EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (the "AGREEMENT"), dated as of the 28th day
of October, 1996 ("EFFECTIVE DATE"), is by and between Spaghetti Warehouse,
Inc., a Texas corporation (hereinafter referred to as the "COMPANY"), and
Xxxxxxx Xxxxxx (hereinafter referred to as the "EXECUTIVE") and supersedes that
prior Employment Agreement, dated as of June 25, 1994, by and between the
Company and the Executive.
W I T N E S S E T H:
WHEREAS, the Company desires to renew the employment of the Executive in
the capacity of President and Chief Executive Officer; and
WHEREAS, the Board of Directors of the Company (the "BOARD") agreed with
the Executive on October 28, 1996 as to the terms and conditions of such
employment and such parties desire to memorialize such agreement; and
WHEREAS, the Executive agrees to accept such employment on the terms and
conditions agreed to as herein set forth.
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, it is hereby agreed by and between the Company and the
Executive as follows:
DURATION
1. This Agreement shall commence on the Effective Date and shall
continue in effect until terminated as provided in Paragraphs 24-29.
COMPENSATION
2. The Company agrees to compensate the Executive at an annual base
compensation rate of Two Hundred Seventy-Five Thousand Dollars ($275,000) per
year, payable in equal bi-weekly payments. The Executive agrees such
compensation is fair and adequate compensation for his services, and for the
mutual promises described below.
3. The Company and the Executive acknowledge that during the term of
employment of the Executive pursuant to this Agreement, the Executive's
compensation will be subject to an annual review and adjustment by the Board at
the beginning of each fiscal year.
4. The Company agrees that it will grant to Executive stock options to
acquire One Hundred Thousand (100,000) shares of the Company's common stock
("OPTIONS") at an option price of $53/8 per share. The Options will be granted
on the Effective Date under the Spaghetti
EMPLOYMENT AGREEMENT - PAGE 1
CORPDAL:58668.5 08099-00002
Warehouse, Inc. 1990 Incentive Stock Option Plan (the "Option Plan"). The
Options shall consist of Incentive Stock Options exercisable into shares having
a value of $400,000 on the date of grant, and which will vest in four (4) equal
installments of twenty-five percent (25%) on each of June 25, 1999, 2000, 2001,
and 2002. The remainder of the Options will be nonqualified options and also
will vest in four (4) installments on such dates. The nonqualified options shall
vest with respect to that number of shares subject to the nonqualified options
which, when added to the shares of Incentive Stock Options vesting on the
corresponding date, will equal 25,000 shares on each vesting date. See
Attachment I, which is incorporated herein by reference, for an example of the
above vesting rules. In addition, the Options will provide that, (a) in the
event of the termination of this Agreement in manner set forth in Paragraphs 25
or 27, then, in addition to the Options that already have vested in accordance
with the above schedules, both the Incentive Stock Options, and the nonqualified
options will vest in an amount equal to (x) in the case of a termination under
Paragraph 25, the product of (i) a fraction, whose numerator is the full months
of employment completed between the termination date and the immediately
preceding Effective Date or anniversary of the Effective Date as the case may
be, and whose denominator is twelve (12), and (ii) the number of shares that
would have become vested on the next succeeding anniversary of the Effective
Date had the Executive remained in the employ of the Company until that
anniversary, and (y) in the case of a termination under Paragraph 27, the number
of shares that would have become vested on the next anniversary of the Effective
Date had Executive remained in the employ of the Company until that anniversary.
In the case of a termination of the Executive's employment hereunder without
"Cause" (as defined in Paragraph 26 below), then the Executive shall have six
(6) months to exercise any Options outstanding to him that have vested
(including options outstanding prior to the Effective Date hereof). The Company
will amend the Option Plan to allow and any related option agreements will
provide for such six-month exercisability period. The Options will have other
terms and conditions for Options granted to other executives under the Option
Plan.
