EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement") is made and entered
into this 15th day of September, 1995 to be effective as of the
24th day of April, 1995 ("Effective Date"), by and between TACO
CABANA, INC., a Delaware corporation ("Company"), and JAMES A.
ELIASBERG ("Employee").
W I T N E S S E T H:
Company and Employee wish to enter into this Agreement so as
to establish their understanding with respect to employment of
Employee by Company and to resolve certain other matters
involving Company and Employee, all as set forth herein.
NOW, THEREFORE, for and in consideration of the mutual
covenants and agreements of the parties, and the mutual benefits
to be gained by the performance thereof, and other good and
valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto hereby agree as follows:
1. Employment, Duties and Acceptance. Company hereby
employs Employee, and Employee hereby accepts employment from
Company, on the terms and conditions set forth herein, to serve
as Executive Vice President and General Counsel of the Company.
Employee shall also serve as Executive Vice President of the
Company's affiliated corporations excluding Get Real, Inc. and
Taco Cabana Investments, Inc. Employee shall devote exclusive
and full time services to the Company and its affiliates, subject
to the direction of the President and the Board of Directors of
the Company and its affiliates, and, in connection therewith,
shall perform such duties commensurate with such office as he
shall reasonably be directed to perform.
2. Term of Employment. The term of this Agreement
("Term") shall commence on the Effective Date and shall continue
until April 23, 1998 unless earlier terminated as hereinafter
provided.
3. Compensation.
3.1. Base Salary. As compensation for all services to
be rendered by Employee pursuant to this Agreement, Company
agrees to pay or cause to be paid to Employee, during the Term, a
base salary ("Base Salary") of $185,000 per annum, payable in
equal installments in accordance with Company's general payroll
practices, less such deductions or amounts to be withheld as
shall be required by applicable law and regulations or pursuant
to any benefit plan in which Employee is a participant.
3.2. Expenses. Company shall pay or reimburse Employee
for all reasonable and necessary expenses actually incurred and
paid by Employee during the Term in the performance of his
services under this Agreement, upon presentation of written
expense statements or vouchers accompanied by receipts and such
other supporting documentation as Company may require; provided,
however, that the maximum amount available for such expenses
during any period may be fixed by the Board of Directors of
Company.
3.3. Car Allowance. During the term of this Agreement,
the Company shall pay to Employee a monthly car allowance in the
amount of $625.00.
3.4. Bonus. In addition to any discretionary bonus
that Employee may be paid in the sole discretion of the Board of
Directors of the Company, Employee shall participate in a formula
bonus program to be established for senior management of the
Company based upon the results and performance of the Company as
compared to a financial plan which is approved by the Board of
Directors of the Company. To date such formula bonus program has
not been fully developed but generally it is anticipated that for
each year commencing January 1, 1996, Employee shall be paid a
bonus based upon the Company's achievement of certain performance
goals set forth in a financial plan to be prepared by senior
management of the Company and approved by the Board of Directors
of the Company. For the purposes hereof, "Approved Annual
Financial Plan" shall mean the projections of revenue, expenses
and net income of the Company for each of its calendar years
during the term hereof which is approved by the Board of
Directors of the Company. Commencing fiscal year 1996 and for
each fiscal year thereafter, a financial plan (the "Annual
Financial Plan") is to be prepared by Employee and senior
management of the Company and submitted to the Company's
Compensation Committee for review and comment on approximately
November 30 prior to the commencement of the fiscal year covered
by the Annual Financial Plan. The Company's Compensation
Committee is a committee of the Board of Directors of the
Company. The Annual Financial Plan will include a qualitative
and quantitative analysis of revenues and net profits which shall
be considered by the Compensation Committee of the Company.
Employee and the other members of the Company's senior management
will make themselves available at the convenience of the members
of the Company's Compensation Committee to discuss, analyze,
review, explain, comment and if appropriate, make revisions, to
the Annual Financial Plan which has been submitted by Employee
and senior management of the Company. After this process of
discussion, analysis, review, explanation, comment and revision,
the proposed Annual Financial Plan will be submitted to the Board
of Directors of the Company for discussion, review, amendment, if
necessary, and approval, upon which approval the Annual Financial
Plan, as same may be amended, will become the "Approved Annual
Financial Plan." The Board of Directors of the Company, in its
sole discretion, reserves the right to establish the Approved
Annual Financial Plan upon which the performance of the Company
for any fiscal year will be based for the payment of bonuses to
the Company's senior management. Each year commencing January 1,
1996, Employee shall be paid a bonus equal to a percentage of his
Base Salary set forth in Section 3.1 above as a bonus if the
Company shall achieve not less than 85% of the Approved Annual
Financial Plan and if the Approved Annual Financial Plan is met
or exceeded the bonus will increase. The bonus shall be paid
within seven (7) days after the Independent Public Accountants
regularly employed by the Company shall complete and distribute
the annual audit of the Company for the prior fiscal year. The
details of such formula bonus program will be set forth in
writing on or before December 31, 1995.
