EXHIBIT 10.57
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is entered into as of January
27, 2004 by and between CKE RESTAURANTS, INC., a Delaware corporation (the
"Company"), and XXXX X. XXXXX (the "Employee").
RECITALS:
A. Employee is a key employee of the Company.
B. The Company and Employee desire to enter into this Agreement to set
forth the terms and provisions of Employee's employment by the Company.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth herein, the parties agree as follows:
1. Employment and Duties. Subject to the terms and conditions of this
Agreement, the Company employs the Employee to serve in an executive and
managerial capacity as Executive Vice President of Marketing of the Company, and
the Employee accepts such employment and agrees to perform such reasonable
responsibilities and duties commensurate with the aforesaid positions as
directed by the Company's Board of Directors or as set forth in the Articles of
Incorporation and the Bylaws of the Company. Any change in such titles or
delegation of duties inconsistent with such titles without the consent of
Employee, shall be deemed a termination without cause under Section 7(b) below.
2. Term. The term of this Agreement shall commence on the first day of
the Company's fiscal year commencing in the year 2004 (the "Effective Date") and
shall terminate on the last day of the Company's fiscal year ending in the year
2007, subject to prior termination as set forth in Section 7 below (the "Term").
The Term may be extended at any time upon mutual written agreement of the
parties.
3. Salary. Commencing on the Effective Date, and subject to the other
provisions of this Agreement, the Company shall pay the Employee a minimum base
annual salary of $275,000. The Chief Executive Officer of the Company may, from
time to time, increase such salary in his sole discretion.
4. Other Compensation and Fringe Benefits. In addition to any executive
bonus, pension, deferred compensation and stock option grants which the Company
may from time to time make available to the Employee upon mutual agreement, the
Employee shall be entitled to the following:
(a) The standard Company benefits enjoyed by the Company's other
top executives;
(b) Provision by the Company during the Term and any extensions
thereof to the Employee and his dependents of the medical and other insurance
coverage provided by the Company to its other top executives;
(c) Provision by the Company of supplemental disability insurance
sufficient to provide two-thirds of the Employee's pre-disability minimum base
annual salary for a two-year period; and
(d) For the fiscal years ending in January 2005, 2006 and 2007,
Employee shall be entitled to a bonus in the amount determined by the Company's
Chief Executive Officer, in his sole discretion.
The Company shall deduct from all compensation payable under this
Agreement to the Employee any taxes or withholdings the Company is required to
deduct pursuant to state and federal laws or by mutual agreement between the
parties.
5. Vacation. For and during each year of the Term and any extensions
thereof, the Employee shall be entitled to reasonable paid vacation periods
consistent with his positions with the Company and in accordance with the
Company's standard policies, or as the Company's Board of Directors may approve.
In addition, the Employee shall be entitled to such holidays consistent with the
Company's standard policies or as the Company's Board of Directors may approve.
6. Expense Reimbursement. In addition to the compensation and benefits
provided herein, the Company shall, upon receipt of appropriate documentation,
reimburse the Employee each month for his reasonable travel, lodging,
entertainment, promotion and other ordinary and necessary business expenses in
accordance with the Company's policies then in effect.
7. Termination.
(a) For Cause. The Company may terminate this Agreement
immediately for cause upon written notice to the Employee, in which event the
Company shall be obligated only to pay the Employee that portion of the minimum
base annual salary due him through the date of termination. Cause shall be
limited to (i) the persistent failure to perform duties consistent with a
commercially reasonable standard of care; (ii) the willful neglect of duties;
(iii) criminal or other illegal activities involving dishonesty; or, (iv) a
material breach of this Agreement.
(b) Without Cause. Either party may terminate this Agreement
immediately without cause by giving written notice to the other. If the Company
terminates under this Section 7(b) , then it shall pay to the Employee the sum
of (i) all amounts owed through the date of termination, plus (ii) an amount
equal to the product of the Employee's minimum base annual salary in effect as
of the date of termination times the number of years (including partial years)
remaining in the Term. Such payment to be made in a lump sum on or before the
fifth day following the date of termination, and shall be in lieu of all further
salary and bonus obligations under this Agreement. In addition, if the Company
terminates under this Section 7(b), (i) all options granted to the Employee
which had not vested as of the date of such termination shall vest concurrently
with such termination, and, notwithstanding the terms of any option agreements,
Employee may exercise any vested options, including by reason of acceleration,
for a period after such termination which is the greater of what is provided in
the respective option agreement or 30 days, and (ii) the Company shall maintain
in full force and effect for the continued benefit of the Employee for the
remainder of the Term, all employee benefit plans (except for the Company's
stock option plans) and programs in which the Employee was entitled to
participate immediately prior to the date of termination, provided that the
Employee's continued participation is possible under the general terms and
provisions of such plans and programs. In the event that the Employee's
participation in any such plan or program
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is prohibited, the Company shall, at its expense, arrange to provide the
Employee with benefits substantially similar to those which the Employee would
otherwise have been entitled to receive under such plans and programs from which
his continued participation is prohibited. If the Employee terminates under this
Section 7(b), then the Company shall only be obligated to pay the Employee the
minimum annual base salary due him through the date of termination.
