Exhibit 10.2
EXECUTIVE EMPLOYMENT
AGREEMENT
EXECUTIVE EMPLOYMENT
AGREEMENT (the “ Agreement ”), by and
between Real Mex Restaurants, Inc., a Delaware corporation (the
“ Company ”), and Frederick Wolfe (the “
Executive ”). Capitalized terms used herein but
not otherwise defined have the meaning set forth in Section 1.1
hereof,
WHEREAS, the Company wishes to employ
Executive, and Executive wishes to accept such employment, each
upon the terms and conditions set forth in this
Agreement.
NOW, THEREFORE, in consideration of the mutual
undertakings contained herein and other good and valuable
consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
ARTICLE I
Definitions
1.1
Definitions . As used herein, the following terms
shall have the following meanings.
“ Affiliate ” shall mean, as
to any Person, any other Person which directly or indirectly
controls, or is under common control with, or is controlled by,
such Person. As used in this definition,
“control” (including, with its correlative meanings,
“controlled by” and “under common control
with”) shall mean possession, directly or indirectly, of
power to direct or cause the direction of management or policies
(whether through ownership of securities or partnership or other
ownership interests, by contract or otherwise).
“ Board ” means the board of
directors of the Company.
“ Cause ” means (i) the
commission of a felony or a crime by Executive involving moral
turpitude or the commission of any other act or omission by
Executive involving dishonesty, disloyalty or fraud with respect to
any member of the Company Group, (ii) conduct by Executive which
brings any member of the Company Group into substantial public
disgrace or disrepute, (iii) failure by Executive to perform
material duties as reasonably directed by the Board and, if
susceptible to remedy or cure, is not cured or remedied and
continues for fifteen (15) days after the Board has given written
notice to the Executive
specifying in
reasonable detail the manner in which Executive has continued to
fail to perform his duties, (iv) gross negligence or willful
misconduct by Executive with respect to any member of the Company
Group, or (v) any beach of a material provision of this Agreement
by Executive that is not susceptible to remedy or cure, or if
susceptible to remedy or cure, is not cured or remedied and
continues for fifteen (15) days after the Board has given written
notice to Executive specifying the manner in which Executive has
breaches this Agreement.
“ Company Group ” means,
collectively, the Company and its Subsidiaries and any successors
thereto.
“ Employment Period ” has
the meaning set forth in Section 2.1.
“ Good Reason ” means a
material reduction in Executive’s responsibilities and duties
in his capacity as President and Chief Executive Officer of the
Company that is not susceptible to remedy or cure, or if
susceptible to remedy or cure, is not cured or remedied and
continues for fifteen (15) days after Executive has given the Board
written notice of such material reduction.
“ Permanent Disability ”
means either (i) Executive is or (ii) in the good faith
determination of the Board, Executive will likely be unable to
substantially perform, by reason of illness, accident, injury,
physical or mental incapacity or other disability, his duties or
obligations under his Agreement for a period of ninety (90)
consecutive days or for shorter periods aggregating 120 days during
any period of twelve (12) consecutive months.
“ Person ” means an
individual, a partnership, a corporation, and association, a joint
stock company, a limited liability company, a trust, a joint
venture, an unincorporated organization or a governmental entity or
any department, agency or political subdivision thereof.
“ Subsidiary ” means, with
respect to any Person, 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 that Person or one or more
of the other Subsidiaries of that Person or a combination thereof,
or (ii) if a partnership, association or other
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business entity, a
majority of the partnership or other similar ownership interests
thereof is at the time owned or controlled, directly or indirectly,
by any Person or one or more Subsidiaries of that Person or a
combination thereof. For purposes hereof, a Person or Persons
shall be deemed to have a majority ownership interest in a
partnership, association or other business entity if such Person or
Persons shall be allocated a majority of partnership, association
or other business entity gains or losses or shall be or control the
managing director or general partner of such partnership,
association or other business entity.
ARTICLE II
Employment
2.1 Employment . The
Company agrees to employ Executive, and Executive hereby accepts
employment with the Company and such other members of the Company
Group as the Board shall determine, upon the terms and conditions
set forth in this Agreement for the period beginning on August 21,
2006 (the “ Commencement Date ”) and ending as
provided in Section 2.4 (the “ Employment period
”).
2.2 Position and Duties
.
(a)
Commencing on the date and continuing during the Employment Period,
Executive shall serve as President and Chief Executive Officer of
each of the Company and such other members of the Company Group as
the Board shall determine and shall have the typical duties,
responsibilities and authority of a Person serving in such
capacities in an organization of similar size and structure as the
Company, subject in each instance to the supervision and direction
of the Board or such Person as the Board may designate, Executive
shall report directly to the Board or to such other Person as the
Board may designate.
