This Employee Retention Agreement involves
Title: EMPLOYMENT AGREEMENT
Governing Law: Virginia Date: 11/14/2007
Industry: Restaurants Sector: Services
THIS AGREEMENT is entered into effective the 11 th day of September, 2007, by and between WESTERN SIZZLIN CORPORATION (“Company”), and Robyn B. Mabe (“Executive”).
WHEREAS, Company is a corporation organized under the laws of the State of Delaware, with its principal place of business in Roanoke, Virginia; and
WHEREAS, Executive is now and desires to continue to be employed by the Company on the terms set forth in this Agreement; and
WHEREAS, the Board of Directors of the Company has determined that appropriate steps should be taken to reinforce and encourage the continued attention, and dedication of members of the Company’s management, including Executive, to their assigned duties without distraction.
NOW, THEREFORE, in consideration of the above premises and the mutual covenants contained in this Agreement and other good and valuable consideration, the parties agree as follows:
1. Duties and Obligations . The Company and Executive agree that Executive shall serve as Vice President and Chief Financial Officer of the Company and its wholly-owned subsidiaries. Such duties and powers shall be consistent with those normally expected of persons holding similar positions. Executive’s duties, however, are subject to reasonable modifications based on future developments of the Company.
2. Compensation and Bonus . Executive’s base salary is at the current rate of $125,000 per annum. Executive’s base salary will be determined by the Board, but shall not be less than $125,000 per annum. Executive’s base salary shall be paid in twenty-six (26) equal bi-weekly payments.
In addition to base salary, Executive will be eligible to receive an annual bonus, determined annually by the Board of Directors of Company.
3. Benefits . In addition to salary, Executive shall be entitled to participate in benefit plans which Company adopts and offers to employees, subject to the same terms, conditions and eligibility requirements as other Company employees, including, without limitation health insurance, and retirement, whether pension or profit sharing, plans. Executive’s participation
under any group insurance programs, retirement plans, or other benefit programs, shall be subject to the applicable terms and conditions of the particular plans or programs.
4. Term and Termination . The term of this Agreement shall be one (1) year from the date hereof. Unless otherwise terminated in accordance with this Agreement, the Agreement shall automatically renew for subsequent one year terms (“Renewal Terms”) unless either party provides written notice of termination to the other party more than 30 days in advance of the beginning of any Renewal Term.
Executive’s employment shall be terminated only in one of the following ways:
A. At any time by mutual written agreement of both parties to this Agreement; or
B. Upon thirty (30) days written notice from the Company to Executive; or
C. Automatically and immediately should one of the following events occur:
1. Death . Executive dies; or
2. Disability . Executive becomes totally and permanently disabled, meaning Executive’s inability for a period of three (3) months, to perform her duties contemplated by this Agreement, such that she does not constitute a Qualified Individual with a Disability under the terms of the Americans with Disabilities Act of 1990. Such total and permanent disability shall be determined by the Company based on medical and other evidence satisfactory to it; or
D. For Cause . At any time by the Company, by written notice to Executive, terminating this Agreement and discharging Executive for Cause, as defined in this section of this Agreement.
1. Cause . Termination by the Company of Executive’s employment for “Cause” means:
i. Executive has materially breached this Agreement. A material breach of this Agreement shall include but shall not be limited to a habitual or repeated neglect of Executive’s duties (illness, injury or incapacity of the Executive, or Executive’s failure to meet the performance criteria established for and communicated to Executive, in writing, by the
Company shall not constitute “Cause”);
ii. Executive has breached her duty of loyalty to the Company;
iii. Executive has committed an act of gross negligence, in connection with the performance of her duties that is injurious to the business of the Company;
iv. Executive has committed an act of gross misconduct relating to her employment or the Company’s business, including, but not limited to, theft or embezzlement of the Company’s property or money, or an act of fraud against the Company;
v. Executive is convicted of a felony, or a crime involving moral turpitude.
2. If Company believes Cause exists, as defined herein, a written notice will be delivered to Executive by the Chairman of the Board or of the Compensation Committee, that specifically identifies the manner in which the Chairman believes that Executive has given the Company Cause for termination of Executive’s employment, and giving Executive an opportunity for Executive, together with Executive’s counsel, to be heard before the Board of Directors of the Company. The meeting of the Board of Directors shall not be sooner than fifteen (15) calendar days from the date of the written notice and shall be at a location determined by the Board of Directors, or via telephone, in either case within the discretion of the Board. After granting Executive the opportunity to be heard, the Board of Directors of the Company may then make a finding that, in the good faith opinion of a majority of the Board of Directors the Executive acted (or failed to act when she should have acted) in a manner constituting Cause as defined herein, and specifying the particulars of that finding. Following the opportunity for the Executive, together with the Executive’s counsel, to be heard, the Board of Directors may excuse the Executive from any further Board of Directors’ proceeding where the finding is discussed or made. Pending an opportunity for Executive, together with Executive’s counsel, to be heard before the Board of Directors of the Company, Executive may be immediately placed upon an indefinite suspension without pay and shall be required to immediately leave the Company’s premises. In the event that a majority of the Board of Directors (excluding the Executive if she is then a
Director), do not find that Executive acted (or failed to act when she should have acted) in a manner constituting Cause as defined herein, then Executive shall be reimbursed for any compensation lost during said suspension.
