AMENDED AND RESTATED RETENTION AND SEVERANCE AGREEMENT
Exhibit 10.23
AMENDED AND RESTATED
This AMENDED AND RESTATED RETENTION AND SEVERANCE AGREEMENT (“Agreement”) is entered into by
and between Roadhouse Grill, Inc., a Florida corporation (“Company”) and Xxxxxxx X. Xxxxx
(“Employee”) as of the 8th day of August, 2005 (“Effective Date”).
WHEREAS, Employee is currently employed as the Executive Vice President and Chief Financial
Officer of the Company; and
WHEREAS, on March 29, 2005, Company and Employee entered into that certain Retention Agreement
(the “Original Retention Agreement”) pursuant to which Employee agreed to continue in the employ of
Company until September 30, 2005 and Company agreed to pay certain compensation to Employee for his
agreement to continue in the employ of Company until September 30, 2005; and
WHEREAS, Company and Employee have agreed to enter into this Agreement to amend and restate
the terms of the Original Retention Agreement.
NOW THEREFORE, in consideration of the mutual covenants and agreements contained herein, the
parties hereto agree as follows:
1. Retention Agreement. The parties agree that as of the Effective Date the Original
Retention Agreement is hereby amended and restated in its entirety by this Agreement and shall be
of no further force and effect. To the date of this Agreement, Employee has received $72,719.32 in
payments pursuant to the terms of the Original Retention Agreement. Employee shall be entitled to
retain all such payments.
2. Effect of Termination.
| a. | Termination of Employee Employment. If the Employee is terminated without Cause (as defined in Section 2 below), or if the Employee resigns for any reason, within 12 months after a Change of Control (as defined in Section 2 below), then: (i) the Company shall pay to Employee on or before the date which is three (3) days after the date of termination of employment, an amount equal to his current salary (currently $218,158 per annum), less the amounts previously paid to Employee under the Original Retention Agreement, (ii) the Company shall, for a period of one year from the date of termination, continue to provide Employee with all health benefits (including all employer contributions) to which Employee was entitled to participate at any time during the 12-month period prior to the date of termination; provided, however that this provision shall terminate at such time as |
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| Employee becomes covered by a comparable health benefit plan by a subsequent employer and provided further that if Employee’s continued participation in any health benefit plan of the Company is prohibited, the Company will arrange to provide Employee with benefits substantially similar to those which Employee would have been entitled to receive under such plan for such period on a basis which provides Employee with no additional after tax cost, (iii) the Company shall pay Employee for any unused vacation time that has been earned for all full and partial years of employment, and (iv) all Company stock option grants, restricted stock grants or other equity grants held by Employee at the date of termination will immediately vest and such securities, to the extent they are options to purchase equity of the Company, will remain exercisable for the lesser of the unexpired term of the option without regard to the termination of Employee’s employment or two (2) years from the date of termination of employment. (collectively, the “Special Termination Payments”). Notwithstanding the foregoing, if the payment described in (i) above has not been paid to Employee by December 31, 2005, Company shall be obligated to make the payment described in subsection (i) above to Employee on such date (December 31, 2005), whether or not a Change of Control has occurred as of or prior to that date. Further, in the event that Employee receives the payment described in (i) above on December 31, 2005 and thereafter a Change of Control occurs, Employee shall not be entitled to receive the payment described in (i) above in connection with such subsequent Change of Control (although he will be entitled to receive the benefits provided in the other subsections of this section 2(a) as a result of such subsequent Change of Control). | |||
| b. | The Employee shall be designated as a participant in the Company’s 2005 Special Incentive Compensation Plan. |
