Exhibit 10.1
 
EMPLOYMENT AGREEMENT
 
THIS EMPLOYMENT AGREEMENT (“Agreement”) dated March 31, 2015 is effective as of
May 4, 2015 (the “Effective Date”) between James Zielke (the “Executive”) and
Good Times Restaurants Inc. (“Good Times”).
 
AGREEMENT
 
1.           EMPLOYMENT.  By executing this Agreement, Good Times employs the
Executive and the Executive accepts such employment and agrees to perform the
services specified herein, upon the terms and conditions of this Agreement.
 
2.           TERM.  The Executive’s employment shall continue for a period of
two years from the Effective Date of this Agreement (such two-year period is
referred to herein as the “Full Employment Term”), unless the Executive’s
employment is terminated prior to the expiration of the Full Employment Term, as
provided in Section 7 of this Agreement.  Unless earlier terminated as provided
in Section 7 of this Agreement, on the yearly anniversary of the Effective Date
of this Agreement this Agreement will automatically extend an additional period
of one year to establish a new two year Full Employment Term.
 
3.           CAPACITY AND DUTIES.  Good Times shall continue to employ the
Executive as Chief Financial Officer.  During the Term of this Agreement, the
Executive shall devote his best efforts to the business and affairs of Good
Times and shall devote substantially all of his business time to perform the
duties hereunder.  Notwithstanding the foregoing, with the prior approval of the
Board, the Executive may devote a reasonable portion of his time to serve on
boards of directors, boards of managers or boards of trustees, or committees
thereof, of companies or organizations involving no conflict of interest with
the interests of Good Times.  The Executive shall further be entitled to have
investments in other business enterprises, provided, however, he shall not have
any investment or financial interest in any business enterprise which conducts
business activities directly competitive with any business activities conducted
by Good Times now or at any time during the Term of this Agreement (other than
an investment of no more than five percent (5%) of any class of equity
securities of a company which conducts business activities directly competitive
with any business activities of Good Times, provided those securities are traded
on a national securities exchange).   This non-compete covenant for any directly
competitive business activity of Good Times shall continue until two years after
the termination of Executive’s employment in any capacity by Good Times, whether
such termination is voluntary or otherwise.
 
4.           COMPENSATION.
 
(a)           Base Compensation.  During the Term of this Agreement, the
Executive shall be paid a minimum annual base salary of $175,000 (the “Base
Compensation”).  The Base Compensation shall be paid, at the election of Good
Times, in equal biweekly, bimonthly or monthly payments or at such other times
and in such other installments as are paid to other executives of Good
Times.  The Base Compensation may be increased, but not decreased, by the Board,
in its sole discretion, if the Board determines that such increase is
appropriate based upon a performance review of the Executive, which review shall
be conducted no less than annually during the Term of this Agreement.
 
 
  

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(b)           Performance Cash Bonuses and Equity Awards.  Good Times agrees to
provide for performance cash bonuses and equity awards to the Executive for the
fiscal year 2015, prorated base on the percentage of the fiscal year the
Executive is employed, and each subsequent fiscal year through the Term of this
Agreement, with such bonuses and awards to be based upon the performance of the
Executive and Good Times.  Good Times shall provide for a cash bonus and equity
award to the Executive in an amount determined by the Board, in its sole
discretion.  The amount of the performance cash bonus and equity award shall be
based upon the Executive and Good Times attaining their respective goals and
objectives as set by the Board.  The determination of whether the Executive has
met his performance goals and objectives and the amount of any performance cash
bonus shall be made by the Board, in its sole discretion.
 
5.           EXPENSES.  The Executive shall be reimbursed, consistent with
policies applicable to other officers of Good Times, for all reasonable expenses
incurred by the Executive in performing services under this Agreement.  The
Executive will submit appropriate receipts, invoices and other evidence of
expenditures as required by Good Times policy.  Good Times shall reimburse the
Executive for reasonable travel and commuting expenses for travel to and from
his home in Wichita, Kansas through a mutually agreeable period of time and Good
Times shall provide reasonable relocation expenses for the Executive to relocate
to Colorado by October 31, 2015.   Such relocation expenses shall not include
any costs related to the sale of the Executive’s current home or the purchase of
new home.
 
