Exhibit 10.1 

 

EMPLOYMENT AGREEMENT

  

This Employment Agreement (this “Agreement”) is made and entered into by and
between THE ONE GROUP HOSPITALITY, INC. a Delaware corporation (the “Company”),
and EMANUEL HILARIO (the “Executive”), and effective as of October 30, 2017 (the
“Effective Date”).

 

RECITALS

 

WHEREAS, the Company desires to employ the Executive as its President and Chief
Executive Officer and the Executive desires to be so employed by the Company on
the terms and conditions set forth in this Agreement.

 

NOW, THEREFORE, in consideration of the mutual covenants and agreements herein
contained and other good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, the parties agree as follows:

 

AGREEMENT

 

1.       Position and Duties. The Executive shall serve as the President and
Chief Executive Officer of the Company (including its subsidiary The ONE Group
LLC) and, in such capacity shall be responsible for the general management of
the business, affairs and operations of the Company, shall perform such duties
as are customarily performed by a president and chief executive officer of a
company of a similar size and shall have such power and authority as shall
reasonably be required to enable him to perform his duties hereunder; provided,
however, that in exercising such power and authority and performing such duties,
he shall at all times be subject to the authority, control and direction of the
Board of Directors of the Company (the “Board”). The Executive shall report to
the Board and shall devote substantially his full business time and attention to
the business and affairs of the Company and its subsidiaries. The Executive
shall perform his duties and responsibilities in a diligent, trustworthy,
businesslike and efficient manner. The Executive shall not engage in any other
business activities that could reasonably be expected to conflict with the
Executive’s duties, responsibilities and obligations hereunder.

 

2.       Term. The employment hereunder shall be for a term of three (3) years
commencing on the Effective Date and ending on the three (3) year anniversary
thereof (the “Expiration Date”), unless terminated earlier pursuant to Section 4
of this Agreement (the “Term of Employment”). Thereafter, this Agreement shall
automatically be renewed and the Term of Employment extended for additional
consecutive terms of one (1) year (each a “Renewal Term”), unless such renewal
is objected to by either the Company or the Executive upon ninety (90) days
written notice prior to the commencement of the next Renewal Term. In the event
of renewal, the last day of each Renewal Term shall be deemed the new Expiration
Date.

 

3.       Compensation and Related Matters.

 

(a)       Base Salary. As compensation for services rendered hereunder, the
Executive shall initially receive a salary of $450,000 annually (the “Base
Salary”), which shall be paid in accordance with the Company’s then prevailing
payroll practices. The Executive may receive increases (but not decreases) in
his Base Salary as the Board, or the compensation committee of the Board, may
approve in its sole discretion from time to time; provided that the Executive’s
Base Salary will be reviewed for potential upward adjustment not less often than
annually.

 

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(b)       Bonus. The Executive will be eligible to receive an annual,
discretionary bonus (the “Bonus”) based in part upon achievement of individual
and corporate performance objectives as determined by the Board. The Bonus shall
be targeted at fifty percent (50%) of the Executive’s then-effective annual Base
Salary. The Executive shall be eligible to receive a Bonus in excess of the
targeted Bonus if Company performance exceeds 100% of the targeted goals, and a
Bonus below the target amount may be payable if actual performance at least
equals a minimum threshold, each as approved by the Board in consultation with
the Executive at the time the annual performance goals are established.
Notwithstanding the foregoing, whether the Executive receives a Bonus and the
amount of any such Bonus, will be determined by the Board in its sole and
absolute discretion, except that any portion of the Bonus that Board determines
to be based on the targeted goals will be considered non-discretionary and
payable based on achievement of such goals. The Bonus will be deemed earned
provided that the Executive is employed as of December 31st of the calendar year
to which such Bonus relates and is not in material breach of this Agreement as
of the payment date. The Bonus, if any, will be paid no later than April 30 of
the year following the year to which the performance objectives relate.

 

(c)       Stock Options. On the Effective Date, the Executive shall be granted,
under the 2013 Employee, Director and Consultant Equity Incentive Plan (the
“Stock Incentive Plan”), options (the “Options”) to purchase 300,000 shares of
the Company’s common stock at an exercise price equal to the Closing Price. The
Options shall be subject to and governed by the terms of the Stock Incentive
Plan and a stock option agreement. The Options shall vest ratably over the first
three (3) anniversaries of the grant date subject to Executive’s continuous
employment through each vesting date.

