May 3, 1996
Xxxx X. Xxxxxx
0000 Xxxxx Xxxxx
Xxxxx 000
Xxxxxxxxxxx, XX 00000
Dear Xxxx:
This letter will set forth our agreement with respect to
your continued employment by Good Times Restaurants Inc. ("Good
Times"). For convenience, we shall refer to you as "Xxxxxx."
1. Good Times shall continue to employ Xxxxxx as
President and Chief Executive Officer. Xxxxxx shall devote his
full time and best efforts to such position and in general to
protecting and advancing the best interests of Good Times.
2. Xxxxxx'x compensation shall be $110,000 per annum.
Such compensation shall be periodically increased to the extent, if
any, determined reasonable and appropriate by the Board of
Directors of Good Times. Xxxxxx shall also have a general
perquisite allowance of $10,000 per annum. Xxxxxx shall also
participate in the other fringe benefits, including vacations,
accorded by Good Times to its key executives at benefit levels no
less favorable than those currently accorded to him.
3. The employment of Xxxxxx hereunder shall continue
for a term of three years from the date of this agreement. Such
three-year term shall be extended each year by one additional year
upon the approval of such extension by the Board of Directors of
Good Times. Good Times may terminate the employment of Xxxxxx
during such term only for cause consisting of a consistent and
substantial failure of Xxxxxx to discharge the responsibilities and
authority of his position hereunder after notice to Xxxxxx of such
failure and a reasonable opportunity for him to remedy such
failure.
4. In consideration for the efforts put forth by Xxxxxx
in enhancing the value of Good Times, upon (i) the sale of all or
substantially all of the assets of Good Times to a party that is
not a "Related Party" (as defined below), (ii) the sale of at least
ninety percent of the capital stock of Good Times to a party which
is not a Related Party, or (iii) a merger, consolidation,
reorganization or similar transaction to which Good Times is a
party, except for a transaction in which Good Times is the
surviving corporation and, after giving effect to such transaction,
the holders of Good Times' outstanding capital stock immediately
before the transaction own enough of Good Times' outstanding
capital stock after the transaction to elect a majority of Good
Times' Board of Directors under ordinary circumstances, and in the
event that within one year after any of the foregoing transactions
(A) the employment of Xxxxxx is terminated for any reason other
than cause (as defined above), or (B) if the employment duties of
Xxxxxx are substantially diminished or (C) if the place of
employment of Xxxxxx is relocated outside of the Denver
metropolitan area, Xxxxxx shall be entitled to compensation equal
to one years' salary plus his perquisite allowance and other fringe
benefits for such year. For purposes of this paragraph 4, a
"Related Party" means any of the shareholders or any entity which
controls, is controlled by, or under common control with a
shareholder or group of shareholders that own enough of Good Times'
outstanding capital stock to elect a majority of Good Times' Board
of Directors.
If this letter correctly sets forth our agreement, kindly
sign and return the attached copy hereof.
Sincerely,
GOOD TIMES RESTAURANTS INC.
By: /s/ Xxx X. Xxxxx, XX, Chairman
Xxx X. Xxxxx XX, Chairman
AGREED to this 17th day of May, 1996.
/s/ Xxxx X. Xxxxxx
Xxxx X. Xxxxxx
