EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is made effective as of January 1,
2001, by and between GRILL CONCEPTS, INC., a Delaware corporation (the
"Company") and XXXXXX X. XXXXXX ("Employee").
RECITALS
WHEREAS, the Company and Employee have heretofore entered into Employment
Agreements dated, January 1, 1993, January 1,1996 and January 1,1999
(collectively the `'Previous Agreements"), setting forth the terms and
conditions of the Company's employment of Employee as its Chief Executive
Officer; and
WHEREAS, the Company and Employee desire that Employee continue his employment
with the Company as its Chief Executive Officer and to replace its current
agreement, pursuant to and in accordance with the terms and conditions
hereinafter set forth in this Agreement;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained in this Agreement, the parties hereby agree as follows:
1. EMPLOYMENT
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1.1 The Company hereby employs Employee as its Chief Executive Officer for
a term of three (3) years, commencing as of January 1, 2001 and ending as of
December 31, 2004 (the "Term"); provided, however, that the Term may be extended
by the mutual written agreement of the parties. Employee hereby accepts such
position, upon the terms and conditions set forth in this Agreement.
1.2 During the Term, Employee shall devote his full time, energies and
skills to the performance of his duties hereunder, which shall include, but not
be limited to, the active development, management and operation of the Company's
business.
1.3 During the Term, Employee shall not, directly or indirectly, alone or
as a member of a partnership or other association, or as an officer, director or
stockholder, be engaged in or concerned with any other duties or pursuits in a
business activity which complete, directly or indirectly, with the business of
the Company without the written consent of the Company, other than owning
securities in a publicly traded company, provided that such ownership by
Employee does not exceed ten percent (10%) of any class of securities of such
company.
1.4 In the course of Employee's employment hereunder, it is anticipated
that Employee may from time to time be allowed access to confidential
information and trade secrets (collectively the "Confidential Information")
owned by the Company and used in the course of its business. The parties
acknowledge and agree that there is a competitive value and confidential nature
with respect to the Confidential Information, and that material damage will
result to the Company if any of the Confidential Information is disclosed to a
third party. Employee therefore agrees that during the Term, and for a period of
one (1) year thereafter, Employee will not, directly or indirectly, disclose or
use any of the Confidential Information except as required in the ordinary
course of the company's business and Employee's employment hereunder. All
records, files, documents and materials relating to the Company's business which
Employee shall prepare, use or be provided with during the Term shall be and
remain the sole property of the Company, and shall not be removed from the
Company's premises or otherwise utilized by Employee for other than the benefit
of the Company without the Company's written consent.
1.5 Employee acknowledges and agrees that in the event of a breach by
Employee of any of the provisions of paragraphs 1.3 and 1.4 above, that in
addition to any other remedies it may have at law or in equity, the Company
shall be entitled to injunctive relief, without the necessity of proving the
inadequacy of such other remedies.
2. SALARY. Employee shall receive an annual base salary during each year of
the Term of this Agreement as follows:
Year One: $225,000
Year Two: $235,000
Year Three: $250,000
Such salary shall be payable in monthly or in such other installments on
the payroll dates established for the Company's other employees. All payments of
salary hereunder shall be subject to the deduction of such payroll taxes and
similar deductions as required by law.
3. OTHER COMPENSATION. Employee shall be entitled to the following benefits
and other compensation during the Term:
3.1 Vacation. Five (5) weeks vacation during each year of the Term, at
such times or times as shall be mutually agreed upon between Employee and
the Company; provided, however, that Employee may not accumulate any unused
vacation time from one employment year to the next during the Term.
3.2 Automobile. Unlimited use of an automobile of a make and model
commensurate with Employee's position as Chief Executive Officer of the
Company hereunder and consistent with that provided to Employee by the
Company in the past. The Company shall pay all expenses for repair,
maintenance and insurance for such automobile.
3.3 Travel and Entertainment. Unlimited reimbursement by the Company
of Employee for entertainment, dining and travel expenses incurred by
Employee in the course of his performing his duties hereunder.
3.4 Expense Allowance. In addition to the reimbursement under
paragraph 3.3 above, Employee shall be entitled to a monthly expense
allowance to be used by Employee in his sole discretion, in an amount not
to exceed One Thousand Five Hundred Dollars ($1,500) per month.
3.5 Health Benefits. During the Term and any extension thereof, unless
the Executive is terminated for cause, each of the Executive and his spouse
(or widow) shall be entitled to receive, at the sole expense of the
Company, such benefits, including without limitation, participation in
group life, health, accident, disability, liability or hospitalization
insurance plans, pension plans, severance plans or retirement plans, as the
Company currently makes available to its highest level of executive
employees as a group or as such programs and benefits are amended. In
addition, the Company will, at its own expense, continue to provide the
benefits referred to in Paragraph 3.5 to the Executive and his spouse (or
widow) for five (5) years after the expiration of the Term, such benefits
to be provided regardless of the reason for any separation of employment
including, but not limited to, the Executive's death or disability, but
excluding termination for cause. The Company represents and warrants that
the benefits to the Executive and his spouse (or widow) described in
paragraph 3.5 shall at all times be substantially as favorable or more
favorable to the Executive and his spouse (or widow) as those currently
provided. In the event that the Company is unable to continue to provide
the benefits required by this paragraph 3.5 through continued participation
in the Company's plans, the Company is required to provide comparable
benefits for the Executive and his spouse (or widow) from another source.
