Exhibit 4
CERTIFICATE AND AGREEMENT OF PARTICIPATION
SILVER DINER, INC.
RESTAURANT OWNER OPERATOR PROGRAM
This Certificate and Agreement of Participation ("Certificate of
Participation") is entered into as of this ____ day of __________, 1997, by and
between Silver Diner, Inc., a Delaware corporation ("SDI") and its wholly-owned
subsidiary Silver Diner Development, Inc., a Virginia corporation (both
corporations being collectively referred to herein, unless the context otherwise
requires, as "Silver Diner") and _______________ ("Owner Operator").
1. Owner Operator; Duties and Performance; Effective Date.
Silver Diner hereby retains the Owner Operator to serve as the general
manager for the Silver Diner Restaurant located at _________________ (the
"Restaurant") on the terms and conditions set forth herein.
(a) Duties. The Owner Operator's duties shall include (i)
managing the day-to-day business, operations and affairs of the Restaurant; (ii)
assuming responsibility for efficiently and effectively operating the Restaurant
so as to achieve high levels of customer satisfaction, (iii) assuming
responsibility for the supervision, retention, and development of Restaurant
employees and operating personnel, (iv) using his/her best efforts to promote
the Restaurant's image in the community that it serves, and (v) carrying out
such other duties as may be delegated from time to time by the officers of
Silver Diner.
(b) Full Time. The Owner Operator shall devote his/her full
time and attention to operating the Restaurant.
(c) Effective Date. The date the Owner Operator assumes
on-site general management responsibilities for his or her restaurant shall be
the "Effective Date."
2. Base Salary; Benefits; Profit Sharing.
In consideration of the Owner Operator's services, commencing on the
Effective Date the Owner Operator shall (i) receive from Silver Diner the Base
Salary and benefits described below and (ii) be entitled to participate and
share in the Restaurant's operating income described below.
(a) Base Salary and Benefits. The annual Base Salary of the
Owner Operator shall be $45,000 payable bi-weekly. Silver Diner shall also
provide such benefits as may generally be provided to other management
employees, (which may change from time to time) including health and dental
insurance for the Owner Operator and eligible members of his/her family, and two
weeks of vacation per year, with scheduling approved by Silver Diner.
(b) Monthly Profit Sharing. The Owner Operator shall be
entitled to receive in cash five percent (5%) of the monthly Restaurant
Operating Income (as defined below) of the Restaurant, which amount shall be
paid to the Owner Operator within thirty (30) days of the close of the month. As
used in this Certificate of Participation:
(bullet) a month shall mean that period of time as reflective of the
monthly accounting period then being used by Silver Diner for
financial reporting purposes, which period now consists of
four week or 28 days, and
(bullet) Restaurant Operating Income shall mean the net sales of the
Restaurant determined by Silver Diner in accordance with
generally accepted accounting principles consistently applied
("GAAP") for the for the month less cost of sales, labor, and
operating expenses of the restaurant (including allocated
corporate expenses on behalf of the restaurant, such as
advertising and menu costs, not to exceed three percent (3%)
of the Restaurant's net sales), occupancy costs (including
rent, property and real estate taxes, and insurance for the
month) and depreciation and amortization allocable to the
Restaurant. However, if land upon which a Restaurant is
situated is owned by Silver Diner, there will be an
appropriate ground rent allocation to the Restaurant.
(c) Quarterly Positive Sales Profit Sharing. The Owner
Operator shall be entitled to receive in cash two percent (2%) of the Restaurant
Operating Income for each fiscal quarter if his/her Restaurant has positive same
store sales for the quarter. Appendix I attached hereto sets forth the methods
to be used in determining whether there are positive same store sales.
3. Restricted Stock Awards.
Silver Diner will issue to the Owner Operator at the times and
in the amounts specified below that number of fully paid and non-assessable
shares of SDI Common Stock ("Common Stock") as provided below.