4. Death During Employment. This Agreement and all
rights, benefits and obligations of the parties hereunder shall
immediately terminate upon the death of Employee, except that
Employee's legal representative shall be entitled to receive
payments based on the Base Salary specified in Section 3.1 hereof
to the last day of the month next following the month in which
Employee's death occurs and Employee's estate shall be entitled
to receive a prorated portion of the percentage bonus described
in Section 3.4. The bonus shall be prorated based upon the
portion of the calendar year before the employee's death and
shall be paid within ninety (90) days after the end of the
calendar year in which the Employee's death occurs.
5. Disability. If Employee shall become disabled, as
herein defined, the Company may, upon thirty (30) days written
notice, terminate Employee's employment hereunder as herein
provided. For the purposes of this Agreement, "disability" shall
be defined as substantial impairment, physical or mental, of
Employee's ability to substantially perform his duties as set
forth herein if such impairment continues for a period of ninety
(90) continuous days. Such determination of disability shall be
certified by three qualified and licensed physicians, one of
which is to be selected by the Company, one is to be selected by
the Employee or Employee's designee and the other is to be
selected by the other two physicians selected. If the two
physicians selected by the Company and Employee or Employee's
designee can not agree upon a third physician within thirty (30)
days, a third physician will be selected by the head of the Bexar
County Medical Association. The determination of a majority of
the physicians as to Employee's disability shall control and be
binding upon the parties hereto and their respective legal
representatives and successors. Company shall continue to pay
Employee his full Base Salary compensation up to and including
the date of termination. Upon such termination, all rights,
benefits and obligations of the parties hereunder shall
immediately terminate, except that Employee shall be entitled to
receive a prorated portion of the percentage bonus described in
Section 3.4. The bonus shall be prorated based upon the portion
of the calendar year before the Employee's disability and shall
be paid within ninety (90) days after the end of the calendar
year in which the Employee's disability occurs.
6. Termination.
6.1. Termination. This Agreement may be terminated by
Employee upon thirty (30) days written notice to the Company.
Upon termination of this Agreement, all rights, benefits and
obligations of the parties hereunder shall immediately terminate
and neither party shall have any further obligation to the other
except the payment by Company to Employee of compensation based
on the Base Salary specified in Section 3.1 hereof through the
date of termination, and the rendition of services by Employee
through such date of termination.
6.2. Termination for Cause. Company may terminate and
discharge Employee for cause (as defined herein) at any time,
effective immediately upon the giving of notice to such effect to
Employee. Such discharge shall be effected by written notice to
Employee which shall specify the reasons for Employee's
discharge. As used herein, the term "for cause" shall only
include (i) Employee's theft or fraud, (ii) Employee's conviction
of a felony, (iii) Employee's violation of the terms and
conditions of Sections 8.1 or 9, or (iv) Employee's failure to
comply with all reasonable policies, standards, and regulations
of the Company or any of its affiliated companies in effect as of
the date of this Agreement and failure to cure such violation
within thirty days after receipt of written notice thereof.
7. Vacation and Benefits.
7.1. Vacation and Benefits. Employee shall be entitled
to three (3) weeks paid vacation time each calendar year. The
times for such vacation shall be mutually agreed upon by Company
and Employee. Vacation time not used in one calendar year shall
carry over and may be used in the next calendar year; provided,
however, Employee shall not be entitled to more than six (6)
weeks of vacation time in any one calendar year; and provided
further, that vacation time carried over to the next calendar
year shall not exceed six (6) weeks. As a full-time employee of
Company, Employee shall be entitled to participate in such other
fringe benefits as are formally adopted by Company and its
affiliated companies from time to time for and on behalf of its
full-time employees. In this regard, during the Term, Employee
shall be eligible to participate, and shall be entitled to
participate, in any
(i) pension, profit sharing, bonus, stock option, stock
ownership or similar plans or programs of Company and its
affiliated companies established for or benefitting
executive employees, or
(ii) group insurance, hospitalization, medical,
health and accident, disability or similar insurance plans
or programs of Company and its affiliated companies now
existing or hereafter established, to the extent that he is
eligible under the general provisions thereof.
7.2. Stock Options. Taco Cabana will grant to Employee
an option to acquire 200,000 shares of common stock (the
"Option") at an exercise price not less than the closing price of
the common stock on the effective date of grant. Such Option
will vest in five equal annual installments of 40,000 shares
each, commencing on June 6, 1996; provided, however, that any
portion of such Option to the extent not vested shall vest
immediately upon any Change of Control of the Company during the
term hereof (as Change of Control is defined in the Employee's
Stock Option Agreement to be entered into to evidence the Option
referenced herein). Such Stock Option Agreement will be entered
into no later than sixty days from September 15, 1995.