5. In addition, (i) during all periods of employment by the Company
during which the Executive is insurable at standard rates, the Company will
purchase and maintain a life insurance policy(ies) (which policy(ies) shall
remain an asset of the Company) that will provide a death benefit to Executive's
designated beneficiary in an amount equal to one (1) times the Executive's
annual base compensation in the event of his death while employed by the
Company; PROVIDED, FURTHER, that, without limitation, such amount shall be in
addition to any amount provided under any other employee benefit plan of the
Company and the amount provided in Paragraph 27, and (ii) in the event the
Executive is not insurable at standard rates at any time of reference, the
Company will pay to Executive on a quarterly basis, one fourth of the premium
that would be required to purchase one year nonrenewable term insurance on the
life of the Executive in the amount provided in (i) if the Executive were
insurable at standard rates.
Also, during all periods of employment by the Company during
which the Executive is insurable at the standard rates, the Company will
purchase and maintain a disability policy(ies) (which policy(ies) shall remain
an asset of the Company) that will provide a disability benefit to the Executive
equal to sixty percent (60%) of his base compensation rate, as provided under
the Company's executive disability policies currently in effect.
EMPLOYMENT AGREEMENT - PAGE 2
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6. The Company and the Executive acknowledge and agree that the Company
shall reimburse the Executive for any reasonable expenses, including, but not
limited to, travel expenses, lodging expenses, meals or entertainment expenses,
that the Executive may incur in the performance of his duties and obligations
under this Agreement. PROVIDED, HOWEVER, that the Executive shall be required to
submit receipts or other acceptable documentation to the Company to verify such
expenses prior to any reimbursements.
7. Notwithstanding any provision hereof to the contrary, in the event
of termination of this Agreement for any reason, the Company will pay Executive
accrued vacation pay, and sick leave compensation, pursuant to the applicable
Company policy in effect at the time of termination.
8. The Company and the Executive acknowledge and agree that, in the
sole discretion of the Board, the Executive may be entitled to bonus
compensation. The Executive acknowledges and agrees that any such bonus
compensation shall be payable at such times and under such terms and conditions
as are provided in this Agreement and as the Board may from time to time
approve.
9. The Executive acknowledges and agrees that, at the discretion of the
Company, certain employee benefits may be provided to the Executive incident to
the Executive's employment with the Company. The Executive acknowledges and
agrees that any employee benefits provided to the Executive by the Company
incident to the Executive's employment are governed by the applicable plan
documents, summary plan descriptions or employment policies, and may be
modified, suspended or revoked at any time, in accordance with the terms and
provisions of the applicable documents. The Executive agrees that any employee
benefits provided to the Executive by the Company incident to the Executive's
employment are not a part of this Agreement, except as expressly provided
herein.
RESPONSIBILITIES
10. The Executive shall perform such duties as are customary for a
President and Chief Executive Officer of comparable companies. The Executive
shall also assume such responsibilities, perform such duties not inconsistent
with his position, and shall have such authority, as may from time to time be
assigned or delegated by the Board.
11. The Executive understands and agrees that, without limitation, the
Executive has a fiduciary duty of loyalty to the Company, and that he will do no
act that in any way xxxxx the business, business interests or reputation of the
Company.
12. Subject to reasonable vacation and holiday periods consistent with
Company policy, and absences due to illness or disability, the Executive shall
devote one hundred percent of his business time to his duties hereunder;
provided, however, that the foregoing shall not prevent the Executive from
serving as a member of the board of directors of a corporation if the Board, or
EMPLOYMENT AGREEMENT - PAGE 3
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the appropriate Committee thereof, determines in its sole discretion that such
membership is not adverse to the interests of the Company. Subject to the
foregoing, the Executive shall not engage in any business activities that are
directly or indirectly competitive with any business then conducted by the
Company or any of its subsidiaries. Notwithstanding the foregoing, the Executive
may continue to serve as a member of the board of directors of all corporations
on which he is serving on the date of this Agreement.