(a) Annual Awards. Subject to the terms of Section 5 and prior
to any Termination under Section 6, the Owner Operator shall be awarded on the
365th day following commencement of the quarter occurring immediately after the
quarter in which the Effective Date occurs and on each subsequent anniversary of
such commencement (each such date being referred to as the "Award Date") that
number of shares of Common Stock as determined by dividing the closing price of
the shares of Common Stock on the NASDAQ National Market System on the day
immediately preceding each Award Date into:
(bullet) $5,000 for the first anniversary following the Award Date
(bullet) $7,500 for each of the second and third anniversaries following
the Award Date, and
(bullet) $10,000 for the fourth and fifty anniversaries following the
Award Date.
(b) Restrictions. The shares of Common Stock awarded to
the Owner Operator shall be subject to each of the restrictions and limitations
contained in Section 5.
4. Silver Diner Stock Investment
The Owner Operator shall be obligated on the Effective Date to invest
$12,500 in Silver Diner and have the option to invest an additional $12,500 as
follows:
(a) Mandatory Investment. The Owner Operator shall be required
to invest $12,500 in SDI by purchasing for cash shares of Common Stock at a
price equal to 50% of the closing price of the shares of Common Stock on the
National Market System on the day immediately preceding the date that the Owner
Operator pays for such shares (the "Closing Price"), which date must be on or
before the fifth business day following the date of the execution of this
Agreement.
(b) Optional Investment. The Owner Operator shall also have
the option, but not the obligation, to invest an additional $12,500 in SDI by
purchasing shares of Common Stock at a price equal to 50% of the Closing Price.
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(c) Payment. The Owner Operator shall pay the purchase price
for the shares of Common Stock in cash on or before the Effective Date. The
Owner Operator understands that failure to do so will result in no payment or
accrual of monthly profit sharing or quarterly positive sales profit sharing and
in no stock awards being granted or accrued until the purchase price is paid.
(d) Silver Diner Repurchase Right. Silver diner shall have the
option, but not the obligation, to purchase the shares of Common Stock acquired
by the Owner Operator pursuant to Sections 4(a) and 4(b) at any time during the
ninety (90) day period following Termination of this Certification of
Participation (except if Termination is by reason of death or disability as
provided below) if Termination occurs at any time during the five years
following the Effective Date on payment to the Owner Operator in case of the
amount originally paid by the Owner Operator to SDI to acquire such shares from
SDI without payment of any premium or interest.
(e) Bank Loan Default. If the Owner Operator borrows money
from a bank for all or part of the purchase price for his/her purchase of common
shares of Silver Diner pursuant to the mandatory or optional investment
provisions set forth above, which bank loan is secured by a pledge of all of
such purchased shares, and defaults on such bank loan, the bank shall have the
right to send notice of such default to Silver Diner and request that Silver
Diner repurchase the pledged shares. Silver Diner shall have the right, but not
the obligation, during the ten (10) day period following receipt of such notice
and request from the bank to repurchase the pledged shares in cash of the amount
originally paid by the Owner Operator to SDI, without payment of any premium or
interest. If Silver Diner does not exercise such repurchase right, the bank may
dispose of the pledged shares free of any restrictions on transferability other
than under applicable federal and state securities laws.
(f) Transfer Restrictions; Liens. All shares of Common Stock
acquired by the Owner Operator pursuant to Section 4(a) (Mandatory Investment)
and 4(b) (Optional Investment) shall be subject to the provisions of Section
4(c) (Silver Diner Repurchase Right), 4(d) (Bank Loan Default), 5(a) (Stock
Transfer Restrictions), 5(b) (Stock Dividends, etc.), and 5(d) (Legends) for a
period of five years following the Effective Date.
