Exhibit 10.1
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
AMENDED AND RESTATED EMPLOYMENT AGREEMENT (the "Agreement") dated July
23, 2004 by and between Volume Services America Holdings, Inc., a Delaware
corporation (the "Company") and Lawrence E. Honig (the "Executive").
Executive has been employed by the Company since April 15, 2002
pursuant to that certain Employment Agreement by and between the Company and
Executive dated April 15, 2002, as amended by that certain Amendment and Waiver
dated as of July 1, 2003 (the "Existing Agreement")
The Company desires to continue to employ Executive and to amend and
restate the Existing Agreement;
Executive desires to continue in his employment with the Company and to
amend and restate the Existing Agreement;
In consideration of the premises and mutual covenants herein and for
other good and valuable consideration, the parties agree as follows:
1. Term of Employment. Subject to the provisions of Section 7 of this
Agreement, Executive shall be employed by the Company for a term commencing on
April 15, 2002 (the "Commencement Date") and ending on April 14, 2004 (the
"Employment Term") on the terms and subject to the conditions set forth in this
Agreement. Unless sooner terminated under the provisions of Section 7 of this
Agreement, the Employment Term will automatically be extended for additional
one-year terms at the conclusion of the initial two-year term ("Initial Term")
and each succeeding one-year extension ("Extension Term").
2. Position.
(a) During the Employment Term, Executive shall serve as the
Company's Chief Executive Officer. In such position, Executive shall
have such duties and authority as shall be determined from time to time
by the Board of Directors of the Company (the "Board"). Executive will
be nominated and, when elected, serve as a member of, the Board.
(b) During the Employment Term, Executive will devote
Executive's full business time and best efforts to the performance of
Executive's duties hereunder and will not engage in any other business,
profession or occupation for compensation or otherwise which would
conflict or interfere with the rendition of such services either
directly or indirectly, without the prior written consent of the Board;
provided that nothing herein shall preclude Executive, subject to the
prior approval of the Board, from accepting appointment to or continue
to serve on any board of directors or trustees of any business
corporation or any charitable organization; provided in each case, and
in the aggregate, that such activities do not conflict or interfere
with the performance of Executive's duties hereunder or conflict with
Section 9. Executive currently performs his duties in the Company's
office in Spartanburg, South Carolina. Executive may elect to perform
his duties at another location with the prior approval of the Board of
Directors, which approval shall not be unreasonably withheld.
3. Base Salary. During the Employment Term, the Company shall pay
Executive a base salary at the annual rate of $450,000, payable in regular
installments in accordance with the Company's usual payment practices. Executive
shall be entitled to such increases in Executive's base salary, if any, as may
be determined from time to time in the sole discretion of the Board. Executive's
annual base salary, as in effect from time to time, is hereinafter referred to
as the "Base Salary."
4. Bonus. Executive shall be eligible to earn an annual bonus award (an
"Annual Bonus") each fiscal year during the Employment Term, payable as provided
in the Company's annual bonus plan. The Annual Bonus will be targeted to at
least fifty percent (50%) of Executive's Base Salary (the "Target") based upon
the achievement of budgeted performance goals of the Company established by the
Board (the "Company's Budget") and incorporated into the existing executive
bonus plan that the Board has established for the senior executives of the
Company.
5. Employee Benefits.
(a) During the Employment Term, the Executive shall be
entitled to the coverage or benefits under any and all employee benefit
plans maintained by the Company (including, without limitation, medical
insurance, life insurance, long-term disability insurance and pension
plans, if any) (collectively, "Employee Benefits") to the extent
permissible under the terms of the plans and to all fringe benefits for
which his status and level of employment qualify him in accordance with
the Company's benefit policies governing senior executives; provided,
however, that the Executive's Employee Benefits shall not include the
split dollar life insurance program which is no longer being offered by
the Company to new employees.
(b) The Executive shall be entitled to paid vacations in
accordance with the Company's standard vacation policies governing
senior executives, but in no event less than four weeks each calendar
year during the Employment Term.
6. Business Expenses. During the Employment Term, reasonable business
expenses incurred by Executive in the performance of Executive's duties
hereunder shall be reimbursed by the Company in accordance with Company
policies.
7. Termination. The Employment Term and Executive's employment
hereunder may be terminated by either party at any time and for any reason;
provided that Executive will be required to give the Company at least 60 days
advance written notice of any resignation of Executive's employment.