13. The Executive may be an investor, shareholder, joint venturer or
partner in any enterprise, association, corporation, joint venture or
partnership ("INVESTMENT"); provided, however, that any such Investment does not
(i) violate the Company's conflict of interest policy as in effect from time to
time, (ii) require the Executive's involvement in the management (except service
on boards of directors to the extent permitted by Paragraph 12) hereof) or
operation of such Investment (recognizing that the Executive shall be permitted
to monitor and oversee the Investment, as would any prudent Investor) or (iii)
interfere with the performance of the Executive's duties and obligations
hereunder.
NONDISCLOSURE
14. Information concerning the Company's products, processes,
techniques and equipment was developed at considerable effort and expense to the
Company, and for the Company's sole and exclusive use, and which, if
misappropriated by the Company's competitors, would give them an unfair business
advantage. Consequently, the Executive understands and agrees that all such
information constitutes a trade secret, and the Executive understands and agrees
that this information will not be disclosed to any person who is not a current
employee of the Company whose job requires such disclosure at any time prior to,
or subsequent to, the termination of this Agreement without the express, written
consent of the Company.
15. The Executive understands and agrees that the Company will provide
the Executive with certain confidential and highly sensitive information
including, without limitation, information relating to the Company's customers,
confidential market studies, current and prospective products, and financial
information. The Executive understands and agrees that this information, if
disclosed, could place the Company at a competitive disadvantage. Consequently,
the Executive understands and agrees that all such information constitutes a
trade secret, and the Executive understands and agrees not to disclose such
information to any person who is not a current employee of the Company.
NONCOMPETITION
16. The Executive understands and agrees that as President and Chief
Executive Officer he is responsible for building and maintaining business
relationships which are crucial to the profitable performance of the Company.
The Executive understands and agrees that this
EMPLOYMENT AGREEMENT - PAGE 4
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responsibility creates a special relationship of trust and confidence between
the Company and the Executive.
17. Executive recognizes that he will be exposed to and will acquire
information regarding the "Spaghetti Warehouse Concept" consisting, without
limitation, of design, pricing, service policies, food items and other aspects
of its operation, and that the use of the Spaghetti Warehouse Concept is a
unique approach and is essential for the Company to maintain its competitive
advantage in the marketplace.
18. The Executive understands and agrees that in consideration of the
execution of the noncompetition agreements mentioned below at Paragraphs 19 and
20, the Executive will receive substantial, valuable consideration including:
(i) confidential trade secret and proprietary information including, without
limitation, the Company's current and prospective products and inventories, the
Company's business projections and market studies, the Company's pricing
studies, and confidential financial information; (ii) employment pursuant to the
terms and conditions of this Agreement; and (iii) compensation and benefits as
described above in Paragraphs 2-9. The Executive understands and agrees that (i)
- (iii) above constitute fair and adequate consideration for the execution of
the noncompetition agreements contained in Paragraphs 19 and 20.
19. In consideration of the valuable consideration described above, the
Executive understands and agrees that for a period of twelve (12) months
following the date on which this Agreement shall terminate for any reason, the
Executive will not, directly or indirectly, solicit, recruit or hire, or assist
others in recruiting or hiring, any person who, within the preceding twelve
months was an employee of the Company.
20. In consideration of the valuable consideration described above, the
Executive understands and agrees that for a period of twelve (12) months
following the date on which this Agreement shall terminate for any reason, the
Executive will not, directly or indirectly (including without limitation, as an
owner, manager, employee, director or consultant) operate, work for, or
otherwise provide services (including, without limitation, advisory or
consulting services whether or not compensated) to any business which owns,
operates, licenses, or manages one or more restaurants (i) which receives
twenty-five percent (25%) or more of its gross revenues directly or indirectly
from the sale of food which is commonly considered "Italian" in character,
including, without limitation, any menu item(s) that feature pasta as an
integral element, which would include, without limitation, spaghetti, lasagna,
ravioli, parmigiana, cannelloni, manicotti and similar items, and pizza, and
(ii) which is located in the Continental United States or in those provinces of
Canada in which are located a Company owned or franchised restaurant at the time
of reference.