5. Stock Transfer Restrictions, Vesting; Legends.
(a) Stock Transfer Restrictions. The Owner Operator agrees
that for a period beginning on the Effective Date and ending on the anniversary
of (i) the fifth year following the Effective Date with respect to the shares
acquired pursuant to Section 4(a) (Mandatory Investment) and 4(b) (Optional
Investment), (ii) the fourth year following the Award Date with respect to the
Award Shares for the first year and (iii) the third year following the Award
Date with respect to the Award Shares for each year thereafter; he/she shall
not, directly or indirectly, sell, assign, transfer, convey, give, bequeath,
grant a security interest in, otherwise encumber, make a short sale of, loan,
grant any option for the purchase of, or otherwise dispose of, voluntarily or
involuntarily, the Common Stock acquired pursuant to Section 3 or 4 and any such
transfer or attempted transfer shall be void; provided, however, that all
provisions of this Section 5(a) shall terminate (i) immediately in the event of
the Owner Operator's death and (ii) on Termination by Silver Diner in the event
of the Owner Operator's disability.
(b) Stock Dividends, Splits, Reclassifications and
Subdivisions. In the event that SDI, or any successor entity, declares a
dividend or makes a distribution on the Common Stock payable in securities or
subdivides or reclassifies the Common Stock or reorganizes, consolidates or
merges with or into any other legal entity, then any securities issues as a
result of any such event shall be deemed to constitute part of the shares of
Common Stock sold or Awarded to the Owner Operator and shall be deemed to
constitute part of the shares of Common Stock sold or Awarded to the Owner
Operator and shall be subject to Sections 3, 4 and 5.
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(c) Vesting. The shares of Common Stock awarded to the Owner
Operator pursuant to Section 3 (including the allocable portion of the shares
issued pursuant to an event specified in Section 3(b)) shall, except for death
or disability as determined by Silver Diner, be forfeited and canceled without
payment of any consideration to the Owner Operator if this Certificate of
Participation is Terminated (as defined below) prior to expiration of the fourth
year following the Award Date with respect to the shares awarded on the first
year following the Effective Date and for each year thereafter.
(d) Legends. Each certificate representing shares of Common
Stock issued pursuant to this Certificate of Participation shall conspicuously
bear a legend in substantially the following form.
"The transfer of the Common Stock (by sales, transfer,
conveyance, gift, bequest, hypothecation, pledge or otherwise)
represented by this certificate is restricted and the shares
of Common Stock are, pursuant to the terms of an agreement to
which the Corporation is a party, as such agreement may be
amended, supplemented, or otherwise modified from time to
time, subject either (i) to the right of the corporation to
redeem such shares for cash at a price substantially less than
the price at which the shares of Common Stock may be trading,
or (ii) to forfeiture without payment of any consideration and
the Corporation has a lien on the Common Stock represented by
this certificate to ensure payment and performance of all
obligations thereunder. A copy of the Agreement is on file at
the Corporation's office."
6. Termination.
(a) Termination by Silver Diner or by the Owner Operator.
Silver Diner reserves the right to terminate the services of the Owner Operator
and, except as provided in Section 6(c), all obligations and liabilities under
this Certificate of Participation at any time for any reason in its sole and
absolute discretion and with or without cause. The Owner Operator reserves the
right to resign and terminate, except as provided in Section 6(c), all
obligations and liabilities under this Certificate of Participation at any time
for any reason in his/her sole and absolute discretion and with or without
cause.
(b) Effective of Termination. As used in this Certificate of
Participation, "Termination" shall mean termination pursuant to this Section 6.
(i) Following Termination for any reason, other than
death or the determination by Silver Diner of disability, the Owner Operator
shall be entitled to receive the Base Salary which has accrued prior to the date
of Termination, the Profit Participation which has accrued for the month or
quarter preceding the month or quarter in which Termination occurs and that
number of shares of Common Stock acquired by the Owner Operator pursuant to
Section 3 (the Award Shares) which shall have been held for the periods of time
required by Section 5 and the Owner Operator's right to the shares of Common
Stock which have not been held for the period of time required by Section 5
shall be forfeited. In addition, the shares of Common Stock purchased by the
Owner Operator pursuant to Section 4 shall be subject to Silver Diner's option,
but not obligation, to purchase or redeem such shares as provided in Section
4(c) (Termination) and 4(d) (Bank Loan Default).