 

(d)       Restricted Stock Units. On the Effective Date, the Executive shall be
granted 300,000 Restricted Stock Units (“RSUs”) pursuant to the Stock Incentive
Plan. The RSUs shall be subject to and governed by the terms of the Stock
Incentive Plan and a restricted stock unit award agreement. The RSUs shall vest
ratably over the first three (3) anniversaries of the grant date subject to
Executive’s continuous employment through each vesting date, provided, however,
that the RSUs may vest earlier as follows (i) 100,000 RSUs shall vest on the
date that the Average Closing Price is fifty percent (50%) more than the Closing
Price; (ii) 100,000 shall vest on the date that the Average Closing Price is
seventy-five percent (75%) more than the Closing Price; and (iii) 100,000 RSUs
shall vest on the date that the Average Closing Price is one-hundred percent
(100%) more than the Closing Price. As used herein, “Closing Price” is the
closing price of the Company’s common stock on the date of grant. “Average
Closing Price” is the average closing price of the Common’s common stock as
measured over ten (10) consecutive trading days.

 

(e)       Signing Grant. On the Effective Date, the Executive shall be granted,
pursuant to the Stock Incentive Plan, 71,000 shares of the Company’s common
stock.

 

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(f)       Travel and Housing Allowance. Executive acknowledges and agrees that
the Company’s headquarters are located in New York, New York, and that he will
be required to travel to the Company’s offices in New York as necessary for the
performance of his duties to the Company. So long as Executive’s primary
residence is in Denver, Colorado, the Company will reimburse the Executive for
his reasonable out-of pocket expenses, accommodation in New York, and for
round-trip coach tickets for his travel to New York.

 

(g)       Other Benefits. The Executive shall be entitled to participate in all
incentive, savings and retirement plans, all welfare benefit plans and all other
perquisites of employment on the same terms and conditions generally available
to other executives of the Company having comparable rank, authority and
seniority to the Executive. The Executive understands that, except when
prohibited by applicable law or with respect to Section 5(e), the Company’s
benefit plans and fringe benefits may be cancelled, changes, modified, replaced,
terminated, or amended by the Company from time to time in its sole discretion
so long as such revisions do not have a disproportionately negative impact on
the Executive vis-à-vis other Company employees, to the extent applicable.

 

(h)       Vacation; Holiday Pay and Sick Leave. The Executive shall be entitled
to four (4) weeks’ paid vacation in each calendar year, which if not taken, may
not be carried over from one calendar year to the next. Executive shall receive
holiday pay and paid sick leave as provided to other executive employees of the
Company. Upon cessation of Executive’s employment for any reason, Executive
shall receive pay for all accrued and unused vacation, calculated at his Base
Salary rate in effect at the time of the cessation of his employment, provided
that the amount of vacation that Executive shall be entitled to accrue during
the Term shall be in accordance with Company policy.

 

(i)       Withholding. All amounts payable to the Executive under this Section 3
shall be subject to all required federal, state and local withholding, payroll
and insurance taxes.

 

4.       Termination. The Executive’s employment may be terminated and this
Agreement terminated pursuant to this Section 4. Upon termination of Executive’s
employment for any reason (whether voluntarily or involuntarily), Executive
shall be deemed to have resigned from all offices and directorships, if any, and
then held with the Company or any of its affiliates, and, at the Company’s
request, Executive shall execute such documents as are necessary or desirable to
effectuate such resignations.

 

(a)       Death. The Executive’s employment hereunder shall terminate upon his
death.

 

(b)       Disability. The Company may terminate the Executive’s employment upon
written notice if the Executive becomes subject to a Disability. For purposes of
this Agreement, “Disability” shall mean the absence of the Executive from the
Executive’s duties with the Company on a full-time basis for 180 consecutive
business days as a result of incapacity due to mental or physical illness, which
is determined to be total and permanent by a physician selected by the Company
or its insurers and reasonably acceptable to the Executive or the Executive’s
legal representative. Executive hereby consents to such examination and
consultation regarding his health and ability to perform as aforesaid.

 

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(c)       Termination by Company for Cause. The Company may terminate the
Executive’s employment for Cause upon written notice. For purposes of this
Agreement, “Cause” shall mean (i) failure by Executive to substantially perform
material duties hereunder, after written notice requesting such performance;
(ii) Executive's material violation of a material Company policy that results in
significant and demonstrable damage to the Company's business or reputation,
which, to the extent such failure is curable, Executive does not cure within a
period of thirty (30) days (the “Cause Cure Period”) after written notice of
such failure is provided to Executive by the Company; or (iii) Executive's
conviction of or plea of guilty to any felony.

