EXHIBIT 99.3
EMPLOYMENT AGREEMENT
This Agreement is entered into effective as of this 29th day of April,
2003, by and between Lone Star Steakhouse & Saloon, Inc., a corporation (the
"Corporation") and Xxxx X. Xxxxx ("Employee").
RECITALS
WHEREAS, Employee agrees to serve as Executive Vice President -
Treasurer of the Corporation; and
WHEREAS, Employee is a principal officer of the Corporation and an
integral part of its management; and
WHEREAS, the Corporation desires to engage the services of Employee,
whose experience, knowledge and abilities with respect to the business and
affairs of the Corporation are extremely valuable to the Corporation; and
WHEREAS, the parties hereto desire to enter into this Agreement
setting forth the terms and conditions of the continued employment relationship
of the Corporation and Employee and to supercede and replace the existing
employment agreement between the Corporation and Employee dated March 22, 2000.
NOW THEREFORE, it is agreed as follows:
ARTICLE I
1.1 EMPLOYMENT AGREEMENT. The Employment Agreement dated March 28,
2000, executed by the Corporation and Employee is hereby terminated and shall be
superseded by this Agreement.
ARTICLE II
2.1 TERM OF EMPLOYMENT. The Corporation shall initially employ
Employee for a period of three years from the date hereof (the "Initial Term").
2.2 EXTENSION OF INITIAL TERM. Upon each annual anniversary date of
this Agreement after the expiration of the Initial Term, this Agreement shall be
extended automatically for successive terms of one year each, unless either the
Corporation or Employee gives contrary written notice to the other not later
than 90 days prior to the annual anniversary date thereof.
ARTICLE III
DUTIES OF EMPLOYEE
GENERAL DUTIES. Employee shall serve as Executive Vice President -
Treasurer of the Corporation or in such other position as the Board of Directors
(the "Board") shall determine. He shall do and perform all services, acts or
things necessary or advisable to manage and conduct the business of the
Corporation consistent with such position subject to such policies and
procedures as may be established by the Chief Executive Officer or the Board.
Additionally, Employee shall be responsible for all duties that may be required
by the Corporation in connection with any securities law or stock exchange
listing rules, including, without limitation, the Xxxxxxxx-Xxxxx Act of 2002
("Xxxxxxxx-Xxxxx Act"), with such duties to include, without limitation, the
execution of any certifications required by the Corporation in connection with
and/or pursuant to the Xxxxxxxx-Xxxxx Act. Further, Employee shall abide by the
Corporation's Code of Ethics, as may be adopted by the Corporation from time to
time.
Employee shall: (i) devote his entire business time, attention, and
energies to the business of the Corporation, and, (ii) faithfully and
competently perform his duties hereunder; and, Employee shall not, during the
term of this Agreement, engage in any other business activity except as
permitted by Article 9. Notwithstanding any provision of this Agreement,
Employee may perform his duties as Executive Vice President - Treasurer from his
home office, not to exceed two days a week, subject to his reasonable discretion
and subject to approval of the Chief Executive Officer, but shall be accessible
to the Chief Executive Officer and Corporation from his home office as
necessary.
ARTICLE IV
COMPENSATION
Executive Senior Vice President - Treasurer, Employee shall
initially be paid a salary at the annual rate of $600,000, (herein referred to
as "Salary") payable bi-weekly. On the first day of each calendar year during
the term of this Agreement with the Corporation or on such other date as the
Corporation shall determine, Employee shall be eligible for an increase in
Salary based on recommendations made by the Compensation Committee of the Board.
At such time as the Corporation hires an individual to handle the investor
relation function Employee agrees to assist in the transition and training of
the individual. Once the training is completed, Employee's salary shall be
reduced to the annual rate of $500,000.
2
4.2 BONUS. Employee is eligible to participate in the stock option
plan of the employer and all bonus compensation plans, which may be offered from
time to time.
ARTICLE V
EMPLOYEE BENEFITS
5.1 USE OF AUTOMOBILE. The Corporation shall provide, at the option
of Employee, with either the use of an automobile for business and personal use
or a car allowance of to be specified by the Corporation, which complies with
I.R.S. Guidelines. The Corporation shall pay all expenses of operating,
maintaining and repairing the automobile and shall procure and maintain
automobile liability insurance in respect thereof, with such coverage insuring
each Employee for bodily injury and property damage.
