EXHIBIT 10-8
EMPLOYMENT AGREEMENT
AGREEMENT dated as of ____________, 1997 between TAM
RESTAURANTS, INC., a Delaware corporation (the "Employer" or the "Company"), and
Xx. Xxxxx Xxxxxxxx (the "Employee").
W I T N E S S E T H :
WHEREAS, the Employee is currently the Company's
President and Chief Executive Officer;
WHEREAS, the Employer desires to continue to employ the
Employee as its President and Chief Executive Officer and to be assured of his
services as such on the terms and conditions hereinafter set forth; and
WHEREAS, the Employee is willing to accept such
employment on such terms and conditions;
NOW, THEREFORE, in consideration of the mutual covenants and
agreements hereinafter set forth, and intending to be legally bound hereby, the
Employer and the Employee hereby agree as follows:
1. Term. Employer hereby agrees to continue to employ
Employee, and Employee hereby agrees to continue to serve Employer for a
three-year period commencing effective as of the effective date of an initial
public offering of the Company's securities (the "Effective Date") (such period
being herein referred to as the "Initial Term," and any year commencing on the
Effective Date or any anniversary of the Effective Date being hereinafter
referred to as an "Employment Year"). After the Initial Term, this Agreement
shall be renewable automatically for successive one year periods (each such
period being referred to as a "Renewal Term"), unless, more than thirty days
prior to the expiration of the Initial Term or any Renewal Term, either the
Employee or the Company give written notice that employment will not be renewed.
2. Employee Duties.
(a) During the term of this Agreement, the Employee
shall have the duties and responsibilities of President and Chief Executive
Officer of the Employer, reporting directly to the Board of Directors of the
Employer (the "Board"). It is understood that such duties and responsibilities
shall be reasonably related to the Employee's position.
(b) The Employee shall devote a majority of his
business time, attention, knowledge and skills faithfully, diligently and to the
best of his ability, in furtherance of the business and activities of the
Company. The principal place of performance by the Employee of his duties
hereunder shall be the Company's principal executive offices or such other place
as the Board shall determine, although the Employee may be required to travel
outside of the area where the Company's principal executive offices are located
in connection with the business of the Company.
3. Compensation.
(a) During the term of this Agreement, the Employer
shall pay the Employee a salary (the "Salary") at a rate of $175,000 per annum
in respect of each Employment Year, payable in equal installments bi-weekly, or
at such other times as may mutually be agreed upon between the Employer and the
Employee. Such Salary may be increased from time to time at the discretion of
the Board.
(b) In addition to the foregoing, the Employee shall
be entitled to such other cash bonuses and such other compensation in the form
of stock, stock options or other property or rights as may from time to time be
awarded to him by the Board during or in respect of his employment hereunder.
4. Benefits.
(a) During the term of this Agreement, the Employee
shall have the right to receive or participate in all benefits and plans which
the Company may from time to time institute during such period for its employees
and for which the Employee is eligible. Nothing paid to the Employee under any
plan or arrangement presently in effect or made available in the future shall be
deemed to be in lieu of the Salary or any other obligation payable to the
Employee pursuant to this Agreement.
(b) During the term of this Agreement, the Employee
will be entitled to the number of paid holidays, personal days off, vacation
days and sick leave days in each calendar year as are determined by the Company
from time to time. Such vacation may be taken in the Employee's discretion with
the prior approval of the Employee, and at such time or times as are not
inconsistent with the reasonable business needs of the Company.
5. Travel Expenses. All travel and other expenses incident to
the rendering of services reasonably incurred on behalf of the Company by the
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Employee during the term of this Agreement shall be paid by the Employer. If any
such expenses are paid in the first instance by the Employee, the Employer shall
reimburse him therefor on presentation of appropriate receipts for any such
expenses.
6. Termination. Notwithstanding the provisions of Section 1
hereof, the Employee's employment with the Employer may be earlier terminated as
follows:
(a) By action taken by the Board, the Employee may be
discharged for cause (as hereinafter defined), effective as of such time as the
Board shall determine. Upon discharge of the Employee pursuant to this Section
6(a), the Employer shall have no further obligation or duties to the Employee,
except for payment of Salary through the effective date of termination, and as
provided in Sections 5 and 8, and the Employee shall have no further obligations
or duties to the Employer, except as provided in Section 7.
(b) In the event of (i) the death of the Employee or
(ii) by action of the Board and the inability of the Employee, by reason of
physical or mental disability, to continue substantially to perform his duties
hereunder for a period of 180 consecutive days, during which 180 day period
Salary and any other benefits hereunder shall not be suspended or diminished.