 

(d)       Termination by the Company Without Cause. The Company may terminate
the Executive’s employment at any time without Cause upon thirty (30) days prior
written notice. During the 30-day notice period, the Executive shall remain an
active employee of the Company and will be expected to continue to perform his
duties in a satisfactory manner, and in compliance with all of the Company’s
policies and procedures. However, the Company may, at its sole discretion, both
place the Executive on paid leave and suspend all of his duties and powers for
all or part of the applicable notice period.

 

(e)       Termination by the Executive without Good Reason. The Executive may
terminate his employment at any time without Good Reason, upon 30 days prior
written notice. During the 30-day notice period, the Executive shall remain an
active Company employee and will be expected to continue to perform his duties
in a satisfactory manner, and in compliance with all of the Company’s policies
and procedures. However, the Company may, at its sole discretion, either place
the Executive on paid leave or suspend all of his duties and powers for all or
part of the applicable notice period.

 

(f)       Termination by the Executive for Good Reason. The Executive may
terminate his employment for Good Reason. For purposes of this Agreement, “Good
Reason” is defined as, without his consent, (i) at any time following a Change
of Control (as defined below) the relocation of Executive’s principal place of
employment to a location more than 50 miles from his current location in Denver,
Colorado, (ii) a material reduction in his Base Salary or target bonus, (iii)
the Company’s material breach of this Agreement, or (iv) a material diminution
in Executive’s title and/or duties, responsibilities or authority. No
resignation shall be deemed a resignation for Good Reason unless the Executive
shall have first provided the Company with written notice of the conditions
constituting Good Reason and the Company shall have failed to cure such
conditions within thirty (30) days following its receipt of the notice (the
“Good Reason Cure Period”).

 

(g)       Expiration of the Term. Executive’s employment will terminate
automatically upon the Expiration Date if either party has elected not to renew
the Term of Employment.

 

(h)       Termination Date. The “Termination Date” means: (i) if the Executive’s
employment is terminated by his death under Section 4(a), the date of his death;
(ii) if the Executive’s employment is terminated on account of his Disability,
as finally determined under Section 4(b), the date set forth in the Company’s
written termination notice to the Executive; (iii) if the Company terminates the
Executive’s employment for Cause under Section 4(c), the date on which the
Company provides the Executive a written termination notice, unless the
circumstances giving rise to the termination are subject to the Cause Cure
Period, in which case the date on which the Company provides the Executive a
written termination notice following the end of the Cause Cure Period; (iv) if
the Company terminates the Executive’s employment without Cause under Section
4(d), 30 days after the date on which the Company provides the Executive a
written termination notice; (v) if the Executive resigns his employment without
Good Reason under Section 4(e), 30 days after the date on which the Executive
provides the Company a written termination notice; (vi) if the Executive resigns
his employment with Good Reason under Section 4(f), the date on which the
Executive provides the Company a written termination notice following the end of
the Good Reason Cure Period; and (vii) if this Agreement expires under Section
2, the Expiration Date.

 

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5.       Compensation upon Termination.

 

(a)       Termination by the Company for Cause or by the Executive without Good
Reason. If the Executive’s employment with the Company is terminated pursuant to
Sections 4(c) or (e), or as a result of the non-renewal of the Term of
Employment, the Company shall pay or provide to the Executive the following
amounts through the Termination Date: (i) any and all earned and unpaid portion
of his then-effective Base Salary (on or before the first regular payroll date
following the Termination Date in accordance with applicable law); (ii) any and
all unreimbursed business expenses (in accordance with the Company’s
reimbursement policy); (iii) any and all accrued and unused vacation time
through the Termination Date (on or before the first regular payroll date
following the Termination Date in accordance with applicable law); (iv) any
unpaid portion of the Bonus from a prior year, payable when other senior
executives receive their annual bonuses for such year, and in no event later
than March 15 of the year following the year for which the Bonus was earned; and
(v) any other benefits the Executive is entitled to receive as of the
Termination Date under the employee benefit plans of the Company, less standard
withholdings (collectively the “Accrued Obligations”) on or before the time
required by law but in no event more than 30 days after the Executive’s
Termination Date.