5.2 MEDICAL, LIFE AND DISABILITY INSURANCE BENEFITS. The Corporation
shall provide employee with the medical, life and disability insurance benefits
in accordance with the established benefit policies of the Corporation. The
Corporation shall provide major medical, life, health, dental, prescription and
AD&D insurance for Employee for his life with insurance coverage comparable to
present levels, as well as reimbursement for out-of-pocket expenses, deductibles
and non-insured health and medical costs.
5.3 BUSINESS EXPENSES. Employee shall be authorized to incur
reasonable expenses for promoting the business of the Corporation including
expenses for entertainment, travel, and similar items. The Corporation shall
reimburse Employee for all such expenses upon the presentation by Employee, from
time to time, of an itemized account of such expenditures.
5.4 VACATIONS. Employee shall be entitled to an annual paid vacation
commensurate with the Corporation's established vacation policy for executive
officers. The timing of paid vacations shall be scheduled in a reasonable manner
by Employee.
5.5 RETIREMENT PLANS. Employee shall, to the extent maintained by
the Corporation, be entitled to participate in the Corporation's Qualified
401(k) plan and/or in the Corporation's Nonqualified Deferred Compensation plan,
in accordance with the established policies of the Corporation and the terms and
conditions of such plans.
3
5.6 ADDITIONAL BENEFITS. Employee may also be eligible to receive
any other benefits that may be offered to the Corporation's similarly situated
employees, in accordance with and subject to the terms and conditions of such
benefits.
5.7 DISABILITY. Upon disability (as defined herein) of Employee,
Employee shall be entitled to receive an amount equal to 50% of his annual
Salary (in addition to any disability insurance benefits received pursuant to
Section 5.2 herein), such amount being paid semi-monthly in twelve equal
installments.
ARTICLE VI
TERMINATION
6.1 DEATH. Employee's employment hereunder shall be terminated upon
Employee's death.
6.2 DISABILITY. The Corporation may terminate Employee's employment
hereunder in the event Employee is disabled and such disability continues for
more than 180 days. Disability shall be defined as the inability of Employee to
render the services required of him under this Agreement as a result of physical
or mental incapacity.
6.3 CAUSE.
(a) The Corporation may terminate Employee's employment hereunder
for Cause. For the purpose of this Agreement, "Cause" shall mean the (i) willful
and intentional failure by Employee to substantially perform his duties
hereunder, other than any failure resulting from Employee's incapacity due to
physical or mental incapacity, or (ii) commission by Employee, in connection
with his employment by the Corporation, of an illegal act or any act (though not
illegal) which is not in the ordinary course of Employee's responsibilities and
which exposes the Corporation to a significant level of undue liability, or
(iii) if Employee is convicted of or pleads no contest/nolo contendere to any
felony, or (iv) Employee breaches any provision of Sections 9.1, 9.2 and 9.3.
For purposes of Subsections (i) and (ii) of this paragraph, no act or failure to
act on Employee's part shall be considered to have met either of the preceding
tests unless done or omitted to be done by Employee not in good faith without a
reasonable belief that his action or omission was in the best interest of the
Corporation. "Cause" shall also include Employee's willful or material violation
of, or noncompliance with, any securities law or stock exchange listing rules
relating to or affecting the Corporation in any material respects, including,
without limitation, the Xxxxxxxx-Xxxxx Act, and including, without limitation,
non-execution by Employee of any certifications requested by the Corporation for
4
similarly situated employees in connection with and/or pursuant to the
Xxxxxxxx-Xxxxx Act.
(b) Notwithstanding the foregoing, Employee shall not be deemed to
have been terminated for Cause unless and until there shall have been delivered
to Employee a copy of a resolution, duly adopted by the majority vote of the
Board.
6.4 COMPENSATION UPON TERMINATION FOR CAUSE OR UPON RESIGNATION BY
EMPLOYEE. If Employee's employment shall be terminated for Cause or if Employee
shall resign his position with the Corporation, the Corporation shall pay
Employee's compensation only through the last day of Employee's employment by
the Corporation. The Corporation shall then have no further obligation to
Employee under this Agreement.
6.5 INVOLUNTARY TERMINATION. If (i) Employee is terminated by
Corporation at any time prior to the termination of this Agreement for reasons
other than Cause (as defined herein), or (ii) Corporation gives notice to
Employee, in accordance with Section 2.2 herein, that this Agreement will not be
renewed, and Employee executes a standard general mutual release by and between
Employee and the Corporation;
Employee shall be paid, over the ensuing six (6) month period, a sum
equal to the cash compensation paid to him excluding all bonuses of any kind by
Corporation for the six (6) month period immediately preceding such termination
or non-renewal. Such six (6) month period, as the case may be, shall begin: (i)
on the date of termination in the case of termination of Employee's employment;
or (ii) on the date notice of non-renewal is given in the case of termination of
this Agreement not accompanied by simultaneous termination of Employee's
employment with the Corporation.
