EXHIBIT 10.9
EXECUTION COPY
MANAGEMENT AGREEMENT
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THIS MANAGEMENT AGREEMENT (this "Agreement") is made as of July 1,
1998, by and among Roma Restaurant Holdings,Inc., (formerly known as
Romacorp, Inc.), a Delaware corporation (the
"Company"), and ▇▇▇▇▇▇ ▇. Page ("Executive"). Certain definitions are set
forth in Section 14 of this Agreement.
The Company and Executive desire to enter into an
agreement (i) setting forth the terms pursuant to which the
Company shall grant to Executive an option to acquire certain shares of
Common stock; (ii) setting forth the terms and conditions of Executive's
employment with the Company; and (iii) setting forth the obligation of
Executive to refrain from competing with the Company and/or its
Subsidiaries under certain circumstances as provided herein.
The parties hereto agree as follows:
STOCK AND OPTION PROVISIONS
1. [This Section intentionally omitted]
2. Stock Option.
a) Grant of Option. Pursuant to the Plan, the Company hereby
grants to Executive a nonqualified stock option (the "Option") to
purchase 11.11 shares (the "Option Shares") of Common, at a price per
share of $12,500.00 (the "Exercise Price"). The Exercise Price and the
number of Option Shares may be adjusted as provided in the Plan. The
Option is not intended to be an "incentive stock option" within the
meaning of Section 422 of the Internal Revenue Code.
(b) Executive Bound by Plan. Attached hereto as Annex A is a copy of the
Plan which is incorporated herein by reference and made a part hereof.
Executive hereby acknowledges receipt of a copy of the Plan and agrees
to be bound by all the terms and provisions thereof. The Plan should be
carefully examined before any decision is made to exercise the option.
(c) Exercisability. Subject to Section 2(f), the Option shall be
exercisable, in whole or in part, by written notice to the Company at any
time, and from time to time, during the period of time after the date
hereof and prior to the tenth anniversary of the date hereof or such
earlier date upon which the Option expires as specified herein or in the
Plan. The Option may not be exercised for a fraction of a share of
Common. The Option is subject to cancellation as provided in the Plan.
(d) Vesting of Option. The Option shall vest with respect to the
Option Shares as follows:
(i) Time Option Shares. This Option shall vest with respect
to 5.55 Option Shares subject to this Option (the "Time Option Shares")
provided the Executive remains continuously employed with the Company
after the date hereof and through and including the vesting dates
described below as follows:
Number of Time
Vesting Date Option Shares Which Vest
The first anniversary of 1.11
the date hereof 1999
The last day of each of the 0.0925
firsts 48 months after the first
anniversary of the date hereof
provided, that upon the closing of a Sale of the Company, this Option
will immediately vest with respect to all of the unvested Time Option
Shares.
(ii) Performance Option Shares. This Option shall vest with respect
to 5.55 Option Shares (the "Performance Option Shares") upon the
attainment of certain goals described in this Section 2(d)(ii). This
Option shall vest with respect to 1.85 Performance Option Shares as of
the vesting dates set forth below if (x) the Company's EBITDA (as defined
below) for the fiscal year ending on such vesting date equals at least
the dollar amount set forth opposite such vesting date (each a "Target
EBITDA") and (y) the Executive has been continuously employed with the
Company from the date hereof through the applicable vesting date.
Vesting Dates Target EBITDA
Last day of fiscal year 1999 $18,806,000
Last day of fiscal year 2000 $20,580,000
Last day of fiscal year 2001 $25,393,000
Last day of fiscal year 2002 $30,950,000
; provided that the last day of fiscal year 2002 vesting date is provided
only for the purposes of vesting Performance Option Shares, if any, which
do not vest on the last day of fiscal year 2001 and in no event shall
more than 5.55 Option Shares vest pursuant to this Section 2(d)(ii).
The effective date of vesting shall be as set forth above even
though EBITDA for the applicable period may not be determined until a
date thereafter.
In the event that the Company does not achieve the Target EBITDA
provided in the table above as of the last day of fiscal year 1999, the
last day of fiscal year 2000 and/or the last day of fiscal year 2001, the
portion of the Option which did not vest on any such date shall vest if
the actual EBITDA for the following fiscal year exceeds the Target EBITDA
for such following fiscal year by an amount greater than or equal to the
shortfall in Target EBITDA for the prior fiscal year.
In the event that (a) the Company consummates any acquisition of the
capital stock or assets of another corporation in any given year or
(b)the Company commits to a one-time unusual capital expenditure, the
Target EBITDA for such year will be adjusted to account for the pro-forma
and pro-rata EBITDA impact of such acquired corporation or such capital
expenditure, as the case may be.