 

(b)       Termination by the Company Without Cause, by the Executive with Good
Reason. If the Executive’s employment is terminated by the Company without Cause
as provided in Section 4(d) or the Executive terminates his employment for Good
Reason as provided in Section 4(f), then the Executive shall receive the Accrued
Obligations. In addition, the Executive shall be entitled to receive from the
Company the following, subject to Section 6:

 

(i)severance payments of the monthly pro-rata portion of the then-effective Base
Salary for eighteen (18) months, paid in equal installments according to the
Company’s regular payroll schedule over the eighteen (18) months following the
Termination Date;

 

(ii)a monthly amount equal to one-twelfth (1/12) of the target Bonus, paid
according to the Company’s regular payroll schedule over eighteen (18) months
following the Termination Date;

 

(iii)any equity awards that vest over time and are unvested as of the
Termination Date shall be accelerated such that the portion of the equity awards
that would have vested in the eighteen (18) months following the Termination
Date will vest as of the Termination Date; and

 

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(iv)an amount equal to the “COBRA” premium for as long as the Executive and, if
applicable, the Executive’s dependents are eligible for COBRA, subject to a
maximum of eighteen (18) months.

 

(c)       Severance. The payments described in Sections 5(b)(i) and (ii) above
shall hereinafter be referred to as the “Severance”.

 

(d)       Termination Upon Death, Disability. If the Executive’s employment is
terminated pursuant to Sections 4 (a) or (b), the Executive (or the Executive’s
estate, or other designated beneficiary(s) as shown in the records of the
Company in the case of death) shall be entitled to receive from the Company
payment for the Accrued Obligations at the times specified in Section 5(a)
above.

 

(e)       Severance upon a Change of Control. Anything contained herein to the
contrary notwithstanding, in the event the Executive’s employment hereunder is
terminated without Cause pursuant to Section 4(d) or by the Executive for Good
Reason pursuant to Section 4(f) within two (2) years following a Change of
Control by the Company, then Executive shall be entitled to receive the
Severance in a lump sum. As used in this Agreement, “Change of Control” means
(i) any “Person” (as such term is used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934 (the “Exchange Act”)) becomes the “Beneficial
Owner” (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of the Company representing 50% or more of the total
voting power represented by the Company’s then outstanding voting securities
(excluding for this purpose any such voting securities held by the Company or
its affiliates or by any employee benefit plan of the Company) pursuant to a
transaction or a series of related transactions which the Board does not
approve, or (ii) (A) a merger or consolidation of the Company whether or not
approved by the Board, other than a merger or consolidation which would result
in the voting securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity or the parent of such
corporation) more than 50% of the total voting power represented by the voting
securities of the Company or such surviving entity or parent of such
corporation, as the case may be, outstanding immediately after such merger or
consolidation; or (B) the sale or disposition by the Company of all or
substantially all of the Company’s assets in a transaction requiring stockholder
approval.

 

(f)       No Duty of Mitigation. The Executive shall not be required to mitigate
the amount of any payment provided for in this Section 5 by seeking other
employment or otherwise, nor shall the amount of any payment provided for in
this Section 5 be reduced by any compensation earned by the Executive as the
result of employment by another employer or business or by profits earned by the
Executive from any other source at any time before and after the Termination
Date.

 

6.       Release; Payment. The Executive’s entitlement to Severance and benefits
set forth in Section 5(b) and Section 5(e) is conditioned on (A) the Executive’s
executing and delivering to the Company of a mutual release of claims
substantially in the form attached hereto as Exhibit A within forty-five (45)
days following the Termination Date, and on such release becoming effective, (B)
the Executive’s return of all Company property, data and documents to the
Company as of the Termination Date, and (C) the Executive’s compliance with the
restrictive covenants set forth in Sections 8 and 9; provided, that if such
forty-five (45) day period begins in one taxable year and ends in the following
taxable year, the Severance shall commence in the second taxable year (and any
payments that would have been made in the first taxable year shall be paid in a
lump sum at the time payments commence pursuant to Section 5(b) or 5(e), as the
case may be).

 

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7.       Section 409A Compliance.

 

(a)       All in-kind benefits provided and expenses eligible for reimbursement
under this Agreement shall be provided by the Company or incurred by the
Executive during the time periods set forth in this Agreement. All
reimbursements shall be paid as soon as administratively practicable, but in no
event shall any reimbursement be paid after the last day of the taxable year
following the taxable year in which the expense was incurred. The amount of
in-kind benefits provided or reimbursable expenses incurred in one taxable year
shall not affect the in-kind benefits to be provided or the expenses eligible
for reimbursement in any other taxable year. Such right to reimbursement or
in-kind benefits is not subject to liquidation or exchange for another benefit.