ARTICLE VII
NO OBLIGATION TO MITIGATE DAMAGES; NO EFFECT
ON OTHER CONTRACTUAL RIGHTS
7.1 NO MITIGATION. Employee shall not be required to mitigate
damages or the amount of any payment provided for under this Agreement by
seeking other employment or otherwise, nor shall the amount of any payment
provided for under this Agreement be reduced by any compensation earned by
Employee as the result of employment by another employer after Employee's
termination or resignation.
7.2 OTHER CONTRACTUAL RIGHTS. The provisions of this Agreement, and
any payment provided for hereunder, shall not reduce any amount otherwise
5
payable, or in any way diminish Employee's existing rights, or rights which
would accrue solely as a result of passage of time under any employee benefit
plan or other contract, plan or arrangement of which Employee is a beneficiary
or in which he participates.
ARTICLE VIII
SUCCESSORS TO THE CORPORATION
EMPLOYEE'S SUCCESSORS AND ASSIGNS. This Agreement shall inure to the
benefit of and be enforceable by Employee's personal and legal representatives,
executors, administrators, successors, heirs, distributees, devisees and
legatees. If Employee should die while any amounts are still payable to him
hereunder, all such amounts, unless otherwise provided herein, shall be paid in
accordance with the terms of this Agreement to Employee's devisee, legatee or
other designee or, if there be no such designee, to Employee's estate.
ARTICLE IX
RESTRICTIONS ON EMPLOYEE
9.1 NON-DISCLOSURE. (a) Employee acknowledges that, because of his
duties and his position of trust under this Agreement, Employee will become
familiar with trade secrets (including, but not limited to, marketing objectives
and strategies, financial reporting, management systems, recipes, procedures,
business methods, processes and financial information) and other confidential
information (including, but not limited to, operating methods and procedures,
secret lists of actual and potential sources of supply, customers and employees,
costs, profits, markets, sales and plans for future developments) (the trade
secrets and other confidential information being referred to herein as "Business
Information") which are valuable assets and property rights of the Corporation
and not publicly known. Except in connection with the performance of his duties
for the Corporation, Employee agrees that he will not during the term of this
Agreement and at any time after for a period of ten (10) years after the
termination hereof, either directly or indirectly, individually or jointly with
others, for the benefit of Employee or any third party, publish, disclose, use,
or authorize anyone else to publish, disclose, or use, any Business Information
or any information relating to any aspect of the business or operations of the
Corporation, including, but not limited to any secret or Business Information
relating to the business, customers, trade or industrial practices, trade
secrets, technology, recipes or know-how of the Corporation or any facts
concerning the systems, methods, procedures or plans developed or used by the
Corporation and its subsidiaries and Affiliates (as hereinafter defined).
Employee agrees to retain all such Business Information in a fiduciary capacity
6
for the sole benefit of the Corporation, its successors and assigns. Upon
termination of his employment by the Corporation or at any time that the
Corporation may so request Employee will surrender to the Corporation all
non-public papers, notes, reports and other documents (and all copies thereof)
relating to the business of the Corporation which he may then possess or have
under his control.
(b) To the extent that Employee has generated or will generate
during the course of his employment works of authorship (which shall be deemed
to be "works for hire"), copyrightable material, inventions, trademarks, trade
dress or other intellectual property (hereinafter collectively referred to as
"Intellectual Property"), such Intellectual Properly shall be the property of
the Corporation. In the event that the "works for hire" doctrine is found
inapplicable, all such Intellectual Properly, and all rights therein, will be
and are hereby deed to be, assigned and transferred by this Agreement to the
Corporation, its successors and assigns. The Corporation, its successor and
assigns, will have the exclusive right to obtain copyright patent and/or
trademark registrations or other protection of the Intellectual Property
(including without limitation, maintaining such Intellectual Property as trade
secrets) in the Corporation's own name, or in the names of the Corporation's
successors or assigns, as inventor, author and/or owner and to secure any
renewals and extension of such protection throughout the world. If the
Corporation chooses to maintain any part or all of the Intellectual Property as
a trade secrets, the Corporation shall so inform Employee and Employee shall
maintain such Intellectual Property as confidential to the extent required by
this paragraph. Employee further agrees as follows:
(i) Employee hereby acknowledges that he retain no
rights whatsoever with respect to the aforementioned Intellectual
Property, including but not limited to, any rights to reproduce such
Intellectual Property, or to make, have made, use and/or sell
products based upon the Intellectual Property, or otherwise to
prepare derivatives thereof, to file patent, copyright or trademark
applications with respect thereto, to distribute copies of any
Intellectual Property in any manner whatsoever, to exhibit, use or
display any such Intellectual Property publicly or otherwise, or to
license or assign to any third party the right to do any of the
foregoing; and
(ii) Employee will without further remuneration (except
for out-of-pocket expenses), execute and deliver any documents and
give any assistance as may be reasonably requested by the
Corporation to effect the ownership rights as provided in this
Agreement or otherwise to further the purposes of this paragraph.