6.           ADDITIONAL BENEFITS.
 
(a)           Benefits.  During the Term of this Agreement, Good Times shall
provide the Executive with an annual discretionary allowance of $15,000 and
other benefits generally provided to its other executive officers under its
welfare benefit plans, practices, policies and programs (including, without
limitation, medical, prescription, dental, disability, life and other insurance
plans, pension plans, and savings or profit-sharing plans).  The discretionary
allowance is intended to cover automobile, phone and benefits costs.
 
(b)           Vacation.  Executive shall be entitled to three weeks paid annual
vacation to be taken at such times as are reasonably convenient to the
Executive, provided that such vacation times do not substantially interfere with
the performance of his duties hereunder.
 
7.           EARLY TERMINATION.
 
(a)           Termination for Cause.  Termination “for cause” shall mean
termination by the Board of Directors of the Executive’s employment with Good
Times because of (i) any intentional, wanton, or reckless act or omission that
constitutes a material breach by the Executive of his obligations under this
Agreement; (ii) any willful failure by the Executive to perform the duties or to
serve Good Times in the capacities prescribed by the Board, provided that with
respect to the first occurrence only of any such willful failure, such willful
failure remains uncured more than ten (10) business days after the date on which
Good Times provides written notice of such willful failure to the Executive;
(iii) a criminal conviction, guilty plea, or no contest plea of the Executive to
any felony, any drug related offense, or a crime involving an act of moral
turpitude; or (iv) the Executive’s perpetration of an act of fraud or
embezzlement against Good Times.
 
 
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(b)           Termination Without Cause.  Either party may terminate this
Agreement without cause by providing the other party sixty (60) days’ written
notice.  All options and rights granted to the Executive under any Good Times
Stock Option Plan or Good Times Omnibus Equity Plan shall be accelerated and
shall become exercisable immediately prior to the termination without cause by
Good Times so as to permit the Executive fully to exercise all outstanding
options and rights.
 
(c)           Termination Upon Death or Disability.  This Agreement shall
terminate upon (i) the death of the Executive or, (ii) at Good Times’ written
election, if the Executive becomes unable, by reason of physical or mental
disability, with reasonable accommodation, to perform the essential functions of
his position for the Minimum Disability Period.  The term “Minimum Disability
Period” means any period exceeding (i) ninety (90) consecutive calendar days, or
(ii) an aggregate of one hundred (100) business days during any twelve (12)
month period.  If this Agreement terminates under this provision Executive (or
his estate) shall be entitled to the Severance Compensation and Stock Sale
Option in the amount and at such time as set forth under Section 7(f).  In
addition, all options and rights granted to the Executive under any Good Times
Stock Option Plan shall be accelerated and shall become exercisable immediately
prior to the event giving rise to termination under this provision so as to
permit the Executive (or his estate) fully to exercise all outstanding options
and rights.
 
(d)           Breach by Good Times.  The Executive shall have the right to
terminate his employment pursuant to this Agreement upon Good Times’ willful and
material breach or violation of any of the terms and conditions of this
Agreement by delivering written notice to Good Times stating with particularity
the applicable term or condition breached or violated, the specific facts relied
upon and a termination date not less than thirty days after the date of delivery
of such writing.  Good Times shall have ten (10) business days to cure such
breach.  If Executive terminates his employment under this provision it shall be
deemed a termination without cause by Good Times and the Executive shall be
entitled to the Severance Compensation and Stock Sale Option in the amount and
at such time as set forth under Section 7(f).  In addition, all options and
rights granted to the Executive under any Good Times Stock Option Plan shall be
accelerated and shall become exercisable immediately prior to the Executive’s
termination under this provision so as to permit the Executive fully to exercise
all outstanding options and rights.
 