"EBITDA" means earnings before interest, income taxes, depreciation,
amortization, Sentinel Capital Partners, L.P.'s or one of its affiliate's
management fee and non-recurring charges
(e) Early Expiration Upon Termination of Employment. Any portion-of
the Option that has previously vested prior to or on the date Executive's
employment with the Company, Roma Restaurant Holdings, Inc. (the
Company's parent) or the Company's Subsidiaries terminates (the
"Termination Date") for any reason other than termination by the Company
for Cause may be exercised by Executive within 30 days of the Termination
Date. If Executive does not elect to exercise any vested portion of the
Option within 30 days of the Termination Date, such portion shall expire
and shall no longer be exercisable. If Executive elects to exercise any
portion of such Option within 30 days of the Termination Date, such
portion shall be immediately subject to the Repurchase Option pursuant
to the terms and conditions set forth in Section 3. If the Executive's
employment is terminated by the Company for Cause, the portion of the
Option that is vested but not yet exercised shall be forfeited.
(f) Procedure for Exercise. Executive may exercise all or a portion
of the Option by delivering written notice of exercise to the Company,
together with (i) written acknowledgment that Executive has read and has
been afforded an opportunity to ask questions of management of the
Company regarding all financial and other information provided to
Executive regarding the Company and (ii) payment in full by delivery of
a cashiers or certified check in: the amount equal to the sum of (A) the
Exercise Price multiplied by the number of shares of Common to be
acquired and (b) the amount, if any, of any additional federal and state
income taxes required to be withheld by reason of the exercise of the
Option. As a condition to the exercise of any part of the Option,
Executive will permit the Company to, and at the request of Executive the
Company shall, deliver to him all financial and other information
regarding the Company and its Subsidiaries which it believes necessary
to enable Executive to make an informed investment decision.
(g) Securities Laws Restrictions. Executive represents that when
Executive exercises the Option he will be purchasing Option Shares for
Executive's own account and not on behalf of others. Executive
understands and acknowledges that federal and state securities laws
govern and restrict Executive's right to offer, sell or otherwise dispose
of any Option Shares unless Executive's of her, sale or other disposition
thereof is registered under the Securities Act and state securities laws
or, in the opinion of the Company' counsel, such offer, sale or other
disposition is exempt from registration thereunder. Executive agrees that
he will not offer, sell or otherwise dispose of any Option Shares in any
manner which would: (i) require the company to file any registration
statement (or similar filing under state law) with the Securities and
Exchange Commission or to amend or supplement any such filing or (ii)
violate or cause the Company to violate the Securities Act. the rules and
regulations promulgated thereunder or any other state or federal law
Executive further understands that the certificates for any Option Shares
Executive purchases will bear the legend set forth in Section 5 hereof
or such other legends as the Company necessary or desirable in connection
with the Securities Act or other rules, regulations or laws.
(h) Non-Transferability of the Option. The Option is personal to
Executive and is not transferable by Executive. Only Executive or
Permitted Transferees or their respective estates or heirs are entitled
to exercise the Option.
(i) Effect of Transfers in Violation of Agreement. The Company will
not be required (i) to transfer on its books any Option Shares which have
been sold or transferred in violation of any of the provisions set forth
in this Agreement, or (ii) to treat as owner of such shares, to accord
the right to vote as such owner or to pay dividends to any transferee to
whom such shares have been transferred in violation of this Agreement.
(j) Delivery of Shares. The date on which Executive has delivered
to the Company the items required under Section 2(f) is referred to
herein as Executive's Exercise Dates. Certificates for Option Shares
purchased upon exercise of the Option shall be delivered by the Company
to Executive within five business days after Executive's Exercise Date.
(k) Date of Issuance. The Option Shares issuable upon the exercise
of the Option shall be deemed to have been issued to Executive on
Executive's Exercise Date, and Executive shall be deemed for all purposes
to have become the record holder of such Option Shares on Executive's
Exercise Date.
(1) Fully Paid. The issuance of certificates for Option Shares upon
exercise of the Option shall be made without charge to Executive for any
issuance tax in respect thereof or other cost incurred by the Company in
connection with such exercise. Each Option Share issuable upon exercise
of the Option shall, upon payment of the exercise price therefor, be
fully paid and nonassessable and free from all liens and charges with
respect to the issuance thereof.
(m) Book Transfer. The Company shall not close its books against the
transfer of any Option Shares issued or issuable upon the exercise of the
Option in any manner which interferes with the timely exercise of the
Option.
(n) Filings. The Company shall assist and cooperate with Executive
to make any required governmental filings or obtain any governmental
approvals prior to or in connection with any exercise of the Option.
(o) Reservation. The Company shall at all times reserve and keep
available out of its authorized but unissued shares of Common solely for
the purpose of issuance upon the exercise of the Option, such number of
shares of Common as are issuable upon the exercise of all outstanding
Options. All Option Shares which are so issuable shall, when issued, be
duly and validly issued, fully paid and nonassessable and free from all
taxes, liens and charges. The Company shall take all such actions as may
be necessary to assure that all such Option Shares may be so issued
without violation of any applicable law or governmental regulation or any
required ends of any domestic securities exchange or market upon which
shares of Common may be listed (except for official notice of issuance
which shall be immediately delivered by the Company upon each such
issuance).
