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MARC A. BUEHLER
EXECUTIVE EMPLOYMENT AGREEMENT
EXECUTIVE EMPLOYMENT AGREEMENT
This Executive Employment Agreement (Agreement), dated as of November 2, 2009, is made by and between Kona Grill, Inc., a Delaware corporation, its affiliates, subsidiaries, divisions, successors and assigns (collectively referred to throughout this Agreement as the Company), and Marc A. Buehler, a resident of Texas, his heirs, executors, administrators, successors, and assigns (collectively referred to throughout this Agreement as the Executive).
WHEREAS, the Company desires to employ Executive, and Executive desires to accept employment upon the terms and conditions set forth herein;
WHEREAS, Executive acknowledges that during the course of his employment, Executive will have access to and be provided with confidential and proprietary information and trade secrets of the Company which are invaluable to the Company and vital to the success of the Companys business;
WHEREAS, the Company and Executive desire to protect such proprietary and confidential information and trade secrets from disclosure to third parties or unauthorized use to the detriment of the Company; and
WHEREAS, the Company and Executive desire to set forth in this Agreement, the terms, conditions, and obligations of the parties with respect to such employment.
NOW, THEREFORE, in consideration of the foregoing recitals, premises and mutual covenants herein contained, and intending to be legally bound hereby, the Company and the Executive hereby agree as follows:
1.1 Board means the Board of Directors of the Company.
1.2 Cause means (a) the Executive engages in gross misconduct or gross negligence in the performance of the Executives duties for the Company or any of its subsidiaries, (b) the Executive embezzles or willfully misappropriates for his personal use, assets of the Company or any of its subsidiaries, (c) the Executive is convicted (including a plea of guilty or nolo contendere) of a felony involving moral turpitude, (d) the Executives breach of any restrictive covenant set forth in Section 8 of this Agreement, or (e) the Executives willful and material failure to follow the lawful and reasonable instructions of the Board, which, in each such case (except with regard to (c), is not cured within 30 days after receipt of notice and no such cure period will be available for a second violation of (a), (b), (d), or (e) in connection with the same or similar conduct by Executive).
1.3 Change in Control means:
(a) a merger, consolidation, statutory exchange or reorganization approved by the Companys stockholders, unless securities representing more than fifty percent (50%) of the total combined voting power of the outstanding voting securities of the successor corporation are immediately thereafter beneficially owned directly or indirectly and in substantially the same proportion , by the persons who beneficially owned the Companys outstanding voting securities immediately prior to such transaction;
(b) any transaction or series of related transactions pursuant to which any person or any group of persons comprising a group within the meaning of Rule 13d-5(b)(1) under the Securities Exchange Act of 1934, as amended (other than the Company or a person that, prior to such transaction or series of related transactions, directly or indirectly controls, is controlled by or is under common control with, the Company) becomes directly or indirectly the beneficial owner (within the meaning of Rule 13d-3 of the Securities Exchange Act of 1934, as amended) of securities possessing (or convertible into or exercisable for securities possessing) thirty percent (30%) or more of the total combined voting power of the Companys securities (determined by the power to vote with respect to the elections of Board members) outstanding immediately after the consummation of such transaction or series of related transactions, whether such transaction involves a direct issuance from the Company or the acquisition of outstanding securities held by one or more of the Companys stockholders;
(c) the stockholders of the Company shall approve a plan of complete liquidation of the Company or an agreement for the sale, transfer or disposition by the Company of all or a substantial portion of the Companys assets to another person or entity which is not a wholly-owned subsidiary of the Company (i.e., fifty percent (50%) or more of the total assets of the Company);
(d) a change in the composition of the Companys Board of Directors over a period of eighteen (18) consecutive months or less such that a majority of Board members ceases to be comprised of individuals who have been Board members continuously since the beginning of such period.
