EMPLOYMENT AGREEMENT
This Employment Agreement (this "AGREEMENT") is made effective as of August __,
2000, by and between TAM Restaurants, Inc. ("TAM"), of 0000 Xxxxxx Xxx., Xxxxxx
Xxxxxx, Xxx Xxxx, 00000 and Xxxxxxx X. Xxxxx ("XX. XXXXX"), of 0 Xxxxxx Xxxx,
Xxxxxxxxx, Xxx Xxxx, 00000.
X. XXX is engaged in the business of operating multi-unit restaurant
and catering operations. As of the date of the agreement, it is
expected by both parties that Xx. Xxxxx will primarily perform the job
duties at the following location: 0000 Xxxxxx Xxx., Xxxxxx Xxxxxx, Xxx
Xxxx. Xx. Xxxxx agrees that this location may change over time within
the metropolitan New York area.
X. XXX desires to continue to retain the services of Xx. Xxxxx.
C. Xx. Xxxxx desires to continue being employed by TAM.
Therefore, the parties agree as follows:
1. EMPLOYMENT. TAM shall employ Xx. Xxxxx as the Executive Vice President, Chief
Operating Officer, Chief Financial Officer, and President. Xx. Xxxxx shall
provide to TAM the services described on the attached Exhibit A, which is made a
part of this Agreement by this reference. Xx. Xxxxx accepts and agrees to such
employment, and agrees to be subject to the general supervision, advice and
direction of TAM's Chairman, Xxxxxxx Xxxxxx, XXX'x Board of Directors and TAM's
Executive Committee.
2. BEST EFFORTS OF EMPLOYEE. Xx. Xxxxx agrees to perform faithfully,
industriously, and to the best of Xx. Xxxxx'x ability, experience, and talents,
all of the duties that may be reasonably required by the express and implicit
terms of this Agreement. Such duties shall be provided at such place(s) as the
needs, business, or opportunities of TAM may require from time to time.
3. COMPENSATION OF EMPLOYEE. As compensation for the services provided by Xx.
Xxxxx under this Agreement, TAM will pay Xx. Xxxxx a base annual salary of
$160,000.00 payable on Wednesday of every other week in accordance with the
normal payroll practices of TAM, which are subject to change. This salary will
be retroactive to July 1, 2000.
4. BONUS PAYMENTS. In addition to the payments under the preceding paragraph,
Xx. Xxxxx shall also be entitled to earn bonus payments of up to 20% of his base
compensation as listed above (hereinafter referred to as the "TARGET BONUS").
Target Bonus payments shall be made quarterly, and shall be based on Xx. Xxxxx'x
achievement of TAM's overall corporate budget target relative to EBITDA (defined
as earnings before interest, depreciation, taxes and amortization), for all
operating restaurants owned by TAM, inclusive of corporate overhead. Said budget
will be prepared by Xx. Xxxxx and XXX'x Controller with input from each of TAM's
operating restaurant's General Managers, and approved by the Board of Directors.
The projected EBITDA included in that budget shall be the target for which Xx.
Xxxxx'x bonus payments will be based. However, should TAM experience any
extraordinary unbudgeted expenses, (i.e. shareholder lawsuits, additional
accounting and legal fees incurred as a result of the sale or potential sale of
TAM, the securing of additional debt or equity financing, etc.) for which Xx.
Xxxxx has no control, then those expenses shall be excluded from any calculation
of EBITDA for the purposes of determining Xx. Xxxxx'x bonus payments. Similarly,
an adjustment will be made for any windfall or account adjustment for which Xx.
Xxxxx has no influence or control over.
Using the above definition of EBITDA , should TAM's EBDITA achieve 100% of
projections in any payment period, then Xx. Xxxxx shall receive a bonus equal to
100% of the Target Bonus for that quarter. Should TAM's EBDITA exceed
projections in any payment period, then Xx. Xxxxx shall receive a bonus equal to
100% of the Target Bonus for that quarter, plus the additional percentage of
increase (for example should TAM's EBITDA achieve 105% of projections then, Xx.
