Exhibit 10.1
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is made effective as of March 3
2006, by and between GRILL CONCEPTS, INC., a Delaware corporation (the
"Company") and XXXXXX XXX ("Employee').
RECITALS
WHEREAS, the Company and Employee have heretofore entered into Employment
Agreements dated, July 2004 (collectively the "Previous Agreement"), setting
forth the terms and conditions of the Company's employment of Employee as its
EVP and Chief Financial Officer; and
WHEREAS, the Company and Employee have heretofore entered into Change of Control
Agreement dated, September 30, 2005 (collectively the "Change In Control
Agreement"), setting forth certain benefits that the employee would be entitled
in the event of a change in control (as defined in the Change in Control
Agreement); and
WHEREAS, the Company and Employee desire that Employee continue his employment
with the Company and employ the Employee as its President and Chief Executive
Officer and have a seat on its Board Of Directors and to replace its Previous
Agreement, which shall have no force and effect to the Change In Control
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 President and Chief
Executive Officer for a term of three and one-half (31/2) years, commencing as
of June 22, 2006 and ending as of December 31, 2009 (the "Term"); provided,
however, that the Term may be extended for one year by mutual written agreement
of the parties. Employee hereby accepts such position, upon the terms and
conditions set forth in the 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
limited to, the active development, management and operation of the Company's
business, provided, that the foregoing shall not prohibit employee from serving
on the boards of directors of any other (non competitive, which for this purpose
shall include restaurant companies) company, up to a limit of three such
companies, whether for profit or not for profit
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 compete, directly or indirectly, with the business of
the Company without written consent with 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 the Confidential Information is disclosed to a third
party. Employee therefore agrees that during the Term, and for a period of ten
(10) years 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 the Employee
shall prepare, use or be provided with during the Term shall be and remain sole
property of the Company and shall not be removed form the Company's presence or
otherwise utilized by the 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
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of the Term of this agreement as follows:
June 23, 2006 to June 22, 2007 $275,000
June 23, 2007 to June 22, 2008: $300,000
June 23, 2008 to June 22, 2009: $325,000
June 23, 2009 to December 31, 2009: $350,000
3. OTHER COMPENSATION. Employee shall be entitled to the following
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benefits and other compensation during the Term:
3.1 Vacation. Five (5) weeks vacation during each year of the Term,
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at such times as shall be mutually agreed upon between he Employee and the
Company; provided, however, that Employee may not accumulate any unused vacation
time form one employment year to the next during the Term.
3.2 Automobile. Unlimited use of an automobile of a make and model
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commensurate with Employee's position as Chief Executive Officer of the Company.
The Company shall pay all expenses for repair, maintenance and insurance for
such automobile in an amount not to exceed Ten Thousand Dollars per year.
3.3 Travel and Entertainment. Unlimited reimbursement by the
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Company of Employee for entertainment, dining and travel expenses incurred by
Employee in the course of performing his duties hereunder.
3.4 Intentionally Omitted.
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3.5 Health Benefits. During the Term and any extension
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thereof, unless the Employee is terminated for cause, each of the Employee and
his spouse (or widow) shall be entitle 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.
3.6 Life Insurance. Term life insurance in the face of One Million
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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 fifty
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thousand (50,000) shares of stock at a price of $3.19 per share, in accordance
with provisions of the Company's Stock Option plan (the "Plan"). The options
will vest one-third (1/3) June 22,2007, one-third June 22, 2008 and the final
one-third on June 22, 2009.
3.8 Bonus Plan. Employee shall be eligible for a performance-based
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bonus of a maximum of fifty percent (50%) of salary. Metrics shall be
established by the Compensation Committee of the Board of Directors each year.
3.9 Other Benefits. Such other benefits as Employee may be eligible
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to receive in accordance with the Company's announced employee benefit programs
in effect from time to time. Nothing contained in this paragraph shall be
deemed to restrict, limit or affect any stock options that may have previously
been granted to Employee.
4. TERMINATION. This Agreement shall terminate upon commencement of any
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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 the employee.
4.4 The permanent disability of the 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
that 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
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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
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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 form a preceding illness and though separated by relatively short
period 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 the 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 of 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 disability hereunder shall be made by the sole physician
selected.
7. ASSIGNMENT. Employee may not assign or otherwise transfer this
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Agreement or any of the Employee's rights, duties, interests or obligations
hereunder without the written request of the Company.
8. ENTIRE AGREEMENT. This Agreement embodies the entire agreement and
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understanding between the parties with respect to the subject matter hereof, and
supercedes all prior and contemporaneous agreements and understandings relating
to such subject matter, whether oral or written, including, without limitation,
the Previous Agreement. 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 excet by a written
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document executed by both parties.
10. SEVERABILITY. If any provision of this Agreement shall be held
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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 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
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under the laws of the State of California.
12. ARBITRATION. Any dispute arising under the terms of this Agreement
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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 in 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 the event of a claim made in
excess of One Hundred Thousand Dollars ($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
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 full jurisdiction over the arbitration.
13. ATTORNEY'S FEES. In any arbitration or action to enforce this
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Agreement, the prevailing party shall be entitled to recover from the
non-prevailing party all reasonable costs, including, without limitation,
attorneys' fees.
14. ADDITIONAL DOCUMENTS. The parties agree to execute such
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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
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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
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binding upon and shall inure to the benefit of the parties and their respective
successors, assigns, heirs, and legal representatives.
17. NOTICE. Any notice or other communication given hereunder shall be
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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:
Grill Concepts, Inc.
00000 Xxx Xxxxxxx Xxxx., #000
Xxx Xxxxxxx, XX 00000
If to Employee:
Xxxxxx Xxx
0000 Xxxx Xxxxx
Xxxxxx Xxxxx, XX 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
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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 signed by that party.
19. ACKNOWLEDGEMENT OF INDEPENDENT COUNSEL. Both the Company and
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Employee acknowledge that each of them has read and understands this Agreement.
In connection with the foregoing, the parties acknowledge that each of them has
had an opportunity to have the 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
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Its:
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Employee:
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Xxxxxx Xxx