3. Repurchase Option.
(a) Repurchase Option. In the event that Executive is no longer
employed by the Company or any of its Subsidiaries for any reason, the
Executive Securities, whether held by Executive, or one or more Permitted
Transferees, will be subject to repurchase by the Company and the
Investors pursuant to the terms and conditions set forth in this Section
3 (the "Repurchase Option").
(b) Termination for Reasons Other than for Cause. If the Executive's
employment with the Company or any of its Subsidiaries is terminated for
any reason other than for Cause, then within one year after the
Termination Date, the Company may elect to purchase all or some of 50%
of the Executive Securities (other than the Option Shares) and 100% of
the Option Shares (collectively, the "Eligible Stock"), at a price per
share equal to the Fair Market Value thereof (x) as determined on the
Termination Date, if the Repurchase Notice (as defined in Section 3(d)
below) has been delivered within three months after the Termination Date,
or (y) as determined as of a date determined by the Board within 30 days
prior to the delivery of the Repurchase Notice, if the Repurchase Notice
is delivered after the third month following the Termination Date;
provided that if Executive terminates his employment and violates
Sections 10,11 or 12, the repurchase price for each share of Eligible
Stock shall be equal to the lesser of its Fair Market Value or the
Original Value thereof.
(c) Termination for Cause. If Executive is no longer employed by the
Company or any of its Subsidiaries as a result of Executive's termination
for Cause, then within one year after the Termination Date, the Company
may elect to purchase all or any portion of the Executive Securities
(collectively, the "Available Stock"), at a price per share equal to the
lower of the Fair Market Value thereof and the Original Value thereof.
(d) Repurchase Procedures. The Company may elect to exercise the right
to purchase all or any portion of the Eligible Stock or the Available
Stock, as the case may be, by delivering written notice (the "Repurchase
Notice") to the holder or holders of such Executive Securities. The
Repurchase Notice will set forth the number of shares of Executive
Securities to be acquired from such holder(s), the aggregate
consideration to be paid for such shares and the time and place for the
closing of the transaction. If any shares of Executive Securities are
held by Permitted Transferees of Executive, the Company shall purchase
the shares elected to be purchased from such holder(s) of shares of
Executive Securities pro rata according to the number of shares of
Executive Securities held by such holder(s) at the time of delivery of
such Repurchase Notice (determined as nearly as practicable to the
nearest share).
(e) Investors' Rights.
(i) If for any reason the Company does not elect to purchase all
of the Eligible Stock or the Available Stock, as the case may be, prior
to the 90th day following the Termination Date, Sentinel and then in
certain circumstances, each Investor will be entitled to exercise the
Repurchase Option, in the manner set forth in Section 3(d), for the
Eligible Stock or the Available Stock, as the case may be, that the
Company has not elected to purchase (the "Available Shares"). As soon as
practicable but in any event within thirty (30) days after the Company
determines that there will be Available Shares, the Company will deliver
written notice (the "Option Notice") to all Investors setting forth the
number of Available Shares and the price for each Available Share.
(ii) Sentinel will be permitted to purchase all or some of the
number (the "Sentinel Portion") of Available Shares equal to the product
of (A) Sentinel's Pro Rata Share and (B) the number of Available Shares,
by delivering written notice to the Company and the other Investors
within 30 days after receipt of the Option Notice from the Company (such
30-day period being referred to herein as the "Sentinel Election
Period"). The quotient determined by dividing (x) the number of shares
of Available Shares elected to be purchased by Sentinel and (y) the
Sentinel Portion, shall be referred to as the "Sentinel Percentage." If
Sentinel elects to purchase any of the Available Shares, each of the
other Investors shall be permitted to purchase all or some of the number
of Available Shares equal to the product of (m) the Sentinel Percentage,
(n) such Investor's Pro Rata Share and (o) the number of Available
Shares, by delivering written notice to the Company within 30 days after
receipt of the Option Notice from the Company.
(f) Closing. The closing of the transactions contemplated by this
Section 3 will take place on the date designated by the Company in the
Repurchase Notice, which date will not be more than 90 days after the
delivery of such notice. The Company and/or the Investors, as the case
may be, will pay for the Executive Securities to be purchased pursuant
to the Repurchase Option by delivery of, in the case of an Investor, a
check payable to the holder of Executive Securities, and in the case of
the Company (i) a check payable to the holder of such Executive
Securities, (ii) a note or notes payable in three equal annual
installments beginning on the first anniversary of the closing of such
purchase and bearing interest (payable quarterly) at a rate per annum
equal to 10% or (iii) both (i) and(ii) in the aggregate amount of the
purchase price for such shares (which note will also become due upon a
Change of Ownership). The Company and/or the Investors, as the case may
be, will receive customary representations and warranties from Executive
regarding the sale of the Executive Securities, including but not limited
to the representation that Executive has good and marketable title to the
Executive Securities to be transferred free and clear of all liens,
claims and other encumbrances.