(c) Disability. If the Employee fails to perform his duties
hereunder on account of illness or other incapacity for a period of six
consecutive months, then the Company shall have the right upon written notice to
the Employee to terminate this Agreement without further obligation by paying
the Employee the minimum base annual salary, without offset, for the remainder
of the Term in a lump sum or as otherwise directed by the Employee.
(d) Death. If the Employee dies during the Term, then this
Agreement shall terminate immediately and the Employee's legal representatives
shall be entitled to receive the minimum annual base salary for the remainder of
the Term in a lump sum or as otherwise directed by the Employee's legal
representative. Executive's outstanding Company options will immediately vest in
full and be exercisable for a period of 90 days from Employee's death.
(e) Effect of Termination. Termination for any reason or for no
reason shall not constitute a waiver of the Company's rights under this
Agreement nor a release of the Employee from any obligation hereunder except his
obligation to perform his day-to-day duties as an employee.
(f) Mitigation. Employee shall not be required to mitigate the
amount of any payment provided for in this Section 7 by seeking other employment
or otherwise, nor shall any compensation or other payments received by the
Employee after the date of termination reduce any payments due under this
Section 7.
8. Non-Delegation of Employee's Rights. The obligations, rights and
benefits of the Employee hereunder are personal and may not be delegated,
assigned or transferred in any manner whatsoever, nor are such obligations,
rights or benefits subject to involuntary alienation, assignment or transfer.
9. Confidential Information. The Employee acknowledges that in his
capacity as an employee of the Company he will occupy a position of trust and
confidence and he further acknowledges that he will have access to and learn
substantial information about the Company and its operations that is
confidential or not generally known in the industry, including, without
limitation, information that relates to purchasing, sales, customers, marketing,
and the Company's financial position and financing arrangements. The Employee
agrees that all such information is proprietary or confidential, or constitutes
trade secrets and is the sole property of the Company. The Employee will keep
confidential, and will not reproduce, copy or disclose to any other person or
firm, any such information or any documents or information relating to the
Company's methods, processes, customers, accounts, analyses, systems, charts,
programs, procedures, correspondence or records, or any other documents used or
owned by the Company, nor will the Employee advise, discuss with or in any way
assist any other person, firm or entity in obtaining or learning about any of
the items described in this Section 9. Accordingly, the Employee agrees that
during the Term and at all times thereafter he will not disclose, or permit or
encourage anyone else to disclose, any such information, nor will he utilize any
such information, either alone or with others, outside the scope of his duties
and responsibilities with the Company.
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10. Non-Competition During Employment Term. The Employee agrees that,
during the Term and any extensions thereof, he will devote substantially all his
business time and effort, and give undivided loyalty, to the Company, and that
he will not engage in any way whatsoever, directly or indirectly, in any
business that is competitive with the Company or its affiliates, nor solicit, or
in any other manner work for or assist any business which is competitive with
the Company or its affiliates. In addition, during the Term and any extensions
thereof, the Employee will undertake no planning for or organization of any
business activity competitive with the work he performs as an employee of the
Company, and the Employee will not combine or conspire with any other employee
of the Company or any other person for the purpose of organizing any such
competitive business activity.
11. Non-Competition After Employment Term. The parties acknowledge that
the Employee will acquire substantial knowledge and information concerning the
business of the Company and its affiliates as a result of his employment. The
parties further acknowledge that the scope of business in which the Company is
engaged as of the Effective Date is national and very competitive and one in
which few companies can successfully compete. Competition by the Employee in
that business after this Agreement is terminated would severely injure the
Company. Accordingly, for a period of two years after this Agreement is
terminated or the Employee leaves the employment of the Company for any reason
whatsoever, except as otherwise stated hereinbelow, the Employee agrees (i) not
to become an employee, consultant, advisor, principal, partner or substantial
shareholder of any firm or business that in any way competes with the Company or
its affiliates in any of their presently-existing or then-existing products and
markets; and (ii) not to solicit any person or business that was at the time of
such termination and remains an executive employee of the Company or any of its
affiliates. Notwithstanding any of the foregoing provisions to the contrary, the
Employee shall not be subject to the restrictions set forth in this Section 11
under the following circumstances:
(a) If the Employee's employment with the Company is terminated by
the Company without cause; or
(b) If the Employee's employment with the Company is terminated as
a result of the Company's unwillingness to extend the Term of this Agreement.
