Contract
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AMENDED
AND RESTATED
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AMENDED
AND RESTATED EMPLOYMENT AGREEMENT dated as of the 31st day of March,
2008, by and between Benihana Inc., a Delaware corporation (the “Company”) and
Xxxx X. Xxxxxx (“Executive”).
R
E C I T A L S :
Executive,
pursuant to an election by the Company’s Board of Directors on March 23, 2007,
is, and has been since April 2, 2007, employed by the Company as its President
and Chief Operating Officer. Executive is employed by the Company pursuant to
the terms and conditions of the Amended and Restated Employment Agreement dated
as of the 18th day of
June, 2007 (the “Employment Agreement”). The Company is desirous of continuing
the employment of Executive in such capacity and Executive is desirous of
continuing to be employed by the Company in such capacity on the terms and
conditions hereinafter set forth.
Certain
revisions to the Employment Agreement have been necessitated by the enactment of
Section 409A of the Internal Revenue Code, as amended (the “Code”) and the final
Treasury Regulations promulgated thereunder. As a result, the Company and
Executive have agreed to amendments to the Employment Agreement and to the
restatement of the Employment Agreement, as so amended, as set forth in its
entirety herein.
NOW, THEREFORE, the Employment Agreement is hereby
amended and restated in its entirety as follows:
1. Engagement
and Term. The
Company hereby continues to employ Executive and Executive hereby accepts such
continued employment by the Company on the terms and conditions set forth
herein, for a period commencing on April 2, 2007 (the “Effective Date”), and
ending, unless sooner terminated in accordance with the provisions of Section 4
hereof, on March 31, 2010 (the “Employment Period”).
2. Scope of
Duties.
Executive shall be employed by the Company as its President and Chief Operating
Officer. In such capacity, Executive shall have such authority, powers and
duties as are customarily attendant upon such position. If elected or appointed,
Executive shall also serve, without additional compensation, in one or more
offices and, if and when elected, as a director of the Company or any subsidiary
or affiliate of the Company, provided that his duties and responsibilities are
not inconsistent with those pertaining to his position as an executive.
Executive shall faithfully devote his full business time and efforts so as to
advance the best interests of the Company. During the Employment Period,
Executive shall not be engaged in any other business activity, whether or not
such business activity is pursued for profit or other pecuniary advantage,
unless same is only incidental and is in no way, directly or indirectly,
competitive with, or opposed to the best interests of the Company.
3. Compensation.
3.1. Basic
Compensation.
In respect of services to be performed by Executive during the Employment
Period, the Company agrees to pay Executive an annual salary at the rate of Two
Hundred Fifty Thousand Dollars ($250,000) for the portion of the Employment
Period that is prior to March 31, 2008 and at the rate of Two Hundred
Seventy-One Thousand Dollars ($271,000) thereafter as may be increased pursuant
to this Agreement (“Basic Compensation”), payable in accordance with the
Company’s customary payroll practices for executive employees. In addition to
the cost of living adjustment set forth in Section 3.5, Executive shall be
entitled to any discretionary increments in the Basic Compensation as shall be
determined from time to time by the Board of Directors of the
Company.
3.2. Bonus
Arrangements.
Executive shall be entitled to participate in any performance-based bonus plan
or other bonus arrangements maintained by the Company for its executive
employees as determined by the Company’s Compensation and Stock Option
Committee. In the event the Company does not maintain such a plan or
arrangement, Executive will be eligible for such discretionary bonuses as may be
determined from time to time by the Compensation and Stock Option Committee of
the Board of Directors of the Company. In addition to the foregoing, Executive
shall be entitled to receive a performance-based bonus of up to twenty-five
percent (25%) of Basic Compensation, as determined by the Company’s Compensation
and Stock Option Committee and Chief Executive Officer, at the end of each
fiscal year of service based upon Executive’s performance including, without
limitation, consideration of the following criteria: the Company’s actual
results of operations compared with the Company’s business plan as adopted by
the Company’s Board of Directors; restaurant development; and management
retention. Any such bonus will be payable in accordance with the terms of such
bonus plan or arrangement or, if there is no such plan or arrangement, within 2½
months after the end of the fiscal year of the Company to which it relates but
in no event later than the end of the calendar year in which such fiscal year
ends.
3.3. Stock
Options.
Executive will be eligible to receive stock options under the Company’s stock
option plans at the discretion of the Compensation and Stock Option Committee of
the Board of Directors of the Company in accordance with policies existing at
the time of such grants.
3.4.
Other
Benefits.
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(a) During
the Employment Period, Executive shall be entitled to participate, at the
Company’s expense, in the major medical health insurance plan, and all
other health, insurance or other benefit plans applicable generally to
executive officers of the Company.
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(b) During
the Employment Period, Executive will be entitled to paid vacations and
holidays consistent with the Company’s policy applicable to executives
generally. All vacations shall be scheduled at the mutual convenience of
the Company and
Executive.