3. Definitions.
| a. | Change in Control. For purposes of this Agreement, a “Change in Control” shall be deemed to have occurred as of the first day that any one or more of these conditions shall have been satisfied: |
| i. | any “person” (as such term is defined in sections 13(d)(3) and 14(d)(3) of the Exchange Act), other than the Company, any majority owned subsidiary of the Company, any compensation plan of the Company, any majority owned subsidiary of the Company, or Berjaya Group (Cayman) Limited or any subsidiary thereof, becomes the “beneficial owner” (as defined in Rule 13d-3 of the Exchange Act), directly or indirectly, of securities of the Company representing more than 30% of the combined voting power of the Company; or |
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| ii. | if, during the Term (as defined below) of this Agreement, one or more directors are appointed or elected to the Company’s Board of Directors (“Board”) and any of such new directors are not either: (a) appointed to the Board by a vote that includes the affirmative vote approving such director nominee of at least 75% of the directors who are serving on the Board as of the date of this Agreement, or (b) elected to the Board by a vote (or action by written consent) of the requisite percentage of shareholders required to elect such nominees for election to the Board under circumstances where the slate of nominees that is elected to the Board is affirmatively proposed for election to the Board by the affirmative vote of at least 75% of the directors who are serving on the Board at the date of this Agreement, or | ||
| iii. | the shareholders of the Company approve (1) a reorganization, merger, or consolidation with respect to which persons who were the shareholders of the Company immediately prior to such reorganization, merger, or consolidation do not immediately thereafter own more than 30% of the combined voting power entitled to vote generally in the election of the directors of the reorganized, merged or consolidated entity; (2) a liquidation or dissolution of the Company; or (3) the sale of all or substantially all the assets of the Company or of a subsidiary of the Company that accounts for more than 66 2/3% of the consolidated revenues of the Company, but not including a reorganization, merger, or consolidation of the Company. Notwithstanding the foregoing, the term “Change in Control” shall not include any reorganization or liquidation that occurs under the Bankruptcy Code. |
| b. | Termination Without Cause. A termination without Cause shall be defined as a termination of Employee’s employment with the Company in a situation which is not deemed a termination for Cause. For purposes of this Agreement, Cause shall be defined to mean (i) Employee’s conduct that would constitute under federal or state law either a felony or a misdemeanor involving moral turpitude, or a determination by the Board, after consideration of all available information and following the procedures set forth below, that Employee has willfully violated Company policies or procedures involving discrimination, harassment, alcohol or substance abuse, or work place violence causing material injury to the Company, (ii) Employee’s actions or omissions that constitute fraud, dishonesty or gross misconduct, (iii) Employee’s knowing and intentional breach of any fiduciary duty that causes material injury to the Company, or (iv) Employee’s inability to perform his material duties, after reasonable notice and an opportunity to resolve the issues, due to |
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| alcohol or other substance abuse. Notice of any termination for Cause shall be given to the Employee in writing and shall set forth in detail all acts or omissions upon which the Company is relying to terminate the Employee for Cause. Further, upon a determination by the Company that Cause exists to terminate the Employee, the Company shall cause a special meeting of the Board to be called and held at a time mutually convenient to the Board and Employee, but in no event later than ten (10) business days after Employee’s receipt of the notice that the Company intends to terminate the Employee for Cause. Employee shall have the right to appear before such special meeting of the Board with legal counsel of his choosing to refute such allegations and shall have a reasonable period of time to cure any actions or omissions which provide the Company with a basis to terminate the Employee for Cause (provided that such cure period shall not exceed 30 days). A majority of the members of the Board must affirm that Cause exists to terminate the Employee. No finding by the Board will prevent the Employee from contesting such determination through appropriate legal proceedings provided that the Employee’s sole remedy shall be to xxx for damages, not reinstatement, and damages shall be limited to those that would be paid to the Employee if he had been terminated without Cause. In the event the Company terminates the Employee for Cause, the Company shall only be obligated to continue to pay in the ordinary and normal course of its business to the Employee his current Salary plus any other earned but unpaid compensation, including unpaid bonuses, plus accrued but unused vacation time through the termination date and the Company shall have no further obligations to Employee from and after the date of termination. |
4. Confidentiality; Non-Competition. In the event that Employee’s employment is
terminated pursuant to Section 2 of this Agreement and Employee receives the Special Termination
Payments, Employee agrees that following the termination of Employment:
| a. | Employee shall, for so long as such information remains non-public, (i) hold in confidence and refrain from disclosing to any other party all information, whether written or oral, tangible or intangible, of a private, secret, proprietary or confidential nature, of or concerning the Company or any of its subsidiaries or affiliates and their business and operations, and all files, letters, memoranda, reports, records, computer disks or other computer storage medium, data, models, or any photographic or other tangible materials containing such information (“Confidential Information”), including, but not limited to, any sales, promotional, or marketing plans, programs, techniques, practices or strategies, any expansion plans (including existing and entry into new geographic and/or product markets), and any customer lists; (ii) take all precautions necessary to ensure that the Confidential Information |
