Consulting Agreement - Benihana Inc. and Rocky H. Aoki
CONSULTING AGREEMENT
This CONSULTING AGREEMENT, dated as of the 1st
day of April, 2001 (the "Effective Date") by and between BENIHANA INC., a
Delaware corporation (the "Company") and ROCKY H. AOKI (the "Consultant").
The Consultant has heretofore for many years been
retained by the Company and by Benihana National Corp ("BNC"), a Delaware
corporation, a predecessor corporation of the Company and, as of the Effective
Date, a wholly owned subsidiary of the Company, as a consultant and, prior to
May 18, 1998 as its Chief Executive Officer and Chairman of the Board. The
Company and the Consultant desire to enter into a consulting agreement which
will set forth the terms and conditions upon which the Consultant shall serve as
a consultant to the Company and upon which the Company shall compensate the
Consultant, and to replace and supersede the Employment Agreement (the "Prior
Agreement"), dated as of May 15, 1995 and amended December 11, 1997 and May 18,
1998 between the Consultant and the Company.
NOW THEREFORE, in consideration of the premises
and of the mutual covenants hereinafter set forth, the parties hereto have
agreed, and do hereby agree, as follows:
10 EMPLOYMENT; TERM
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1.1 Subject to the terms and
provisions of this Agreement, the Company will continue to employ the Consultant
in its business and the Consultant will continue to work for the Company as a
consultant for an extended term continuing until March 31, 2006. "Consulting
Period" shall mean the term hereof. Such employment may be terminated by the
Company at any time for "cause", which shall be limited to (i) Consultant's
deliberate and intentional refusal (except by reason of incapacity due to mental
or physical illness or disability) to comply with the provisions of Section 3.1
of this Agreement relating to the time and effort to be devoted by the
Consultant to the business and affairs of the Company after demand for
performance by the Company that specifically identifies the manner in which the
Company alleges the Consultant has not performed his duties, (ii) the
Consultant's proven dishonesty with respect to the Company, disloyalty,
Consultant's gross negligence or wilful misconduct which, in any case, results
in demonstrable material harm to the Company, (iii) the breach by the Consultant
of his covenant not to compete contained in Section 9.4 hereof, (iv) the
continuing breach of any of the other covenants on the Consultant's part herein
set forth resulting in, or which may reasonably be expected to result in a
substantial adverse effect on the Company, or (v) Consultant's conviction of a
crime involving moral turpitude.
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1.2 The term "Company" as used in
this Agreement shall be deemed to include any and all present and future
subsidiaries and affiliates of the Company.
20 DUTIES
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During the Consulting Period, the
Consultant shall perform such duties as a consultant as may be, from time to
time, reasonably delegated or assigned to him by the Board of Directors of the
Company consistent with the Consultant's abilities.
30 DEVOTION OF TIME
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During the Consulting Period,
the Consultant shall expend a substantial part of his working time for the
Company; shall devote his best efforts, energy and skill to the services of the
Company and the promotion of its interests; and shall not take part in
activities detrimental to the best interests of the Company. Nothing in this
Agreement shall preclude the Consultant during the term of this Agreement from
engaging, directly or indirectly, in any business activity which is not
competitive with the then existing business of the Company and Consultant shall
be permitted to spend portions of his working time and best efforts, energy and
skill as is necessary to fulfill his duties as an officer, director or employee
of Benihana of Tokyo, Inc. ("BOT") provided such activities are in compliance
with, and do not constitute a breach of (i) the Agreement and Plan of
Reorganization dated December 29, 1994 among BOT, BNC, the Company and BNC
Merger Corp. (the "Reorganization Agreement") and (ii) the License Agreement,
dated May 15, 1995, between the Company and BOT (the "License").
40 COMPENSATION
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4.1 In respect of services to be
performed by the Consultant during the Employment Period, the Company agrees to
pay the Consultant an annual salary of Six Hundred Thousand ($600,000) Dollars
("Basic Compensation"), payable in accordance with the Company's customary
payroll practices for executive employees.
4.2 The Basic Compensation shall be
increased by an amount established by reference to the "Consumer Price Index for
Urban Wage Earners and Clerical Workers, New York, New York, all items - Series
A-01" published by the Bureau of Labor Statistics of the United States
Department of Labor (the "Consumer Price Index"). The base period shall be the
month ended December 31, 2000 (the "Base Period"). If the Consumer Price Index
for the month of December in any year, commencing in 2001, is greater than the
Consumer Price Index for the Base Period, Basic compensation shall be increased,
commencing on March 1 of the next following year, to the amount obtained by
multiplying Basic Compensation by a fraction, the numerator of which is the
Consumer Price Index for the month of December of the year in which such
determination is being made and the denominator of which is the Consumer Price
Index for the Base Period.
