Employment Agreement - Benihana Inc. and Taka Yoshimoto
2001
EMPLOYMENT AGREEMENT
AGREEMENT dated as of this 1st day of April, 2001, (the
"Effective Date") by and between BENIHANA INC., a Delaware corporation (the
"Company"), and TAKA YOSHIMOTO (the "Executive").
R E C I T A L
The Executive has for many years been employed by the
Company and by its predecessor, Benihana National Corp. as its Executive Vice
President - Operations. The Company and the Executive desire to enter into a new
employment agreement which will set forth the terms and conditions upon which
the Executive shall serve in the employ of the Company and upon which the
Company shall compensate the Executive and to replace and supercede the
Employment Agreement between the parties hereto dated April 1, 1995 and amended
by an Amendment No. 1 dated December 11, 1997, by an Amendment No. 2 dated
September 1, 1998 and by an Amendment No. 3 dated January 25, 2000 (the "Prior
Agreement").
NOW, THEREFORE, in consideration of the mutual covenants
herein contained, it is hereby agreed by and between the Company and Executive
as follows:
1. ENGAGEMENT AND TERM. The Company hereby employs
Executive and Executive hereby accepts such employment by the Company on the
terms and conditions set forth herein, for a period commencing on the Effective
Date of this Agreement and ending, unless sooner terminated in accordance with
the provisions of Section 5 hereof, on March 31, 2006 (the "Employment Period").
2. SCOPE OF DUTIES. Executive shall be employed
by the Company as its Executive Vice President - Operations. In such capacities,
the Executive shall have such authority, powers and duties customarily attendant
upon such offices. If elected or appointed, Executive shall also serve, without
additional compensation, in one or more offices and, if and when elected, as a
director of the Company or any subsidiary or affiliate of the Company, provided
that his duties and responsibilities are not inconsistent with those pertaining
to his position as stated above. Executive shall faithfully devote his full
business time and efforts so as to advance the best interests of the Company.
During the Employment Period, Executive shall not be engaged in any other
business activity, whether or not such business activity is pursued for profit
or other pecuniary advantage, unless same is only incidental and is in no way,
directly or indirectly, competitive with, or opposed to the best interests of
the Company.
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3. COMPENSATION.
3.1 Basic Compensation. In respect of
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services to be performed by the Executive during the Employment Period, the
Company agrees to pay the Executive an annual salary of One Hundred Sixty-Five
Thousand Dollars ($165,000) ("Basic Compensation"), payable in accordance with
the Company's customary payroll practices for executive employees.
3.2 Cost of Living Adjustments. The Basic
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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- Northern New Jersey area 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 April 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.
3.3 Discretionary Increases. The
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Executive 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.
3.3 Other Benefits.
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(a) Executive shall be entitled
to participate, at Company's expense, in the major medical health insurance
plan, and all other health, insurance or other benefit plans applicable
generally to executive officers of the Company.
(b) During the Employment
Period, Executive will be entitled to paid vacations and holidays consistent
with the Company's policy applicable to executives generally. All vacations
shall be scheduled at the mutual convenience of the Company and the Executive.
4. TERMINATION OF EMPLOYMENT. The
provisions of Section 1 of this Agreement notwithstanding, the Company may
terminate this Agreement and Executive's employment hereunder in the manner and
for the causes hereinafter set forth, in which event the Company shall be under
no further obligation to Executive other than as specifically provided herein:
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4.1 If Executive is absent from work or
otherwise substantially unable to assume his normal duties for a period of sixty
(60) successive days or an aggregate of ninety (90) business days during any
consecutive twelve-month period during the Employment Period because of physical
or mental disability, accident, illness, or any other cause other than vacation
or approved leave of absence, the Company may thereupon, or any time thereafter
while such absence or disability still exists, terminate the employment of
Executive hereunder upon ten (10) days' written notice to Executive.
4.2 In the event of the death of
Executive, this Agreement shall immediately terminate on the date thereof.