In the event Executive’s employment is terminated at any time by mutual written agreement of both parties, voluntarily terminated by Executive, automatically and immediately terminated upon Executive’s death or total and permanent disability, or terminated for “Cause”, as defined in this Agreement, then following termination, Executive shall not be entitled to payment of further compensation (whether salary or bonus) or benefits of any type (other Executive’s right to “vested” benefits under the Company’s benefit plans or continuing insurance coverage under the Company’s Health Benefit Plan pursuant to the Consolidated Omnibus Budget Reconciliation Act (“COBRA”) at Executive’s sole expense) under this Agreement. In the event Executive’s employment is terminated by the Company without “Cause,” as defined in this Agreement, then Executive shall be entitled to a Severance Benefit as set forth in Section 5, below. If the Company terminates this Agreement without Cause, the Company shall have the right at its option, to require Executive to immediately leave the Company’s premises.
In the event that Employee is successful in subsequently challenging the Company’s final determination to terminate her employment for Cause, her damages shall be limited solely to that compensation she would have received hereunder had her employment been terminated without Cause. To the maximum extent permitted by law, the Company shall not be liable for any special, incidental, indirect, consequential, punitive, or exemplary damages, whether based upon contract, tort, negligence, short liability, or otherwise, even if the Company has been advised of the possibility of such damages.
5. Severance for Termination Without Cause . In the event that the Company terminates Executive’s employment at any time, upon thirty (30) days’ written notice, without Cause and not under circumstances amounting to a Change in Control, then Executive’s sole remedy shall be payment of the following “Severance Benefit”.
A. If the Company terminates this Agreement without Cause, the Company shall have the right at its option, to require Executive to immediately leave the Company’s premises; provided, that the Company shall be obligated to pay (as additional severance) Executive’s base salary during the 30-day notice period.
B. Executive shall be entitled to a severance payment in an amount equal to six (6) months base salary at the rate then in effect. If the Company terminates this Agreement without Cause, the Company shall have the right at its option, to require Executive to immediately leave the Company’s premises; provided, that the
Company shall be obligated to pay (as additional severance) Executive’s base salary during the 30-day notice period.
C. Executive shall not be entitled to, and shall not receive any cash bonus paid for any year in which the termination occurs, on a pro rata basis or otherwise. The base salary portion of the severance shall be payable, at the Executive’s option, in a lump sum or in equal monthly installments consistent with the Company’s ordinary payroll practices.
D. In the event Executive elects continuing insurance coverage under the Company’s Health Benefit Plan pursuant to the Consolidated Omnibus Budget Reconciliation Act (“COBRA”) following any Termination Without Cause, then, in addition to payment of salary as set forth above, the Company shall reimburse Executive for all premiums paid by Executive for said continuation coverage for a period of six (6) months.
6. Severance for Termination in Connection with Change in Control.
A. Change in Control .
The Company recognizes that, as is the case with many publicly held corporations, the possibility of a change in control exists, and that possibility, along with the uncertainty and questions which may arise among management, may result in the departure or distraction of management personnel to the detriment of the Company and its shareholders. In order to induce Executive to remain in its employ, the Company agrees to provide Executive the payments and benefits described in this Agreement if Executive’s employment with the Company is terminated subsequent to a “Change in Control” of the Company as defined in Section 6B, under the circumstances described in Section 6C.
B. Definition of Change in Control .
For purposes of this Agreement, a Change in Control of the Company means the occurrence of any of the following events during the period in which this Agreement remains in effect. A Change in Control will be deemed to occur on the date the event occurs:
1. Change in Voting Power . Any person or persons acting together which would constitute a “group” for purposes of Section 13(d) of the Exchange Act (other than the Company, or any Subsidiary, or any entity beneficially owned by any of the foregoing) beneficially own (as defined in Rule 13(d)-3 under the Exchange Act) without Board approval or consent, directly or indirectly, at least thirty percent (30%) of the total
voting power of the Company entitled to vote generally for the election of the