21. The Executive acknowledges and agrees that the noncompetition
agreements set forth above in Paragraphs 19 and 20 are ancillary to an otherwise
enforceable agreement and supported by independent valuable consideration as
required by Tex. Bus. & Com. Code Xxx. ss. 15.50. The Executive further
acknowledges and agrees that the limitations as to time,
EMPLOYMENT AGREEMENT - PAGE 5
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geographical area, and scope of activity to be restrained by Paragraphs 19 and
20 are reasonable and acceptable to the Executive, and do not impose any greater
restraint than is reasonably necessary to protect the goodwill and other
business interests of the Company.
22. The Executive acknowledges and agrees that if, at some later date,
a court of competent jurisdiction determines that the noncompetition agreements
set forth in Paragraphs 19 and 20 do not meet the criteria set forth in Tex.
Bus. & Com. Code Xxx. ss. 15.50(2), the Executive covenants and agrees that
these paragraphs may be reformed by the court, pursuant to Tex. Bus. & Com. Code
Xxx. ss. 15.51(c) or other applicable law, and enforced to the maximum extent
permitted under law.
REMEDIES
23. In the event that the Executive violates any of the provisions set
forth in Paragraphs 14-22 of this Agreement relating to NONDISCLOSURE and/or
NONCOMPETITION, the Executive understands and agrees that the Company will
suffer immediate and irreparable harm that cannot be accurately calculated
purely in monetary damages. Consequently, in the event of a violation of such
provisions, the Executive understands and agrees that the Company shall be
entitled to immediate injunctive relief, either by temporary or permanent
injunction, to prevent such a violation. The Executive understands and agrees
that this injunctive relief shall be in addition to any other legal or equitable
relief to which the Company would be entitled. The parties agree that each party
will pay its own legal fees incurred in connection with any action to enforce
this Agreement .
TERMINATION
24. The Executive may resign by providing sixty (60) days advance
written notice of the effective date of his resignation; PROVIDED, HOWEVER that
the Board, in its sole discretion, may accelerate the date of the resignation to
any date on or after receipt of the notice. In such event, the Company's sole
obligation to the Executive shall be to pay the Executive, in cash, an amount
equal his unreimbursed expenses and bonuses specifically declared in an amount
with respect to the Executive (but unpaid) prior to the termination. Without
limitation, it is the specific intention of the Executive and the Company that
regardless of the reason for the termination of this Agreement, the Executive
shall not be entitled to all or any portion of a bonus that is attributable to
the Executive's period of employment, but which has not been specifically
declared in an amount and time of payment with respect to the Executive prior to
the termination of this Agreement.
25. The Executive understands and agrees that the Company may terminate
his employment and this Agreement at any time, without notice and without
"Cause" (as defined in Paragraph 26 below), and further that he may, with 60
days' notice, terminate his employment and this Agreement at any time for "Good
Reason" (as defined below). In either such event the
EMPLOYMENT AGREEMENT - PAGE 6
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Company's sole obligations to the Executive under this Agreement will be (i) to
continue the medical benefits coverage, which is then in effect for the
Executive, during the continuance of the severance payment period; and (ii) to
pay the Executive monthly, in cash, the monthly base pay of the Executive at the
rate in effect at the time of the termination, which monthly payments shall
continue for six (6) months; provided, however, that such monthly payments shall
continue for an additional six (6) months, unless the Executive has obtained
other employment during such period, in which case such monthly payments shall
be reduced by the amount of the monthly base pay received by the Executive under
such new employment. For all purposes hereof, "GOOD REASON" shall mean (i)
without his express written consent, the assignment to the Executive of any
duties materially inconsistent with his positions, duties, responsibilities and
status with the Company as President and Chief Executive Officer, or a change in
his titles or offices, or any removal of the Executive from or any failures to
re-elect the Executive to the Board, except in connection with the termination
of his employment for Cause or as a result of his Disability or death, or
termination by the Executive other than for Good Reason; (ii) a reduction of his
base compensation below Two Hundred Seventy-Five Thousand Dollars ($275,000) per
year; (iii) relocation of Executive's principal location of work to any location
that is in excess of fifty (50) miles from the location of the Executive's
principal location of work on the date of the relocation; (iv) failure by the
Company to 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, by agreement in form and substance reasonably
satisfactory to the Executive, expressly to assume and agree to perform this
Agreement 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; or (v) any
material breach of this Agreement by the Company.