(g) Restrictions on Repurchase. Notwithstanding anything to the
contrary contained in this Agreement, all repurchases of Executive
Securities by the Company shall be subject to applicable restrictions
contained in the Delaware General Corporation Law and in the Company's
and its Subsidiaries= debt and equity financing agreements. If any such
restrictions prohibit the repurchase of Executive Securities hereunder
which the Company is otherwise entitled or required to make, the Company
may make such repurchases as soon as it is permitted to do so under such
restrictions.
(h) Termination of Repurchase Right. The right of the Company and
the Investors to repurchase Executive Securities pursuant to this Section
3 shall terminate upon the first to occur of a Sale of the Company or a
Qualified Public Offering.
4. Stockholders Agreement. The parties hereto acknowledge that the shares
of Executive Securities are subject to the terms and conditions of the
Stockholders Agreement and such shares shall be deemed to be "Company
Shares" and the Executive shall be deemed to be a "Stockholder" for all
purposes of the Stockholders Agreement.
5. Restrictions on Transfer.
(a) The certificates representing the Executive Securities bear the
following legend:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE WERE ORIGINALLY ISSUED
ON
, 1998, HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE AACT"), AND MAY NOT BE SOLD OR TRANSFERRED IN
THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR AN
EXEMPTION FROM REGISTRATION THE THEREUNDER THE SECURITIES REPRESENTED BY
THIS CERTIFICATE ARE ALSO SUBJECT TO ADDITIONAL RESTRICTIONS ON TRANSFER,
CERTAIN REPURCHASE OPTIONS AND CERTAIN OTHER AGREEMENTS SET FORTH IN A
MANAGEMENT AGREEMENT AMONG ROMA RESTAURANT HOLDINGS, INC. (THE "COMPANY")
AND EXECUTIVE DATED AS OF JULY 1, 1998, AS AMENDED AND MODIFIED FROM TIME
TO TIME. A COPY OF SUCH AGREEMENT MAY BE OBTAINED BY THE HOLDER HEREOF
AT THE COMPANY'S PRINCIPAL PLACE OF BUSINESS WITHOUT CHARGE."
(b) No holder of Executive Securities may sell, transfer or dispose of
any Executive Securities (except pursuant to an effective registration
statement under the Securities Act) without first delivering to the
Company an opinion of counsel (reasonably acceptable in form and
substance to the Company) that neither registration nor qualification
under the Securities Act and applicable state securities laws is required
in connection with such transfer.
EMPLOYMENT PROVISIONS
6. Employment. The Company shall employ Executive, and Executive hereby
accepts employment with the Company, upon the terms and conditions set
forth in this Agreement for the period beginning on the date hereof and
ending as provided in Section 9 hereof (the "Employment Period").
7. Position and Duties.
(a) During the Employment Period, Executive shall serve as the Chief
Executive Officer of the Company and shall have the normal duties,
responsibilities and authority of the Chief Executive Officer, subject
to the power of the Board to expand or limit such duties,
responsibilities and authority and to override actions of the President.
(b) Executive shall report to the Board, and Executive shall devote
his best efforts and substantially all of his business time and attention
(except for permitted vacation periods and reasonable periods of illness
or other incapacity) to the business and affairs of the Company and its
Subsidiaries. Executive shall perform his duties and responsibilities to
the best of his abilities in a diligent, trustworthy, businesslike and
efficient manner.
(c) In addition, Executive shall be responsible for (i) providing
assistance to the Company in maintaining all of the Company's
relationships with its customers and suppliers, and (ii) assisting the
Company in the evaluation of new business opportunities.
8. Base Salary, Benefits and Bonuses.
(a) During the Employment Period, Executive's base salary shall be
$200,000 per annum or such higher rate as the Board may designate from
time to time (the "Base Salary"), which salary shall be payable in
regular installments in accordance with the Company's general payroll
practices and shall be subject to customary withholding. In addition,
during the Employment Period, Executive shall be entitled to participate
in all of the Company's employee benefit programs for which senior
executive employees of the Company and its Subsidiaries are generally
eligible, including, but not limited to the Company's group medical
coverage program, and Executive shall be eligible for paid vacation in
accordance with the policies of the Company.
(b) The Company shall reimburse Executive for all reasonable expenses
incurred by him in the course of performing his duties under this
Agreement which are consistent with the Company's policies in effect from
time to time with respect to travel, entertainment and other business
expenses, subject to the Company's requirements with respect to reporting
and documentation of such expenses.
