term or provision of this Agreement which is invalid or unenforceable
in any jurisdiction shall,
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as to such jurisdiction, be ineffective to the extent of such invalidity or
unenforceability without rendering invalid or unenforceable the remaining terms
and provisions of this Agreement or affecting the validity or enforceability of
any of the terms of provisions of this Agreement in any other jurisdiction.
15. Waiver of Breach.
The waiver by any party of a breach of any provisions of this Agreement,
which waiver must be in writing to be effective, shall not operate as or be
construed as a waiver of any subsequent breach.
16. Notices.
All notices hereunder shall be in writing and shall be deemed to have been
duly given when delivered by hand, or one day after sending by express mail or
other "overnight mail service," or three days after sending by certified or
registered mail, postage prepaid, return receipt requested. Notice shall be sent
as follows: if to Executive, to the address as listed in the Company's records;
and if to the Company, to the Company at its office as set forth at the head of
this Agreement, and if to the attention of Parent, to the attention of its
President and Chief Operating Officer. Either party may change the notice
address by notice given as aforesaid.
17. Assignability; Binding Effect.
This Agreement shall be binding upon and inure to the benefit of Executive
and Executive's legal representatives, heirs and distributees, and shall be
binding upon and inure to the benefit of the Company, its successors and
assigns. This Agreement may not be assigned by the Executive. This Agreement may
not be assigned by the Company except in connection with a merger or a sale by
the Company of all or substantially all of its assets and then only provided the
assignee specifically assumes in writing all of the Company's obligations
hereunder.
18. Governing Law.
(a) All issues pertaining to the validity, construction, execution and
performance of this Agreement shall be construed and governed in accordance with
the laws of the State of New York, without giving effect to the conflict or
choice of law provisions thereof.
(b) The Company and Executive each irrevocably consent that any legal
action or proceeding against any of them under, arising out of or in any manner
relating to, this Agreement or any other document delivered in connection
herewith, may be brought in any court of the State of New York located within
Nassau County or Suffolk County or in the United States District Court for the
Eastern District of New York. The Company and Executive by the execution and
delivery of this Agreement, expressly and irrevocably consent and submit to the
personal jurisdiction of any of such courts in any such action or proceeding.
The Company and Executive further irrevocably consent to the service of any
complaint, summons, notice or other process relating to any such action or
proceeding by delivery thereof to it by hand or by any other manner provided for
in Section 16. The Company and Executive hereby expressly and irrevocably waive
any claim or defense in any such action or proceeding based on any alleged lack
of personal jurisdiction, improper venue or forum non convenient or any similar
basis. Nothing in this Section shall affect or impair in any manner or to any
extent the right of the Company to commence legal proceedings or otherwise
proceed against the Executive in any jurisdiction or to serve process in any
manner permitted by law.
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19. Headings.
The headings in this Agreement are intended solely for convenience of
reference and shall be given no effect in the construction or interpretation of
this Agreement.
20. Counterparts.
This Agreement may be executed in several counterparts, each of which
shall be deemed to be an original but all of which together shall constitute one
and the same instrument.
21. Guarantee and Joinder.
Parent hereby unconditionally and irrevocably guarantees, as primary
obligor and not merely as surety: (i) the punctual payment when due of all
obligations of the Company arising under this Agreement; and (ii) the due and
punctual performance and observance by the Company of all covenants, agreements
and conditions on its part to be performed and observed under this Agreement.
Parent hereby agrees to comply with, and be bound by this Agreement.
IN WITNESS WHEREOF, the Company and Parent have each caused this Agreement
to be duly executed by an authorized officer and Executive has hereunto set his
hand as of the date first set forth above.
NATHAN'S FAMOUS SERVICES, INC.
By:/s/ Xxxxx Xxxxxxx
--------------------------
Name: Name: Xxxxx Xxxxxxx
Title: President
/s/ Xxxxxx XxXxx
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Xxxxxx XxXxx
NATHAN'S FAMOUS, INC.
By:/s/ Xxxxx Xxxxxxx
-------------------------
Name: Xxxxx Xxxxxxx
Title: President
