Employment Agreement - Rick's Cabaret International Inc. and Eric Langan
EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement"), entered into as of the _____
day of August, 1998, by and between RICK'S CABARET INTERNATIONAL, INC., a Texas
corporation (the "Company"), and ERIC LANGAN ("Executive").
W I T N E S S E T H:
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WHEREAS, Company desires to employ Executive as provided herein; and
WHEREAS, Executive desires to accept such employment.
NOW, THEREFORE, for and in consideration of the mutual covenants and
agreements contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
1. Employment. Company hereby employs Executive and Executive hereby
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accepts employment with Company upon the terms and conditions hereinafter set
forth.
2. Duties. Subject to the power of the Board of Directors of Company
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to elect and remove officers, Executive will serve the Company as its vice
president-operations and will faithfully and diligently perform the services and
functions relating to such office or otherwise reasonably incident to such
office, provided that all such services and functions will be reasonable and
within Executive's area of expertise. Executive will, during the term of this
Agreement (or any extension thereof), devote his full business time, attention
and skills and best efforts to the promotion of the business of Company. The
foregoing will not be construed as preventing Executive from making investments
in other businesses or enterprises provided that (a) Executive agrees not to
become engaged in any other business activity that interferes with his ability
to discharge his duties and responsibilities to Company and (b) Executive does
not violate any other provision of this Agreement.
3. Term. Subject to the terms and conditions hereof, the term of
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employment of Executive will commence as of the date hereof (the "Commencement
Date") and will end on that date in the year, 2001, unless earlier terminated by
either party pursuant to the terms hereof. The term of this Agreement is
referred to herein as the "Term."
4. Compensation and Benefits During the Employment Term.
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(a) Salary. Commencing upon the date of this Agreement, Executive
will be paid an annual base salary of $171,600, payable bi-weekly (the
"Salary"). At any time and from time to time the Salary may be increased for
the remaining portion of the term if so determined by the Board of Directors of
Company after a review of Executive's performance of his duties hereunder.
(b) Stock Options. On the Commencement Date, the Company and the
Executive shall enter into a Stock Option Agreement pursuant to which the
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Company grants Executive options (the "Options") to purchase (i) 100,000
shares of common stock ("Common Stock") exercisable at $1.875 per share and
(ii) 150,000 shares of Common Stock exercisable at $__ per share to be issued to
Executive upon the increase of the Company's stock option plan, all vesting one
year from the date of execution hereof.
(c) Expenses. Upon submission of a detailed statement and
reasonable documentation, Company will reimburse Executive in the same manner as
other executive officers for all reasonable and necessary or appropriate
out-of-pocket travel and other expenses incurred by Executive in rendering
services required under this Agreement.
(d) Benefits; Insurance.
(i) Medical, Dental and Vision Benefits. During this
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Agreement, Executive and his dependents will be entitled to receive such
group medical, dental and vision benefits as Company may provide to its
other executives, provided such coverage is reasonably available, or be
reimbursed if Executive is carrying his own similar insurance.
(ii) Benefit Plans. The Executive will be entitled to
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participate in any benefit plan or program of the Company which may
currently be in place or implemented in the future.
(iii) Other Benefits. During the Term, Executive will be
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entitled to receive, in addition to and not in lieu of base salary, bonus or
other compensation, such other benefits and normal perquisites as Company
currently provides or such additional benefits as Company may provide for
its executive officers in the future.
(e) Vacation. Executive will be entitled to two weeks paid
vacation each year of this Agreement.
5. Confidentiality. In the course of the performance of Executive's
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duties hereunder, Executive recognizes and acknowledges that Executive may have
access to certain confidential and proprietary information of Company or any of
its affiliates. Without the prior written consent of Company, Executive shall
not disclose any such confidential or proprietary information to any person or
firm, corporation, association, or other entity for any reason or purpose
whatsoever, and shall not use such information, directly or indirectly, for
Executive's own behalf or on behalf of any other party. Executive agrees and
affirms that all such information is the sole property of Company and that at
the termination and/or expiration of this Agreement, at Company's written
request, Executive shall promptly return to Company any and all such information
so requested by Company.