1.4 Disability means the Executives inability to perform, for a period of 180 consecutive days, substantially all of the duties and responsibilities of Executive hereunder by reason of mental or physical disease or condition, with or without reasonable accommodation as defined by applicable state and federal law, as determined by the written medical opinion of an independent medical physician mutually acceptable to the Executive and the Company. The Company shall comply with the Americans with Disabilities Act and any other applicable federal or state laws in making a determination whether Executives condition constitutes Disability for purposes of this Agreement.
1.5 Good Reason means and will be deemed to exist if, without the Executives consent, (a) the Executive suffers a material diminution in the Executives duties, responsibilities or effective authority or any adverse changes in the Executives titles or positions or Executive is required to relocate (other than from Executives current residence in Plano, Texas to the Phoenix, Arizona metropolitan area), (b) the Executive suffers a reduction of Base Salary, (c) the failure of the Company to adopt an incentive bonus plan in any year that provides Executive the opportunity to earn at least 50% of Executives Base Salary as bonus compensation that is not in compliance with Section 5.2, or (d) the Company fails to pay any earned compensation or to provide for the Executives vested benefits when due and payable and which, in each such case, is not cured within a reasonable period of time after receipt of notice.
2. Employment. Subject to the terms and provisions set forth in this Agreement and specifically as provided in Section 4.1, the Company hereby agrees that the Executive shall be employed as the President and Chief Executive Officer of the Company and shall be a member of the Board, and the Executive hereby accepts such employment.
3. Employment Term. The Executives employment under this Agreement shall be at-will. Executives employment may be terminated by the Company with or without Cause, with or without notice, and without resort to any specific disciplinary procedure or process at any time, subject to the provisions of Section 6 of this Agreement, and Executive may resign or otherwise terminate his employment with the Company at any time, with or without Good Reason, with or without notice. Nothing in writing given to Executive, including this Agreement, and nothing promised verbally, shall obligate the Company to continue to employ Executive for any specified duration or period. Executive is requested, as a matter of professional courtesy, but is not required, to provide the Company with three (3) weeks notice of resignation.
4. Positions, Responsibilities and Duties.
4.1 Positions. During the period of the Executives employment with the Company (the Employment Period), the Executive shall be employed and serve as the President and Chief Executive Officer of the Company and as a member of the Board. In such positions, the Executive shall have the duties, responsibilities and authority normally associated with the office and position of President and Chief Executive Officer and member of the Board of a publicly-held corporation. The Executive shall report to the Board. All other employees of the Company shall report to the Executive and/or his designees.
4.2 Duties. During the Employment Period, the Executive shall have complete responsibility for and authority over all day-to-day operations of the Company. Additionally, during the Employment Period, the Executive shall devote substantially all of his business time, during normal business hours, to the business and affairs of the Company and the Executive shall use his reasonable best efforts to perform faithfully and efficiently the duties and responsibilities contemplated by this Agreement; provided, however, that the Executive shall be allowed, to the extent such activities do not substantially interfere with the performance by the Executive of his duties and responsibilities hereunder, to manage the Executives personal, financial and legal affairs and to serve on corporate, civic or charitable boards or committees.
5. Compensation and Other Benefits.
5.1 Base Salary. During the Employment Period, the Executive shall receive a base salary payable in accordance with the Companys normal payroll practices of $350,000 per year, which the Board may, in its sole discretion, review and may, in its sole discretion, increase (but not decrease without Executives consent, except if salary reduction is imposed on the employees of the Company as part of a general reduction) (Base Salary).
5.2 Annual Incentive Bonus.
(a) In each calendar year during the Employment Period, beginning in calendar year 2010, the Executive shall be eligible to receive an annual incentive bonus determined annually at the discretion of the Board (the Incentive Bonus), subject to the attainment of certain objectives, which shall be established in writing by the Executive and the Board. Any payments made under this Section 5.2(a), shall be paid within 3 1/2 months of the end of the Bonus Period; the Incentive Bonus is not subject to forfeiture after the conclusion of the Bonus Period.