(ii) Following Termination for death or the
determination by Silver Diner of disability, the Owner Operator, and in the
event of death, the representative of the Owner Operator, shall be entitled to
receive the Base Salary which has accrued prior to the date of Termination,
the Profit Participation which has accrued for the month or quarter preceding
the month
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or quarter in which Termination occurs and all shares of SDI Common Stock issued
to the Owner Operator pursuant to Sections 3 and 4 shall become fully vested and
free and clear of any and all liens, claims or restrictions arising under or by
virtue of this Certificate of Participation.
(iii) Following Termination for any reason, the
provisions of Sections 7 through 20 shall remain in full force and effect.
(c) Employment at Will. Nothing contained in this Certificate
of Participation shall constitute or be evidence of any agreement or
understanding, express or implied, on the part of Silver Diner to employ the
Owner Operator for any specific period of time or create any obligation or
liability other than as specifically set forth herein and employment of the
Owner Operator is and shall remain an employment at will.
7. Confidential Information.
The Owner Operator agrees that all Confidential information (as defined
below) relating to Silver Diner or to its business and affairs, including
without limitation, any information whatsoever concerning its organization,
management or finances, shall at all times and notwithstanding that Termination
shall have occurred, be treated as confidential and shall not be used,
disclosed, divulged or otherwise placed at the disposal of any person or entity
except to the extent that (i) the parties hereto may otherwise agree in writing,
(ii) such information is required to be disclosed by law, (iii) such information
is otherwise publicly available other than by reason of a breach by such party
of this Section 7 or (iv) such information is submitted into evidence in any
legal proceedings between or among the parties.
"Confidential Information" means all information, records, documents,
accounts and correspondence of every description regarding past, current or
future business activities interests, methodology or affairs whether written,
recorded or stored by electronic, magnetic, electro-magnetic or other form or
process or otherwise in machine or computer readable form including without
limitation:
(a) business plans, research, know-how, development and
survey information,
(b) customer, staff, and all other training manuals and
product policy manuals, recipes, and
(c) planning and marketing strategies, procedures,
techniques and information.
8. Non-Competition.
The Owner Operator agrees that during the period of time that he/she is
providing services hereunder and for a period ending on the first anniversary of
any Termination:
(i) The Owner Operator will not engage, without first
obtaining Silver Diner's prior written consent, directly or indirectly within
25 miles of a then existing Silver Diner Restaurant, in any restaurant business
(x) with the word "Diner" in its name or logo or which is commonly understood to
be a diner or (y) whose menu, trade dress and pricing are substantially similar
to that employed in the Silver Diner Restaurants, whether as employee, officer,
director, partner, joint venture, stockholder (other than the holder of less
than 5% of the stock of a
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corporation, the securities of which are traded on a national securities
exchange or in the over-the-counter market), consultant or agent.
(ii) The Owner Operator will not engage, without
first obtaining Silver Diner's prior written consent, directly or indirectly,
within the United States, in any restaurant business with the word "Diner" in
its name or logo or which is commonly understood to be a diner, whether as
employee, officer, director, partner, joint venturer, stockholder (other than
the holder of less than 5% of the stock of a corporation, the securities of
which are traded on a national securities exchange or in the over-the-counter
market), consultant or agent.
(iii) The Owner Operator will not induce or attempt
to persuade any employee of Silver Diner to terminate his or her employment
relationship in order to enter into employment which is competitive with Silver
Diner.
(iv) It is the intent and understanding of each
party hereto that if, in any action before any court or agency legally empowered
to enforce the covenants contained in this Section 8 any term, any restriction,
covenant or promise contained therein is found to be unreasonable and for that
reason unenforceable, then such term, restriction, covenant or promise shall be
deemed modified to the extent necessary to make it enforceable by such court
or agency, and such finding shall not, in any event, affect the enforceability
of any other term, restriction, covenant, or promise herein.