Upon any termination of the Employee's employment under this Section 6(b), the
Employer shall have no further obligations or duties to the Employee, except as
provided in Sections 5 and 8.
(c) In the event that Employee's employment with the
Employer is terminated by action taken by the Board without cause, including
termination upon a Change in Control (as hereinafter defined), then the Employer
shall have no further obligation or duties to Employee, except for payment of
the amounts described below and as provided in Sections 5 and 8, and Employee
shall have no further obligations or duties to the Employer, except as provided
in Section 7. In the event of such termination, the Employer shall continue to
pay Salary to the Employee for the remainder of the Initial Term, or the
remainder of the current Renewal Term if this Agreement has been renewed;
provided, however, that if such termination occurs during the third year of the
Initial Term or the final year of any Renewal Term, the Employer shall also pay
to the Employee an amount equal to the total Salary received by the Employee
during the 12 months prior to the date of termination. If such termination
occurs upon a Change in Control, all amounts payable to the Employee pursuant to
this Section 6(c) shall be paid in one lump-sum payment payable immediately upon
such termination.
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(d) For purposes of this Agreement, the Company shall
have "cause" to terminate the Employee's employment under this Agreement upon
(i) the failure by the Employee to substantially perform his duties under this
Agreement, (ii) the engaging by the Employee in criminal misconduct (including
embezzlement and criminal fraud) which is materially injurious to the Company,
monetarily or otherwise, (iii) the conviction of the Employee of a felony, (iv)
gross negligence on the part of the Employee or (v) other misconduct of the
Employee in the performance of his duties hereunder. The Company shall give
written notice to the Employee, which notice shall specify the grounds for the
proposed termination and the Employee shall be given thirty (30) days to cure if
the grounds arise under clauses (i) or (v) above.
(e) For purposes of this Agreement a "Change in
Control" shall be deemed to occur, unless previously consented to in writing by
the Employee, upon the election of directors constituting a majority of the
Board who have not been nominated or approved by the Employee and are not
related to the Employee.
7. Confidentiality; Noncompetition.
(a) The Employer and the Employee acknowledge that
the services to be performed by the Employee under this Agreement are unique and
extraordinary and, as a result of such employment, the Employee will be in
possession of confidential information relating to the business practices of the
Company. The term "confidential information" shall mean any and all information
(verbal and written) relating to the Company or any of its affiliates, or any of
their respective activities, other than such information which can be shown by
the Employee to be in the public domain (such information not being deemed to be
in the public domain merely because it is embraced by more general information
which is in the public domain) other than as the result of breach of the
provisions of this Section 7(a), including, but not limited to, information
relating to: trade secrets, recipes, formulas, personnel lists, financial
information, research projects, services used, pricing, customers, customer
lists and prospects, product sourcing, marketing and selling and servicing. The
Employee agrees that he will not, during or for a period of one year after the
termination of employment, directly or indirectly, use, communicate, disclose or
disseminate to any person, firm or corporation any confidential information
regarding the clients, customers or business practices of the Company acquired
by the Employee during his employment by Employer, without the prior written
consent of Employer; provided, however, that the Employee understands that
Employee will be prohibited from misappropriating any trade secret (as defined
for purposes of New York law) at any time during or after the termination of
employment.
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(b) The Employee hereby agrees that he shall not,
during the period of his employment and for a period of one (1) year following
such employment, directly or indirectly, within any county (or adjacent county)
in any State within the United States or territory outside the United States in
which the Company is engaged in business activities (i.e., operation of a
seafood restaurant or a restaurant at a "landmark" location) during the period
of the Employee's employment or on the date of termination of the Employee's
employment, engage, have an interest in or render any services to any business
(whether as owner, manager, operator, licensor, licensee, lender, partner,
stockholder, joint venturer, employee, consultant or otherwise) competitive with
the Company's business activities; provided however, that the operation of food
concession businesses shall not be deemed to be competitive with the Company's
business activities. Notwithstanding the foregoing, the Employee shall be
permitted to own (as a passive investment) not more than 5% of any class of
securities which is publicly traded.
(c) The Employee hereby agrees that he shall not,
during the period of his employment and for a period of one (1) year following
such employment, directly or indirectly, take any action which constitutes an
interference with or a disruption of any of the Company's business activities
including, without limitation, the solicitations of the Company's customers, or
persons listed on the personnel lists of the Company. At no time during the term
of this Agreement, or thereafter shall the Employee directly or indirectly,
disparage the commercial, business or financial reputation of the Company.