 

(b)        To the extent that any of the payments or benefits provided for in
Section 5 are deemed to constitute non-qualified deferred compensation benefits
subject to Section 409A of the Internal Revenue Code of 1986, as amended (the
“Code”), the following interpretations apply to Section 5: Any termination of
the Executive’s employment triggering payment of benefits under Section 5 must
constitute a “separation from service” under Section 409A(a)(2)(A)(i) of the
Code and Treas. Reg. §1.409A-1(h) before distribution of such benefits can
commence. To the extent that the termination of the Executive’s employment does
not constitute a separation of service under Section 409A(a)(2)(A)(i) of the
Code and Treas. Reg. §1.409A-1(h) (as the result of further services that are
reasonably anticipated to be provided by the Executive to the Company, or any of
its parents, subsidiaries or affiliates, at the time the Executive’s employment
terminates), any benefits payable under Section 5 that constitute deferred
compensation under Section 409A of the Code shall be delayed until after the
date of a subsequent event constituting a separation of service under Section
409A(a)(2)(A)(i) of the Code and Treas. Reg. §1.409A-1(h). For purposes of
clarification, this Section 7(b) shall not cause any forfeiture of benefits on
the Executive’s part, but shall only act as a delay until such time as a
“separation from service” occurs. Further, if the Executive is a “specified
employee” (as that term is used in Section 409A of the Code and regulations and
other guidance issued thereunder) on the date his separation from service
becomes effective, any benefits payable under Section 5 that constitute
non-qualified deferred compensation under Section 409A of the Code shall be
delayed until the earlier of (A) the business day following the six-month
anniversary of the date his separation from service becomes effective, and (B)
the date of the Executive’s death, but only to the extent necessary to avoid
such penalties under Section 409A of the Code. On the earlier of (A) the
business day following the six-month anniversary of the date his separation from
service becomes effective, and (B) the Executive’s death, the Company shall pay
the Executive in a lump sum the aggregate value of the non-qualified deferred
compensation that the Company otherwise would have paid the Executive prior to
that date under Section 5(b) of this Agreement. It is intended that each
installment of the payments and benefits provided under Section 5(b) of this
Agreement shall be treated as a separate “payment” for purposes of Section 409A
of the Code. Neither the Company nor the Executive shall have the right to
accelerate or defer the delivery of any such payments or benefits except to the
extent specifically permitted or required by Section 409A of the Code.

 

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8.       Confidential Information, Noncompetition and Cooperation.

 

(a)       Confidential Information. As used in this Agreement, “Confidential
Information” means information belonging to the Company, its parents,
subsidiaries or controlled affiliates (each, an “Interested Party”), which is of
value to the Interested Party in the course of conducting its business, the
disclosure of which could result in a competitive or other disadvantage to the
Interested Party. Confidential Information includes, without limitation,
financial information, reports, and forecasts; inventions, improvements and
other intellectual property; trade secrets; know-how; drawings, specifications,
algorithms, designs, processes or formulae; software; firmware; market or sales
information or plans; supplier lists (including their contact information, costs
and pricing); customer lists (including past, current and potential customers,
their contact information, preferences and purchase history); costs and pricing
information and strategies; and business plans, prospects and opportunities
(such as possible acquisitions or dispositions of businesses or facilities)
which have been discussed or considered by an Interested Party. Confidential
Information includes information developed by the Executive in the course of the
Executive’s employment with the Company, as well as other information to which
the Executive may have access in connection with his employment. Confidential
Information also includes the confidential information of others disclosed to
Executive and with which an Interested Party has a business relationship.
Notwithstanding the foregoing, Confidential Information does not include
information in the public domain, unless due to breach of the Executive’s duties
under Section 8(b).

 

(b)       Confidentiality. At all times, both during the Executive’s employment
with the Company and after its termination, the Executive will keep in
confidence and trust all such Confidential Information, and will not use or
disclose for his own benefit or the benefit of any other Person any such
Confidential Information without the written consent of the Company, except as
the disclosure of such Confidential Information is required by law, in which
case the Executive shall give notice to and the opportunity to the Company to
comment on the form of the disclosure and only the portion of Confidential
Information that is required to be disclosed by law shall be disclosed.

 

(c)       Documents, Records, etc. All documents, records, data, apparatus,
equipment and other physical property, whether or not pertaining to Confidential
Information, which are furnished to the Executive by an Interested Party or are
produced by the Executive in connection with the Executive’s employment with the
Company will be and remain the sole property of the respective Interested Party.
The Executive will return to the Interested Party all such materials and
property as and when requested by the Interested Party. In any event, the
Executive will return all such materials and property immediately upon
termination of the Executive’s employment for any reason. The Executive will not
retain any such material or property or any copies thereof after the termination
of his employment.