Xxxxx shall receive a Target Bonus equal to 105% of the target bonus for that
quarter). Conversely, should TAM's EBITDA fall short of projections in any
payment period, then Xx. Xxxxx shall receive a Target Bonus equal to the
percentage of EBITDA achieved, (for example should TAM's EBITDA achieve 95% of
projection then, Xx. Xxxxx shall receive a bonus equal to 95% of the Target
Bonus for that quarter). Xx. Xxxxx shall receive such bonus payments providing
that TAM achieves at least 80% of its targeted EBDITA projections in any
quarter. Bonus payments shall be made to Xx. Xxxxx within seven (7) business
days of the close of each quarter by TAM's Controller. TAM shall withhold 30% of
each quarterly bonus payment for distribution to Xx. Xxxxx within 7 business
days of the completion of the annual audit conducted by TAM's outside
accountants, at which time the full year EBITDA will be compared to the approved
corporate budget or any approved adjustment thereto, and Xx. Xxxxx will receive
an additional payment (or the next quarterly Target Bonus shall be reduced)
reconciling the bonus payments Xx. Xxxxx received for that year to the total
bonus that he is entitled to based on the year end audit. The Target Bonus shall
be paid pro rata for any period less than a full quarter that Xx. Xxxxx is
employed by TAM. In the event of a "Change of Control" (as defined below) Xx.
Xxxxx shall be immediately entitled to receive 100% of any and all Target Bonus
payments and reserve funds as of the date such Change of Control occurs.
A. ACCOUNTING. TAM shall maintain records in sufficient detail for
purposes of determining the amount of the Target Bonus. TAM shall provide to Xx.
Xxxxx a written accounting that sets forth the manner in which the Target Bonus
payment was calculated. Xx. Xxxxx, or Xx. Xxxxx'x agent, shall have the right to
inspect TAM's records for the purposes of verifying the calculation of the
Target Bonus payments.
B. DEATH OF THE EMPLOYEE. If Xx. Xxxxx dies during the term of this
Agreement, Xx. Xxxxx'x estate shall be entitled to payments or partial Target
Bonus payments for the period ending with the date of Xx. Xxxxx'x death.
5. GRANT OF OPTIONS. Xx. Xxxxx shall also be entitled to the grant of options to
purchase common shares of TAM. Specifically, he shall receive options (pursuant
to TAM's 1997 Stock Option Plan) to purchase 100,000 common shares of TAM at an
exercise price equal to $.50 per common share (the "OPTIONS"). The Options shall
become exercisable in the following amounts at the following times: 25% of the
Options shall become exercisable immediately upon the execution of this
Agreement. Thereafter, 25% of the Options shall become exercisable at the end of
each six-month period following the execution of this Agreement until the full
grant of Options has become fully vested and exercisable. All Options granted as
part of this Agreement shall therefore become fully vested and exercisable 18
months from the date this Agreement has been executed by all parties. However,
in the event of a Change of Control (as defined below), all Options that have
been granted to Xx. Xxxxx which have not become exercisable shall immediately
become exercisable. "Change of Control" shall be defined as: (i) the sale of all
or substantially all of the assets of TAM; (ii) a sale (including an exchange)
of all or substantially all of the shares of stock of TAM; or (iii) the merger,
consolidation, liquidation, amalgamation or like transaction of TAM with or into
another corporation. These options shall shall terminate five years after Xx.
Xxxxx'x employment is terminated hereunder.
6. CHANGE OF CONTROL BONUS. In the event that TAM closes a transaction prior to
July 1, 2001 thereby selling all or part of its assets, or a Change of Control
occurs as defined above, resulting in the elimination of Corporate overhead and
the termination of Xx. Xxxxx as President and Chief Operating Officer, Xx. Xxxxx
shall receive a special cash bonus of $50,000 plus the equivalent of six months
salary, continued medical coverage for six months, and an additional grant of
options to purchase 50,000 common shares at an exercise price equal to $.50 per
common share. These options shall vest and be exercisable immediately by Xx.
Xxxxx. This cash bonus and issuance of these options shall occur within five
business days after the termination of Xx. Xxxxx'x employment with TAM as set
forth above. These options shall have an exercise price of $.50 per share, and
shall terminate five years after Xx. Xxxxx'x employment is terminated hereunder.