After benefits are no longer required to be provided at the Company's
expense to the Executive and his spouse (or widow) pursuant to this Section
3.5, each of the Executive and his spouse (or widow) shall be entitled to
participate in the Company's health and hospitalization insurance plans as
described in Section 3.5 at his and/or her own expense, for as long as the
Company's plans permit.
3.6 Life Insurance. Term life insurance coverage in the face amount of One
Million Dollars ($1,000,000), the premiums and all other costs for which shall
be paid in full by the Company.
3.7 Stock Options. Company hereby grants to Employee one hundred thousand (
100,000) shares of stock at a price of $ per share, ten percent in excess of the
selling price of the stock on December 31,2000, in accordance with provisions of
the Company's Stock Option Plan (the "Plan'). The options will vest one-third
(1/3) at the end of2001, one-third (1/3) at the end of2002 and the final
one-third at the end of2003.
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3.8 Bonus Plan. Executive shall be eligible for a performance-based bonus
of a maximum of fifty percent (50%) of salary. Metrics shall be established by
the Compensation Committee of the Board of Directors on or before February 28 of
each year.
3.9 Other Benefits. Such other benefits as Employee may be eligible to
receive in accordance with the Company's announced employee benefit programs in
effect from time to time, including, but not limited to, paid sick leave,
participation in qualified pension and/or profit sharing plans, split-dollar
life insurance policies, reimbursement for uninsured medical expenses,
non-qualified and/or incentive stock options, and/or unfunded deferred
compensation. Nothing contained in this paragraph shall be deemed to restrict,
limit or affect any stock options which may have previously been granted to
Employee
4. TERMINATION. This Agreement shall terminate upon the occurrence of any
of the following:
4.1 The expiration of the Term hereof.
4.2 The mutual written consent of the parties hereto.
4.3 The death of Employee.
4.4 The permanent disability of Employee, as such term is defined
in paragraph 6 below.
4.5 For cause, at the option of the Company, as provided in paragraph 5
below
Nothing contained in this paragraph 4 shall be construed, however, to
abrogate the payment by the Company to Employee or Employee's personal
representative or heirs, as the case may be, of any benefits or compensation
which had accrued and was due to Employee prior to termination of this
Agreement.
5. TERMINATION FOR CAUSE. The Company shall have the right, at its sole
election, to terminate Employee's employment hereunder at any time during the
Term for cause, which, for purposes of this Agreement, shall be constituted by
any of the following events:
5.1 Employee is convicted by any federal, state or local authority
with (i) an act of dishonesty; or (ii) an act involving moral turpitude; or
(iii)an act constituting a felony; or (iv) narcotics addiction; or (v)
habitual intemperance.
5.2 The continued failure by Employee, following written notice from
the Company, to fulfill Employee's obligations under or comply with any of
the provisions of this Agreement.
Any election by the Company to terminate this Agreement for cause under
paragraphs 5.1 or 5.2 above shall be made by giving Employee written notice to
such effect by certified or registered mail at Employee's last known address, or
by personal delivery of such notice to Employee; provided, however, that in the
event Employee is either convicted or pleads guilty or nolo contendere to any of
the charges set forth in paragraph 5.1 above, the Company may immediately
terminate this Agreement thereupon. The waiver by the Company of any such acts
of Employee as described in this paragraph 5 shall not be construed as a waiver
of any subsequent acts by Employee.
6. PERMANENT DISABILITY.
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6.1 The terms "permanent disability" as used in this Agreement shall
mean six ( 6) months of substantially continuous disability . Disability shall
be deemed "substantially continuous" if, as a practical matter, Employee, by
reason of mental or physical health, is unable to sustain reasonably long
periods of substantial performance of his duties. Frequent long illnesses,
though different from a preceding illness and though separated by relatively
short periods of Employee's performance of his duties hereunder, shall be deemed
to be "substantially" continuous.
6.2 In the event of any dispute concerning the permanent disability of
Employee, the Company and Employee shall each select a physician licensed to
practice medicine in the State of California, who shall then select a third
physician so licensed. Such selection shall be made within thirty (30) days
after Employee gives notice to the Company that he disputes the Company's
determination that Employee is permanently disabled. The determination of a
majority of the three (3) physicians concerning whether or not Employee is
permanently disabled shall be conclusive and binding upon the parties. Such
determination shall be made by the three (3) physicians within sixty (60) days
of their selection. In the event that either the Company or Employee fails to
select a physician within the prescribed time period, then either it or he shall
be deemed to have waived its or his right to do so, and the determination
regarding Employee's permanent disability hereunder shall be made by the sole
physician selected.
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7. ASSIGNMENT. Employee may not assign or otherwise transfer this Agreement
or any of Employee's rights, duties, interests or obligations hereunder without
the written consent of the Company.