(b) For the Bonus Period or Bonus Periods in which the Executives employment with the Company terminates for any reason, the Company shall pay the Executive a pro rata portion (based upon the period ending on the date on which the Executives employment with the Company terminates) of the discretionary Incentive Bonus under Section 5.2(a) for the Bonus Period or Bonus Periods applicable to the timing of such termination of employment; provided, however, that the Bonus Period for purposes of this Section 5.2(b) shall be deemed to end on the last day of the fiscal quarter of the Company during which the Executives employment so terminates.
(c) The Executive shall receive such additional bonuses, if any, as the Board may in its sole and absolute discretion determine.
(d) Any bonuses payable pursuant to this Section 5.2 are sometimes hereinafter referred to as Incentive Compensation. Each period for which Incentive Compensation is payable under the Agreement is sometimes hereinafter referred to as a Bonus Period. Unless otherwise specified by the Board or provided under this Agreement, the Bonus Period shall be the fiscal year of the Company.
5.3 Stock Options. Stock options awarded to Executive shall vest in accordance with the Companys existing agreements; provided, however, upon the occurrence of (i) termination without Cause under Section 6.3 hereof, all unvested Stock Options scheduled to vest over a period of twelve (12) months following the date of termination shall immediately vest and be immediately exercisable, and (ii) termination of Executives employment following a Change in Control shall be governed by Section 6.5. All or any portion of the vested Stock Options may be exercised at any one or more times by the Executive during the Employment Period and for a period of three (3) months following the Employment Period. The Stock Options shall be granted pursuant to certain restrictions as defined from time to time by the Company in its sole discretion.
5.4 Relocation Expenses. The Company shall reimburse Executive for the actual costs that he incurs in connection with his relocation to the Phoenix, Arizona metropolitan area, such costs to be comprised of real estate commissions and costs for using a full service moving company. Executive will use a three bid selection process to hire a moving company at the most competitive price. To the extent that such relocation benefits are taxable to Executive, the Company will gross up such benefits so that there is no out-of-pocket tax impact to Executive.
5.5 Temporary Housing Reimbursement. Executive will be eligible to receive a monthly temporary housing reimbursement of $1,500 in after-tax dollars, contingent upon his continued employment, which shall be reimbursed for Executives incurred housing expenses in the Phoenix, Arizona metropolitan area. The housing reimbursements will cease immediately upon the earlier of the date of Executives permanent relocation to the Phoenix, Arizona area or June 30, 2010.
5.6 Professional Expenses. The Company will reimburse Executive up to $2,500 for actual professional expenses (legal, tax, and accounting) that he incurs in connection with the completion of this Agreement and his acceptance as an employee of the Company.
5.7 Treatment of Allowances and Expenses. The allowances and reimbursed expenses set forth in Sections 5.4, 5.5, and 5.6 will be subject to required payroll deductions and withholdings to the extent required by law, and will not be considered by the Company part of Executives Base Salary, including but not limited to for such purposes as determination of the Incentive Bonus or the severance benefits described in Section 6 below.
5.8 Vacation. The Executive shall be entitled to four (4) weeks of paid vacation earned ratably over each calendar year during the Employment Period, to be taken at such times as the Executive and the Company shall mutually determine and provided that no vacation time shall unreasonably interfere with the duties required to be rendered by the Executive hereunder. Any vacation time not taken by Executive during any calendar year may not be carried forward into any succeeding calendar year nor may any accrued but unused vacation be converted to cash compensation. Any earned but unused vacation time will be paid out to Executive at the time of his termination in accordance with applicable law.