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3.5.
Cost of
Living Adjustments. The Basic Compensation
shall be increased by an amount established by reference to the Consumer Price
Index for Urban Wage Earners and Clerical Workers, New York, New York- Northern
New Jersey area published by the Bureau of Labor Statistics of the United States
Department of Labor (the “Consumer Price Index”). The base period shall be the
month ended December 31, 2007 (the “Base Period”). If the Consumer Price Index
for the month of December in any year, commencing in 2008, is greater than the
Consumer Price Index for the Base Period, Basic Compensation shall be increased,
commencing on April 1 of the next following year, to the amount obtained by
multiplying Basic Compensation by a fraction, the numerator of which is the
Consumer Price Index for the month of December of the year in which such
determination is being made and the denominator of which is the Consumer Price
Index for the Base Period.
3.6
No
Designation of Year. In no event may Executive,
directly or indirectly, designate the calendar year of any payment under this
Agreement.
4. Term of
Employment. The provisions of
Section 1 of this Agreement notwithstanding, the Company may terminate this
Agreement and Executive’s employment hereunder in the manner and for the causes
hereinafter set forth, in which event the Company shall be under no further
obligation to Executive other than as specifically provided herein:
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(a) If
Executive is absent from work or otherwise substantially unable to assume
his normal duties for a period of sixty (60) successive days or an
aggregate of ninety (90) business days during any consecutive twelve-month
period during the Employment Period because of physical or mental
disability, accident, illness, or any other cause other than vacation or
approved leave of absence, the Company may thereupon, or any time
thereafter while such absence or disability still exists, terminate the
employment of Executive hereunder upon ten (10) days’ written notice to
Executive.
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(b) In
the event of the death of Executive during the Employment Period, this
Agreement shall automatically terminate on the date
thereof.
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(c) If
Executive materially breaches or violates any material term of his
employment hereunder, or commits any criminal act or an act of dishonesty
or moral turpitude, in the reasonable judgment of the Company’s Board of
Directors, then the Company may, in addition to other rights and remedies
available at law or equity, immediately terminate this Agreement upon
written notice to Executive with the date of such notice being the
termination date and such termination being deemed for
“cause.”
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(d) In
the event Executive’s employment is terminated by reason of the provisions
of subparagraph (a) or (b) of this Section 4, then in such event, the
Company shall pay to Executive, if living, or to such other person or
persons as Executive may from time to time designate in writing as the
beneficiary of such payment, the Basic Compensation then in effect for the
three month period following such termination in accordance with its
regular payroll practices, and the Company shall have no further
obligation with respect to the payment of Basic Compensation hereunder.
Notwithstanding the foregoing, if any securities of the Company are
publicly traded on an “established securities market” and Executive is a
“specified employee” (as such terms are defined in Section 409A of the
Code and the regulations thereunder) at the time of any termination of
Executive’s employment by reason of the provisions of subparagraph (a) of
this Section 4, then the amount due to Executive hereunder on account of a
termination of employment under such subparagraph (a) shall instead be
paid to Executive in a lump sum and without interest on the date that is
six months plus one day after such termination of employment but only if
such delay shall be necessary to prevent any accelerated or additional tax
under Section 409A of the Code.
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(e) In
the event (1) Executive’s employment is terminated by the Company during
the Employment Period (i) other than by reason
of the provisions of subparagraph (a), (b) or (c) of this Section 4 or
(ii) following a “Change in Control” as described in Section 5 hereof, and
(2) any securities of the Company are publicly traded on an “established
securities market” and Executive is a “specified employee” (as such terms
are defined in Section 409A of the Code and the regulations thereunder) at
the time of such termination of employment, then the amount, if any, that
the Company may pay to Executive (as a result of the Company’s termination
of Executive’s employment) prior to the date that is six months plus one
day from the date of such termination (the “Delayed Payment Date”) shall
not exceed the lesser of (A) two times Executive’s Basic Compensation for
the calendar year preceding the termination, or (B) two times the amount
specified in Section 401(a)(17) of the Code for the calendar year of such
termination, but only to the extent and in the event that such limitation
is necessary to prevent any accelerated or additional tax under Section
409A of the Code, and any excess shall be paid to Executive, without
interest, on the Delayed Payment Date. Executive acknowledges that any
payments to be made to Executive upon termination of employment may be
made only in connection with a “separation from service” as determined
under Section 409A of the Code (if in effect at the time of such
termination of
employment).
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5. Change in
Control.
5.1.
In the event at any time during the Employment Period, a
majority of the Board of Directors is composed of persons who are not
“Continuing Directors,” as hereinafter defined, and thereafter Executive’s
employment is terminated by the Company other than for one of the reasons set
forth in subparagraphs (a), (b) or (c) of Section 4 hereof, Executive shall not
be obligated to seek employment to mitigate his damages, if any, to which he may
be entitled by reason of the Company’s breach of this Agreement.