4.3 If Executive materially breaches or
violates any material term of his employment hereunder, or commits any criminal
act or an act of dishonesty or moral turpitude, in the reasonable judgment of
the Company's Board of Directors, then the Company may, in addition to other
rights and remedies available at law or equity, immediately terminate this
Agreement upon written notice to Executive with the date of such notice being
the termination date and such termination being deemed for "cause."
4.4 In the event Executive's employment
shall be terminated by reason of the provisions of Section 4.2 or 4.3, then in
such event, the Company shall pay to Executive, if living, or other person or
persons as Executive may from time to time designate in writing as the
beneficiary of such payment a sum, equal to the basic compensation in effect at
the time which such death or disability occurred, such payment to continue for
three months after such death or disability.
5. DISCLOSURE OF CONFIDENTIAL INFORMATION AND
COVENANT NOT TO COMPETE. Executive acknowledges that the Company possesses
confidential information, know-how, customer lists, purchasing, merchandising
and selling techniques and strategies, and other information used in its
operations of which Executive will obtain knowledge, and that the Company will
suffer serious and irreparable damage and harm if this confidential information
were disclosed to any other party or if Executive used this information to
compete against the Company. Accordingly, Executive hereby agrees that except as
required by Executive's duties to the Company, Executive without the consent of
the Company's Board of Directors, shall not at any time during or after the term
of this contract disclose or use any secret or confidential information of the
Company, including, without limitation, such business opportunities, customer
lists, trade secrets, formulas, techniques and methods of which Executive shall
become informed during his employment, whether learned by him as an Executive of
the Company, as a member of its Board of Directors or otherwise, and whether or
not developed by the Executive, unless such information shall be or become
public knowledge other than as a result of the Executive's direct or indirect
disclosure of the same.
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Executive further agrees that for a period of one year
following the termination of Executive's employment, the Company, except as a
result of the breach by the Company of any material term or condition hereof,
Executive will not, directly or indirectly, alone or with others, individually
or through or by a corporate or other business entity in which he may be
interested as a partner, shareholder, joint venturer, officer or director or
otherwise, engage in the United States in "any business which is competitive
with that of the Company or any of its subsidiaries" as hereinafter defined,
provided, however, that the foregoing shall not be deemed to prevent the
ownership by Executive of up to five percent of any class of securities of any
corporation which is regularly traded on any stock exchange or over-the-counter
market. For the purpose of this Agreement, a business activity competitive with
the business of the Company or any of its subsidiaries, shall include only (i)
the operation or franchise of restaurants selling Japanese, or other oriental
food, or restaurants of a type then being operated by the Company, or any of its
subsidiaries; and (ii) the sale at wholesale or retail of oriental food
products.
6. REIMBURSEMENT OF EXPENSES; USE OF AUTOMOBILE.
6.1. The Company shall further pay
directly, or reimburse the Executive, for all other reasonable and necessary
expenses 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.
6.2. In addition to the reimbursement
described in Section 6.1, Executive shall receive an allowance of $200 per month
for automobile expenses, including lease costs or purchase price, gasoline, oil
and garaging.
7. CHANGE IN CONTROL.
7.1. In the event at any time after the Effective
Date, a majority of the Board of Directors is composed of persons who are not
"Continuing Directors", as hereinafter defined, which event is defined to mean a
"Change in Control", Executive shall have the option, to be exercised by written
notice to the Company, to resign as an employee and terminate this Agreement,
effective as of such date specified in the notice of exercise and immediately
upon such termination to receive payment of a sum equal to the product of (A)
the Basic Compensation in effect on the date of such termination multiplied (B)
by the number of years (both full and partial) remaining in the term hereof had
such termination not occurred. The payment to be made upon the exercise of the
option by the Executive in accordance with the provisions of the preceding
sentence is defined as the "Severance Payment". The Severance Payment shall be
made to Executive not later than twenty (20) days after the date designated by
the Executive as the date upon which Executive's resignation as an employee and
termination of his Employment is to be effective. The Severance Payment shall
constitute liquidated damages and not a penalty, and Executive shall not be
obligated to seek employment to mitigate his damages; nor shall any compensation
the Executive receives from any party subsequent to such termination be an
offset to the amount of the Severance Payment.