9. Enforcement Costs.
If any legal action or other proceeding is brought for the enforcement
of any right provided for in this Certificate of Participation, or because of an
alleged dispute or breach in connection with any provisions of any right
provided for in this Certificate of Participation, the party who shall
substantially prevail shall be entitled to recover from the other party all
reasonable attorneys' fees, court costs and all expenses (even if not taxable as
court costs), including without, limitation, all such fees, costs and expenses
incident to appeals, incurred in connection with such action or proceeding, in
addition to any other relief to which the party may be entitled.
10. Withholding of Taxes.
Silver Diner shall, to the extent permitted or required by law, have
the right to deduct from any payment of any kind otherwise due to the Owner
Operator any federal, state or local taxes of any kind required by law to be
withheld, including any withholding required on expiration of the restrictions
imposed on the shares of Common Stock awarded or sold to the Owner Operator
pursuant to the provisions of this Certificate of Participation.
11. Term. The Term of this Certificate of Participation shall be
five (5) years from the Effective Date except that the provisions of Sections
5-20 shall survive the Term.
12. Applicable Law and Venue.
This Certificate of Participation shall be governed by and construed in
accordance with the laws of the State of Maryland. In the event of any legal or
equitable action arising under this Certificate of Participation, the parties
agree that the jurisdiction and venue of such action shall lie exclusively
within either the state courts of Maryland ocated in Xxxxxxxxxx County or the
United States District Court for the District of Maryland in Prince George's
County, Maryland, and the parties do hereby waive any other jurisdiction and
venue.
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13. Assignment Prohibited.
This Certificate of Participation is personal to the Owner Operator and
he/she may not assign or alienate any of his/her obligations under this
Certificate of Participation without the written consent of Silver Diner. This
Certificate of Participation shall be binding upon Silver Diner and its
successors and assigns.
14. Severability.
If any part of this Certificate of Participation is contrary to,
prohibited by, or deemed invalid under applicable law or regulations, such
provision shall be inapplicable and deemed omitted to the extent so contrary,
prohibited or invalid, but the remainder of this Certificate of Participation
shall not be invalid and shall be given full force and effect so far as
possible.
15. Waivers.
The failure or delay of either party at any time to require performance
by the other of any provision of this Certificate of Participation, even if
known, shall not affect the right of such party to require performance of that
provision or to exercise any right, power or remedy hereunder, and any waiver by
either party of any breach of any provision of this Certificate of Participation
shall not be construed as a waiver of any continuing or succeeding breach of
such provision, a waiver of the provision itself, or a waiver of any right,
power or remedy under this Certificate of Participation. No notice to or demand
on either party in any case shall, of itself, entitle such party to any other or
further notice or demand in similar or other circumstances.
16. Remedies Cumulative.
No remedy conferred upon any party pursuant to this Certificate of
Participation is intended to be exclusive of any other remedy, and each and
every such remedy shall be cumulative and shall be in addition to every other
remedy given hereunder or now or hereafter existing at law, in equity, by
statute or otherwise. No single or partial exercise by any party of any right,
power or remedy hereunder shall preclude any other or further exercise thereof.
17. Waiver of Jury Trial. The parties hereto hereby irrevocable
covenant and agree not to elect a trial by jury of any issues triable by a jury
and waive any right to trial by jury fully to the extent any such right should
now or hereafter exist. This waiver of right to a trial by jury is separately
given, knowingly and voluntarily but the Owner Operator and Silver Diner and
this waiver is intended to incorporate individually each instance and each issue
as to which the right to a trial by jury would otherwise occur.
18. Entire Agreement; Amendments.
This Certificate of Participation incorporates the entire agreement
between the parties with respect to the subject matter of the Certificate of
Participation, and supersedes all other prior or contemporaneous agreements,
negotiations or discussions between the parties with respect to employment,
compensation and benefits and no change or modification shall be valid unless
made in writing and signed by both the parties.