26. The Executive understands and agrees that the Company may terminate
his employment and this Agreement at any time, without notice, for Cause. In
such event the Company's sole obligation to the Executive under this Agreement
will be to pay Executive, in cash, the amounts provided under Paragraph 24. For
all purposes hereof, a termination shall be for "CAUSE" if Executive has (i)
committed an intentional act of fraud, embezzlement or theft in connection with
his duties or in the course of his employment with the Company; (ii) violated
the provisions of any one of Paragraphs 14-22; (iii) committed an intentional
breach of fiduciary duty resulting in personal gain or personal enrichment at
the expense of the Company to which the Executive is not legally entitled; (iv)
been convicted of, or entered a plea of guilty to or nolo contendere to, any
felony; or (v) intentionally failed to perform material stated duties (but only
after receiving written notice thereof and being given a reasonable period, not
less than 30 days, to cure said intentional failure by taking such reasonable
corrective action as shall be reasonably within his power at the time of
reference).
27. The Executive understands and agrees that this Agreement will
terminate immediately, without notice, in the event of his death and may be
terminated at any time by the Company, without notice, if, during any ninety
(90) consecutive-day period, the Executive failed for a material period of time
to perform material duties of his position on a substantially full time basis by
reason of a disability as defined in the Company's long term disability plan at
the time of reference, and he cannot perform the essential functions of his
position, with reasonable
EMPLOYMENT AGREEMENT - PAGE 7
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accommodation. The Executive understands and agrees that in the event of his
death or such disability, except as expressly provided to the contrary
hereunder, the Company's sole obligation under the Agreement will be to pay to
the Executive or his estate the amounts that it would have paid to Executive in
the event of a termination under Paragraph 24, plus, but only in the event of
his disability, the product of the monthly base pay of the Executive at the rate
in effect at the time of his termination, and twelve (12).
28. The Executive shall not be required to mitigate the amount of any
payment or benefit provided by this Agreement nor shall the amount of any
payment or benefit provided for by this Agreement be reduced by any compensation
earned by the Executive as the result of employment by another employer
following termination of this Agreement.
29. The Executive understands and agrees that in the event of
termination of this Agreement for any reason, the Executive will return to the
Company within seventy-two (72) hours of the time when notice of termination is
communicated by either party, or sooner if requested by the Company, any and all
equipment, literature, documents, data, information, memoranda, correspondence,
records, cards or notes acquired, compiled or coming into the Executive's
knowledge, possession or control in connection with his employment by the
Company.
SURVIVAL OF OBLIGATIONS
30. It is the intention and understanding of Executive and the Company
that the obligations of the Executive under Paragraphs 14-22 shall survive the
expiration of this Agreement.
WITHHOLDING
31. The Company may withhold from any amounts or benefits payable under
this Agreement all Federal, State, City, or other taxes as it shall reasonably
determine to be required pursuant to any law or governmental regulations or
rulings.
SEVERABILITY
32. The Executive understands and agrees that each covenant and/or
provision of this Agreement shall be enforceable independently of every other
covenant and/or provision. Furthermore, the Executive understands and agrees
that, in the event any covenant and/or provision of this Agreement is determined
unenforceable for any reason, the remaining covenants and/or provisions will
remain effective, binding and enforceable.
EMPLOYMENT AGREEMENT - PAGE 8
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WAIVER
33. The Executive understands and agrees that the failure of the
Company to enforce any provision of this Agreement shall not constitute a waiver
of that particular provision, or of any other provisions of this Agreement.
SUCCESSORS AND ASSIGNS
34. The Executive understands and agrees that this Agreement may be
assigned by the Company to any successor-in-interest, without notice to or the
consent of the Executive, and shall inure to the benefit of, and be fully
enforceable by, any successor and/or assignee.