Notwithstanding any other provision of this Agreement, the provisions of this
Section 7 shall exclusively govern Executive's rights upon termination of
employment with the Company and its affiliates.
(a) By the Company For Cause or By Executive Resignation
Without Good Reason.
(i) The Employment Term and Executive's employment
hereunder may be terminated by the Company for Cause (as
defined below) and shall terminate automatically upon
Executive's resignation without Good Reason (as defined in
Section 7(c)).
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(ii) For purposes of this Agreement, "Cause" shall
mean termination by action of at least a majority of the
members of the Board (excluding the Executive) upon (i) the
Executive's breach of Section 8 or 9 of this Agreement; (ii)
the Executive's material breach of any other provision of this
Agreement if the Executive has been given written notice and a
reasonable opportunity to cure such breach; (iii) the
Executive's willful failure to adhere to any written Company
policy if the Executive has been given written notice and a
reasonable opportunity to comply with such policy or cure his
failure to comply; (iv) serious willful misconduct by the
Executive in connection with his employment; or (v) the
commission of a felony or the equivalent thereof or a
misdemeanor including moral turpitude. Such action shall take
place at a meeting duly called and held upon at least 15 days'
prior written notice to the Executive specifying the
particulars of the action or inaction alleged to constitute
"Cause" (and at which meeting the Executive and his counsel
are entitled to be present and given reasonable opportunity to
be heard). Action or inaction by the Executive shall not
include failure to act by reason of total or partial
incapacity due to physical or mental illness.
(iii) If Executive's employment is terminated by the
Company for Cause, or if Executive resigns without Good
Reason, Executive shall be entitled to receive:
(A) the Base Salary through the date of
termination;
(B) any Annual Bonus earned but unpaid as of
the date of termination for any previously completed
fiscal year;
(C) reimbursement for any unreimbursed
business expenses properly incurred by Executive in
accordance with Company policy prior to the date of
Executive's termination;
(D) accrued vacation; and
(E) such Employee Benefits, if any, to which
Executive may be entitled in his status as a
terminated employee under the employee benefit plans
of the Company.
The amounts described in clauses (A) through (E)
hereof shall be referred to as the "Accrued Rights."
Following such termination of Executive's
employment by the Company for Cause or resignation by
Executive without Good Reason, except as set forth in
this Section 7(a)(iii),Executive shall have no
further rights to any compensation or any other
benefits under this Agreement.
(b) Disability or Death.
(i) The Employment Term and Executive's employment
hereunder terminate upon Executive's death and may be
terminated by the Company if Executive becomes physically or
mentally incapacitated and is therefore unable for a period of
120 consecutive days or 180 days during any consecutive 12
month
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period to perform Executive's duties (such incapacity is
hereinafter referred to as "Disability"). Any question as to
the existence of the Disability of Executive as to which
Executive and the Company cannot agree shall be determined in
writing by a qualified independent physician mutually
acceptable to Executive and the Company. If Executive and the
Company cannot agree as to a qualified independent physician,
each shall appoint such a physician and those two physicians
shall select a third who shall make such determination in
writing. The determination of Disability made in writing to
the Company and Executive shall be final and conclusive for
all purposes of the Agreement.
(ii) Upon termination of Executive's employment
hereunder for either Disability or death, Executive or
Executive's estate (as the case may be) shall be entitled to
receive (A) the Accrued Rights; (B)an amount paid in twenty
four (24) monthly installments equal to two times (2x) the
Executive's Base Salary over the one-year period prior to the
date of his death or Disability; and (C) a pro rata portion of
any Annual Bonus (the "Pro Rata Bonus") to which Executive
would have been entitled for the fiscal year in which such
termination occurs, which Pro Rata Bonus shall be paid in the
following fiscal year when other employee bonuses are paid and
which shall be calculated by multiplying a fraction
representing the portion of the fiscal year for which
Executive was employed by the Company (e.g., if employment
ends in September, the fraction would be 9/12) by the full
Annual Bonus, if any, which Executive would have earned for
such fiscal year if he had worked for the full fiscal year. In
addition, if the Executive's employment is terminated due to
his death, the Company shall continue to provide, for a period
of one year from the date of the Executive's death, the
Executive's spouse and minor children with medical,
hospitalization and dental insurance comparable to that
provided by the Company prior to such termination.
Following Executive's termination of employment due
to death or Disability, except as set forth in this Section
7(b)(ii), Executive shall have no further rights to any
compensation or any other benefits under this Agreement.