8. Restrictive Covenants.
8.1. During Employment. Employee is hired by Company
as a full-time employee and Employee agrees to use his best
efforts to serve and advance the interests of Company and its
affiliated companies well and faithfully and to devote his full
time and attention exclusively to the business of Company and its
affiliated companies for so long as he shall be employed
hereunder. During the Term, Employee shall not, directly or
indirectly, alone or as a member of a partnership or as an
officer, director, shareholder or consultant of any other
corporation, be engaged in or concerned with any business or
commercial activities, duties or pursuits whatsoever, other than
those of Company. Without limiting the generality of the
foregoing, Employee shall not, directly or indirectly, own,
manage, operate, join, control, participate in or be connected
with as an officer, director, employee, consultant, partner,
shareholder or individual, in or with any business or occupation
which is a competitor with Company or any of its affiliated
companies. Notwithstanding anything to the contrary herein
contained, nothing herein shall be construed to prohibit Employee
from making passive personal investments or writing books,
screenplays or other literary endeavors during periods of time
outside normal and customary business hours and such passive
investments and any screenplays, books or literary endeavors
written by the Employee shall remain his sole and exclusive
property, together with any commercialization proceeds thereof.
8.2. After Termination of Employment. For and in
consideration of the promises herein contained and for other good
and valuable consideration the receipt and sufficiency of which
is hereby acknowledged, Employee agrees that for a period of two
(2) years after Employee's employment is terminated for any
reason, Employee shall not, directly or indirectly, own, manage,
operate, control, participate in or be connected with as an
officer, director, employee, consultant, partner, shareholder or
individual, in or with any business or occupation which owns a
Mexican fast food restaurant or Mexican "quick service"
restaurant in the continental United States.
9. Protection of Confidential Information. Employee
acknowledges that in his employment with Company hereunder he
occupies a position of trust and confidence and that during the
Term of this Agreement, he will have access to and will become
familiar with many confidential affairs of Company and its
affiliated companies, including, without limitation, information
about costs, profits, markets, sales, products, key personnel,
pricing policies, operational methods, trade secrets, technical
processes and other business affairs and methods, plans for
future developments and other information not readily available
to the public (collectively "Confidential Information").
Employee covenants and agrees that he will keep secret all
Confidential Information of Company and that he will not disclose
any of such Confidential Information, directly or indirectly,
unless he is compelled to disclose it by judicial process.
Employee further covenants and agrees that he will not use any
such Confidential Information in any way, either during the Term
of this Agreement or at any time thereafter, except as required
in the course of his employment. All files, records, documents,
drawings, specifications, equipment and other similar items
relating to the business of Company shall remain the sole and
exclusive property of Company and shall not be removed by
Employee from the premises of Company under any circumstances
whatsoever without the prior written consent of Company and shall
in no way be reproduced or copied by Employee without the prior
written consent of Company. Employee agrees to deliver or return
to Company, upon termination of his employment, all copies, data,
drawings, prints and written information furnished by Company or
prepared by Employee during the Term of this Agreement in
connection with his services hereunder. Employee will retain no
copies thereof after termination of his employment. Employee
hereby releases and transfers, assigns and conveys any right,
title or interest Employee may have in any trademarks, trade
names, service marks, service names or other proprietary marks
("Marks") of Company or any of its affiliated companies, whether
presently existing or hereafter developed, and Employee agrees
not to undertake either during the Term hereof or at any time
thereafter, to apply for any registration with respect to any
such Mark except on behalf of the Company or any affiliated
company pursuant to a specific written directive from Company.
Employee is an attorney and should he develop legal form files,
form agreements or other similar attorney work products that do
not contain Company confidential information, Employee shall be
entitled to retain copies of such attorney work product
notwithstanding anything to the contrary herein contained.
10. Specific Remedy. Company and Employee agree that in
the event Employee commits a material breach of Sections 8 or 9
of this Agreement, Company shall have, in addition to any other
remedies provided by law, the right and remedy to have such
provision specifically enforced by any court having equity
jurisdiction, it being acknowledged and agreed that any such
breach or threatened breach will cause irreparable injury to
Company and that money damages will not provide an adequate
remedy to Company.
11. Prohibition Against Assignment. Employee agrees on
behalf of himself and of his executors, administrators, heirs,
legatees, distributees and any other person or persons claiming
any benefits through or under him under this Agreement that this
Agreement and its rights, interests and benefits shall not be
assigned, transferred, pledged or hypothecated in any way by
Employee or any executor, administrator, heir, legatee,
distributee or other person claiming through or under Employee by
virtue of this Agreement, and shall not be subject to execution,
attachment or similar process. Any attempted assignment,
transfer, pledge or hypothecation, or disposition of this
Agreement or of such rights, interests and benefits contrary to
the above provisions, or the levy of any attachment or similar
process thereupon, shall be null and void and without effect.