(b)
Executive shall devote his best efforts and his full 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 Group and the performance of Executive’s
duties as President and Chief Executive Officer of the Company and
such other members of the Company Group as the Board shall
determine. The Executive shall perform his duties and
responsibilities to the best of his abilities in a diligent,
trustworthy, businesslike and efficient manner.
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(c)
With respect to all regular elections of directors during the
Employment Period, each of the Company and such other members of
the Company Group as the Board shall determine shall nominate, and
use their respective best efforts to elect, Executive to serve as a
member of their respective boards of directors.
2.3 Base Salary, Bonus and
Benefits .
(a)
During the Employment Period, Executive’s total bas salary
shall be $473,000 per annum or such greater amount as the Board
shall determine, from time to time, in its sole discretion (the
“ Base Salary ”), which salary shall be payable
in regular installments in accordance with the Company’s
general payroll practical and shall be subject to customary
withholding. The Company will review the Executive’s
total base salary annually.
(b)
During the Employment Period, Executive shall be eligible to
receive an annual (based on the Company’s fiscal year) bonus
of up to 66-2/3% of his Base Salary (the “ Bonus
”). The Bonus shall be based upon the Company’s
annual financial results, as reflected in its audited financial
statements, and shall consist of a cash payment payable within
thirty (30) days after the completion of the Company’s
audited annual financial statements. The Bonus shall be
determined as follows: Within a mutually agreeable time
period prior to the beginning of each fiscal year of the Company,
Executive shall submit to the Board for its approval the
Company’s operational plan, including a fiscal budget, for
the next fiscal year of the Company. The Board shall
establish financial targets and set conditions each year based on
the approved operational plan (a “ Bonus Plan
”). The financial targets and conditions established
for Executive’s Bonus shall be consistent with those
established for other senior executives of the Company.
Executive shall receive the percentage of the maximum Bonus
specified by the applicable Bonus Plan, depending on whether the
Company attains all or a portion of the financial targets
established, and meets all of the conditions set under such Bonus
Plan for that year. Any of the Company’s financial
results that are used to calculate a Bonus shall be taken only from
the Company’s audited financial statements for the applicable
year.
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(c)
During the Employment Period, consistent with past custom and
practice, Executive shall be entitled to (i) participate in all of
the Company Group’s employee benefit programs for which
senior executive employees of the Company Group are generally
eligible, including, if offered by the Company to such executives,
medical surgical, hospitalization, dental, worker’s
compensation insurance and disability converge, (ii) four (4) weeks
of paid vacation each year (which shall include $5,000 paid to
Executive for an annual comparative shopping trip for research and
development purposes to be taken during such vacation), which if
not taken may not be carried forward to any subsequent year, (iii)
the payment by the Company, or such other member of the Company
Group as the Bard shall determine to the Executive of a car
allowance of $1,000 a month, plus reimbursement of all reasonable,
documented expenses related to the operation of an automobile,
including repairs, maintenance, insurance and registration fees,
(iv) payment by the Company of the premiums on a $1 million term
life insurance policy on the life of the Executive, the death
benefit of which will be payable to the Estate of the Executive or
his designee (the cost of the premiums thereon not to exceed
$10,000 a year); provided, however, that Executive shall assist the
Company in procuring such insurance by submitting a reasonable
medical examination and by filling out, executing and delivering
such applications and other instruments in writing as may
reasonably be required by any insurer to which the Company may
apply, and (v) such other benefits as the Board may from time to
time determine. The benefits described in Section
2.3(c)(i)-(v) above are collectively referred to herein as the
Executive’s “Benefits.”
2.4 Term; Severance Payments:
Release .
(a)
The Employment Period shall end five years from the Commencement
Date, subject to earlier termination (i) by reason of
Executive’s death or Permanent Disability, (ii) by resolution
of a majority of the directors of the Board, terminating
Executive’s employment hereunder, with or without Cause,
(iii) upon Executive’s voluntary resignation without Good
Reason or (iv) upon Executive’s resignation for Good
Reason.
(b)
If the Employment Period is terminated by the Board for Cause or by
Executive’s voluntary resignation without Good Reason, the
Executive shall be entitled to his Base Salary and
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Benefits up to the end termination, but shall
not be entitled to any further Base Salary or Benefits or any then
unpaid Bonus for that year, any prior year, or any future year, or
to any severance compensation of any kind, nature or
amount.
(c) &nbs