8. ENTIRE AGREEMENT. This Agreement embodies the entire agreement and
understanding between the parties with respect to the subject matter hereof, and
supersedes all prior and contemporaneous agreements and understandings relating
to such subject matter, whether oral or written, including, without limitation,
the Previous Agreements. The parties acknowledge and agree that neither has made
any representations with respect to the subject matter of this Agreement except
as specifically set forth in this Agreement.
9. AMENDMENT. This Agreement may not be amended except by a written
document executed by the parties.
10. SEVERABILITY. If any provision of this Agreement shall be held
unenforceable as applied to any circumstance, the remainder of this Agreement
and the application of such provision to other circumstances shall be
interpreted so as best to affect the intent of the parties. The parties further
agree to replace any such unenforceable provision with an enforceable provision
(and to take such other action) which will achieve, to the extent possible, the
purposes of the unenforceable provision.
11. GOVERNING LAW. This Agreement shall be governed by and construed under
the laws of the State of California.
l2. ARBITRATION. Any dispute arising under the terms of this Agreement
shall be submitted to binding arbitration under the Commercial Arbitration Rules
of the American Arbitration Association (the Rules'). Any hearing under the
Rules shall take place at Los Angeles, California, in accordance with Rule 11 of
the Rules. The hearing shall be before one (1) arbitrator in accordance with
Rule 17 of the Rules; provided, however, that in the event of a claim made in
excess of One Hundred Thousand Dollars (S 100,000), the hearing shall be before
three (3) arbitrators, in accordance with the Rules. The provisions of Section
1283.05 of the California Code of Civil Procedure are incorporated into and made
a part of this Agreement, except that subparagraph (e) of Section 1283.05 shall
not apply. Depositions in any arbitration hereunder may be noticed in accordance
with the California Code of Civil Procedure, and leave to do so need not be
requested by the arbitrator or arbitrators. Any award rendered by the arbitrator
pursuant to this Agreement and the Rules shall be enforced in the Superior Court
of the County of Los Angeles in and for the State of California as the court
having sole jurisdiction over the arbitration.
13. ATTORNEYS' FEES. In any arbitration or action to enforce this
Agreement, the prevailing party shall be entitled to recover from the
non-prevailing party all reasonable costs, including, without limitation,
attorneys' fees.
l4. ADDITIONAL DOCUMENTS. The parties agree to execute such additional
documents and perform such other acts as may be necessary or appropriate to
achieve the purposes of this Agreement.
15. NON-WAIVER. No waiver by a party of any failure by the other party to
keep any provision of this Agreement shall be deemed a waiver of any preceding
or succeeding breach of the same or any other provision.
16. BINDING EFFECT. Subject to paragraph 7 above, this Agreement is binding
upon and shall inure to the benefit of the parties and their respective
successors, assigns, heirs, and legal representatives.
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17. NOTICE. Any notice or other communication given hereunder shall be
deemed sufficient if in writing and sent by registered or certified mail, return
receipt requested, addressed to the parties as indicated below:
If to the Company:
00000 Xxx Xxxxxxx Xxxxxxxxx, #000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
If to Employee:
ll66l Xxx Xxxxxxx Xxxxxxxxx, #000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
or to such other address as the parties may designate in writing pursuant to
this paragraph. Notice shall be deemed to have been given on the date of
mailing, except notices of change of address, which shall be deemed to have been
given when received.
18. COUNTERPARTS. This Agreement may be executed in one or more
counterparts and/or by facsimile, each of which shall be deemed an original but
all of which together shall constitute one and the same instrument. Facsimile
signatures shall be accepted by the parties as valid and binding in lieu of
original signatures; however, if facsimile signatures are presented by any party
in lieu of original signatures, within two (2) business days after execution of
the Agreement such party shall also deliver to counsel for the other party(ies)
an original signature signed by that party.
19. W AIVER OF CONFLICT OF INTEREST. The parties acknowledge that this
Agreement was originally prepared by the law firm of Herzog, Fisher, Flame &
Xxxxxxx (the Firm') at the request of the Company. The Firm has not however
represented either party in connection with the terms hereof. In view of the
fact that the Firm (and/or one or more of its individual members) has in the
past rendered legal services to and represented and will continue to render
legal services to, represent and/or be involved with the Company and/or Employee
in connection with the Company and other matters, there is a potential for
conflicts of interest. The parties acknowledge that they are aware of such
conflicts of interest and the potential adverse effects to them which may result
therefrom, and, notwithstanding same, hereby consent to the Firm's preparation
of this Agreement and waive any potential conflicts of interest with respect to
or against the Firm in connection therewith. Further, both the Company and
Employee acknowledge that all of the terms of this Agreement were negotiated by
the parties without the Firm's participation in same, both parties being advised
by the Firm that independent legal advisors should be consulted relative to
same. In connection with the foregoing, the parties acknowledge that each of
them has had an opportunity to have this Agreement reviewed by independent
counsel, and that each of the parties is aware of and understands the form,
content and legal effect of this Agreement and their rights and obligations
hereunder .
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
The Company: GRILL CONCEPTS, INC.,
a Delaware corporation
By: /s/
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Its: Chairman
Employee: /s/
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Xxxxxx X. Xxxxxx
