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Sample Business Contracts

Employment Agreement - Rick's Cabaret International Inc. and Robert Watters

Employment Forms

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                              EMPLOYMENT AGREEMENT
                              --------------------

THIS  EMPLOYMENT  AGREEMENT  ("Agreement") between Rick's Cabaret International,
Inc.,  a Texas corporation, having its principal office and place of business in
Houston,  Texas (hereinafter referred to as the "Company") and Robert Watters, a
resident  of  Houston,  Texas  (hereinafter  referred  to  as  the  "Employee").

                                    RECITALS:
                                    ---------

The  Company  presently  operates  Rick's  Cabaret  in Houston, Texas and Rick's
Cabaret  in  New Orleans, Louisiana and Tantra in Houston, Texas and the Company
desires  to  employ  the  Employee  in  the  capacity of the President and Chief
Executive  Officer  of  the  Company  to manage the day-to-day operations of the
nightclubs  and  the  Employee  desires  to be so employed under this Agreement,
subject  to  the  terms,  conditions  and  covenants  contained  herein.

                             CONDITIONS OF AGREEMENT
                             -----------------------

                                        I.
                                  CONSIDERATION
                                  -------------

This  Agreement  is  executed and delivered for good and valuable consideration,
the  receipt  and  sufficiency  of  which  is  hereby  acknowledged. The special
training  and  knowledge  acquired  or  to  be  acquired  by the Employee during
employment  are  material  factors  relating  to  the employment of the Employee
without  which  the  employment relationship would not be commenced. The parties
hereto  acknowledge  and  agree  that this Agreement is necessary to protect the
Company's  legitimate  interests,  including,  but  not limited to, its business
goodwill,  trade  secrets  and  other  confidential  or proprietary information.

                                       II.

                               TERM OF EMPLOYMENT
                               ------------------

2.1     Term.  The  Company  hereby employs the Employee and the Employee hereby
        ----
accepts  employment  with the  Company  for a term of three (3) years  ('Initial
Term") which shall  commence on the 15th day of April,  1997 and shall  Continue
for the entire Initial Term, subject to earlier  termination as provided in this
Agreement.

2.2  Extension of Initial Term. After the  expiration of the Initial Term,  this
     --------------------------
Agreement will he  automatically  extended for additional and successive one (1)
year periods,  unless either party gives written notice to the other at least 30
days prior to the  expiration of the Initial Term, or any one year renewal term,
that such

                                                                               1
<PAGE>
automatic  extension shall not occur, in which event Employee's employment shall
terminate  upon  the  expiration  of  the  Initial  Term,  or  such  renewal,

                                      III.

                               DUTIES OF EMPLOYEE
                               ------------------

3.1  Duties.  The  Employee  is hereby employed as President and Chief Executive
     -------
Officer of the Company. The Employee's responsibilities for such office shall be
as  set  forth  in  the  Bylaws of the Company including managing the day-to-day
operations  of  the  Company's  business  and  its  ongoing  expansion  efforts.
Generally,  in  his  capacity  as  President  and Chief Executive Officer of the
Company, the Employee will be primarily responsible for the general supervision,
direction,  and control of the Company, subject to the control of the President.
In  the  discharge  of  such  duties  and  throughout Employee's employment with
Company,  Employee  shall,  with  respect  to  conduct involving certain matters
including,  but  not  limited to, conflicts of interest, usurpation of corporate
authority, and personal and professional decorum and reputation, comply with (i)
all requirements imposed by the Company upon similarly situated employees of the
Company;  (ii)  standards  generally  accepted  within  the  business  community
regarding  similarly  situated  persons; and (iii) any relevant legal authority.

3.2  Change in Duties.The duties of Employee shall be those assigned to him from
     -----------------
time  by the Company and may be changed by the Company from time to time without
resulting  in  rescission  or  termination  of  this  Agreement.

3.3 Engaging in Other Employment.The Employee shall devote such productive time,
    -----------------------------
ability,  and  attention  to the business of the Company during the term of this
Agreement as is required to fulfill his duties and responsibilities as set forth
in  Section  3.1  above.  During  the period of employment, the Employee further
agrees  not  to (I) solely or jointly with others undertake or join any planning
for  or  organization  of  any  business  activity competitive with the business
activities  of  the  Company,  and  (ii)  directly  or  indirectly,  engage  or
participate  in  any  other activities in conflict with the best interest of the
Company. Notwithstanding anything herein contained to the contrary, the Employee
shall  be  able  to devote such time as he deems reasonably necessary to his own
private  investments  and  affairs,  so  long as the performance of the Employee
hereunder  is  not impaired and the covenants contained herein are not violated,

                                       IV.