(c) In addition to the Base Salary, the Board shall award a bonus to
Executive following the end of each fiscal year equal to up to 50% of the
Executive's Base Salary based upon performance, determined at the
discretion of the Board. It is anticipated that in any given fiscal year
if the Company were to just meet the performance goals contained in the
Company's management plan, the bonus awarded under this Section 8(c)
would be approximately 25% of the Executive's Base Salary.
9. Term: Termination.
(a) The Employment Period shall end on the third annual anniversary
of the date hereof; provided that (i) the Employment Period shall
terminate prior to such date upon Executive's death, resignation or
Disability; (ii) the Employment Period may be terminated by the Company
at any time prior to such date for Cause or without Cause; (iii) the
Employment Period may be terminated by Executive at any time for any
reason (a "Voluntary Termination"); and (iv) unless each party is
notified in writing within 30 days before the third annual anniversary
of the date hereof or the end of a Renewal Period, the Employment Period
shall automatically be extended for additional one year periods (each
such period, a "Renewal Period").
(b) Upon (1) a Voluntary Termination of the employment relationship by
Executive other than within 10 days of a Good Reason Event or (2)
termination of the Executive's employment relationship by the Company for
Cause, prior to the end of the Employment Period (the "Term"), all future
compensation or bonuses to which Executive would otherwise be entitled
and all fixture benefits for which Executive would otherwise be eligible
shall cease and terminate as of the date of such termination; provided,
however, that any salary, bonus, incentive payment, deferred compensation
or other compensation or benefit which has been earned by or accrued for
the benefit of Executive prior to the date of termination shall not be
forfeited and shall be paid to Executive promptly.
(c) Upon a termination of Executive's employment prior to the end of
the Term other than (i) a termination by the Company for Cause or (ii)
a Voluntary Termination of the employment relationship by Executive other
than within 10 days of a Good Reason Event, the Executive shall be
entitled, in consideration of Executive's continuing obligations
hereunder after such termination (including, without limitation,
Executive's non-competition obligations), to receive his Base Salary,
payable bi-weekly, and fringe benefits, as if Executive's employment
(which shall cease on the date of such termination) had continued for the
twelve (12) months following termination; provided that in the event
Executive's employment is terminated for the reasons set forth in clauses
(i) or (ii) above, Executive shall be required to use his reasonable best
efforts to obtain, as expeditiously as possible, employment with at least
comparable salary and responsibilities commensurate with those set forth
herein. In such event, Executive's right to receive the amounts and
benefits set forth in this Section 9(c) shall terminate. Notwithstanding
the foregoing, if Executive obtains employment in accordance with this
Section 9(c) and the salary to be paid to Executive is less than the Base
Salary, the Company shall pay to Executive an amount equal to such
deficiency, payable bi-weekly, for the remainder of the severance period.
MISCELLANEOUS PROVISIONS
10. Confidential Information. Executive acknowledges that the
information, observations and data obtained by him while employed by the
Company and its Subsidiaries (including those obtained while employed by
the Company prior to the date of this Agreement) concerning the business
or affairs of the Company or any of its Subsidiaries ("CONFIDENTIAL
Information") are the property of the Company or such Subsidiary.
Therefore, Executive agrees that he shall not disclose to any
unauthorized person or use for his own purposes any Confidential
Information without the prior written consent of the Board, unless and
to the extent that (i) such information was otherwise available to
Executive from a source other than the Company and (ii) the
aforementioned matters become generally known to and available for use
by the public other than as a result of Executive's acts or omissions.
Executive shall deliver to the Company at the termination of the
Employment Period, or at any other time the Company may request, all
memoranda, notes, plans, records, reports, computer tapes, printouts and
software and other documents and data (and copies thereof) relating to
the Confidential Information, Work Product (as defined below) or the
business of the Company or any Subsidiary which he may then possess or
have under his control.
11. Inventions and Patents. Executive acknowledges that all inventions,
innovations, improvements, developments, methods, designs, analyses,
drawings, reports and all similar or related information (whether or not
patentable) which relate to the Company=s or any of its Subsidiaries=
actual or anticipated business, research and development or existing or
future products or services and which are conceived, developed or made
by Executive while employed by the Company and its Subsidiaries ("Work
Product") belong to the Company or such Subsidiary. Executive shall
promptly disclose such Work Product to the Board and perform all actions
reasonably requested by the Board (whether during or after the Employment
Period) to establish and confirm such ownership (including, without
limitation, assignments, consents, powers of attorney and other
instruments).