 
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(e)           Change In Control.  If a Change in Control (as defined below)
occurs with respect to Good Times, the Executive shall have the right for a
period of six months from the Change in Control to deem the Change in Control a
termination without cause by Good Times and the Executive shall receive his base
compensation through the date of termination and the Severance Compensation and
Stock Sale Option in the amount and at such time as set forth under Section
7(f).  In addition, all options and rights granted to the Executive under any
Good Times Stock Option Plan shall be accelerated and shall become exercisable
immediately prior to the occurrence of the transaction giving rise to the Change
in Control so as to permit the Executive fully to exercise all outstanding
options and rights.  “Change in Control” is defined herein to include:  (i) the
sale of all or substantially all of the assets of Good Times; (ii) the sale of
at least fifty percent of the capital stock of Good Times in a single
transaction or series of related transactions, other than in a public offering;
(iii) taking Good Times “private” such that its stock is no longer publicly
traded; or (iv) a merger, consolidation, reorganization or similar transaction
to which Good Times is a party, except for a transaction in which Good Times is
the surviving corporation and, after giving effect to such transaction, the
holders of Good Times’ outstanding capital stock immediately before the
transaction own enough of Good Times’ outstanding capital stock to elect a
majority of Good Times’ Board of Directors.
 
(f)           Severance Compensation and Stock Sale Option.  If Executive’s
employment is terminated without cause by Good Times or by the Executive under
Sections 7(d) or 7(e) (Breach by Good Times or Change In Control) during the
first year of Executive’s employment, then, subject to Section 7(g), Good Times
shall pay the Executive (or his estate) in a lump-sum payment within five
business days of Executive’s termination of employment an amount equal to the
two years of the Executive’s base salary for the year of the termination.
Thereafter, if Executive’s employment is terminated without cause by Good Times
or by the Executive under Sections 7(d) or 7(e) (Breach by Good Times or Change
In Control), or under Section 7(c) (Death or Disability), then, subject to
Section 7(g), (i) Good Times shall pay the Executive (or his estate) in a
lump-sum payment within five business days of Executive’s termination of
employment an amount equal to the sum of (A) Executive’s base salary for the
year of the termination, (B) the average of the Executive’s annual incentive
compensation for the two years immediately prior to the year of the termination
or if Executive has been employed less than two years, the annual incentive
compensation for the year immediately prior to the year of termination, and (C)
$15,000 (“Severance Compensation”); and (ii) the Executive (or his estate) shall
have the right, but not the requirement, exercisable at any time within fifteen
(15) business days after the effective date of such termination, to sell to Good
Times all or any portion of the outstanding shares of Good Times stock owned by
the Executive (including any shares acquired by exercise of accelerated options
or otherwise) (“Stock Sale Option”).  If the Executive (or his estate) exercises
his rights under the Stock Sale Option, the purchase price for each share of
Good Times stock to be purchased by Good Times from the Executive shall be the
average daily market price of Good Times stock (“GTIM”) on NASDAQ or any other
applicable public trading market for Good Times stock over the thirty (30)
trading days immediately preceding the public announcement of termination of the
Executive’s employment.  The purchase price shall be paid in cash to the
Executive and the closing of such sale shall occur within five (5) business days
after the Executive (or his estate) provides Good Times with written
notification of his exercise of the Stock Sale Option.
 
 
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(g)           Code Section 409A Compliance.
 
(i)           Definition of Termination of Employment.  For purposes of this
Agreement, the phrase “Termination of Employment” means the termination of the
Executive’s employment with the Company and all affiliates due to death,
retirement or other reasons.  The Executive’s employment relationship is treated
as continuing while the Executive is on military leave, sick leave, or other
bona fide leave of absence (if the period of such leave does not exceed six
months, or if longer, so long as the Executive’s right to reemployment with the
Company or an affiliate is provided either by statute or contract).  If the
Executive’s period of leave exceeds six months and the Executive’s right to
reemployment is not provided either by statute or by contract, the employment
relationship is deemed to terminate on the first day immediately following the
expiration of such six-month period.  Whether a termination of employment has
occurred will be determined based on all of the facts and circumstances and in
accordance with regulations issued by the United States Treasury Department
pursuant to Section 409A of the Internal Revenue Code of 1986, as amended
(“Code”).
 