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4.3 The Consultant shall also be
entitled to such additional increments and bonuses as shall be determined from
time to time by the Board of Directors of the Company.
50 USE OF AUTOMOBILE; REIMBURSEMENT OF EXPENSES
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5.1 The Company shall pay directly,
or reimburse the Consultant, for all other reasonable and necessary expenses
(other than the automobile expenses described in Section 5.2) and disbursements
incurred by him for and on behalf of the Company in the performance of his
duties during the Employment Period upon submission of vouchers or other
evidence thereof in accordance with the Company's usual policies of expense
reimbursement. a65535 In addition to the reimbursement described in Section 5.1,
Consultant shall receive an allowance which is commensurate with his consulting
duties hereunder and consistent with Company policy for automobile expenses,
including lease costs or purchase price, gasoline and oil and garaging.
60 DISABILITY, DEATH OR RETIREMENT
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6.1 If during the Employment Period,
the Consultant shall die, voluntarily retire or have a "Disability", as
hereinafter defined, then there shall be paid to Consultant, if living, or other
person or persons as Consultant shall from time to time designate in writing as
the beneficiary of such payment ("Beneficiary") a sum equal to fifty (50%)
percent of the Compensation paid for the Company's fiscal year immediately
preceding the year in which such death, retirement or Disability occurred; such
reduced payment to continue for the remainder of the term of this Agreement.
6.2 "Disability" shall mean the
inability of Consultant, for a continuous period of more than twelve (12)
months, to perform substantially all of his regular duties and carry out
substantially all of his responsibilities hereunder because of physical or
mental incapacity. The Company shall have the right to have Consultant examined
by a competent doctor for purposes of determining his physical or mental
incapacity. In the event Executive's employment hereunder shall terminate
because Executive has incurred a Disability, the payments referred to in Section
6.1 shall commence on the first day of month next following such termination of
employment. In the event Executive shall suffer an event which might reasonably
be considered a Disability, either the Company or theExecutive (or the
Executive's legal representative shall have the right to give to the other party
written notice of such termination on 15 days notice. In the event the parties
shall in good faith disagree on whether Executive is suffering a Disability,
final determination shall be made by a doctor reasonable acceptable to both
parties.
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6.3 If the Consultant shall be able
to resume his full duties after a Disability, he shall commence to receive his
full Compensation from and after the date on which he shall have resumed full
employment.
6.4 The obligations of the Company
under Articles 6.1 and 6.2 may be satisfied, in whole or in part, by payments to
the Consultant under disability insurance provided by the Company, and under
laws providing disability benefits for employees.
70 CONFIDENTIAL INFORMATION; INVENTIONS;
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RESTRICTIVE COVENANT
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7.1 The Consultant agrees not to
divulge, furnish or make available to anyone (other than in the regular course
of business of the Company) any knowledge or information with respect to the
Company, or with respect to any other confidential or secret aspect of the
Company's activities.
7.2 Any methods, developments,
inventions and/or improvements, whether patentable or unpatentable, which the
Consultant may conceive or make along the lines of the Company's business while
in its employ as an Consultant or consultant, shall be and remain the property
of the Company. The Consultant further agrees on request to execute patent
applications based on such methods, developments, inventions and/or
improvements, including any other instruments deemed necessary by the Company
for the prosecution of such patent application or the acquisition of Letters
Patent of this and any foreign country.
7.3 The Consultant agrees to
communicate and make known to the Company all knowledge possessed by him
relating to any methods, developments, inventions and/or improvements, whether
patented, patentable or unpatentable, which concern in any way the business or
the Company, whether acquired by him before or during the term hereof, provided,
however, that nothing herein shall be construed as requiring any such
communication where the method, development, invention and/or improvement is
lawfully protected from disclosure as the trade secret of a third party or by
any other lawful bar to such communication.
7.4 The services of the Consultant
are unique and extraordinary and essential to the business of the Company,
especially since the Consultant shall have access to the Company's customer
lists, trade secrets and other privileged and confidential information essential
to the Company's business. Therefore, the Consultant agrees that if his
employment or consulting hereunder shall at any time be terminated for any
reason whatsoever, the Consultant will not at any time within three (3) years
after such termination, without the prior written approval of the Company,
directly or indirectly, within the United States of America (excluding the State
of Hawaii), or any other area in which the Company shall then conduct
substantial operations, engage in any business activity competitive with the
business of the Company; and further, the Consultant agrees that during such
three (3) year period he shall not solicit, directly or indirectly, any employee
or customer or account of the Company who at the time of such termination was
then actively being solicited by the Company. For the purpose of this agreement
a business activity competitive with the business of the Company shall include
(i) the operation or franchising of restaurants of a type then being operated,
or under construction, by the Company and (ii) the sale, at wholesale or retail,
of (A) food products bearing the trade name or trademarks of any company engaged
in the hospitality industry or (B) oriental food products, if the Company is
marketing food products, at wholesale or retail, at the time of Consultant's
termination of employment.