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7.2 "Continuing Directors" shall mean (i) the
directors of the Company at the close of business on April 10, 2001, and (ii)
any person who was or is recommended to (A) succeed a Continuing Director or (B)
become a director as a result of an increase in the size of the Board, in each
case, by a majority of the Continuing Directors then on the Board.
7.3 If during the term hereof Executive owns any
options to purchase securities of the Company which securities are publicly
traded and which options were granted to him in connection with his service as
an employee, officer or director of the Company, the Executive shall have the
right at any time after a "Change in Control" to cause the Company to repurchase
such options from him at a purchase price equal to the difference between (i)
the closing price of the appropriate security of the Company (if traded on the
New York or American Stock Exchange or quoted in the NASDAQ National Market) or
the average between the closing bid and asked prices (if traded on the
over-the-counter market) on the date immediately prior to the date on which
Executive exercises such right and (ii) the exercise price of such option;
provided however, that in no fiscal year of the Company shall the aggregate
purchase price of such options exceed five percent (5%) of the total
stockholders equity (net worth) of the Company as shown on its audited financial
statements for the fiscal year immediately preceding the year in which such
right is exercised. Such right shall be exercised by Executive giving the
Company written notice thereof and the purchase and sale shall be consummated
not more than ten (10) business days after receipt by the Company of the notice
of exercise.
8. TERMINATION OF EMPLOYMENT WITHOUT CAUSE. Upon any
termination of the Executive's employment without cause, the Executive shall be
entitled to receive an amount computed in the same manner as the Severance
Payment not later than 20 days after any such termination. This payment shall
constitute liquidated damages and not a penalty, and Executive shall not be
obligated to seek employment to mitigate his damages; nor shall any compensation
the Executive receives from any party subsequent to such termination be an
offset to the amount of such payment.
9. MISCELLANEOUS PROVISIONS.
9.1 Section headings are for convenience
only and shall not be deemed to govern, limit, modify or supersede the
provisions of this Agreement.
9.2 This Agreement is entered into in
the State of Florida and shall be governed pursuant to the laws of the State of
Florida. If any provision of this Agreement shall be held by a court of
competent jurisdiction to be invalid, illegal or unenforceable, the remaining
provisions hereof shall continue to be fully effective.
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9.3 This Agreement contains the entire
agreement of the parties regarding this subject matter. There are no
contemporaneous oral agreements, and all prior understandings, agreements,
negotiations and representations are merged herein. This Agreement replaces and
supercedes the Prior Agreement.
9.4 This Agreement may be modified only
by means of a writing signed by the party to be charged with such modification.
9.5 Notices or other communications
required or permitted to be given hereunder shall be in writing and shall be
deemed duly given upon receipt by the party to whom sent at the respective
addresses set forth below or to such other address as any party shall hereafter
designate to the other in writing delivered in accordance herewith:
If to the Company:
Benihana Inc.
8685 NW 53rd Terrace
Miami, Florida 33166-0120
If to Executive:
Taka Yoshimoto
7010 N.W. 186th Street - #516
Miami, Florida 33015
9.6 This Agreement shall inure to the
benefit of, and shall be binding upon, the Company, its successors and assigns,
including, without limitation, any entity that may acquire all or substantially
all of the Company's assets and business or into which the Company may be
consolidated or merged. This Agreement may not be assigned by Executive.
9.7 This Agreement may be executed in
separate counterparts, each of which shall constitute the original hereof.
IN WITNESS WHEREOF, the parties have set their hands as of
the date first above written.
BENIHANA INC.
By: /s/ Joel A. Schwartz
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Joel A. Schwartz, President
/s/ Taka Yoshimoto
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Taka Yoshimoto