(c) By the Company Without Cause or Resignation by Executive
for Good Reason.
(i) The Employment Term and Executive's employment
hereunder may be terminated by the Company without Cause or by
Executive's resignation for Good Reason.
(ii) For purposes of this Agreement, "Good Reason"
shall mean (A) the Company's material breach of this
Agreement; (B) the assignment of the Executive, without his
consent, to a position, responsibilities or duties of a
materially lesser status or degree of responsibility than his
position, responsibilities or duties as of the date hereof;
(C) the failure to elect the Executive to serve as a member of
the Board; (D) the Company's breach of Section 4; or (E) a
"Change of Control" if the Executive terminates his employment
hereunder within six (6) months of the date on which the
Change of Control takes place;
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provided that for purposes hereof, "Change of Control" shall
mean (a) any "person" (as such term is used in Section 3(a)(9)
and 13(d)(3) of the Securities Exchange Act of 1934) is or
becomes the beneficial owner, directly or indirectly, of
securities of the company representing 51% or more of the
combined voting power of the then outstanding securities of
the Company, (b) a change in the composition of a majority of
the Board of Directors of the company within twelve months
after any person is or becomes the beneficial owner, directly
or indirectly, of securities of the Company representing 25%
of the combined voting power of the then outstanding
securities of the Company, or (c) the sale of substantially
all the assets of the Company and/or its operating
subsidiaries; provided, further, that the events described in
this Section 7(c)(ii) shall constitute Good Reason only if the
Company fails to cure such event within 30 days after receipt
from Executive of written notice of the event which
constitutes Good Reason; provided, further, that except for a
"Change of Control," which shall be governed exclusively by
clause (E) above, "Good Reason" shall cease to exist for an
event on the 60th day following the later of its occurrence or
Executive's knowledge thereof, unless Executive has given the
Company written notice thereof prior to such date.
(iii) If Executive's employment is terminated by the
Company without Cause (other than by reason of death or
Disability) or if Executive resigns for Good Reason,
Executive shall be entitled to receive:
(A) the Accrued Rights;
(B) subject to Executive's continued
compliance with the provisions of Sections 8 and 9,
severance equal to two times (2x) the Executive's
Base Salary in effect at the time of termination,
payable in a lump sum at the time of termination;
(C) continued Employee Benefits (to the
extent permissible under the terms of the plans
providing such Employee Benefits) for the earlier of
eighteen (18) months from the date of termination and
the date the Executive receives comparable coverage
from a subsequent employer; and
(D) any Pro Rata Bonus to which Executive is
entitled, calculated and paid as set forth in Section
7(b)(ii) above.
Following Executive's termination of
employment by the Company without Cause (other than
by reason of Executive's death or Disability) or by
Executive's resignation for Good Reason, except as
set forth in this Section 7(c)(iii), Executive shall
have no further rights to any compensation or any
other benefits under this Agreement.
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(d) Bonuses.
Any provisions concerning the entitlement to a payment of any
Annual Bonus or Pro Rata Bonus in this Agreement shall be applicable
notwithstanding any contrary provision in any annual bonus plan.
(e) Continued Employment Beyond Employment Term.
Unless the parties otherwise agree in writing, continuation of
Executive's employment with the Company beyond the Employment Term
shall be deemed an employment at-will and shall not be deemed to extend
any of the provisions of this Agreement and Executive's employment may
thereafter be terminated at will by either Executive or the Company;
provided that the provisions of Sections 8 and 9 of this Agreement
shall survive any termination of this Agreement or Executive's
termination of employment hereunder.
(f) Notice of Termination.
Any purported termination of employment by the Company or by
Executive (other than due to Executive's death) shall be communicated
by written Notice of Termination to the other party hereto in
accordance with Section 11(g) hereof. For purposes of this Agreement, a
"Notice of Termination" shall mean a notice which shall indicate the
specific termination provision in this Agreement relied upon and shall
set forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of employment under the provision so
indicated.
(g) Board/Committee Resignation.
Upon termination of Executive's employment for any reason,
Executive shall be deemed to have resigned, as of the date of such
termination, and to the extent applicable, from the Board (and any
committees thereof) and the Board of Directors (and any committees
thereof) of any of the Company's affiliates, and Executive shall
execute such documents as may be necessary to reflect such
resignations.