5.9 Benefit Plans. During the Employment Period, the Executive shall be eligible to participate in all pension, 401(k) and other employee pension benefit plans, policies and programs (the Retirement Plans) maintained by the Company from time to time for the benefit of senior executive officers. During the Employment Period, the Executive, the Executives spouse, if any, and his eligible dependents, if any, shall be eligible to participate in and be covered on the same basis as other senior executive officers of the Company under all the welfare benefit plans, policies and/or programs maintained by the Company from time to time including, without limitation, all medical, hospitalization, dental, disability, life, accidental death and dismemberment and travel accident insurance plans, policies and/or programs (the Welfare Benefit Plans). The Welfare Plans and the Retirement Plans are sometimes referred to collectively herein as the Benefit Plans. The Company reserves the right to modify, suspend or discontinue any Benefit Plans at any time without notice to or recourse by Executive, so long as such action is taken generally with respect to other similarly situated executives employed by the Company.
5.10 Expense Reimbursement. During and in respect of the Employment Period, the Executive shall be entitled to receive reimbursement for reasonable business expenses incurred by the Executive in performing his duties and responsibilities hereunder, including travel, entertainment, parking, business meetings and professional dues, incurred and substantiated in accordance with the policies and procedures established from time to time by the Company for senior executives of the Company.
5.11 Life Insurance. Executive agrees to cooperate with the Company in obtaining all life insurance as the Board or any lender deems necessary.
5.12 Directors & Officers Insurance. At all times during the Employment Period, Executive shall be considered an officer of the Company and shall be covered by D&O Insurance, or any other similar type of insurance, that provides coverage for the Executives acts or omissions undertaken during the course and scope of his employment.
6. Termination. Upon the occurrence of any termination of the Executives employment as chief executive officer, the Executive shall remain a member of the Board unless mutually agreed that he shall resign or in the event Executive is not able to serve for any reason.
6.1 Termination Due to Death. In the event of the Executives death, the Company will terminate the Executives employment hereunder and the Executives estate or his legal representative, as the case may be, shall be entitled to: (a) any Base Salary earned but unpaid as of the date of death; (b) a pro-rata payment of the portion of the discretionary Incentive Bonus that would have been earned for such year (determined at the end of the fiscal year in which such termination occurs) multiplied by a fraction, the numerator of which is the number of days transpired in the calendar year up to and including the date on which the Executive is terminated by the Company due to death, and the denominator of which is 365, such payment shall be made at the time when bonus payments are paid to other senior executives in accordance with the Companys normal payroll procedures; and (c) any other payments and/or benefits which the Executive or the Executives legal representative is entitled to receive under any of the Benefit Plans or otherwise in accordance with the terms of such plan or arrangement.
6.2 Termination Due to the Executives Disability. If Executives condition meets the definition of Disability above, the Company may terminate Executives employment upon written notice. If terminated by the Company as herein provided, the Company shall pay to Executive:
(a) any Base Salary earned but unpaid as of the date of the Executives termination due to Disability and for 180 days after said termination as salary continuation;
(b) a pro-rata payment, for the year of termination, equal to the Incentive Bonus that would have been earned for such year (determined at the end of the fiscal year in which such termination occurs) multiplied by a fraction, the numerator of which is the number of days transpired in the calendar year up to and including the date on which the Executive is terminated by the Company due to Disability, and the denominator of which is 365, such payment shall be made at the time when bonus payments are paid to other senior executives in accordance with the Companys normal payroll procedures; and
(c) any other payments and/or benefits which the Executive or the Executives legal representative is entitled to receive under any of the Benefit Plans or otherwise in accordance with the terms of such plan or arrangement.
Notwithstanding the foregoing, if, in the good faith determination of the Board, the Executive is suffering from a mental or physical disease or condition that impacts the performance of his duties in any material respect and it has not yet been determined whether Executives condition meets the definition of Disability, the Company may suspend the Executive for a period of up to 180 days (provided that such suspension shall not constitute Good Reason under Section 1.5 and provided further that during such suspension, the Executive shall (a) continue to receive his Base Salary in accordance with Section 5.1 and (b) be eligible to receive the benefits he may be entitled to under the Companys short-term disability plan, if any). If the Board does not re-instate the Executive to employment (under the terms and conditions of this Agreement) by the end of such 180 day period or at any time prior to the end of such period, the Company may (i) terminate the Executives employment without Cause (as provided under Section 6.3) if the Executives condition does not meet the definition of Disability at the time of termination, or (ii) terminate the Executives employment due to Disability (as provided under this Section) if the Executives condition meets the definition of Disability at the time of termination, with the exception of the salary continuation payment.