                            COMPENSATION TO EMPLOYEE
                            ------------------------

4.1.  Monthly  Salary.  During  the Initial Term of this Agreement, the Employee
      ----------------
shall be entitled to a monthly salary of $25,000.00, less all payroll deductions
and  applicable  taxes.  The  time  of  payment  for  each  installment shall be
consistent  with  the  general  business  practices  of  the  Company.

                                                                               2
<PAGE>

4.2  Other  CompensationThe  Employee understands and agrees that any additional
     -------------------
compensation  to  the  Employee  (whether  a  bonus  or other form of additional
compensation shall rest in the sole discretion of the Board of Directors (or any
Compensation  Committee  consisting  of  members  of the Board of Directors) and
shall  be  based upon the performance of the Company as well as participation in
all  benefit  plans  maintained  by  the  company  for  salaried  employees.

4.3  Review.  The  Employee,  after  the  initial Term, if still employed by the
     -------
Company,  shall  be  reviewed at such times as are consistent with the Company's
general  personnel  policies.

4.4  Fringe  Benefits-Employee  Benefits Plan. The Employee shall be entitled to
     -----------------------------------------
participate  on  an  equitable  basis,  as  the  Board  of Directors may, in the
exercise  of  its  discretion deem appropriate, in any stock option plan and any
additional  year  end  or  other  profit  sharing  or  incentive  or  deferred
compensation  arrangements,  whether  provided  for in stock, cash or otherwise,
which  the  Company  may  distribute  to  or  provide for officers and employees
generally, or for a limited or selected group, as well as under any other plans,
benefits,  customs  or  practices  now  or  hereinafter  made available to other
executives  of the Company, including as examples only, group life insurance and
medical  insurance.  The  Company may terminate, amend or modify any or all such
plans  at  any time and may choose not to adopt additional plans. The Employee's
rights  under  any  benefits  plans now in force or later adopted by the Company
shall  be  governed  solely  by  their  terms.

4.5 Expense Account.The Employee is authorized to incur reasonable and necessary
    ----------------
expenses directly associated with the promotion of the interests of the Company,
and the performance of his assignments, including expenditures for entertainment
and  travel.  The  Company will reimburse the Employee from time to time for all
such  business  expenses,  upon  the  Employee's  presenting to the Company such
information  and  support  as  prescribed  by  Company  policy.

4.6  Holidays and Vacations.   The Employee shall be entitled to three (3) weeks
     -----------------------
of paid  vacation  for each  year  during  the term  hereof.  Additionally,  the
Employee  shall be entitled to such fully paid holidays as are normally taken by
other full time employees of businesses  similar to the Company,  and such other
holidays which may be particular to the Employee's religious preference.

4.7  Replacement of Present Contract.  This agreement shall replace the contract
     --------------------------------
presently in existence between Robert Watters and the Company which commenced on
January 1, 1995 and which expires on December 31, 1997.

                                       V.

                                 LIFE INSURANCE
                                 --------------

                                                                               3
<PAGE>

     At  any  time during the term of this Agreement, the Company shall have the
right  to  insure  the  Employee's  life  for the Company's sole benefit, and to
determine the amount and type of insurance and type of policy. The Company shall
be  required  to  pay  all  premiums  due  on  such policies. The Employee shall
cooperate  with  the  Company  in taking out insurance by submitting to physical
examination(s),  by supplying all information required by the insurance company,
and by executing any and all other necessary documents. The Employee shall incur
no  financial  obligation  by executing the required documents and shall have no
interest  in  any  such  policies,  except  as  otherwise  provided  herein.

                                       V1.

                            TERMINATION OF EMPLOYMENT
                            -------------------------

6.1  Termination by the Employee Without Cause. If theemployment of the Employee
     ------------------------------------------
is  terminated  by  the  Employee  for any reason other than as set forth in the
other  paragraphs  of  this Article VI (such termination being herein defined as
without  cause"),  the  Employee shall give the Company thirty (30) days written
notice  of  termination;  provided,  however,  that  the  Employee  shall not be
entitled  to  terminate  his employment with the Company during the initial Term
without  cause. Except as otherwise provided for herein, any such termination of
the  Employee's  employment  for  any  reason  whatsoever,  whether voluntary or
involuntary,  shall  not  prejudice  any  other remedy to which any party may be
entitled  either  at  law,  in  equity,  or  under  this  Agreement.