7. EXPENSE REIMBURSEMENT. All travel and other expenses (including but not
limited to, meals, postage, professional dues and expenses, cost of job-related
education, if course work is successfully completed) incident to the rendering
of services reasonably incurred on behalf of TAM by Xx. Xxxxx during the term of
this Agreement shall be paid by TAM. If any such expenses are paid in the first
instance by Xx. Xxxxx, XXX shall reimburse him therefor on presentation of
appropriate receipts for any such expenses, provided that any individual expense
over $750 must be approved by the Chairman of the Board of TAM. TAM agrees that
it shall make all lease payments (during the time that Xx. Xxxxx is employed by
TAM pursuant to this Agreement) on his currently owned Chevrolet Blazer, and
related auto insurance, gas, and tolls, and related repairs and maintenance on
such automobile. For the convenience of TAM during his employment, Xx. Xxxxx
will extend us one or more of his credit cards for use by key TAM employees as
payment for normal expenses incurred, TAM shall pay within the terms of such
credit obligations all charges, expenses, fees, late fees, interest charges,
etc. related to such purchases made by said TAM employees provided such
purchases are in connection with the ongoing business of TAM and approved by the
Officers of TAM..
8. BENEFITS. During the time this Agreement is in effect, Xx. Xxxxx shall be
entitled to employment benefits, including personal leave, sick leave, vacation,
health insurance, dental insurance, short and long-term disability insurance,
life insurance, and pension plan as provided by TAM's policies governing these
benefits.
9. TERM/TERMINATION. Xx. Xxxxx'x employment under this Agreement shall be for an
unspecified term on an "at will" basis as follows. This Agreement may be
terminated by TAM upon 90 calendar day's written notice, and by Xx. Xxxxx upon
90 calendar day's written notice. If either TAM or Xx. Xxxxx shall so terminate
this Agreement, Xx. Xxxxx shall be entitled to receive his full salary, Target
Bonus, and welfare benefits (including health insurance) for the term of the
90-day notice period. During this 90 day period, Xx. Xxxxx shall remain on TAM's
payroll, shall assist TAM in any transition process, and his Options shall
continue to become exercisable to the same extent they otherwise would. On the
final day of the 90-day notice period (solely in the event of the termination of
this Agreement by TAM without cause), all of the Options shall vest (if they
have not already) Xx. Xxxxx shall receive, in a lump sum, a severance payment
equal to six month's salary, any Target Bonus payment held in reserve as set
forth above, any earned Target Bonus through such date, and/or deferred Target
Bonus, and his accrued vacation pay. TAM shall continue to pay for Xx. Xxxxx'x
health insurance benefits for six (6) months after the conclusion of the
aforementioned 90-day notice period (solely in the event of the termination of
this Agreement by TAM without cause).
If the Board of Directors terminates Xx. Xxxxx for cause then TAM shall have no
further obligation to Xx. Xxxxx other than the payment of salary through the
effective date of termination and Xx. Xxxxx shall have no further obligations or
duties to TAM other than the terms set forth in Section 10 below. For purposes
of this Agreement, "for cause" is defined as: (i) the engaging by the Xx. Xxxxx
in criminal misconduct (including embezzlement and criminal fraud) which is
materially injurious to TAM, monetarily or otherwise, as determined by a court
of competent jurisdiction, or (ii) the conviction of Xx. Xxxxx of a felony by a
court of competent jurisdictionIn such event all Options that have not already
vested shall be returned to TAM.
In the event of the inability of Xx. Xxxxx, by reason of physical or mental
disability, to continue substantially to perform his duties hereunder for a
period of 180 consecutive days, during which 180 day period his salary and any
other benefits hereunder shall not be suspended or diminished. Upon any
termination of Xx. Xxxxx'x employment due to such disability, TAM shall have no
further obligations or duties to the Employee, except: all of the Options shall
vest (if they have not already) for the payment of any Target Bonus payment held
in reserve as set forth above, any earned Target Bonus through such date, and/or
deferred Target Bonus, and his accrued vacation pay. TAM shall continue to pay
for Xx. Xxxxx'x health insurance benefits for six (6) months after the
conclusion of such period.
10. CONFIDENTIALITY: NON-COMPETITION. Upon termination of employment with TAM,
Xx. Xxxxx hereby agrees not to take copies of or make proprietary confidential
information available to third parties including but not limited to internal
financial documents, personnel lists and compensation, internal correspondence,
customer lists and menu item recipes, formulations and costs without the express
written consent of TAM's Board of Directors. Xx. Xxxxx further agrees that for a
period of six months following his termination he shall not directly or
indirectly hire, offer to hire, entice, solicit or in any other manner persuade
or attempt to persuade any officer or restaurant General Manager then under
employment of TAM to discontinue or alter his relationship with TAM. Failure to
abide by the terms of this Section shall be grounds for the forfeiture of all
severance and bonus payments and stock option grants or net proceeds from the
executions of said options.