6.3 Termination by the Company Without Cause or by the Executive for Good Reason. At any time the Company shall have the right to terminate the Executives employment without cause by providing written notice not less than ninety (90) days prior to the termination date, to the Executive. The Executive may terminate his employment hereunder with the Company for Good Reason upon 90 days written notice.
6.3.1 Upon any termination pursuant to this Section 6.3, the Executive shall be entitled to, upon execution of a general release of claims against the Company and after the expiration of any applicable rescission or revocation period: (a) Base Salary earned but unpaid as of the date of the Executives termination and (b) any other payments and/or benefits which the Executive is entitled to receive under any of the Benefit Plans or otherwise in accordance with the terms of such plan or arrangement. Additionally, the Executive will receive (i) Base Salary in effect at the time of the termination for a period of twelve (12) months (the Continuation Period) following the termination of the Executives employment with the Company, in the manner and at such times as the Base Salary otherwise would have been payable to the Executive, (ii) continuation of medical and dental benefits in effect under COBRA as of the date of termination of employment for the Continuation Period, (iii) a pro-rata payment for the year of termination equal to the discretionary Incentive Bonus multiplied by a fraction, the numerator of which is the number of days transpired in the calendar year up to and including the date on which the Executives employment is terminated rounded to the end of the quarter in accordance with 5.2(b), and the denominator of which is 365, such payment shall be made at the time of termination in accordance with the Companys normal payroll procedures; and (iv) all unvested Stock Options scheduled to vest over a period of twelve (12) months following the date of termination shall immediately vest and be immediately exercisable. In order to comply with Section 409A of the Internal Revenue Code of 1986, as amended (the Code), under no circumstances may the time or schedule of any payment made, or benefit provided, pursuant to this Section 6.3.1 be accelerated or subject to a further deferral except as otherwise permitted or required pursuant to regulations or other guidance issued pursuant to Section 409A of the Code. In addition, Executive does not have any right to make any election regarding the time or form of any payment due under this Section 6.3.1 or any other provision of this Agreement.
6.4 Termination by the Company for Cause or Termination by the Executive Without Good Reason. The Executive shall have the right to terminate his employment hereunder without Good Reason or without any reason at all. The Company may terminate the Executives employment hereunder for Cause. In either such event, the Executive shall be entitled only to: (a) any Base Salary earned but unpaid through the date of such termination; (b) any other accrued and vested payments and/or benefits which the Executive is entitled to receive under any of the Benefit Plans.
6.5 Change in Control of the Company.
6.5.1 Executive understands and acknowledges that the Company may undergo a Change in Control. In the event Executive terminates his employment under this Agreement during the period ending one year following the date of a Change in Control, then Executive shall not receive any benefits set forth in Section 6.5.4; provided, however, that if Executive terminates his employment under this Agreement for Good Reason during the one year period following the date of a Change in Control, then he shall be entitled to benefits pursuant to Section 6.3.
6.5.2 In the event of a pending Change in Control wherein the Company and/or the Executive have not received written notice at least five (5) business days prior to the anticipated closing date of a transaction giving rise to the Change in Control from the successor to all or a substantial portion of the Companys business and/or assets that such successor is willing as of the closing to assume and agree to perform the Companys obligations under this Agreement in the same manner and to the same extent that the Company is hereby required to perform, then such Change in Control shall be deemed to be a termination of this Agreement by the Company and Section 6.5.4 hereof will apply.
6.5.3 In any Change in Control situation, Executive may, at his sole discretion, elect to terminate this Agreement at any time on or after the one year anniversary of the date of the Change in Control by providing written notice to the Company and/or a successor to all or a substantial portion of the Companys business and/or assets at least ninety (90) days prior to the anticipated termination date. In such case, or in the event that the Company and/or its successor terminates the Executive after a Change in Control for any reason, the applicable provisions of Section 6.5.4 hereof will apply.