(d) For purposes of clarification, but not of
limitation, the Employee hereby acknowledges and agrees that the provisions of
subparagraphs 7(b) and (c) above shall serve as a prohibition against him,
during the period referred to therein, directly or indirectly, hiring, offering
to hire, enticing, soliciting or in any other manner persuading or attempting to
persuade any officer, employee, agent, lessor, lessee, licensor, licensee or
customer who has been previously contacted by either a representative of the
Company, including the Employee, (but only those suppliers existing during the
time of the Employee's employment by the Company, or at the termination of his
employment), to discontinue or alter his, her or its relationship with the
Company.
(e) Upon the termination of the Employee's employment
for any reason whatsoever, all documents, records, notebooks, equipment, price
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lists, specifications, programs, customer and prospective customer lists and
other materials which refer or relate to any aspect of the business of the
Company which are in the possession of the Employee including all copies
thereof, shall be promptly returned to the Company.
(f) (i) The Employee agrees that all processes,
technologies and inventions ("Inventions"), including new contributions,
improvements, ideas and discoveries, whether patentable or not, conceived,
developed, invented or made by him during his employment by Employer shall
belong to the Company, provided that such Inventions grew out of the Employee's
work with the Company are related in any manner to the business (commercial or
experimental) of the Company or are conceived or made on the Company's time or
with the use of the Company's facilities or materials. The Employee shall
further: (a) promptly disclose such Inventions to the Company; (b) assign to the
Company, without additional compensation, all patent and other rights to such
Inventions for the United States and foreign countries; (c) sign all papers
necessary to carry out the foregoing; and (d) give testimony in support of his
inventorship;
(ii) If any Invention is described in a patent
application or is disclosed to third parties, directly or indirectly, by the
Employee within one year after the termination of his employment by the Company,
it is to be presumed that the Invention was conceived or made during the period
of the Employee's employment by the Company; and
(iii) The Employee agrees that he will not assert
any rights to any Invention as having been made or acquired by him prior to the
date of this Agreement, except for Inventions, if any, disclosed to the Company
in writing prior to the date hereof.
(g) The Company shall be the sole owner of all
products and proceeds of the Employee's services hereunder, including, but not
limited to, all materials, ideas, concepts, formats, suggestions, developments,
arrangements, packages, programs and other intellectual properties that the
Employee may acquire, obtain, develop or create in connection with and during
the term of the Employee's employment hereunder, free and clear of any claims by
the Employee (or anyone claiming under the Employee) of any kind or character
whatsoever (other than the Employee's right to receive payments hereunder). The
Employee shall, at the request of the Company, execute such assignments,
certificates or other instruments as the Company may from time to time deem
necessary or desirable to evidence, establish, maintain, perfect, protect,
enforce or defend its right, or title and interest in or to any such properties.
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(h) The parties hereto hereby acknowledge and agree
that (i) the Company would be irreparably injured in the event of a breach by
the Employee of any of his obligations under this Section 7, (ii) monetary
damages would not be an adequate remedy for any such breach, and (iii) the
Company shall be entitled to injunctive relief, in addition to any other remedy
which it may have, in the event of any such breach.
(i) The parties hereto hereby acknowledge that, in
addition to any other remedies the Company may have under Section 7(h) hereof,
the Company shall have the right and remedy to require the Employee to account
for and pay over to the Company all compensation, profits, monies, accruals,
increments or other benefits (collectively, "Benefits") derived or received by
the Employee as the result of any transactions constituting a breach of any of
the provisions of Section 7, and the Employee hereby agrees to account for any
pay over such Benefits to the Company.
(j) Each of the rights and remedies enumerated in
Section 7(h) and 7(i) shall be independent of the other, and shall be severally
enforceable, and all of such rights and remedies shall be in addition to, and
not in lieu of, any other rights and remedies available to the Company under law
or in equity.
(k) If any provision contained in this Section 7 is
hereafter construed to be invalid or unenforceable, the same shall not affect
the remainder of the covenant or covenants, which shall be given full effect,
without regard to the invalid portions.
(l) If any provision contained in this Section 7 is
found to be unenforceable by reason of the extent, duration or scope thereof, or
otherwise, then the court making such determination shall have the right to
reduce such extent, duration, scope or other provision and in its reduced form
any such restriction shall thereafter be enforceable as contemplated hereby.