12. Non-Compete. Non-Solicitation.
(a) In further consideration of the compensation to be paid to
Executive hereunder, Executive acknowledges that in the course of his
employment with the Company prior to the date of this Agreement he has
become familiar, and during his continued employment with the Company he
shall become familiar, with the Company's trade secrets and with other
Confidential Information concerning the Company and its Subsidiaries and
that his services have been and shall be of special, unique and
extraordinary value to the Company and its Subsidiaries. Therefore,
Executive agrees that, during the period commencing on the date hereof
and ending on the third anniversary of the termination of the Employment
Period (including any Renewal Period) (the ANoncompete Period"), he shall
not directly or indirectly own any interest in, manage, control,
participate in, consult with, or render services for, any Person that is
in the casual dining rib restaurant business in the United States.
Nothing herein shall prohibit Executive from being a passive owner of not
more than 5% of the outstanding stock of any class of a corporation which
is publicly traded, so long as Executive has no active participation in
the business of such corporation.
(b) During the Noncompete Period, Executive shall not directly, or
indirectly through another entity, (i) induce or attempt to induce any
employee of the Company or any Subsidiary to leave the employ of the
Company or such Subsidiary, or in any way interfere with the relationship
between the Company or any Subsidiary and any employee thereof, (ii) hire
any person who was an employee of the Company or any Subsidiary at any
time during the Employment Period or (iii) induce or attempt to induce
any customer, supplier, licensee, licenser, franchisee or other business
relation of the Company or any Subsidiary to cease doing business with
the Company or such Subsidiary, or in any way interfere with the
relationship between any such customer, supplier, licensee or business
relation and the Company or any Subsidiary (including, without
limitation, making any negative statements or communications about the
Company or its Subsidiaries).
13. Enforcement. If, at the time of enforcement of Sections 10, 11 or
12 of this Agreement, a court holds that the restrictions stated herein
are unreasonable under circumstances then existing, the parties hereto
agree that the maximum period, scope or geographical area reasonable
under such circumstances shall be substituted for the stated period,
scope or area. Because Executive's services are unique and because
Executive has access to Confidential Information and Work Product, the
parties hereto agree that money damages would not be an adequate remedy
for any breach of this Agreement. Therefore, in the event a breach or
threatened breach of this Agreement, the Company or its successors or
assigns may, in addition to other rights and remedies existing in their
favor, apply to any court of competent jurisdiction for specific
performance and/or injunctive or other relief in order to enforce, or
prevent any violations of, the provisions hereof (without posting a bond
or other security). In addition, in the event of an alleged breach or
violation by Executive of Section 12, the Noncompete Period shall be
tolled until such breach or violation has been duly cured. Executive
agrees that the restrictions contained in Section 12 are reasonable.
14. Definitions. All references to a fiscal year refer to the
Company's fiscal year.
"Affiliate" means, with respect to any Person, any other Person
controlling, controlled by, or under common control with such Person. For
purposes of this Agreement, the term "control" (including, with
correlative meanings, the terms "controlled by" and "under common control
with" as used with respect to any Person) means the possession, directly
or indirectly, of the power to direct or cause the direction of the
management and policies of such Person whether through ownership of
voting securities, by contract or otherwise.
"Board" means the board of directors of the Company.
"Cause" means (i) the continued failure by Executive to perform duties
described under Section 7 hereof (which failure is not cured within 5
days following notice from the Board), (ii) gross negligence (which is
not cured within 5 days after notice from the Board) or willful
misconduct by Executive in the performance of his duties or (iii)
Executive=s commission of a felony or other offense involving moral
turpitude.
"Change of Ownership" is any event pursuant to which (i) any Person
together with such Person's Affiliates (other than the Investors and
their Affiliates) collectively own at least 50% of the aggregate number
of shares of Common outstanding at any given time, and (ii) the Investors
and their Affiliates collectively cease to own at least 50% of the
aggregate number of shares of Common that they own on the date hereof (as
adjusted for stock splits, stock dividends and recapitalization and for
exchanges in connection with a merger, consolidation, reorganization or
sale).
"Closing" means the closing of the transactions contemplated by the
Recapitalization Agreement.
"Common" means the Company's Common Stock par value $.01 per share.
"Disability" means Executive's inability, due to illness, accident
injury, physical or mental incapacity or other disability, to carry out
effectively his duties and obligations to the Company or to participate
effectively and actively in the management of the Company for a period
of at least 90 consecutive days or for shorter periods aggregating 14
days (whether or not consecutive) during each three month period for not
less than six months, as determined by an independent physician.
"Executive Securities" means (i) the Option Shares which are issued
and outstanding from time to time, (ii) any other shares of Common
otherwise issued to, acquired by or held by Executive and (iii) shares
of the Company's capital stock issued with respect to the securities
specified in clauses (i) or (ii) above by way of a stock split, stock
dividend or other recapitalization; provided that Executive Securities
shall continue to be Executive Securities in the hands of any holder
other than Executive (except for the Company and the Investors and except
for transferees in a Public Sale), and except as otherwise provided
herein, each such other holder of Executive Securities shall succeed to
all rights and obligations attributable to Executive as a holder of
Executive Securities hereunder.