(ii)           Delay of Payments.  Notwithstanding the provision for the time of
payment as set forth in (d), (e), and (f) above, if Good Times determines that
the Executive is a “specified employee” (as defined in Code Section 409A), and
no exception to Code Section 409A applies, the payments set forth in (d), (e)
and (f) above will commence on the first day of the seventh month following
Executive’s termination of employment.  All payments that would have otherwise
been paid to Executive during this six-month period shall also be paid to
Executive in one lump sum on the first day of the seventh month following his
termination of employment, plus interest accruing at the prime rate of interest
announced in the Wall Street Journal.  If Executive dies before he receives the
above payments, the Company will distribute the benefits to Executive’s
beneficiary as soon as administratively feasible following the date of
Executive’s death.  Except for the above required delay in payment, neither the
Executive nor Good Times shall have the right or the ability to accelerate or
defer the payment of amounts determined pursuant to this Section 7.
 
(iii)           Code Section 409A Savings Clause.  Notwithstanding any other
provision in the Agreement, Good Times shall administer this Agreement, and
exercise all authority and discretion under this Agreement, to satisfy the
requirement of Code Section 409A or any exemption thereto.
 
8.           ENTIRE AGREEMENT.  This Agreement, together with any applicable
Stock Option Agreement between Good Times and the Executive, set forth the
entire understanding of the parties regarding the Executive’s employment with
Good Times, and replace and supersede any previous understandings, agreements,
discussions, letters or representations between such parties, written or oral,
that may have related in any way to the subject matter hereof including, without
limitation, any employment offers or term sheets dated as of or prior to the
date hereof.
 
9.           AMENDMENT.  This Agreement may only be amended or modified by an
instrument in writing signed by each of the parties hereto.  No failure or delay
on the part of either party to this Agreement in the exercise of any power or
right, and no course of dealing between the parties hereto, shall operate as a
waiver of such power or right, nor shall any single or partial exercise of any
power or right preclude any further or other exercise thereof or the exercise of
any other power or right.  Any waiver of any provision of this Agreement, and
any consent to any departure by either party from the terms of any provision
hereof, shall be effective only in the specific instance and for the specific
purpose for which given.  Nothing contained in this Agreement and no action or
waiver by any party hereto shall be construed to permit any violation of any
other provision of this Agreement or any other document or operate as a waiver
by such party of any of his or its rights under any other provision of this
Agreement or any other document.
 
 
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10.           BINDING EFFECT.  This Agreement is personal to, and may not be
assigned or otherwise transferred by, the Executive; however, this Agreement
shall inure to the benefit of the Executive’s legal representatives and
heirs.  This Agreement shall be binding upon, and inure to the benefit and be
the obligation of Good Times, its successors or assigns.
 
11.           MISCELLANEOUS.
 
(a)           Severability; Construction.  Whenever possible, each provision of
this Agreement shall be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Agreement is held by a court
of competent jurisdiction to be prohibited by or invalid under applicable law,
such provision shall be ineffective only to the extent of such prohibition or
invalidity, without invalidating the remainder of this Agreement.
 
(b)           Choice of Law.  This Agreement shall be governed by, and construed
in accordance with, the internal laws (as opposed to conflict of laws
provisions) of the State of Colorado.
 
(c)           Expenses.  In the event of any litigation between the parties
relating to this Agreement and their rights hereunder, the prevailing party
shall be entitled to recover all reasonable litigation costs and reasonable
attorneys’ fees and expenses from the non-prevailing party.
 
IN WITNESS WHEREOF, this Agreement has been executed by Good Times and the
Executive as of the date first above written.
 

 
GOOD TIMES RESTAURANTS INC.
                           
By:
/s/ Robert J. Stetson
     
Robert Stetson, Chairman
                   
EXECUTIVE
                   
By:
/s/ James K. Zielke
     
James Zielke
 

 
 
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