5.2.
“Continuing Directors” shall mean (i) the directors of the Company
at the close of business on April 2, 2007 and (ii) any person who was or is
recommended to (A) succeed a Continuing Director by the Company’s
Nominating Committee or (B) become a director as a result of an increase in the
size of the Board by a majority of the Continuing Directors then on the
Board.
6. Disclosure
of Confidential Information and Covenant Not to Compete.
Executive agrees that his primary loyalty will be to the Company.
Executive acknowledges that the Company possess confidential information,
know-how, customer lists, purchasing, merchandising and selling techniques and
strategies, and other information used in its operations of which Executive will
obtain knowledge, and that the Company will suffer serious and irreparable
damage and harm if this confidential information were disclosed to any other
party or if Executive used this information to compete against the Company.
Accordingly, Executive hereby agrees that except as required by Executive’s
duties to the Company, Executive without the consent of the Company’s Board of
Directors shall not at any time during or after the term of this contract
disclose or use any secret or confidential information of the Company,
including, without limitation, such business opportunities, customer lists,
trade secrets, formulas, techniques and methods of which Executive shall become
informed during his employment, whether learned by him as an executive of the
Company, as a member of the Board of Directors or otherwise, and whether or not
developed by Executive, unless such information shall be or become public
knowledge other than as a result of Executive’s direct or indirect disclosure of
the same.
Executive
further agrees that for a period of two years following the termination of
Executive’s employment, except as a result of the breach by the Company of any
material term or condition hereof, Executive will not, directly or indirectly,
alone or with others, individually or through or by a corporate or other
business entity in which he may be interested as a partner, shareholder, joint
venturer, officer or director or otherwise, engaged in the United States in any
“business which is competitive with that of the Company or any of its
subsidiaries” as hereinafter defined; provided, however, that the
foregoing shall not be deemed to prevent the ownership by Executive of up to
five percent of any class of securities of any corporation which is regularly
traded on any stock exchange or over-the-counter market. For the purpose of this
Agreement, a “business which is competitive with the business of the Company or
any of its subsidiaries,” shall include only the operation of franchise
restaurants selling Japanese, or other Asian food, or restaurants of a type then
being operated by the Company or any of its subsidiaries.
7. Reimbursement
of Expenses; Use of Automobile. The Company shall further
pay directly, or reimburse Executive, for all other reasonable and necessary
expenses and disbursements incurred by him for and on behalf of the Company in
the performance of his duties during the Employment Period upon submission of
vouchers or other evidence thereof in accordance with the Company’s usual
policies of expense reimbursement. During the Employment Period, Executive shall
receive an allowance of $300 per month for automobile expenses, including the
lease costs or purchase price, gasoline, oil and garaging.
8. Miscellaneous
Provisions.
8.1. Section
headings are for convenience only and shall not be deemed to govern, limit,
modify or supersede the provisions of this Agreement.
8.2. This
Agreement is entered into in the State of Florida and shall be governed pursuant
to the laws of the State of Florida. If any provision of this Agreement shall be
held by a court of competent jurisdiction to be invalid, illegal or
unenforceable, the remaining provisions hereof shall continue to be fully
effective.
8.3. This
Agreement contains the entire agreement of the parties regarding this subject
matter. There are no contemporaneous oral agreements, and all prior
understandings, agreements, negotiations and representations are merged
herein.
8.4.
This Agreement may be modified only by means of a writing signed by the party to
be charged with such modification.
8.5. Notices
or other communications required or permitted to be given hereunder shall be in
writing and shall be deemed duly given upon the receipt by the party to whom
sent at the respective addresses set forth below or to such other address as any
party shall hereafter designate to the other in writing delivered in accordance
herewith:
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If
to the Company:
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0000
Xxxxxxxxx 00xx
Xxxxxxx
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Xxxxx,
Xxxxxxx 00000-0000
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Attention:
Chief Executive Officer
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If
to Executive:
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Xxxx
X. Xxxxxx
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c/o
Benihana Inc.
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0000
Xxxxxxxxx 00xx
Xxxxxxx
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Xxxxx,
Xxxxxxx 00000-0000
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8.6. This
Agreement shall inure to the benefit of, and shall be binding upon, the Company,
its successors and assigns, including, without limitation, any entity that may
acquire all or substantially all of the Company’s assets and business or into
which the Company may be consolidated or merged. This Agreement may not be
assigned by Executive.
8.7. This
Agreement may be executed in separate counterparts, each of which shall
constitute the original thereof.
8.8. This
Agreement supersedes and replaces all previous Employment Agreements between the
Company and Executive.
IN WITNESS WHEREOF, the parties have set their hands as
of the date first above written.
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By:
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/s/ Xxxx X. Xxxxxxxx | ||
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Name:
Xxxx X. Xxxxxxxx
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Title:
Chief Executive Officer
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Xxxx
X. Xxxxxx
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