"Fair Market Value" of each Option Share or share of Executive
Securities, as the case may be, means the marker value as determined in
good faith mutually by the Board and Executive; provided that if the
parties cannot agree within 30 days, the Fair Market Value will be
decided by a mutually acceptable independent investment bank, whose
determination will be final and binding.
"Family Group" means Executive's spouse and descendants (whether
natural or adopted) and any trust solely for the benefit of Executive
and/or Executive's spouse and/or descendants.
"Good Reason Event" means:
(a) Notwithstanding the exercise of the power granted to the
Company and the Board by the concluding clause of Section 7(a) hereof,
the assignment to the Employee of any duties inconsistent in any material
respect with Employee's position (including status, offices, titles and
reporting requirements), authority, duties or responsibilities initially
assigned to Executive and as contemplated by Section 7 of this Agreement,
or any other action that results in a diminution in such position,
authority, duties or responsibilities, excluding for this purpose an
isolated, insubstantial and inadvertent action not taken in bad faith
that is remedied within 10 days after receipt of written notice thereof
from the Employee to the Company; or
(b) Any failure by the Company to comply with any of the provisions
of this Agreement, other than an isolated, insubstantial and inadvertent
failure not occurring in bad faith that is remedied within 10 days after
receipt of written notice thereof from the Employee to the Company.
"Investor Shares@ means (i) any Common acquired by the Investors, and
(ii) any equity securities of the Company issued or issuable directly or
indirectly with respect to the securities referred to in clause (i) above
by way of stock dividend or stock split or in connection with a
combination of shares, recapitalization, merger, consolidation or other
reorganization; provided that Investor Shares shall not include (a)
shares of Common issued pursuant to the conversion or exercise of any
options, warrants or other convertible securities or (b) any equity
securities of the Company issued or issuable with respect to the
securities referred to in clause (a) above in connection with a
combination or split of shares, recapitalization, merger, consolidation
or other reorganization.
"Investors" means the parties listed on Schedule 1 attached hereto,
provided that if a party who is an employee of the Company as of the date
hereof or becomes an employee of the Company at any time after the date
hereof ceases to be an employee of the Company hereafter or thereafter,
such party shall be deemed to have been removed from the Schedule and
shall no longer be deemed an Investor for purposes of this Agreement.
"Option Shares" means, collectively, the Time Option Shares and the
Performance Option Shares.
"Original Value" means with respect to each Option Share, the
exercise price paid for such Option Share (each as proportionally
adjusted for all stock splits, stock dividends and other recapitalization
subsequent to the date hereof.
"Permitted Transferee@ has the meaning set forth in the Stockholders
Agreement.
"Person" means any natural person, corporation, partnership, limited
liability company, trust, unincorporated organization or other entity.
"Plan" means that certain Roma Restaurant Holdings, Inc. 1998 Stock
Option Plan.
"Pro Rata Share" means, with respect to each Investor, the quotient
determined by dividing (i) the total number of Investor Shares held by
such Investor, by (ii) the total number of Investor Shares held by all
Investors.
"Public Sale" means any sale pursuant to a registered public offering
under the Securities Act or any sale to the public pursuant to Rule 144
promulgated under the Securities Act effected through a broker, dealer
or market maker.
"Qualified Public Offering" has the meaning set forth in the
Stockholders Agreement.
"Recapitalization Agreement" means that certain Recapitalization
Agreement, dated as of April 24, 1998, by and among the Company and
certain other parhes thereto, as amended.
"Sale of the Company" means the first to occur of any transaction (i)
following which there has been a Change of Ownership, or (ii) involving
the sale of substantially all of the Company=s assets determined on a
consolidated basis.
"Securities Act" means the Securities Act of 1933, as amended from
time to time.
"Sentinel" means Sentinel Capital Partners, L.P., a Delaware limited
partnership.
"Stockholders Agreement" means that certain Stockholders Agreement
dated as of the date hereof, by and among the Company and the Company's
stockholders.
"Subsidiary" means any corporation, partnership, association or other
business entity of which (i) if a corporation, a majority of the total
voting power of shares of stock entitled (without regard to the
occurrence of any contingency) to vote in the election of directors,
managers or trustees thereof is at the time owned or controlled, directly
or indirectly, by the Company or (ii) if a partnership, association or
other business entity, a majority of the partnership or other similar
ownership interests thereof is at the time owned or controlled, directly
or indirectly, by the Company. For purposes hereof, the Company shall be
deemed to have a majority ownership interest in a partnership,
association or other business entity if the Company, directly or
indirectly, is allocated a majority of partnership, association, or other
business entity gains or losses, or is or controls the managing director
or general partner (or Person having like authority) of such partnership,
association or other business entity.