7
9.2 NON-SOLICITATION. (a) Except in the performance of his duties
hereunder, at no time during the term of this Agreement and for a period of
twenty-four (24) months thereafter such Employee shall not directly or
indirectly, employ or seek to employ, target or assist others in employing or
seeking to employ directly or indirectly any employee of the Corporation.
(b) In addition during the term of this Agreement and for such
twenty-four (24) months thereafter, Employee shall not influence or attempt to
influence customers or suppliers of the Corporation or any of its present or
future subsidiaries or Affiliates, either directly or indirectly to divert their
business to any individual, partnership, firm, corporation or other entity then
in direct or indirect competition with the business of the Corporation, or any
subsidiary or Affiliate of the Corporation.
9.3 NON-COMPETITION. During the term of this Agreement and for
twenty-four (24) months thereafter, regardless of any termination pursuant to
Article 6 or any voluntary termination or resignation by Employee, Employee
shall not in any capacity whatsoever, individually or jointly with others,
directly or indirectly, whether for his own account or for that of any other
person or entity be employed by, engage in, serve as an officer, director,
consultant, agent, partner, proprietor or other participant, or own or hold any
ownership interest in any person or entity engaged in a restaurant business,
which features steak and where steak sales, as a percentage of food sales,
exceed thirty percent (30%) which restaurant business is located within a
twenty-five mile radius of any existing Lone Star Steakhouse & Saloon
restaurant, Del Frisco's Double Eagle Steak House restaurant, Xxxxxxxx'x
Steakhouse restaurant or Frankie's Italian Grille restaurant without the
Corporation's written consent.
For the purposes of this Agreement, "Affiliate(s)" of the
Corporation shall mean any person that directly, or indirectly through one or
more intermediaries, controls or is controlled by, or is under common control
with the Corporation, including but not limited to the executive officers and
directors of the Corporation.
ARTICLE X
UNIQUENESS OF PROVISIONS
The provisions of Article 9 of this Agreement are of a unique nature
and of extraordinary value and of such a character that a material breach of the
provisions of Article 9 of this Agreement by Employee will result in irreparable
damage and injury to the Corporation for which the Corporation will not have any
8
adequate remedy at law. Therefore, in the event that Employee commits or
threatens to commit any such breach, the Corporation will have (a) the right and
remedy to have the provision of Article 9 of this Agreement specifically
enforced by any court having equity jurisdiction, it being agreed that in any
proceeding for an injunction, and upon any motion for a temporary or permanent
injunction, Employee's ability to answer in damages shall not be a bar or
interposed as a defense to the granting of such injunction and (b) the right and
remedy to require Employee to account for and to pay over to the Corporation all
compensation, profits, monies, accruals, increments and other benefits
(hereinafter referred to collectively as the "Benefits") derived or received by
him as a result of any transactions constituting a breach of any of the
provisions of Article 9 of this Agreement, and Employee hereby agrees to account
for and pay over such Benefits to the Corporation. Each of the rights and
remedies enumerated in Article 9 above shall be independent of the other, and
shall be severally enforceable, and all of such rights and remedies shall be in
addition to, and not in lieu of, any other rights and remedies available to the
Corporation on law or in equity.
ARTICLE XI
MISCELLANEOUS
11.1 INDEMNIFICATION. To the full extent permitted by law, the Board
shall authorize the payment of expenses incurred by or shall satisfy judgments
or fines rendered or levied against Employee in any action brought by a
third-party against Employee (whether or not the Corporation is joined as a
party defendant) to impose any liability or penalty on Employee for any act
alleged to have been committed by Employee while employed by the Corporation
unless Employee was acting with gross negligence or willful misconduct. Payments
authorized hereunder shall include amounts paid and expenses incurred in
settling any such action or threatened action.