6.5.4 Upon any termination of Executives employment pursuant to this Section 6.5, the Executive shall be entitled to: (a) Base Salary earned but unpaid as of the date of the Executives termination and (b) any other payments and/or benefits which the Executive is entitled to receive under any of the Benefit Plans or otherwise in accordance with the terms of such plan or arrangement. Additionally, the Executive will receive (i) the Executives Base Salary in effect at the time of the termination for a period of fifteen (15) months (the Continuation Period) following the termination of the Executives employment with the Company, in the manner and at such times as the Base Salary otherwise would have been payable to the Executive, (ii) continuation of medical and dental benefits under COBRA in effect as of the date of termination of employment for the Continuation Period, (iii) payment equal to the discretionary Incentive Bonus earned for such year, such payment shall be made at the time of termination in accordance with the Companys normal payroll procedures; and (iv) all of Executives Stock Options in the Company shall immediately vest and become exercisable and all or any portion of the vested Stock Options may be exercised at any one or more times by the Executive for a period of three (3) months following termination of Executives employment with the Company.
6.5.5 For purposes of applying this Section 6.5 under the circumstances described in Section 6.5.2 above, the effective date of termination will be the closing date of the transaction giving rise to the Change in Control and all compensation, reimbursements and lump-sum payments due Executive must be paid in full by the Company at or prior to such closing.
6.6 Certain Other Payments.
6.6.1 In the event that (i) the Executive becomes entitled to any other payments or benefits from the Company in connection with a Change in Control (collectively, the Total Payments) which constitute an excess parachute payment as defined in Section 280G(b) of the Code, and (ii) the Executive would be subject to an excise tax imposed under Section 4999 of the Code (the Excise Tax), then the Executive may submit all or any portion of the Total Payments to a shareholder vote for purposes of satisfying Section 280G(b)(5) of the Code (a Shareholder Vote).
6.6.2 To the extent that the Executive does not so submit any portion of the Total Payments to a Shareholder Vote and, if any such portion of the Total Payments would subject Executive to the Excise Tax, then, such non-submitted portion of the Total Payments and benefits will be reduced to the extent necessary to eliminate the imposition of the Excise Tax.
7.1 The Executive. This Agreement is personal to the Executive and, without the prior express written consent of the Company, shall not be assignable by the Executive, except that the Executives rights to receive any compensation or benefits under this Agreement may be transferred or disposed of pursuant to testamentary disposition, intestate succession or pursuant to a domestic relations order. This Agreement shall inure to the benefit of and be enforceable by the Executives heirs, beneficiaries and/or legal representatives.
7.2 The Company. This Agreement shall inure to the benefit of and be binding upon the Company and its respective successors and assigns.
8. Confidential Information.
8.1 Non-Disclosure. Executive acknowledges that the Company continually develops Confidential Information (as defined below), that Executive obtained Confidential Information during employment with the Company, that Executive may develop Confidential Information for the Company, and that Executive may learn of Confidential Information during the course of employment. Executive will comply with the policies and procedures of the Company for protecting Confidential Information obtained from the Company and shall not use or disclose to any person, corporation or other entity (except as required by applicable law or for the proper performance of the regular duties and responsibilities of Executive for the Company) any Confidential Information obtained by Executive during employment with the Company, or other association with the Company. Executive understands that this restriction shall continue to apply for one year after Executives employment terminates, regardless of the reason for such termination.
8.2 Confidential Information. For purposes of this Agreement, Confidential Information means any and all information of the Company or concerning the business or affairs of the Company that is not generally known by others with whom any of them compete or do business, or with whom any of them plan to compete or do business. Confidential Information includes, without limitation, such information relating to: (i) the development, research, testing, marketing, strategies, and financial activities of the Company, (ii) the products and services, present and in contemplation, of the Company, (iii) inventions, processes, operations, administrative procedures, databases, programs, systems, flow charts, software, firmware and equipment used in the business of the Company, (iv) the costs, financial performance and strategic plans of the Company, (v) the people and organizations with whom the Company has or had business relationships and the substance of those relationships. Confidential Information also includes all information that the Company received belonging to others with any understanding, express or implied, that it would not be disclosed.
