EMPLOYMENT AGREEMENT
Exhibit
10.1
This Employment Agreement (the
"Agreement"), entered into effective as of the 1st day of April 2008, by and
between RICK'S CABARET
INTERNATIONAL, INC., a Texas corporation (the "Company"), and XXXX XXXXXX
("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 President and Chief Executive Officer
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 2010, 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 $600,000, 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. As
further compensation, Executive will be eligible for bonuses as determined
from time to time by the Board of
Directors.
|
|
|
(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 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)
|
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 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, 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(d) 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) for good reason under Section 7(d); (iv) upon the
voluntary termination of employment by Executive under Section7(e); or without
cause 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)
|
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(d)(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.
|
|
|
(e)
|
Voluntary
Termination. The Executive may terminate his employment
voluntarily.
|
|
|
(f)
|
Without
Cause. 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 (e), 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 (d) 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:
Xxxxxx Xxxxx, Executive Vice President
|
|
If
to Executive:
|
Xxxx
Xxxxxx
|
00000
Xxxxxx 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
judgement 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.
Counterparts. This
Agreement may be executed in one or more counterparts, each of which will be
deemed an original and all of which will constitute one and the same instrument,
but only one of which need be produced.
18.
- Company
Authorization. The Company represents that the Board of
Directors has approved this Agreement.
IN WITNESS WHEREOF, the parties
hereto have duly executed this Agreement to become effective as of the day and
year first above written.
|
COMPANY:
|
||
|
RICK'S
CABARET INTERNATIONAL, INC.
|
||
|
By:
|
/s/ Xxxxxx Xxxxx
|
|
|
Xxxxxx
Xxxxx, Executive Vice President
|
||
|
EXECUTIVE:
|
||
|
By:
|
/s/ Xxxx Xxxxxx
|
|
|
Xxxx
Xxxxxx
|
||
Employment
Agreement - Page 7