 

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(d)       No Competition. From the Effective Date through the eighteen (18)
month anniversary of the Termination Date, regardless of the reason for the
termination (the “Restricted Period”), the Executive will not, directly or
indirectly, whether as owner, partner, shareholder, consultant, agent, employee,
co-venturer, member, manager, franchisor, franchisee, independent contractor or
otherwise, engage in, prepare to engage in, assist in, invest in, own, operate,
lease, manage, license, franchise, promote, consult with, participate with, or
enter into any agreement regarding any Competing Business in any Geographic Area
(as defined below) in which the Company, or an Interested Party incorporating
the know-how of the Company Business, distributes its products or provides its
services or plans to distribute its products or provide its services.
Notwithstanding the foregoing, the Executive may own up to 5% of the outstanding
stock of a publicly held corporation which constitutes or is affiliated with a
Competing Business.

 

(e)       No Solicitation. During the Restricted Period, the Executive shall
not, directly or indirectly, take any of the following actions, and, to the
extent the Executive owns, manages, operates, controls, is employed by or
participates in the ownership, management, operation or control of, or is
connected in any manner with, any business, the Executive shall use his best
efforts to ensure that such business does not take any of the following actions:

 

(i)persuade or attempt to persuade any Customer, Prospective Customer or
Supplier to cease doing business with an Interested Party, or to reduce the
amount of business it does with an Interested Party;

 

(ii)persuade or attempt to persuade any Service Provider to cease providing
services to an Interested Party; or

 

(iii)solicit for hire or hire for himself or for any third party any Service
Provider unless such person’s employment was terminated by the Company or any of
its affiliates or such person responded to a “blind advertisement”.

 

(f)       The following definitions are applicable to this Section 8.

 

(i)“Company Business” means: (A) any steak concept restaurant, other than the
Rivershore Bar and Grille in Oregon City, Oregon, with an average check in
excess of $75; (B) any other restaurant or food or beverage operation that has a
theme, menu or cuisine substantially similar to any current or planned (at the
time of termination of the Executive’s employment with the Company, based on
substantive and repeated executive-level discussions) restaurant or food or
beverage operation operated by the Company; or (C) food and beverage operations
in a hotel. For the sake of clarity, a steak concept restaurant with an average
check less than $75 is not, and shall not be deemed to be, Company Business,
unless such steak concept restaurant is otherwise included within the meaning of
Section 8(f)(i)(B).

 

(ii)“Competing Business” means any Person that engages in the Company Business.

 

(iii)“Customer” means any Person that purchased goods or services from an
Interested Party at any time within twelve (12) months prior to the date of the
solicitation prohibited by Section 8(e)(i).

 

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(iv)“Geographic Area” shall mean a twenty (20) mile radius of: (A) any existing
Company owned or operated restaurant or hospitality venue; or (B) any
prospective location in which the Company is considering engaging in Company
Business. For the sake of clarity, such prospective locations shall consist of
any location considered in substantive and repeated executive-level discussions.

 

(v)“Person” means an individual, a sole proprietorship, a corporation, a limited
liability company, a partnership, an association, a trust, or other business
entity, whether or not incorporated.

 

(vi)“Prospective Customer” means any Person with whom an Interested Party met or
to whom an Interested Party presented for the purpose of soliciting the Person
to become a Customer of an Interested Party within six (6) months prior to the
date of the solicitation prohibited by Section 8(e)(i).

 

(vii)“Service Provider” means any Person who is an employee or independent
contractor of an Interested Party or who was within six (6) months preceding the
solicitation prohibited by Section 8(e)(ii) or (iii) an employee or independent
contractor of an Interested Party.

 

(viii)“Supplier” means any Person that sold goods or services to an Interested
Party at any time within twelve (12) months prior to the date of the
solicitation prohibited by Section 8(e)(i).

 

(g)       Reasonableness of Restrictions. The Executive recognizes and
acknowledges that: (i) the types of employment which are prohibited by this
Section 8 are narrow and reasonable in relation to the skills which represent
the Executive’s principal salable asset both to Company and to other prospective
employers; and (ii) the specific but broad temporal and geographical scope of
this Section 8 is reasonable, legitimate, and fair to the Executive in light of
the Company’s need to market its services and sell its services in a large
geographic area in order to maintain a sufficient customer base and the limited
restrictions on the type of employment prohibited herein compared to the types
of employment for which the Executive is qualified to earn his livelihood.