35. The Executive understands and agrees that his obligations, duties
an responsibilities under this Agreement are personal and shall not be
assignable. In the event of the Executive's death, this Agreement shall be
enforceable by the Executive's heirs, executors and/or legal representatives, to
the extent provided herein.
CHOICE OF LAW
36. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF TEXAS, WITHOUT REFERENCE TO PRINCIPLES OF CONFLICT
OF LAWS. THE COMPANY AND THE EXECUTIVE AGREE THAT THE STATE AND FEDERAL COURTS
SITUATED IN DALLAS COUNTY, TEXAS SHALL HAVE PERSONAL JURISDICTION OVER THE
COMPANY AND THE EXECUTIVE TO HEAR ALL DISPUTES ARISING UNDER THIS AGREEMENT.
THIS AGREEMENT IS TO BE AT LEAST PARTIALLY PERFORMED IN DALLAS COUNTY, TEXAS,
AND, AS SUCH, THE COMPANY AND THE EXECUTIVE AGREE THAT VENUE SHALL BE PROPER
WITH THE STATE OR FEDERAL COURTS IN DALLAS COUNTY, TEXAS TO HEAR SUCH DISPUTES.
IN THE EVENT EITHER THE COMPANY OR EXECUTIVE IS NOT ABLE TO EFFECT SERVICE OF
PROCESS UPON THE OTHER WITH RESPECT TO SUCH DISPUTES, THE COMPANY AND THE
EXECUTIVE EXPRESSLY AGREE THAT THE SECRETARY OF STATE FOR THE STATE OF TEXAS
SHALL BE AN AGENT TO RECEIVE SERVICE OF PROCESS WITH RESPECT TO SUCH DISPUTES.
The captions of this Agreement are not part of the provisions hereof and shall
have no force or effect. This Agreement may not be amended or modified otherwise
than by a written agreement executed by the parties hereto or their respective
successors and legal representatives.
37. All notices and other communications hereunder shall be in writing
and shall be given by hand-delivery to the other party or by registered or
certified mail, return receipt requested, postage prepaid, addressed as follows:
EMPLOYMENT AGREEMENT - PAGE 9
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If to the Executive, to him at:
His residential address as reflected on the records of the Company.
If to the Company, to it at:
Spaghetti Warehouse, Inc.
000 Xxxx X-00
Xxxxxxx, Xxxxx 00000
Attention: Chief Financial Officer
or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notices and communications shall be effective
when actually received by the addressee. Without limitation, both parties
confirm their understanding and agreement that the law of Texas will govern the
validity, interpretation and effect of this Agreement.
ARBITRATION
38. The Executive and the Company acknowledge and agree that any claim
or controversy arising out of or relating to this Agreement or the breach of
this Executive Agreement, or any other dispute arising out of or relating to the
employment of the Executive by the Company, shall be settled by final and
binding arbitration in the City of Dallas, Texas in accordance with the
Commercial Arbitration Rules of the American Arbitration Association in effect
on the date the claim or controversy arises. The Executive and the Company
further acknowledge and agree that either party must request arbitration of any
claim or controversy within ninety (90) days of the date the claim or
controversy accrues or first arises by giving written notice of the party's
request for arbitration by certified U.S. mail or personal delivery addressed to
the Company's principal business address or to the Executive's last known
address reflected in the Company's personnel records. Notice shall be effective
upon delivery or mailing. Failure to give notice of any claim or controversy
within ninety (90) days shall constitute a waiver of the claim or controversy.
39. All claims or controversies subject to arbitration shall be
submitted to arbitration within six (6) months from the date the written notice
of a request for arbitration is effective. All claims or controversies shall be
resolved by a panel of three (3) arbitrators who are licensed to practice law in
the State of Texas and who are experienced in the arbitration of labor and
employment disputes. These arbitrators shall be selected in accordance with the
Commercial Arbitration Rules of the American Arbitration Association in effect
at the time the claim or controversy arises. Either party may request that the
arbitration proceeding be stenographically recorded by a Certified Shorthand
Reporter. The arbitrators shall issue a written decision with respect to all
claims or controversies within thirty (30) days from the date the claims or
controversies are submitted to arbitration. The parties shall be entitled to be
represented by legal
EMPLOYMENT AGREEMENT - PAGE 10
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counsel at any arbitration proceeding. The Executive and the Company acknowledge
and agree that each party will bear fifty percent (50%) of the cost of the
arbitration proceeding. The parties shall be responsible for paying their own
attorneys' fees, if any.