11.2 ARBITRATION. The parties agree that any disputes, claims or
controversy of any kind arising out of this Agreement or out of the employment
relationship between Employee and the Corporation shall be submitted to
arbitration. Employee simultaneously with the execution of this Agreement and as
a condition to the Corporation agreeing to enter into this Agreement, agrees to
execute an agreement acknowledging the Corporation's Mandatory Arbitration
Policy. The arbitration hearing shall take place in the State of Kansas.
11.3 NOTICES. All notices, requests, demands and other
communications hereunder, must be in writing and shall be deemed to have been
duly given upon receipt if delivered by hand, sent by telecopier or courier, and
9
three (3) days after such communication is mailed within the continental United
States by first class certified mail, return receipt requested, postage prepaid,
to the other party.
11.4 WAIVER OF BREACH. The waiver by any party hereto of a breach of
any provision of this Agreement shall not operate or be construed as a waiver of
any subsequent breach by any party.
11.5 AMENDMENT. No amendment or modification of this Agreement shall
be deemed effective unless or until executed in writing by the parties hereto.
11.6 VALIDITY. This Agreement, having been executed and delivered in
the State of Kansas, its validity, interpretation, performance and enforcement
will be governed by the laws of that state.
11.7 ARTICLE HEADINGS. Article and other headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.
11.8 COUNTERPART EXECUTION. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute but one and the same instrument.
11.9 EXCLUSIVITY. Specific arrangements referred to in this
Agreement are not intended to exclude Employee's participation in any other
benefits available to executive personnel generally or to preclude other
compensation or benefits as may be authorized by the Board from time to time.
11.10 PARTIAL INVALIDITY. If any provision in this Agreement is held
by a court of competent jurisdiction to be invalid, void, or unenforceable, the
remaining provisions shall nevertheless continue in full force without being
impaired or invalidated in any way.
ARTICLE XII
12.1 RELEASE. Employee understands, intends and agrees that this
Section 12 constitutes full, complete and final satisfaction of all claims,
demands, lawsuits or actions of any kind, whether known or unknown, against the
Corporation and/or its respective directors, officers or employees (with the
Corporation, collectively, the "Released Persons"), from the commencement of
Employee's employment with the Corporation and arising at any time up to and
including the date of this Agreement, and Employee hereby forever releases each
Released Person from all such matters. This includes, but is not limited to, a
10
release of claims, demands, lawsuits and actions of any kind relating to any
employment or application for employment, claims relating to resignation and/or
cessation of employment, claims alleging breach of contract of any tort, claims
for wrongful termination, defamation, intentional infliction of emotional
distress, personal injury, violation of public policy and/or negligence related
to employment or resignation, claims under Title VII of the Civil Rights Act of
1964, as amended, the Age Discrimination in Employment Act of 1967, as amended,
the Rehabilitation Act of 1973, the Americans with Disabilities Act of 1990, the
Employee Retirement Income Security Act of 1974, as amended, the Worker
Adjustment and Retraining Notification Act, the Family and Medical Leave Act of
1993, or any other state, Federal or local law prohibiting discrimination, and
claims based on any other law, regulation, or common law, whether before any
Federal, state or local agency, in any court of law or before any other forum.
Notwithstanding the foregoing, Employee's release shall not extend to any claims
(i) for benefits under employee plans that are qualified under Section 401(a) of
the Internal Revenue Code; (ii) for compensation or benefits to which Employee
is entitled under this Agreement; or (iii) for indemnification under the
Corporation's policy on indemnification or officers and directors and coverage
under any related insurance policies.
12.2 ADVICE, TIME TO CONSIDER AND REVOCATION. Employee is hereby
advised to consult with an attorney prior to executing this Agreement. Employee
hereby represents that he had a period of twenty-one (21) days within which to
consider the terms and conditions of this Agreement and whether or not to
execute it. In addition, for a period of seven (7) days following Employee's
execution of this Agreement, he has the right to revoke this Agreement, and no
portion of this Agreement shall become effective or enforceable until such
revocation period has expired.
IN WITNESS WHEREOF, the Corporation has caused this Agreement to be
executed and its seal affixed hereto by its officers thereunto duly authorized;
and Employee has executed this Agreement, as of the day and year first above
written.
Attest LONE STAR STEAKHOUSE &
SALOON, INC., "CORPORATION"
By /s/
-----------------------------------
Xxxxxx X. Xxxxx By /s/
Senior Vice President -----------------------------
Xxxxx X. Xxxxxxx,
Chief Executive Officer
Witness
/s/ /s/
-------------------------------- ---------------------------------
Xxxx X. Xxxxx, "EMPLOYEE"
11