 

(h)       Effect of Breach. In the event that the Executive breaches any of the
terms described in Section 8(d) and (e) above, the Executive acknowledges and
agrees that the Restricted Period shall be tolled and shall not run during the
time that the Executive is in breach of such obligations; provided that, the
Restricted Period shall begin to run again once the Executive has ceased
breaching the terms of Section 8(d) and/or (e) (as applicable) and is otherwise
in compliance with his obligations described therein.

 

9.       Intellectual Property.

 

(a)       All creations, inventions, ideas, designs, copyrightable materials,
trademarks, and other technology and rights (and any related improvements or
modifications), whether or not subject to patent or copyright protection
(collectively, “Creations”), relating to any activities of the Company which are
conceived by the Executive or developed by the Executive in the course of his
employment with the Company, whether conceived alone or with others and whether
or not conceived or developed during regular business hours, and if based on
Confidential Information, after the termination of the Executive’s employment,
shall be the sole property of the Company and, to the maximum extent permitted
by applicable law, shall be deemed “works made for hire” as that term is used in
the United States Copyright Act.

 

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(b)       To the extent, if any, that the Executive retains any right, title or
interest with respect to any Creations delivered to the Company or related to
his employment with the Company, the Executive hereby grants to the Company an
irrevocable, paid-up, transferable, sub-licensable, worldwide right and license:
(i) to modify all or any portion of such Creations, including, without
limitation, the making of additions to or deletions from such Creations,
regardless of the medium (now or hereafter known) into which such Creations may
be modified and regardless of the effect of such modifications on the integrity
of such Creations; and (ii) to identify the Executive, or not to identify him,
as one or more authors of or contributors to such Creations or any portion
thereof, whether or not such Creations or any portion thereof have been
modified. The Executive further waives any “moral” rights, or other rights with
respect to attribution of authorship or integrity of such Creations that he may
have under any applicable law, whether under copyright, trademark, unfair
competition, defamation, right of privacy, contract, tort or other legal theory.

 

(c)       The Executive will promptly inform the Company of any Creations. The
Executive will also allow the Company to inspect any Creations he conceives or
develops within one year after the termination of his employment for any reason
to determine if they are based on Confidential Information. The Executive shall
(whether during his employment or after the termination of his employment)
execute such written instruments and do other such acts as may be necessary in
the opinion of the Company or its counsel to secure the Company’s rights in the
Creations, including obtaining a patent, registering a copyright, or otherwise
(and the Executive hereby irrevocably appoints the Company and any of its
officers as his attorney in fact to undertake such acts in my name). The
Executive’s obligation to execute written instruments and otherwise assist the
Company in securing its rights in the Creations will continue after the
termination of his employment for any reason. The Company shall reimburse the
Executive for any out-of-pocket expenses he incurs in connection with his
compliance with this Section 9(c).

 

10.       Specific Acknowledgements Regarding Sections 8 and 9.

 

(a)       Survival. The Executive’s acknowledgments and agreements set forth in
Sections 8 and 9 shall survive the termination of the Executive’s employment
with Company for any reason.

 

(b)       Severability. The parties intend Sections 8 and 9 of this Agreement to
be enforced as written. However, if any portion or provision of such sections
shall to any extent be declared illegal or unenforceable by a duly authorized
court having jurisdiction, then the remainder of such sections, or the
application of such portion or provision in circumstances other than those as to
which it is so declared illegal or unenforceable, shall not be affected thereby,
and each remaining portion and provision of such sections shall be valid and
enforceable to the fullest extent permitted by law.

 

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(c)       Modification And Blue Pencil. The parties agree and intend that the
covenants contained in Sections 8 and 9 of this Agreement shall be deemed to be
a series of separate covenants and agreements, and if any provision of such
sections shall be adjudicated to be invalid or unenforceable, such provision,
without any action on the part of the parties hereto, shall be deemed amended to
delete (i.e., “blue pencil”) or modify the portion adjudicated to be invalid or
unenforceable, to the extent necessary to cause the provision as amended to be
valid and enforceable.

 

(d)       Irreparable Harm. The Executive expressly acknowledges that any breach
or threatened breach of any of the terms and/or conditions of Sections 8 or 9 of
this Agreement will result in substantial, continuing and irreparable injury to
the Company. Therefore, the Executive hereby agrees that, in addition to any
other remedy that may be available to the Company, the Company shall be entitled
to injunctive or other equitable relief by a court of appropriate jurisdiction
in the event of any breach or threatened breach of the terms of Section 8 or 9,
without having to post bond.