"Termination Date" has the meaning set forth in Section 2(e).
15. Notices. Any notice provided for in this Agreement must be in writing
and must be either personally delivered, mailed by first class mail
(postage prepaid and return receipt requested) or sent by reputable
overnight courier service (charges prepaid) to the Investors at the
addresses indicated in the Company's records and to the other recipients
at the address indicated below:
If to Executive: ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
If to the Company: Roma Restaurant Holdings, Inc.
c/o Sentinel Capital Partners, L.P.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇
with a copy to: ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇
Citicorp Center
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Esquire
- and -
▇▇▇▇▇ ▇▇▇▇▇
Romacorp, Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
or such other address or to the attention of such other person as the
recipient party shall have specified by prior written notice to the
sending party. Any notice under this Agreement shall be deemed to have
been given when so delivered or sent or, if mailed, five days after
deposit in the U.S. mail.
16. General Provisions.
(a) Executive Acknowledgment. The Executive acknowledges that he/she
shall not be entitled to any salary, bonuses, benefits or options granted
hereunder unless and until the stockholders of the Company approve such
rights in compliance with the requirements of Section 280G(b) (5)(B) of
the Internal Revenue Code and proposed Treasury Regulation Section
1280G-l, Q&A 7.
(b) Transfers in Violation of Agreement. Any transfer or attempted
transfer of any Executive Securities in violation of any provision of
this Agreement shall be void, and the Company shall not record such
transfer on its books or treat any purported transferee of such Executive
Securities as the owner of such stock for any purpose.
(c) Severability. Whenever possible, each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be
invalid, illegal or unenforceable in any respect under any applicable law
or rule in any jurisdiction, such invalidity, illegality or
unenforceability shall not affect any other provision or any other
jurisdiction, but this Agreement shall be reformed, construed and
enforced in such jurisdiction as if such invalid, illegal or
unenforceable provision had never been contained herein.
(d) Complete Agreement. This Agreement, those documents expressly
referred to herein and other documents of even date herewith embody the
complete agreement and understanding among the parties and supersede and
preempt any prior understandings, agreements or representations by or
among the parties, written or oral, which may have related to the subject
matter hereof in any way.
(e) Counterparts. This Agreement may be executed in separate
counterparts, each of which is deemed to be an original and all of which
taken together constitute one and the same agreement.
(f) Successors and Assigns. Except as otherwise provided herein, this
Agreement shall bind and inure to the benefit of and be enforceable by
Executive, the Company, the Investors and their respective successors and
assigns (including subsequent holders of Executive Securities); provided
that the rights and obligations of Executive under this Agreanent shall
not be assignable except in connection with a permitted transfer of
Executive Securties hereunder.
(g) Choice of Law. The corporate law of the State of Delaware shall
govern all questions concerning the relative rights of the Company,
Executive and the Investors. All issues and questions concerning the
construction, validity, enforcement and interpretation of this Agreement
and the exhibits and schedules hereto shall be governed by, and construed
in accordance with, the laws of the State of New York, without giving
effect to any choice of law or conflict of law rules or provisions
(whether of the State of New York or any other jurisdiction) that would
cause the application of the laws of any jurisdiction other than the
State of New York.
(h) Remedies. Each of the parties to this Agreement (including the
Investors) shall be entitled to enforce its rights under this Agreement
specifically, to recover damages and costs (including reasonable
attorney's fees) caused by any breach of any provision of this Agreement
and to exercise all other rights existing in its favor. The parties
hereto agree and acknowledge that money damages would not be an adequate
remedy for any breach of the provisions of this Agreement and that any
party may in its sole discretion apply to any court of law or equity of
competent jurisdiction (without posting any bond or deposit) for specific
performance and/or other injunctive relief in order to enforce or prevent
any violations of the provisions of this Agreement.
(i) Amendment and Waiver. The provisions of this Agreement may be
amended and waived only with the prior written consent of the Company and
Executive. The provisions of Section 3 may be amended and waived only
with the prior written consent of the Investors.
(j) Third-Party Beneficiaries. The parties hereto acknowledge and
agree that the Investors are third party beneficiaries of this Agreement.
This Agreement will inure to the benefit of and be enforceable by the
Investors and their successors and assigns.
* * * * *
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the date first written above.
ROMA RESTAURANT HOLDINGS, INC.
By: /s/▇▇▇▇▇ ▇. Short
Its: Vice President
/s/ ▇▇▇▇▇▇ ▇. Page
▇▇▇▇▇▇ ▇. Page
Schedule I
Sentinel Capital Partners, L.P.
Sentinel Capital Partners II, L.P.
Omega Partners, L.P.
The Provident Bank
Travelers Casualty and Surety Company
The Travelers Insurance Company The Travelers Life and Annuity Company
The Phoenix Insurance Company NPC Restaurant Holdings, Inc.