12. General.
12.1. Severability. The provisions of this Agreement
are severable and the invalidity or unenforceability of any
provision hereof shall not affect the validity or enforceability
of any other provision. In addition, in the event that any
provision of this Agreement (or portion thereof) is determined by
a court to be unenforceable as drafted by virtue of the scope,
duration, extent or character of any obligation contained
therein, the parties acknowledge that it is their intention that
such provision (or portion thereof) shall be construed in a
manner designed to effectuate the purposes of such provision to
the maximum extent enforceable under applicable law.
12.2. Waiver. Failure or delay in insisting upon strict
compliance with any provision hereof shall not be deemed a waiver
of such provision or any other provision hereof with respect to
prior, contemporaneous or subsequent occurrences. No waiver by
either party of any right hereunder or of any default shall be
binding upon such party unless such waiver is in writing and
signed by a duly authorized officer of such party.
12.3. Remedies Cumulative. All remedies provided for in
this Agreement shall be cumulative and in addition to and not in
lieu of any other remedies available to either party at law, in
equity or otherwise.
12.4. Notice. Any notice, demand, payment, request,
response or other communication contemplated herein or required
or permitted to be given hereunder shall be deemed to be given
and sufficient in all respects if given in writing, by personal
delivery or by United States Mail, Certified Mail, Postage
Prepaid, Return Receipt Requested to the parties at the
respective addresses set forth below:
if to Company: 262 Losoya, Suite 330
San Antonio, Texas 78205
if to Employee: Employee's address
as recorded
in the Personnel Files of
the Company
or to such other address as the party to receive such
communication has last designated by notice delivered to the
other party in accordance with the foregoing provisions. All
notices shall be effective upon receipt.
12.5. Entire Agreement. This Agreement constitutes the
entire understanding and agreement between the parties hereto
with respect to the subject matter hereof and supersedes any
prior understanding or agreement (including the prior signed
Employment Agreement entered into September 15, 1995, which was
inadvertently and mistakenly executed and shall be deemed to have
never been of any force or effect) between Company or any of its
affiliated companies and Employee relating to Employee's
employment with Company or any of its affiliated companies.
There are no representations, agreements, arrangements or
understandings, oral or written, between or among the parties
hereto relating to the subject matter of this Agreement which are
not fully expressed herein.
12.6. Amendment. This Agreement may not be modified or
amended except by written agreement executed by all the parties
to this Agreement at the time of such amendment.
12.7. Governing Law. This Agreement shall be governed
by and construed in accordance with the laws of the State of
Texas, and the parties hereto hereby agree that the sole and
exclusive place of jurisdiction for resolution of any disputes
arising hereunder or related hereto shall be San Antonio, Bexar
County, Texas.
12.8. Binding Effect and Assignment. Subject to the
restrictions against assignment set forth in Section 11, this
Agreement and the terms and conditions hereof shall be binding
upon and inure to the benefit of the parties hereto, their
respective legal representatives, successors and assigns.
12.9. Captions and Section Headings. Captions and
section headings used herein are for convenience only and shall
not be used in construing this Agreement.
12.10. Language. The language used in this
Agreement shall be deemed to be language chosen by both parties
hereto to express their mutual intent, and no rule of strict
construction against either party shall apply to any term or
condition of this Agreement.
12.11. Further Assurances. Each of the parties
hereto agrees to perform any further acts and to execute and
deliver any further documents which may be reasonably necessary
to carry out the purpose or intent of the provisions of this
Agreement.
12.12. Counterparts. This Agreement may be executed
in several counterparts, each of which shall constitute an
original, but all of which taken together shall constitute one
single agreement between the parties hereto.
12.13. Indemnity. The Company shall indemnify the
Employee and hold him harmless for any acts or decisions made by
him in good faith while performing services for the Company as
Employee and/or agent of Company and, in addition thereto, shall
use its best efforts to obtain insurance coverage for him under
any insurance policy now in force or hereinafter obtained during
the term of this Agreement covering the officers and directors of
the Company against lawsuits as Employee and/or agent of Company.
The Company will pay all expenses, including attorneys' fees,
actually and necessarily incurred by the Company or Employee in
connection with the defense of any such act, suit or proceeding
and in connection with any appeal thereon, including costs of
court settlement.
IN WITNESS WHEREOF, the parties have executed this Agreement
on the 15th day of September, 1995, effective as of the Effective
Date.
COMPANY:
TACO CABANA, INC.
BY:
ITS:
EMPLOYEE:
JAMES A. ELIASBERG