8. Non-Competition.
(a) Executive acknowledges and recognizes the highly
competitive nature of the businesses of the Company and its affiliates
and accordingly agrees as follows:
(i) During the Employment Term and for a period of
two years following the termination of Executive's employment
for any or no reason, Executive agrees that, without the prior
written consent of the Company, (A) Executive will not,
directly or indirectly, either as principal, manager, agent,
consultant, officer, stockholder, partner, investor, lender or
employee or in any other capacity, carry on, be engaged in or
have any financial interest in, any business which is in
competition with the business of the Company or any of its
affiliates and (B) Executive shall not, on his own behalf or
on behalf of any person, firm or company, directly or
indirectly, solicit or offer employment to any person, who has
been employed by the Company or
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any of its affiliates at any time during the 12 months
immediately preceding such solicitation.
(ii) For purposes of this Section 8, a business shall
be deemed to be in competition with the business of the
Company and its affiliates if it is involved in the sale or
provision of catering, concession or other food services or
venue management services at stadiums, ballparks, convention
centers, concert halls, theaters, seaports, golf courses,
arenas, race tracks, parks, bandstands, or other recreational
venues.
(iii) Nothing in this Section 8 shall prohibit the
Executive from acquiring or holding not more than one percent
(1%) of any class of publicly traded securities of any
business.
(b) It is expressly understood and agreed that although
Executive and the Company consider the restrictions contained in this
Section 8 to be reasonable, if a final judicial determination is made
by a court of competent jurisdiction that the time or territory or any
other restriction contained in this Agreement is an unenforceable
restriction against Executive, the provisions of this Agreement shall
not be rendered void but shall be deemed amended to apply as to such
maximum time and territory and to such maximum extent as such court may
judicially determine or indicate to be enforceable. Alternatively, if
any court of competent jurisdiction finds that any restriction
contained in this Agreement is unenforceable, and such restriction
cannot be amended so as to make it enforceable, such finding shall not
affect the enforceability of any of the other restrictions contained
herein.
9. Confidentiality. The Executive acknowledges that Executive has
acquired and will acquire information respecting the business and affairs of the
Company, its subsidiaries and affiliates, including, but not limited to,
business and strategic plans, forecasts and projections, profits, information
regarding the identity, address and key contacts of Company customers, prospects
and suppliers, their needs, preferences and any pricing or bidding constraints,
customer and supplier agreements and the terms thereof, policy and procedure
manuals, recipes, menus and accounting forms and procedures ("Confidential
Information"). Accordingly, the Executive shall keep confidential and not
disclose to any person or use (except as required in the conduct of the business
of the Company in the ordinary course and consistent with past practice) all
such Confidential Information, except as required by law (provided prior written
notice thereof is given by the Executive to the Company) or with the Company's
written consent, unless such information is known generally to the public or the
trade (through sources other than the Executive's unauthorized disclosure). Upon
termination of his employment for any reason, the Executive shall deliver to the
Company all Confidential Information (in any form, including, but not limited
to, electronic media) in his possession or subject to his control that belongs
to the Company.
10. Specific Performance. Executive acknowledges and agrees that the
Company's remedies at law for a breach or threatened breach of any of the
provisions of Section 8 or Section 9 would be inadequate and the Company would
suffer irreparable damages as a result of such breach or threatened breach. In
recognition of this fact, Executive agrees that, in the event of such a breach
or threatened breach, in addition to any remedies at law, the Company, without
posting any bond, shall be entitled to cease making any payments or providing
any benefit otherwise required by this Agreement and
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obtain equitable relief in the form of specific performance, temporary
restraining order, temporary or permanent injunction or any other equitable
remedy which may then be available.
11. Miscellaneous.
(a) Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York, without
regard to conflicts of laws principles thereof.
(b) Entire Agreement/Amendments. This Agreement contains the
entire understanding of the parties with respect to the employment of
Executive by the Company. There are no restrictions, agreements,
promises, warranties, covenants or undertakings between the parties
with respect to the subject matter herein other than those expressly
set forth herein. This Agreement may not be altered, modified, or
amended except by written instrument signed by the parties hereto.
(c) No Waiver. The failure of a party to insist upon strict
adherence to any term of this Agreement on any occasion shall not be
considered a waiver of such party's rights or deprive such party of the
right thereafter to insist upon strict adherence to that term or any
other term of this Agreement. A waiver or consent shall only be
effective if in writing and signed by the party against whom the waiver
or consent is to be enforced.
(d) Severability. In the event that any one or more of the
provisions of this Agreement shall be or become invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability
of the remaining provisions of this Agreement shall not be affected
thereby.