8.3 Documents. All documents, records, tapes and other media of every kind and description relating to the business, present or otherwise, of the Company and any copies, in whole or in part, thereof (Documents), whether or not prepared by Executive, shall be the sole and exclusive property of the Company. Executive shall safeguard all Documents and shall surrender to the Company at the time Executives employment terminates, or at such earlier time or times as the Board or its designee may specify, all Documents then in Executives possession or control.
9. Restrictive Covenants.
9.1 Non-Solicitation. In consideration of the salary, benefits and severance pay set forth in this agreement, Executive agrees that during the Employment Period and for a period of twelve (12) months after any termination of employment hereunder for any reason, Executive will not, directly or indirectly, (i) induce or attempt to induce any employee of the Company to leave the employ of the Company; (ii) in any way interfere with the relationships between the Company and any such employee of the Company; (iii) employ or otherwise engage as an employee, independent contractor or otherwise any such employee of the Company; or (iv) induce or attempt to induce any customer, supplier, licensee or other person or entity that has done business with the Company within twenty-four (24) months of Executives last day of employment to cease doing business with the Company or in any way interfere with the relationship between any such customer, supplier, licensee or other business entity and the Company.
9.2 Non-Competition. During the Period of Employment and for a period of twelve (12) months after any termination of employment hereunder for any reason (other than a termination of Executives employment by the Company for Cause), the Executive will not, directly or indirectly, engage or invest in, own, manage, operate, finance, control or participate in the ownership, management, operation, financing or control of, be employed by, associated with or in any manner connected with, or render services or advice or other aid to, or guarantee any obligation of, any person or entity engaged in or planning to become engaged in any business involving a chain of restaurants in the upscale/polished casual dining segment operating on a national or regional level. Nothing in this Section 9.2 will prohibit Executive from acquiring through market purchases and owning, solely as an investment, less than 5% in the aggregate of the equity securities of any class of any issuer whose shares are listed for trading on any nationally recognized stock exchange, or any similar system of automated dissemination of quotations of securities prices in common use, so long as Executive is neither involved in the management or conduct of the business affairs of such issuer nor a member of any control group (within the meaning of the rules and regulations of the U.S. Securities and Exchange Commission) of any such issuer. Executive agrees that this covenant is reasonable with respect to its duration, geographical area and scope.
9.3 Notification of Restrictive Covenants. Executive acknowledges that the Company may serve notice upon any party in the restaurant or food service industries with whom Executive accepts employment, consulting engagement, engagement as an independent contractor, partnership, joint venture or other association if the Company reasonably believes that Executives activities may constitute a violation of Executives obligations under Section 9.1 or 9.2 above. Such notice may inform the recipient that Executive is party to this Agreement and may include a copy of this Agreement or relevant portions thereof.
9.4 Injunctive Relief. The Executive acknowledges and agrees that the Company will have no adequate remedy at law, and would be irreparably harmed, if the Executive breaches or threatens to breach any of the provisions of this Section 9 of this Agreement. The Executive agrees that the Company shall be entitled to equitable and/or injunctive relief to prevent any breach or threatened breach of this Section 9, and to specific performance of each of the terms of such Section in addition to any other legal or equitable remedies that the Company may have. The Executive further agrees that he shall not, in any equity proceeding relating to the enforcement of the terms of this Section 9, raise the defense that the Company has an adequate remedy at law.