(m) It is the intent of the parties hereto that the
covenants contained in this Section 7 shall be enforced to the fullest extent
permissible under the laws and public policies of each jurisdiction in which
enforcement is sought (the Employee hereby acknowledging that said restrictions
are reasonably necessary for the protection of the Company). Accordingly, it is
hereby agreed that if any of the provisions of this Section 7 shall be
adjudicated to be invalid or unenforceable for any reason whatsoever, said
provision shall be (only with respect to the operation thereof in the particular
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jurisdiction in which such adjudication is made) construed by limiting and
reducing it so as to be enforceable to the extent permissible, without
invalidating the remaining provisions of this Agreement or affecting the
validity or enforceability of said provision in any other jurisdiction.
8. Indemnification. The Employer shall indemnify and hold
harmless the Employee against any and all expenses reasonably incurred by him in
connection with or arising out of (a) the defense of any action, suit or
proceeding in which he is a party, or (b) any claim asserted or threatened
against him, in either case by reason of or relating to his being or having been
an employee, officer or director of the Company, whether or not he continues to
be such an employee, officer or director at the time of incurring such expenses,
except insofar as such indemnification is prohibited by law. Such expenses shall
include, without limitation, the fees and disbursements of attorneys, amounts of
judgments and amounts of any settlements, provided that such expenses are agreed
to in advance by the Employer. The foregoing indemnification obligation is
independent of any similar obligation provided in the Employer's Certificate of
Incorporation or Bylaws, and shall apply with respect to any matters
attributable to periods prior to the Effective Date, and to matters attributable
to his employment hereunder, without regard to when asserted.
9. General. This Agreement is further governed by the
following provisions:
(a) Notices. All notices relating to this Agreement
shall be in writing and shall be either personally delivered, sent by telecopy
(receipt confirmed) or mailed by certified mail, return receipt requested, to be
delivered at such address as is indicated below, or at such other address or to
the attention of such other person as the recipient has specified by prior
written notice to the sending party. Notice shall be effective when so
personally delivered, one business day after being sent by telecopy or five days
after being mailed.
To the Employer:
TAM Restaurants, Inc.
0000 Xxxxxx Xxxxxx
Xxxxxx Xxxxxx, XX 00000
To the Employee:
Xx. Xxxxx Xxxxxxxx
00 Xxxxxxxx Xxxx
Xxxxxx Xxxxxx, Xxx Xxxx
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With, in either case, a copy in the same manner to:
Xxxxxx Xxxxxxxxxx LLP
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxx, Esq.
(b) Parties in Interest. Employee may not delegate
his duties or assign his rights hereunder. This Agreement shall inure to the
benefit of, and be binding upon, the parties hereto and their respective heirs,
legal representatives, successors and permitted assigns.
(c) Entire Agreement. This Agreement supersedes any
and all other agreements, either oral or in writing, between the parties hereto
with respect to the employment of the Employee by the Employer and contains all
of the covenants and agreements between the parties with respect to such
employment in any manner whatsoever. Any modification or termination of this
Agreement will be effective only if it is in writing signed by the party to be
charged.
(d) Governing Law. This Agreement shall be governed
by and construed in accordance with the laws of the State of Indiana. Employee
agrees to and hereby does submit to jurisdiction before any state or federal
court of record in Xxxxxx County, Indiana, or in the state and county in which
such violation may occur, at Employer's election.
(e) Warranty. Employee hereby warrants and represents
as follows:
(i) That the execution of this Agreement and the
discharge of Employee's obligations hereunder will not breach or conflict with
any other contract, agreement, or understanding between Employee and any other
party or parties.
(ii) Employee has ideas, information and know-how
relating to the type of business conducted by Employer, and Employee's
disclosure of such ideas, information and know-how to Employer will not conflict
with or violate the rights of any third party or parties.
(f) Severability. In the event that any term or
condition in this Agreement shall for any reason be held by a court of competent
jurisdiction to be invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any other term or
condition of this Agreement, but this Agreement shall be construed as if such
invalid or illegal or unenforceable term or condition had never been contained
herein.
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(g) Execution in Counterparts. This Agreement may be
executed by the parties in one or more counterparts, each of which shall be
deemed to be an original but all of which taken together shall constitute one
and the same agreement, and shall become effective when one or more counterparts
has been signed by each of the parties hereto and delivered to each of the other
parties hereto.
IN WITNESS WHEREOF, the parties hereto have executed and
delivered this Agreement as of the date first above written.
TAM RESTAURANTS, INC.
By:
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Name:
Title:
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