12. Return of Company Documents. Upon termination of this Agreement,
Employee shall return immediately to the Company all records and documents of or
pertaining to the Company and shall not make or retain any copy or extract of
any such record or document.
13. Improvements and Inventions. Any and all improvements or inventions
which the Employee may conceive, make or participate in during the period of his
employment shall be the sole and exclusive property of the Company. The Employee
will, whenever requested by the Company, execute and deliver any and all
documents which the Company shall deem appropriate in order to apply for and
obtain patents for improvements or inventions or in order to assign and convey
to the Company the sole and exclusive right, title and interest in and to such
improvements, inventions, patents or applications.
14. Actions. The parties agree and acknowledge that the rights conveyed
by this Agreement are of a unique and special nature and that the Company will
not have an adequate remedy at law in the event of a failure by the Employee to
abide by its terms and conditions nor will money damages adequately compensate
for such injury. It is therefore agreed between the parties
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that, in the event of a breach by the Employee of any of his obligations
contained in this Agreement, the Company shall have the right, among other
rights, to damages sustained thereby and to obtain an injunction or decree of
specific performance from any court of competent jurisdiction to restrain or
compel the Employee to perform as agreed herein. The Employee agrees that this
Section 14 shall survive the termination of his employment and he shall be bound
by its terms at all times subsequent to the termination of his employment for so
long a period as Company continues to conduct the same business or businesses as
conducted during the Term or any extensions thereof. Nothing herein contained
shall in any way limit or exclude any other right granted by law or equity to
the Company.
15. Amendment; Integration. This Agreement contains, and its terms
constitute, the entire agreement of the parties, and it may be amended only by a
written document signed by both parties to this Agreement.
16. Governing Law. California law shall govern the construction and
enforcement of this Agreement and the parties agree that any litigation
pertaining to this Agreement shall be adjudicated in courts located in
California.
17. Attorneys' Fees. If any party finds it necessary to employ legal
counsel or to bring an action at law or other proceedings against the other
party to enforce any of the terms hereof, the party prevailing in any such
action or other proceeding shall be paid by the other party its reasonable
attorneys' fees as well as court costs, all as determined by the court and not a
jury.
18. Severability. If any section, subsection or provision hereof is
found for any reason whatsoever, to be invalid or inoperative, that section,
subsection or provision shall be deemed severable and shall not affect the force
and validity of any other provision of this Agreement. If any covenant herein is
determined by a court to be overly broad thereby making the covenant
unenforceable, the parties agree and it is their desire that such court shall
substitute a reasonable judicially enforceable limitation in place of the
offensive part of the covenant and that as so modified the covenant shall be as
fully enforceable as if set forth herein by the parties themselves in the
modified form. The covenants of the Employee in this Agreement shall each be
construed as an agreement independent of any other provision in this Agreement,
and the existence of any claim or cause of action of the Employee against the
Company, whether predicated on this Agreement or otherwise, shall not constitute
a defense to the enforcement by the Company of the covenants in this Agreement.
19. Notices. Any notice, request, or instruction to be given hereunder
shall be in writing and shall be deemed given when personally delivered or three
days after being sent by United States certified mail, postage prepaid, with
return receipt requested, to the parties at their respective addresses set for
the below:
To the Company:
CKE Restaurants, Inc.
0000 Xxxxxxxxxxx Xxxxxx, Xxxxx X
Xxxxxxxxxxx, XX 00000
Attention: General Counsel
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To the Employee:
Xxxx X. Xxxxx
[ADDRESS]
20. Waiver of Breach. The waiver by any party of any provisions of this
Agreement shall not operate or be construed as a waiver of any prior or
subsequent breach by the other party.
IN WITNESS WHEREOF the parties have executed this Agreement to be
effective as of the date first set forth above.
CKE RESTAURANTS, INC.
By: /s/ Xxxxxx X. Xxxxxx
-------------------------------------
Its: President & CEO
EMPLOYEE
/s/ Xxxx X. Xxxxx
----------------------------------------
Xxxx X. Xxxxx
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