40. The Company and the Executive acknowledge and agree that the
arbitration provisions in Paragraphs 38 and 39 may be specifically enforced by
either party, and submission to arbitration proceedings compelled, by any court
of competent jurisdiction. The Company and the Executive further acknowledge and
agree that the decision of the arbitrators may be specifically enforced by
either party in any court of competent jurisdiction.
41. Notwithstanding the arbitration provisions set forth at Paragraphs
38-40, the Executive and the Company acknowledge and agree that nothing in this
Agreement shall be construed to require the arbitration of any claim or
controversy arising under the NONDISCLOSURE, NONCOMPETITION and NON-INTERFERENCE
provisions set forth at Paragraphs 14-22 of this Agreement, or the termination
for Cause provisions set forth in Paragraph 26(i) or (iii). These provisions
shall be enforceable by any court of competent jurisdiction and shall not be
subject to ARBITRATION pursuant to Paragraphs 38-41. The Executive and the
Company further acknowledge and agree that nothing in this Agreement shall be
construed to require arbitration of any claim for workers' compensation benefits
(although any claims arising under Texas Labor Code ss. 450.001 shall be subject
to arbitration) or any claim for unemployment compensation.
MODIFICATION
42. Both parties understand and agree that this Agreement constitutes
the complete and entire agreement between the parties, and that no previous
agreement, either oral or written, shall have any effect on its terms or
provisions; and that all previous agreements, either oral or written, are
expressly superseded and revoked by this Agreement.
43. Both parties understand and agree that the covenants and/or
provisions of this Agreement may not be modified by any subsequent agreement
unless the modifying agreement: (i) is in writing; (ii) contains an express
provision referencing this Agreement; (iii) is signed and executed by an
authorized representative of the Company; and, (iv) is signed by the Executive.
LEGAL CONSULTATION
EMPLOYMENT AGREEMENT - PAGE 11
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44. The Executive and the Company acknowledge and agree that both
parties have been accorded a reasonable opportunity to review this Agreement
with legal counsel prior to executing the Agreement.
COUNTERPARTS
45. This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original but all of which together shall constitute a
single Agreement.
IN WITNESS WHEREOF, the Company has duly executed this Agreement and
the Executive has duly signed this Agreement, both as of the date first above
written.
/s/Xxxxxxx Xxxxxx
--------------------
Xxxxxxx Xxxxxx
SPAGHETTI WAREHOUSE, INC.
By: /s/ C. Xxxxxx Xxxxxxxx, Xx.
----------------------------
Print Name: C. Xxxxxx Xxxxxxxx, Xx.
------------------------
Title: Director - Member Compensation Committee
-----------------------------------------
EMPLOYMENT AGREEMENT - PAGE 12
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ATTACHMENT I.
The following example illustrates the intention of the parties with
respect to the vesting of the Options.
Example:
The option price of the shares on the Effective Date is $5.375.
That means 74,418 shares will be subject to an ISO (Proof: $400,000 / 5.375
= 74,418.6).
That means the remaining 25,583 shares (Proof: 100,000 - 74,418 = 25,582)
will be subject to a nonqualified option.
The Agreement provides that 25% of the option shares will vest on each
vesting date. That means, on each such date, exactly 18,604.5 shares will vest
under the ISO and exactly 6,395.5 shares will vest as nonqualified options.
The Agreement provides that a specified total number of shares will vest on
each vesting date, and that the number of shares subject to the nonqualified
option shall be the total that vest on each vesting date, less the ISO shares
vesting on such date.
EMPLOYMENT AGREEMENT - PAGE 13
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