6.2  Termination for Cause by the Company. The Company may "for cause" terminate
     -------------------------------------
the  employment  of the Employee at any time without notice. "For cause" for the
purpose  of  this  Agreement  is  defined  as:

     A. The willful and continued failure to substantially perform his duties as
     set forth in this Agreement;
     B. The breach by the Employee of any of the provisions of this Agreement or
     of the covenants contained in Article Vll of this Agreement;
     C. If the  Employee is convicted of any crime  involving  moral  turpitude;
     including  without  limitation,  fraud or  embezzlement  or similar acts of
     dishonesty toward the Company; or

     If the Employee is terminated for cause as hereinabove defined, the Company
shall  pay  to  the  Employee  onlythat  compensation specified in Paragraph 6.3
                               ----
below.

6.3  Effect  of  Termination on Compensation. In the event of the termination of
     ----------------------------------------
employment  by  the Company or the Employee for any reason whatsoever, including
resignation  or  voluntary  termination  by  the Employee, the Employee shall be
entitled  to the compensation earned by him including all compensation specified
in  Article  IV

                                                                               4
<PAGE>

herein,  prior  to  the  date  of termination as provided for in this Agreement,
computed  pro  rata  up  to  and  including  the  date  of  such  termination of
employment.  Upon such payment to the Employee, the Company shall be relieved of
further  obligation as it relates to this Agreement; however, the Employee shall
still be bound by the covenants and restrictions contained in Article VII below.

                                      VII.

                              RESTRICTIVE COVENANTS
                              ---------------------

7.1  Definition.  The Employee hereby acknowledges that during the course of his
     -----------
employment  with  the  Company,  he will have access to and will become familiar
with  various  trade  secrets and other proprietary and confidential information
which  are  owned  by  the  Company  and  which are used in the operation of the
Company's  business.  "Trade  secrets  and  other  proprietary  and confidential
information"  consist  of,  for  example, and not intending to be inclusive, (i)
methods  of  doing business; (ii) financial information, consisting of financial
cost,  and  sales  data  and other information; (iii) personnel information (iv)
lists  of  Customers  and  accounts, contracts, sales information, pricing list,
vendor and supplier list of the Company; (v) other information of a confidential
nature which must remain confidential for the continuing success of the Company;
and  (vi)  such other information concerning the business of the Company and the
Company's  goodwill.

7.2  Non-Disclosure and Confidentiality Covenants.     The Employee acknowledges
     ---------------------------------------------
that  the  Company's  trade  secrets  and  other  proprietary  and  confidential
information,  as they may exist from time to time,  are  valuable,  special  and
unique assets of the Company's  business.  Additionally,  Employee  acknowledges
that the business  goodwill  and  business  contacts of the Company are the sole
property of the  Company  and are among the  Company's  most  valuable  business
property.  Therefore,  in consideration of the mutual promises herein contained,
and for other good and valuable  consideration,  the receipt and  sufficiency of
which is hereby acknowledged,  and to protect the foregoing valuable property of
the Company, the Employee expressly covenants and agrees as follows:

Except  as  required  in  the  course  of  his  employment with the Company, the
Employee  will  not,  during  and  after  the  termination  of  his  employment:

     (1)  Disclose,  directly or  indirectly,  the  Company's  trade secrets and
     proprietary  and  confidential  information,  or any part  thereof,  to any
     person, corporation,  association or other entity for any reason or purpose
     whatsoever; or

     (2)  Directly  or  indirectly  use the  Company's  trade  secrets and other
     proprietary and confidential information,  or any part thereof, for his own
     purpose or for his own benefit in any activity of any nature whatsoever.

7.3  Return of Company's Property.  The Employee covenants and agrees that, upon
     -----------------------------
the

                                                                               5
<PAGE>

request  of  the  Company  or upon termination of employment, the Employee shall
turn over to the Company all files, records, documents, drawings, presentations,
specifications,  equipment,  disks  or  other  computer  media,  data,  computer
printouts, records, written materials and similar items relating to the business
of the Company, and any other property of the Company in his possession or under
his  control.  In  the event the Employee fails to return the Company's property
when  required  or requested to do so, the Company may, in addition to any other
remedy  provided  by  law,  withhold  any  amounts  due  the Employee until full
compliance  with  this  Paragraph  7.3.