11. INDEMNIFICATION: TAM shall indemnify and hold harmless Xx. Xxxxx against any
and all expenses reasonably incurred by him in connection with or arising out of
a) the defense on any action, suit or proceeding in which he is a party, or b)
any claim asserted or threatened against him, in either case by reason of or
relating to his being or having been an employee, officer or director of the
TAM, whether or not he continues to be such an employee, officer or director at
the time of incurring such expenses, except insofar as such indemnification is
prohibited by law. Such expenses shall include, without limitation, the fees and
disbursements of attorneys, amounts of judgments and amounts of any settlements,
provided that such expenses are agreed to in advance by TAM. The foregoing
indemnification obligation is independent of any similar obligation provided in
TAM's Certificate of Incorporation or Bylaws, and shall apply with respect to
any matters attributable to Xx. Xxxxx'x employment.
12. NOTICES. All notices required or permitted under this Agreement shall be in
writing and shall be deemed delivered when delivered in person or on the third
business day after being deposited in the United States mail, postage paid,
addressed as follows:
TAM:
Mr. Xxxxxxx Xxxxxx
Chairman of the Board
C/o Xxxxx Xxxxxxxx Investment Management
0000 Xxxxxx xx xxx Xxxxx
Xxx Xxxxxxx, Xx 00000
And
Xx. Xxxxx Xxxxxx, Director &
Chairman of Compensation Committee
00 Xxxxxxxx
Xxxxxx, Xx 00000.
XX. XXXXX:
Xxxxxxx X. Xxxxx
0 Xxxxxx Xxxx
Xxxxxxxxx, Xxx Xxxx 00000
Either party may change such addresses from time to time by providing written
notice in the manner set forth above.
13. ENTIRE AGREEMENT. This Agreement contains the entire agreement of the
parties and there are no other promises or conditions in any other agreement
whether oral or written. This Agreement supersedes any prior written or oral
agreements between the parties.
14. AMENDMENT. This Agreement may only be modified or amended, if in writing and
signed by both parties.
15. SEVERABILITY. If any provisions of this Agreement shall be held to be
invalid or unenforceable for any reason, the remaining provisions shall continue
to be valid and enforceable. If a court of competent jurisdiction finds that any
provision of this Agreement is invalid or unenforceable, but that by limiting
such provision it would become valid or enforceable, then such provision shall
be deemed to be written, construed, and enforced as so limited.
16. WAIVER OF CONTRACTUAL RIGHT. The failure of either party to enforce any
provision of this Agreement shall not be construed as a waiver or limitation of
that party's right to subsequently enforce and compel strict compliance with
every provision of this Agreement.
17. APPLICABLE LAW. It is the intention of the parties hereto that this
Agreement and the performance hereunder and all suits and special proceedings
hereunder be exclusively construed in accordance with and under and pursuant to
the laws of the State of New York and that in any action, special proceeding or
other proceeding that may be brought arising out of, or in connection with or by
reason of this Agreement, the exclusive laws of the State of New York shall be
applicable and shall govern to the exclusion of the law of any other forum,
without regard to the jurisdiction in which any action or special proceeding may
be instituted. Each of the parties consents to the exclusive jurisdiction of the
U.S. District Court sitting in the Southern District of the State of New York or
the Supreme Court of the State of New York sitting in Manhattan, in connection
with any dispute arising under this Agreement and hereby waives, to the maximum
extent permitted by law, any objection, including any objection based on FORUM
NON CONVENIENS, to the bringing of any such proceeding in such jurisdiction.
18. SUCCESSORS. This Agreement shall be binding upon TAM and any of its
successors and assigns. In the event of a Change of Control (as defined above),
the provisions of this Agreement shall be binding upon the corporation resulting
from such merger or to which the assets shall be sold, exchanged, transferred,
or consolidated.
19. EXECUTION IN COUNTERPARTS. This Agreement may be executed by the parties in
one or more counterparts, each of which shall be deemed to be an original but
all of which taken together shall constitute one and the same agreement, and
shall become effective when one or more counterparts has been signed by each of
the parties hereto and delivered to each of the other parties hereto.
TAM Restaurants, Inc.
By: ___________________________________ Date: ______________________
Xxxxxxx Xxxxxx
Chairman of the Board
AGREED TO AND ACCEPTED:
__________________________________ Date: ______________________
Xxxxxxx X. Xxxxx