The provisions of this Section 5 shall not, however, prohibit
Executive from disclosing to others or using in any manner information that:
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(a) has been published or has become part of the public domain
other than by acts, omissions or fault of Executive;
(b) has been furnished or made known to Executive by third parties
(other than those acting directly or indirectly for or on behalf of Executive)
as a matter of legal right without restriction on its use or disclosure;
(c) was in the possession of Executive prior to obtaining such
information from Company in connection with the performance of this Agreement;
or
(d) is required to be disclosed by law.
6. Indemnification. The Corporation shall to the full extent permitted
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by law or as set forth in the Articles of Incorporation and the Bylaws of the
Company, indemnify, defend and hold harmless Executive from and against any and
all claims, demands, liabilities, damages, loses and expenses (including
reasonable attorney's fees, court costs and disbursements) arising out of the
performance by him of his duties hereunder except in the case of his willful
misconduct.
7. Termination. This Agreement and the employment relationship created
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hereby will terminate (i) upon the death or disability of Executive under
section 7 (a) or 7 (b); (ii) with cause under Section 7 (c); (iii) for good
reason under Section 7 (d); (iv) upon the voluntary termination of employment by
Executive under Section 7 (e); or (v) without cause under Section 7 (f).
(a) Disability. The Company shall have the right to terminate the
employment of the Executive under this Agreement for disability in the event
Executive suffers an injury, illness, or incapacity of such character as to
substantially disable him from performing his duties without reasonable
accommodation by the Company hereunder for a period of more than one hundred
eighty (180) consecutive days upon the Company giving at least thirty (30) days
written notice of termination.
(b) Death. This Agreement will terminate on the Death of the
Executive.
(c) With Cause. The Company may terminate this Agreement at any
time because of (i) Executive's material breach of any term of the Agreement,
(ii) the determination by the Board of Directors in the exercise of its
reasonable judgment that Executive has committed an act or acts constituting a
felony or other crime involving moral turpitude, dishonesty or theft or fraud;
or (iii) Executive's gross negligence in the performance of his duties
hereunder, provided, in each case, however, that the Company shall not terminate
this Agreement pursuant to this Section 7(c) unless the Company shall first have
delivered to the Executive, a notice which specifically identifies such breach
or misconduct and the executive shall not have cured the same within fifteen
(15) days after receipt of such notice.
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(d) Good Reason. The Executive may terminate his employment for
"Good Reason" if:
(i) he is assigned, without his express written consent, any
duties materially inconsistent with his positions, duties, responsibilities,
or status with the Company as of the date hereof, or a change in his
reporting responsibilities or titles as in effect as of the date hereof;
(ii) his compensation is reduced;
(iii) the Company does not pay any material amount of
compensation due hereunder and then fails either to pay such amount within
the ten (10) day notice period required for termination hereunder or to
contest in good faith such notice. Further, if such contest is not resolved
within thirty (30) days, the Company shall submit such dispute to
arbitration under Section 14.
(e) Voluntary Termination. The Executive may terminate his
employment voluntarily.
(f) Without Cause. The Company may terminate this Agreement
without cause.
8. Obligations of Company Upon Termination,
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(a) In the event of the termination of Executive's employment
pursuant to Section 7 (c) or (e), Executive will be entitled only to the
compensation earned by him hereunder as of the date of such termination (plus
life insurance or disability benefits), plus the rights to those Options that
have vested as of the termination date.
(b) In the event of the termination of Executive's employment
pursuant to Section 7 (a) or (b), Executive will be entitled only to the
compensation earned by him hereunder as of the date of such termination (plus
life insurance or disability benefits), plus the rights to all Options, vested
or not vested, under the same terms as if this Agreement was not terminated.
(c) In the event of the termination of Executive's employment
pursuant to Section 7 (d) or (f), Executive will be entitled to receive $250,000
cash at such time as this Agreement is terminated, all payments of salary earned
through the date of termination in one lump sum, and Executive shall have the
rights to all Options, vested or not vested, under the same terms as if this
Agreement had not terminated.