7.4  Covenant Not to Compete. So long as the Employee is employed by the Company
     ------------------------
and for a  period  of  eighteen  (18)  months  after  either  (i) the  voluntary
termination of employment by Employee or (ii) the termination of the Employee by
the  Company  for  cause,  as set forth in  Section  6.2  hereof,  the  Employee
specifically  agrees  that he  will  not,  for  himself,  on  behalf  of,  or in
conjunction with any person, firm, corporation or entity, other than the Company
(either  as  principal,  employee,   shareholder,   member,  director,  partner,
consultant,  owner or part owner of any corporation,  partnership or any type of
business  entity)  anywhere in any county in which the Company is doing business
at the time of  termination,  directly  or  indirectly,  own,  manage,  operate,
control,  be employed by, participate in, or he connected in any manner with the
ownership, management, operation, or control of any business similar to the type
of  business  conducted  by  the  Company  at the  time  of  termination  of the
Employee's employment.

7.5  Employee's  Acknowledgements and Agreements.  The Employee acknowledges and
     --------------------------------------------
     agrees that:

          (1)  Due to  the  nature  of the  Company's  business,  the  foregoing
     covenants  place no greater  restraint upon the Employee than is reasonably
     necessary to protect the business and goodwill of the Company;

          (2) These covenants  protect a legitimate  interest of the Company and
     do not serve solely to limit the Company's future competition;

          (3) This  Agreement  is not an invalid or  unreasonable  restraint  of
     trade;

          (4)  A  breach  of  these   covenants  by  the  Employee  would  cause
     irreparable damage to the Company;

          (5) These  covenants  will not  preclude the  Employee  from  becoming
     gainfully employed following termination of employment with the Company;

          (6)  These  covenants  are  reasonable  in  scope  and are  reasonably
     necessary to protect the  Company's  business and goodwill and valuable and
     extensive trade which the Company has  established  through its own expense
     and effort;

                                                                               6
<PAGE>

          (7) The signing of this  Agreement  is  necessary  for the  Employee's
     employment; and

          (8) He has  carefully  read  and  considered  all  provisions  of this
     Agreement  and  that  all  of the  restrictions  set  forth  are  fair  and
     reasonable and are reasonably  required for the protection of the interests
     of the Company.

7.6  Remedies  Injunction.   In the event of the Employee's actual or threatened
     ---------------------
breach  provisions of this Agreement, the Employee agrees that the Company shall
be  entitled  to  a  temporary  restraining order, preliminary injunction and/or
permanent injunction restraining and prohibiting the Employee from violating the
provisions  herein. Nothing in this Agreement shall be construed to prohibit the
Company from pursuing any other available remedies for such breach or threatened
breach,  including  the  recovery  of  damages  from  the Employee. The Employee
further  agrees that for the purpose of any such injunction proceeding, it shall
be  presumed  that the Company's legal remedies would be inadequate and that the
Company would suffer irreparable harm as a result of the Employee's violation of
the  provisions  of  this Agreement. In any proceeding brought by the Company to
enforce  the provisions of this Agreement, no other matter relating to the terms
of  any  claim  or  cause  of action of the Employee against the Company will be
defense  thereto.

7.7  Severability. In the event that any of the provisions of this Agreement are
     -------------
held to be invalid or unenforceable in whole or in part, those provisions to the
extent  enforceable and all other:  provisions  shall  nevertheless  continue to
valid and enforceable as though the invalid or unenforceable  parts had not been
included in this Agreement. In the event that any provision relating to the time
period  or scope of a  restriction  shall be  declared  by a court of  competent
jurisdiction  to exceed  the  maximum  time  period or scope  such  court  deems
reasonable  and  enforceable,  then the time period or scope of the  restriction
deemed reasonable and enforceable by the court shall become and shall thereafter
be the  maximum  time period or the  applicable  scope of the  restriction.  The
Employee  further  agrees that such  covenants  and/or any  portion  thereof are
severable,  separate and independent, and should any specific restriction or the
application thereof, to any person, firm,  corporation,  or situation be held to
be invalid,  that holding shall not affect the  remainder of such  provisions or
covenants.

                                      VIII.

                               GENERAL PROVISIONS

8.1  Notices. Any notices to be given hereunder by either party to the other may
     --------
be effected  either by personal  delivery in writing or by mail,  registered  or
certified,  postage prepaid with return receipt requested.  Mailed notices shall
be addressed to the parties at the addresses set forth below, but each party may
change their address by written notice

                                                                               7
<PAGE>

in  accordance  with  this  Paragraph  8.1 Notices delivered personally shall be
deemed  communicated  as  of  actual  receipt;  mailed  notices  shall be deemed
communicated  as  of  three  (3)  days  after  mailing.