(e) Assignment. This Agreement shall not be assignable by
Executive. This Agreement may be assigned by the Company to a person or
entity which is an affiliate or a successor in interest to
substantially all of the business operations of the Company, whether in
connection with a Sale, or otherwise. Upon such assignment, the rights
and obligations of the Company hereunder shall become the rights and
obligations of such affiliate or successor person or entity.
(f) Successors; Binding Agreement. This Agreement shall inure
to the benefit of and be binding upon personal or legal
representatives, executors, administrators, successors, heirs,
distributees, devisees, legatees and permitted assigns.
(g) Notice. For the purpose of this Agreement, notices and all
other communications provided for in the Agreement shall be in writing
and shall be deemed to have been duly given when delivered by hand or
overnight courier or three (3) days after it has been mailed by United
States registered mail, return receipt requested, postage prepaid,
addressed to the respective addresses set forth below, or to such other
address as either party may have furnished to the other in writing in
accordance herewith, except that notice of change of address shall be
effective only upon receipt.
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If to the Company:
Volume Services America Holdings, Inc.
201 East Broad Street
Spartanburg, SC 29306
Attention: General Counsel
If to Executive:
Lawrence E. Honig
8 Torrey Pines
Spartanburg, SC 29306
(h) Indemnification. The Executive shall be entitled to be
indemnified for acting as an officer and director in accordance with
the Company's Certificate of Incorporation and By-Laws. The Company
agrees specifically that it shall maintain provisions in its
Certificate of Incorporation and By-Laws relating to exculpation or
indemnification of officers and directors thereof (unless prohibited by
law) such that the Executive shall continue to be entitled to such
exculpation and indemnification as was in effect immediately prior to
the date hereof under the Certificate of Incorporation and By-Laws of
the Company (or any equally favorable arrangement) to the fullest
extent permitted under the laws of the applicable jurisdiction of
incorporation. The Company also shall maintain directors and officers'
liability insurance coverage for the Executive. Following any Change of
Control, the Company will promptly pay or reimburse the Executive for
all costs and expenses incurred by the Executive as a result of any
claim, action or proceeding arising out of, or challenging the
validity, advisability or enforceability of, this Agreement or any
provision thereof.
(i) Arbitration. Any and all disputes or controversies arising
out of or relating to this Agreement, other than claims brought
pursuant to Section 8 or 9, shall be resolved by arbitration at the
American Arbitration Association (the "AAA") at its New York City
offices before a panel of three arbitrators under the then existing
rules of the AAA. The parties agree that in any such arbitration, the
arbitrators shall not have the power to reform or modify this Agreement
in any way and to that extent their powers are so limited. The
determination of the arbitrators shall be final and binding on the
parties and judgment on it may be entered in any court of competent
jurisdiction. The prevailing party in arbitration in connection with
the enforcement of this Agreement shall be entitled to recover from the
other party all reasonable out-of-pocket costs and disbursements
(including, without limitation, counsel fees and expenses) and any and
all charges that may be made in the cost of the arbitration and the
fees of the arbitrators or any other enforcement thereof. THE PARTIES
HERETO HEREBY WAIVE A JURY TRIAL IN ANY LITIGATION WITH RESPECT TO THIS
AGREEMENT.
(j) Executive Representation. Executive hereby represents to
the Company that the execution and delivery of this Agreement by
Executive and the Company and the performance by Executive of
Executive's duties hereunder shall not constitute a breach of, or
otherwise contravene,
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the terms of any employment agreement or other agreement or policy to
which Executive is a party or otherwise bound.
(k) Cooperation. Executive shall provide his reasonable
cooperation in connection with any action or proceeding (or any appeal
from any action or proceeding) which relates to events occurring during
Executive's employment hereunder. This provision shall survive any
termination of this Agreement.
(l) Withholding Taxes. The Company may withhold from any
amounts payable under this Agreement such Federal, state and local
taxes as may be required to be withheld pursuant to any applicable law
or regulation.
(m) Counterparts. This Agreement may be signed in
counterparts, each of which shall be an original, with the same effect
as if the signatures thereto and hereto were upon the same instrument.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
VOLUME SERVICES AMERICA
HOLDINGS, INC.
/s/ Janet L. Steinmayer /s/ Lawrence E. Honig
- ---------------------------------- -----------------------------
By: Janet L. Steinmayer Lawrence E. Honig
Title: Senior Executive Vice President
General Counsel & Secretary
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