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| shall not be, or be permitted to be, shown, copied, or disclosed to third parties, without the prior written consent of the Company or any of its subsidiaries or affiliates; and (iii) observe all security policies implemented by the Company or any of its subsidiaries or affiliates with respect to the Confidential Information. In the event that the Employee is ordered to disclose any Confidential Information, whether in a legal or regulatory proceeding or otherwise, the Employee shall provide the Company or any of its subsidiaries or affiliates with prompt notice of such request or order so that the Company or any of its subsidiaries or affiliates may seek to prevent disclosure. In addition to the foregoing, the Employee shall not, at any time, libel, defame, ridicule, or otherwise disparage the Company; | |||
| b. | Employee shall not, for a period of twelve (12) months following the termination of employment, for any reason, (i) disparage the Company or any of its subsidiaries or affiliates to any supplier or vendor of the Company or any of its subsidiaries or affiliates, or (ii) request or advise any supplier or vendor of the Company or any of its subsidiaries or affiliates to withdraw, curtail or cancel any such vendor’s business with the Company or any of its subsidiaries or affiliates; and | ||
| c. | Employee shall not, for a period of twelve (12) months following the termination of employment, for any reason, employ, or knowingly permit any company or business directly or indirectly controlled by him, to employ, any person who was employed by the Company or any of its subsidiaries or affiliates at or within the prior six months, or in any manner seek to induce any such person to leave his or her employment |
5. Notices. Notices and all other communications contemplated by this Agreement shall
be in writing and shall be deemed to have been duly given when received at the address specified
herein. In the case of Employee, notices shall be delivered to him at the home address which he
has most recently communicated to Company in writing. In the case of Company, notices shall be
delivered to Company’s corporate headquarters, and all notices shall be directed to the attention
of Company’s Chief Executive Officer.
6. No Mitigation. Employee shall not be required to mitigate the amount of any payment
or benefit contemplated by this Agreement upon his termination of employment (whether by seeking
new employment or in any other manner), nor shall any such payment or benefit be reduced by any
earnings or benefits that Employee may receive from any other source.
7. Modification and Waiver. This Agreement shall not be canceled, rescinded or
revoked, nor may any provision of this Agreement be modified, waived or discharged unless the
cancellation, rescission, revocation, modification, waiver or
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discharge is agreed to in writing and signed by Employee and by the President or Chairman of
the Board of Company. No waiver by either party of any breach of, or of compliance with, any
condition or provision of this Agreement by the other party shall be considered a waiver of any
other condition or provision or of the same condition or provision at another time.
8. Entire Agreement. This Agreement contains the entire understanding of the parties
in respect of its subject matter and supersedes all prior agreements and understandings (oral or
written) between or among the parties with respect to such subject matter.
9. Headings. The headings of paragraphs and sections are for convenience of reference
and are not part of this Agreement and shall not affect the interpretation of any of its terms.
10. Construction. This Agreement shall be construed as a whole according to its fair
meaning and not strictly for or against any party. The parties acknowledge that each of them has
reviewed this Agreement and has had the opportunity to have it reviewed by their respective
attorneys and that any rule of construction to the effect that ambiguities are to be resolved
against the drafting party shall not apply in the interpretation of this Agreement.
11. Withholding. All payments made to the Employee shall be made net of any applicable
withholding for income taxes and the Employee’s share of FICA, FUTA or other taxes. Company shall
withhold such amounts from such payments to the extent required by applicable law and remit such
amounts to the applicable governmental authorities in accordance with applicable law.
12. Litigation; Venue. Any action at law or in equity under this Agreement shall be
brought in the courts of Broward County, Florida, and in no other court (whether or not
jurisdiction can be established in another court). Each party hereto waives the right to argue that
venue is not appropriate in the courts of Broward County, Florida.
13. Expenses. Company shall reimburse the Employee for all costs and expenses,
including legal fees, that Employee incurs in connection with the enforcement of his rights under
this Agreement.
14. Counterparts. This Agreement may be executed in one or more counterparts, each of
which shall be deemed to be an original but all of which together will constitute one and the same
instrument.
15. Term of Agreement. The term (“Term”) of this Agreement shall commence on the
Effective Date of this Agreement and shall automatically expire (unless otherwise extended by the
mutual agreement of the parties hereto) on the date that is two years after the Effective Date of
this Agreement.
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IN WITNESS WHEREOF, this Agreement is executed as of the date first written above.
| ROADHOUSE GRILL, INC. a Florida corporation | ||||
| By: | /s/ Xxxxx X. Sabi | |||
| Xxxxx X. Sabi, President and CEO | ||||
| EMPLOYEE | ||||
| /s/ Xxxxxxx X. Xxxxx | ||||
| Xxxxxxx X. Xxxxx | ||||
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