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80 VACATIONS
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The Consultant shall be entitled to
reasonable vacations during each twelve-month period of the term hereof, the
time and duration thereof to be determined by mutual agreement between the
Consultant and the Company.
90 PARTICIPATION IN EMPLOYEE BENEFIT PLANS
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To the extent permitted by the terms
of such plans and of any insurance policies purchased under such plans, the
Consultant and any beneficiary of the Consultant shall be accorded the right to
participate in and receive benefits under and in accordance with the provisions
of any insurance, medical and dental insurance or reimbursement program of the
Company.
100 KEY MAN INSURANCE
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The Company presently owns life
insurance policy on the Consultant's life in the face amount of Five Million
Dollars. The Company shall remain the owner and beneficiary thereof and shall
pay the annual premium of such policy during the term hereof. Upon the
termination of the Consulting Period, for any reason whatsoever, the policy
shall be assigned to Consultant.
110 INJUNCTIVE RELIEF
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The Consultant acknowledges and
agrees that, in the event he shall violate any of the restrictions of Articles 3
and 7 hereof, the Company will be without adequate remedy at law and will
therefor be entitled to enforce such restrictions by temporary or permanent
injunctive or mandatory relief obtained in an action or may have at law or in
equity, and the Consultant hereby consents to the jurisdiction of such Court for
such purpose, provided that reasonable notice of any proceeding is given, it
being understood that such injunction shall be in addition to any remedy which
the Company may have at law or otherwise.
120 ASSIGNMENT
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This Agreement, as it relates to
the employment of the Consultant, is a personal contract and the rights and
interests of the Consultant hereunder may not be sold, transferred, assigned,
pledged or hypothecated. Except as otherwise expressly provided, this Agreement
shall inure to the benefit of and be binding upon the Company and its successors
and assigns.
130 RIGHT TO PAYMENTS, ETC.
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The Consultant shall not under any
circumstances have any option or right to require payments hereunder otherwise
than in accordance with the terms hereof. To the extent allowed by law, the
Consultant shall not have any power of anticipation, alienation or assignment of
payments contemplated hereunder, and all rights and benefits of the Consultant,
and no other person shall acquire any right, title or interest hereunder by
reason of any sale, assignment, transfer, claim or, judgment or bankruptcy
proceedings against the Consultant.
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140 NOTICES, ETC.
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Any notice required or permitted to
be given to the Consultant pursuant to this Agreement shall be sufficiently
given if sent to the Consultant by certified mail addressed to him at: 8685
Northwest 53rd Terrace, Miami, Florida, 33166, or at any such other address as
he shall designate by notice to the Company, and any notice required or
permitted to be given to the Company pursuant to this Agreement shall be
sufficiently given if sent to the Company by certified mail addressed to it at
8685 N. W. 53rd Terrace, Miami, Florida, 33166, attention of Corporation
Secretary, or such other address as the Company shall designate by notice to the
Consultant, with a copy to Herschel S. Weinstein, Esq., Dornbush Mensch
Mandelstam & Schaeffer, 747 Third Avenue, New York, New York, 10017.
150 GOVERNING LAW
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This Agreement shall be governed by,
and construed in accordance with the laws of the State of New York, applicable
to agreements made and to be performed solely within such state.
160 WAIVER OF BREACH; PARTIAL INVALIDITY
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The waiver by either party of a
breach of any provision of this Agreement shall not operate or be construed as a
waiver of any subsequent breach. If any provisions of this Agreement shall be
held to be invalid or unenforceable, such invalidity or unenforceability shall
attach only to such provision and not in any way affect or render invalid or
unenforceable any other provisions of this Agreement, and this Agreement shall
be carried out as if such invalid or unenforceable provision were not embodied
therein.
170 ENTIRE AGREEMENT
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This Agreement constitutes the
entire agreement between the parties hereto and there are no representations,
warranties or commitments except as set forth herein. This Agreement supersedes
all prior and contemporaneous agreements, understandings, negotiations and
discussions, whether written or oral, of the parties hereto relating to the
transactions contemplated by this Agreement. This Agreement may be amended only
in writing executed by the parties hereto affected by such amendment.
IN WITNESS WHEREOF, the undersigned have executed
this Agreement as of the day and year first above written.
BENIHANA INC.
By: /s/ Joel A. Schwartz
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Joel A. Schwartz, President
/s/ Rocky H. Aoki
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Rocky H. Aoki