19. Notices.
All notices, consents, approvals and other communications given or made
pursuant hereto shall be in writing and shall be (a) delivered personally, (b)
by overnight courier, (c) transmitted by
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telecopier, or (d) by registered or certified mail (postage prepaid, return
receipt requested), in each case to the parties at the following addresses
(or at such other address for a party as shall be specified by like notice):
(a) if to Silver Diner:
Silver Diner, Inc.
00000 Xxxxxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attention: President
(b) if to the Owner Operator at the address maintained by
Silver Diner for the Owner Operator.
20. This Certificate of Participation may be executed in counterparts,
all of which shall be considered one and the same agreement, it being understood
that all parties hereto need not sign the same counterpart.
IN WITNESS WHEREOF, the parties have executed this Certificate of
Participation as of the date first set forth above.
Silver Diner, Inc.
Silver Diner Development, Inc.
Date:__________________ By:_______________________________
Xxxxxx X. Xxxxxx, President
Date:__________________ By:_______________________________
, Owner Operator
By his or her signature above, the Owner Operator agrees to make the $12,500
minimum investment in Silver Diner pursuant to Section 4(a) and the Owner
Operator agrees to make an optional investment in Silver Diner of
$______________ pursuant to Section 4(b).
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APPENDIX I
to Certificate and Agreement of Participation
Owner Operator Quarterly Positive Sales Profit Sharing
1. If there are positive same Store sales for the quarter in question
(sales exceed target), the Owner Operator's share of the Restaurant Income will
be two percent (2%).
2. For existing Stores, the quarter sales target will be based upon
sales in the corresponding fiscal quarter for the prior fiscal year.
3. For new Stores, the quarterly sales target will be based upon a
budget to be established by Silver Diner for the fiscal quarter in which the
Store is opened and for the next four quarters. Such budget will be based upon
an estimate of the market for each particular location and Silver Diner's
investment in the Diner at each location. A sales target for the next two
quarters (5th and 6th) will be based upon the 3rd and 4th quarters (seasonally
adjusted). It is anticipated that this method will factor out the "honeymoon"
performance of a new Store from opening through the 1st and 2nd full quarters.
Commencing with the 7th full quarter after the Store opening, the sales target
will be based upon the sales in the corresponding quarter of the prior fiscal
year.
4. Recognizing that circumstances could occasionally cause a Store's
sales for any quarter to be less than the corresponding quarter of the prior
fiscal year, the Quarterly Positive Sales Profit Sharing will be paid if the
Store's year-to-date sales equal or exceed targeted year-to-date sales.
5. In preparing sales targets and in comparing quarterly sales with
sales in prior periods, Silver Diner will take into account the occasional
impact of 53-week fiscal years.
* * *
Restaurant Owner Operator Program
[ALTERNATIVE I ]
[FORM OF]
Addendum No. 1 to a Certain
Certificate and Agreement of Participation
Silver Diner, Inc.
(The "Certificate of Participation")
This Addendum No. 1 to that certain Certificate of Participation by and between
Silver Diner, Inc., and its wholly-owned subsidiary Silver Diner Development,
Inc. and ________ is made as of February ___, 1997.
RECITALS
R-1. All defined terms in the Certificate of Participation shall have the same
meanings in this Addendum No. 1.
R-2. Silver Diner has introduced a Restaurant Owner Operator Program (the "Owner
Operator Program") to be implemented in part through the Certificate of
Participation.
R-3. Silver Diner recognizes that the Owner Operator Program requires certain
variances as it relates to existing managers who desire to become Owner
Operators under the Owner Operator Program.
R-4. The compensation of existing managers who do not elect to participate in
the Owner Operator Program shall be comprised of their existing base salary and
their participation in a Silver Diner bonus plan as determined from time to
time.
It is mutually agreed that notwithstanding anything to the contrary in the
Certificate of Participation, the following shall apply:
1. Provided this Addendum No. 1 is signed by the Owner Operator on or
before February 14, 1997, the Effective Date shall be January 1, 1997.