9. Waiver of Breach. The waiver by any party hereto of a breach of any
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provision of this Agreement will not operate or be construed as a waiver of any
subsequent breach by any party.
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10. Costs. If any action at law or in equity is necessary to enforce
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or interpret the terms of this Agreement, the prevailing party will be entitled
to reasonable attorney's fees, costs and necessary disbursements in addition to
any other relief to which he or it may be entitled.
11. Notices. Any notices, consents, demands, requests, approvals and
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other communications to be given under this Agreement by either party to the
other will be deemed to have been duly given if given in writing and personally
delivered or within two days if sent by mail, registered or certified, postage
prepaid with return receipt requested, as follows:
If to Company: Rick's Cabaret International, Inc.
3113 Bering Drive
Houston, Texas 77057
Attention: Robert L. Watters
If to Executive: Eric Langan
14514 Kingshead Drive
Houston, Texas 77044
Notices delivered personally will be deemed communicated as of actual
receipt.
12. Entire Agreement. This Agreement and the agreements contemplated
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hereby constitute the entire agreement of the parties regarding the subject
matter hereof, and supersede all prior agreements and understanding, both
written and oral, among the parties, or any of them, with respect to the subject
matter hereof.
13. Severability. If any provision of this Agreement is held to be
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illegal, invalid or unenforceable under present or future laws effective during
this Agreement, such provision will be fully severable and this Agreement will
be construed and enforced as if such illegal, invalid or unenforceable provision
never comprised a part hereof; and the remaining provisions hereof will remain
in full force and effect and will not be affected by the illegal, invalid or
unenforceable provision or by its severance herefrom. Furthermore, in lieu of
such illegal, invalid or unenforceable provision there will be added
automatically as part of this Agreement a provision as similar in its terms to
such illegal, invalid or unenforceable provision as may be possible and be
legal, valid and enforceable.
14. Arbitration. If a dispute should arise regarding this Agreement,
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the parties agree that all claims, disputes, controversies, differences or other
matters in question arising out of this relationship shall be settled finally,
completely and conclusively by arbitration in Houston, Texas in accordance with
the Commercial Arbitration Rules of the American Arbitration Association (the
"Rules"). The governing law of this Agreement shall be the substantive law of
the State of Texas, without giving effect to conflict of laws. A decision of
the arbitrator shall be final, conclusive and binding on the Company and
Executive. Any arbitration held in accordance with this paragraph shall be
private and confidential and no person shall be entitled to attend the hearings
except the arbitrator, Executive, Executive's attorneys, a representative of the
Company, the Company's attorneys, and advisors to or witnesses for any party.
The matters submitted to arbitration, the hearings and proceedings and the
arbitration award shall be kept and maintained in the strictest confidence by
Executive and the Company and shall not be discussed, disclosed or communicated
to any persons except as may be required for the preparation of expert
testimony. On request of any party, the record of the proceeding shall be
sealed and may not be disclosed except insofar, and only insofar, as may be
necessary to enforce the award of the arbitrator and any judgement enforcing an
award. The prevailing party shall be entitled to recover reasonable and
necessary attorneys' fees and costs from the non-prevailing party and the
determination of such fees and costs and the award thereof shall be included in
the claims to be resolved by the arbitrator hereunder.
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15. Captions. The captions in this Agreement are for convenience of
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reference only and will not limit or otherwise affect any of the terms or
provisions hereof.
16. Gender and Number. When the context requires, the gender of all
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words used herein will include the masculine, feminine and neuter and the number
of all words will include the singular and plural.
17. Counterparts. This Agreement may be executed in one or more
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counterparts, each of which will be deemed an original and all of which will
constitute one and the same instrument, but only one of which need be produced.
18. Company Authorization. The Company represents that the Board of
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Directors has approved this Agreement.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as
of the day and year first above written.
COMPANY:
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RICK'S CABARET INTERNATIONAL, INC.
By: /s/ Robert L. Watters
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Robert L. Watters, President
EXECUTIVE:
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By: /s/ Eric Langan
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Eric Langan
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