          If  to  Company:     Rick's  Cabaret  International,  Inc.
                               3113  Bering  Drive
                               Houston,  Texas  77057

          If  to  Employee:    Robert  Waiters
                               3113  Bering  Drive
                               Houston,  Texas

8.2  Law Governing  Agreement and Venue. This Agreement shall be governed by and
     -----------------------------------
construed  in  accordance with the laws of the State of Texas. This Agreement is
executed in Harris County, Texas. Venue shall be in Harris County, Texas for any
legal proceeding to enforce the terms, conditions or covenants contained herein.

8.3  Attorneys'  Fees and Costs.  If any action at law or in equity is necessary
     ---------------------------
to enforce or interpret  the terms of this  Agreement,  the  prevailing  parties
shall  be  entitled  to  reasonable   attorney's   fees,   costs  and  necessary
disbursements in addition to any other relief to which he may be entitled.

8.4  Contract Terms to be Exclusive. This Agreement Contains the sole and entire
     -------------------------------
agreement  between  the parties and shall supersede any and all other agreements
between  the  parties  with  respect  to  the Employee's employment. The parties
acknowledge  and  agree  that  neither  of them has made any representation with
respect  to the subject matter of this Agreement or any other agreement executed
between  them  or any representations inducing the execution and delivery hereof
or  any other agreement executed between them except such representations as are
specifically  set  forth herein and each of the parties hereto acknowledges that
he  or  it has relied on his or its own judgement in entering into the same. The
parties  hereto  further acknowledge that any statements or representations that
may  have heretofore been made by either of them to the other are void and of no
effect and that neither of them has relied thereon in connection with his or its
dealings  with  the  other.

8.5  Waiver or Modification Ineffective Unless in Writing. It is further agreed
     -----------------------------------------------------
that  no waiver or modification of this Agreement or of any covenant, condition,
or  limitation  herein  contained  shall  be  valid  unless  in writing and duly
executed by the party to be charged therewith and that no evidence of any waiver
or  modification  shall  be offered or received in evidence in any proceeding or
litigation  between  the  parties  hereto  arising  out  of  or  affecting  this
Agreement,  or  the  rights  or  obligations of any party hereunder, unless such
waiver  or  modification  is  in  writing,  duly  executed as aforesaid, and the
parties further agree that the provisions of this paragraph may not be waived as
herein  set  forth.

8.6  Invalidity of Contract.  Should  any  provision(s)  of  this  Agreement  be
     -----------------------
declared

                                                                               8
<PAGE>

invalid  or  unenforceable  by  a  court  of competent jurisdiction, 11 shall he
severed  or  modified  and  the remainder of this Agreement shall be enforced in
Iota[  Additionally,  if  the  Employee  claims  that  any provision or covenant
contained  herein  is invalid or unenforceable, he nevertheless agrees to comply
with  such  provision  or  covenant  as  written  until  a  court  of  competent
jurisdiction  determines  the  enforceability  or  validity of such provision or
covenant.  or  limit.  the scope thereof and further agrees to be liable for any
and  all  damages  to  the  Company  pending  such  determination  by the court.

8.7 Assignment The rights and benefits of the Company under this Agreement shall
    ----------
inure  in  the  benefit of and be binding upon the successors and assigns of the
Company.  The  rights of the Employee hereunder are personal and nontransferable
except  that  the  rights  and benefits hereof shall inure to the benefit of the
heirs,  executors  and  legal  representatives  of  the  Employee.

8.8  Gender  In all cases where a feminine or masculine pronoun is used it shall
     ------
be  deemed  to include the other and as may be applicable to the instant matter.

IN  WITINESS  WHEREOF,  this  Agreement  has  been  executed  in Houston, Harris
County.  Texas,  as  of  the  15  day  ______,  1997.
                              --

                                     COMPANY;

                                     RICK'S  CABARET  INTERNATIONAL,  INC.

                                     By:  /s/  Erich N. White
                                     ----------------------------------------
                                               ERICH N. WHITE, VICE PRESIDENT


                                     EMPLOYEE:


                                     /S/  ROBERT  WATTERS
                                     --------------------
                                          ROBERT  WATTERS

                                                                               9