2. Appropriate adjustments shall be made with respect to compensation paid
by Silver Diner to the Owner Operator for the period from January 1,
1997 and prior to February 14, 1997, so that the Owner Operator shall
have received the same amounts that he or she would have received from
Silver Diner if the Certificate of Participation had been in effect as
of January 1, 1997.
3. January 1, 1997, shall be deemed to be the first Award Date under
Section 3 of the Certificate of Participation so that the Owner
Operator shall receive credit for the purpose of the restricted stock
awards for his or her employment by Silver Diner for all of 1996, as
though the Owner Operator Program had been in effect on January 1,
1996. Accordingly:
[ ] January 1, 1997, shall be the first anniversary of the Award
Date ($5,000 stock award).
[ ] January 1, 1998 and January 1, 1999 shall be the second and
third anniversaries of the respective Award Dates ($7,500
stock awards).
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[ ] January 1, 2000 and January 1, 2001 shall be the fourth and
fifth anniversaries of the respective Award Dates ($10,000
stock awards).
[ ] The January 1, 1997 Award Date shall apply to vesting and
restrictions on transferability, thereby crediting 1996 as a
year of service.
4. In determining Restaurant Operating Income, the rent portion of
occupancy costs shall be deemed to be $213,005 a year (at Rockville -
$406,093) and the depreciation of building assets shall be deemed to be
$82,498 a year (at Rockville $190,879).
5. The Owner Operator shall be required to invest $10,000 in SDI, rather
than $12,500, by purchasing shares of Common Stock in SDI having an
aggregate market value of $30,000 rather than $25,000 and shall have
the option to invest up to an additional $12,500 in SDI by purchasing
shares of Common Stock in SDI having an aggregate market value of
$25,000.
6. The Owner Operator shall pay the purchase price for his or her
investment in Silver Diner on or before February 18, 1997. The Closing
Price shall equal 33 1/3% of the lower of the Closing Price of the
shares of Common Stock on the NASDAQ National Market System on (i)
December 31, 1996 or (ii) February 17, 1997.
Silver Diner, Inc.
Silver Diner Development, Inc.
Date: __________________ By: ________________________________
Xxxxxx X. Xxxxxx, President
Date: __________________ By: ________________________________
, Owner Operator
Restaurant Owner Operator Program
[ALTERNATIVE II]
[FORM OF]
Addendum No. 1 to a Certain
Certificate and Agreement of Participation
Silver Diner, Inc.
(The "Certificate of Participation")
This Addendum No. 1 to that certain Certificate of Participation by and between
Silver Diner, Inc., and its wholly-owned subsidiary Silver Diner Development,
Inc. and ___________ is made as of February ___, 1997.
RECITALS
R-1. All defined terms in the Certificate of Participation shall have the same
meanings in this Addendum No. 1.
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R-2. Silver Diner has introduced a Restaurant Owner Operator Program (the "Owner
Operator Program") to be implemented in part through the Certificate of
Participation.
R-3. Silver Diner recognizes that the Owner Operator Program requires certain
variances as it relates to existing managers who desire to become Owner
Operators under the Owner Operator Program.
R-4. The compensation of existing managers who do not elect to participate in
the Owner Operator Program shall be comprised of their existing base salary and
their participation in a Silver Diner bonus plan as determined from time to
time.
It is mutually agreed that notwithstanding anything to the contrary in the
Certificate of Participation, the following shall apply:
1. Provided this Addendum No. 1 is signed by the Owner Operator on or
before February 14, 1997, the Effective Date shall be January 1, 1997.
2. Appropriate adjustments shall be made with respect to compensation paid
by Silver Diner to the Owner Operator for the period from January 1,
1997 and prior to February 14, 1997, so that the Owner Operator shall
have received the same amounts that he or she would have received from
Silver Diner if the Certificate of Participation had been in effect as
of January 1, 1997.
3. In determining Restaurant Operating Income, the rent portion of
occupancy costs shall be deemed to be $213,005 a year (at Rockville -
$406,093) and the depreciation of building assets shall be deemed to be
$82,498 a year (at Rockville $190,879).