9.5 Special Severability. The terms and provisions of this Section 9 are intended to be separate and divisible provisions and if, for any reason, any one or more of them is held to be invalid or unenforceable, neither the validity nor the enforceability of any other provision of this Agreement shall thereby be affected. It is the intention of the parties to this Agreement that the potential restrictions on the Executives future employment imposed by this Section 9 be reasonable in both duration and geographic scope and in all other respects. If for any reason any court of competent jurisdiction shall find any provisions of this Section 9 unreasonable in duration or geographic scope or otherwise, the Executive and the Company agree that the restrictions and prohibitions contained herein shall be effective to the fullest extent allowed under applicable law in such jurisdiction.
10.1 Applicable Law. This Agreement shall be governed by and construed in accordance with the laws of the state in which Executive resides, applied without reference to principles of conflict of laws.
10.2 Amendments. This Agreement may not be amended or modified otherwise than by a written agreement executed by the parties hereto or their respective successors and legal representatives.
10.3 Indemnification. The Company agrees that if the Executive is made a party or is threatened to be made a party to any action, suit or proceeding, whether civil, criminal, administrative or investigative (a Proceeding), by reason of the fact that he is or was a director or officer of the Company, whether or not the basis of such Proceeding is alleged action in an official capacity as a director, officer, employee or agent while serving as a director, officer, employee or agent, he shall be indemnified and held harmless by the Company (unless the Executives actions or omissions constitute gross negligence or willful misconduct) to the fullest extent authorized by law, as the same exists or may hereafter be amended, against all costs and expenses incurred or suffered by the Executive in connection therewith, and such indemnification shall continue as to the Executive even if the Executive has ceased to be an officer, director or agent, or is no longer employed by the Company and shall inure to the benefit of his heirs, executors and administrators. Executive agrees to fully cooperate with the Company should any Proceeding commence.
10.4 Notices. All notices and other communications hereunder shall be in writing and shall be given by hand-delivery to the other parties or by registered or certified mail, return receipt requested, postage prepaid, addressed as follows:
To the Company:
Kona Grill, Inc.
7150 East Camelback Road
Scottsdale, AZ 85251
Attn: Mark Robinow
7150 East Camelback Road
Scottsdale, AZ 85251
Attn: Mark Robinow
If to the Executive:
Marc A. Buehler
9720 Kennemer Dr
Plano, TX 75025
Marc A. Buehler
9720 Kennemer Dr
Plano, TX 75025
or to such other address as (a) indicated in the Companys employment records, or (b) any party shall have furnished to the others in writing in accordance herewith. Notices and communications shall be effective when actually received by the addressee.
10.5 Withholding. The Company may withhold from any amounts payable under this Agreement such federal, state or local income taxes to the extent the same required to be withheld pursuant to any applicable law or regulation.
10.6 Severability. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement.
10.7 Captions. The captions of this Agreement are not part of the provisions hereof and shall have no force or effect.
10.8 Counterparts. This Agreement may be executed in one or more counterparts each of which shall be deemed an original instrument, but all of which together shall constitute but one and the same Agreement.
10.9 Entire Agreement. This Agreement contains the entire agreement between the parties concerning the subject matter hereof and supersedes all prior agreements, understandings, discussions, negotiations and undertakings, whether written or oral, between the parties with respect thereto.
10.10 Survivorship. The respective rights and obligations of the parties hereunder shall survive any termination of the Executives employment under this Agreement for any reason to the extent necessary to the intended provision of such rights and the intended performance of such obligations.
10.11 Attorneys Fees and Costs. In the event of any claim, controversy, or dispute arising out of or relating to this Agreement, or breach hereof, the prevailing party shall be entitled to recover reasonable attorneys fees and costs in connection with any court proceeding.
IN WITNESS WHEREOF, the Executive has hereunto set the Executives hand and the Company has caused this Agreement to be executed in its name on its behalf, all as of the day and year first above written.
|KONA GRILL, INC.
|By:||/s/ Anthony Winczewski|
|Anthony Winczewski, Member of|
|Compensation Committee of the Board of Directors|
|/s/ Marc A. Buehler|
|Marc A. Buehler|