4. The Owner Operator shall be required to invest $10,000 in SDI, rather
than $12,500, by purchasing shares of Common Stock in SDI having an
aggregate market value of $30,000 rather than $25,000 and shall have
the option to invest up to an additional $12,500 in SDI by purchasing
shares of Common Stock in SDI having an aggregate market value of
$25,000.
5. The Owner Operator shall pay the purchase price for his or her
investment in Silver Diner on or before February 18, 1997. The Closing
Price shall equal 33 1/3% of the lower of the Closing Price of the
shares of Common Stock on the NASDAQ National Market System on (i)
December 31, 1996 or (ii) February 17, 1997.
Silver Diner, Inc.
Silver Diner Development, Inc.
Date: ________________ By: ________________________________
Xxxxxx X. Xxxxxx, President
Date: ________________ By: ________________________________
, Owner Operator
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Restaurant Owner Operator Program
[ALTERNATIVE III]
[FORM OF]
Addendum No. 1 to a Certain
Certificate and Agreement of Participation
Silver Diner, Inc.
(The "Certificate of Participation")
This Addendum No. 1 to that certain Certificate of Participation by and between
Silver Diner, Inc., and its wholly-owned subsidiary Silver Diner Development,
Inc. and ________ is made as of February ___, 1997.
RECITALS
R-1. All defined terms in the Certificate of Participation shall have the same
meanings in this Addendum No. 1.
R-2. Silver Diner has introduced a Restaurant Owner Operator Program (the "Owner
Operator Program") to be implemented in part through the Certificate of
Participation.
R-3. Silver Diner recognizes that the Owner Operator Program requires certain
variances as it relates to existing managers who desire to become Owner
Operators under the Owner Operator Program.
R-4. The compensation of existing managers who do not elect to participate in
the Owner Operator Program shall be comprised of their existing base salary and
their participation in a Silver Diner bonus plan as determined from time to
time.
It is mutually agreed that notwithstanding anything to the contrary in the
Certificate of Participation, the following shall apply:
1. Provided this Addendum No. 1 is signed by the Owner Operator on or
before February 14, 1997, the Effective Date shall be January 1, 1997.
2. Appropriate adjustments shall be made with respect to compensation paid
by Silver Diner to the Owner Operator for the period from January 1,
1997 and prior to February 14, 1997, so that the Owner Operator shall
have received the same amounts that he or she would have received from
Silver Diner if the Certificate of Participation had been in effect as
of January 1, 1997.
3. The Owner Operator shall receive on January 1, 1998, in addition to the
award for 1997, an award of Common Stock having a market value of
$2,500 (determined in the manner provided in Section 3(a) of the
Certificate of Participation) for his 1996 service as a General Store
Manager. The Award Date shall be deemed to be January 1, 1998.
4. In determining Restaurant Operating Income, the rent portion of
occupancy costs shall be deemed to be $213,005 a year (at Rockville -
$406,093) and the depreciation of building assets shall be deemed to be
$82,498 a year (at Rockville $190,879).
5. The Owner Operator shall be required to invest $10,000 in SDI, rather
than $12,500, by purchasing shares of Common Stock in SDI having an
aggregate market value of $30,000
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rather than $25,000 and shall have the option to invest up to an
additional $12,500 in SDI by purchasing shares of Common Stock in
SDI having an aggregate market value of $25,000.
6. The Owner Operator shall pay the purchase price for his or her
investment in Silver Diner on or before February 18, 1997. The Closing
Price shall equal 33 1/3% of the lower of the Closing Price of the
shares of Common Stock on the NASDAQ National Market System on (i)
December 31, 1996 or (ii) February 17, 1997.
Silver Diner, Inc.
Silver Diner Development, Inc.
Date: ____________________ By: _______________________________
Xxxxxx X. Xxxxxx, President
Date: ____________________ By: _______________________________
, Owner Operator
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