 

(e)       Covenants Enforceable Upon Material Job Change. The Executive
acknowledges and agrees that if he should transfer between or among any
affiliates or subsidiaries of the Company, wherever situated, or be promoted,
demoted, reassigned to functions other than his present functions, or have his
job duties changed, altered or modified in any way, all terms of Section 8 and
Section 9 of this Agreement shall continue to apply with full force and effect.
For sake of clarity, nothing contained in this Section 10(e) shall vitiate or
impact Executive’s right of termination for Good Reason.

 

(f)       Impact of Breach on Severance. The Executive hereby expressly
acknowledges and agrees that if he breaches any of the terms and/or conditions
set forth in Section 8 and/or Section 9 of this Agreement following a
termination of his employment either by the Company without Cause or by the
Executive for Good Reason, then, in addition to the injunctive relief described
in Section 10(d) above, (i) the Company shall cease providing the Executive with
any further Severance as of the date of such breach, (ii) the Company shall not
be obligated to provide the Executive with, and the Executive shall not be
eligible or otherwise entitled to receive, any further Severance, and (iii) the
Company’s obligation to provide the Executive with the Severance shall be null
and void, and of no further force or effect.

 

11.       Disputes; Governing Law.

 

(a)       Except as set forth in 11(b), any controversy or claim arising out of
or relating to this Agreement, a breach of this Agreement or otherwise arising
out of the Executive’s employment or the termination of his employment
(including, without limitation, any claims of unlawful employment discrimination
whether based on age or otherwise) shall, to the fullest extent permitted by
law, be settled exclusively by arbitration before a single arbitrator appointed
by the American Arbitration Association (“AAA”) in New York, New York (applying
New York law) under the National Rules for the Resolution of Employment Disputes
of the AAA, as may be amended from time to time. Pursuant to applicable law, the
Company and Executive will share the AAA administrative fees, the arbitrator’s
fee and expenses. All Claims and defenses which could be raised before a court
must be raised in arbitration and the arbitrator shall apply the law
accordingly. The arbitrator shall issue a written decision setting forth the
essential findings and conclusions in sufficient detail to permit judicial
review to the extent permitted by law. The decision or award of the arbitrator
shall be final and binding upon the parties. Any arbitral award may be entered
as a judgment or order in any court of competent jurisdiction. Any relief or
recovery based on any claims arising out of your employment, cessation of
employment, including but not limited to, any claim of unlawful harassment or
discrimination, shall be limited to that awarded by the arbitrator.

 

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(b)       Notwithstanding the foregoing, the Executive agrees that it would be
difficult to measure any damages caused to the Company which might result from
any breach by the Executive of the promises set forth in Sections 8 or 9 of this
Agreement, and that in any event, money damages would be an inadequate remedy
for any such breach. Accordingly, if the Executive breaches, or proposes to
breach, Section 8 or 9 of this Agreement, the Company shall be entitled, in
addition to all other remedies that it may have, to a temporary and preliminary
injunction or other appropriate equitable relief to restrain any such breach
without showing or proving any actual damage to the Company from any court
having competent jurisdiction over the Executive, provided that any other relief
shall be pursued through an arbitration proceeding pursuant to Section 11(a).

 

(c)       To the extent that any court action is permitted consistent with or to
enforce this Section 11, the parties hereby consent to the jurisdiction of the
United States District Court for the Southern District of New York, or if that
court is unable to exercise jurisdiction for any reason, the Supreme Court of
New York, New York County. Accordingly, with respect to any such court action,
the Executive: (i) submits to the personal jurisdiction of these courts; (ii)
consents to service of process under the notice provisions set forth in Section
17; (iii) waives any other requirement (whether imposed by statute, rule of
court, or otherwise) with respect to personal jurisdiction or service of
process; and (iv) waives any objection to jurisdiction based on improper venue
or improper jurisdiction.

 

(d)       BOTH THE COMPANY AND THE EXECUTIVE HEREBY WAIVE ANY RIGHT TO A TRIAL
BY JURY IN ANY CONTROVERSY OR CLAIM ARISING OUT OF OR RELATED TO THIS AGREEMENT
TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE FEDERAL OR STATE LAW.

 

(e)       The prevailing party shall be entitled to reasonable attorneys’ fees
and costs in connection with any action filed under Section 11(a), (b) or both.

 

(f)       This Agreement shall be governed by and construed in accordance with
the laws of the State of New York without giving effect to the conflict of laws
principles of New York or any other state.

 

12.       Integration. This Agreement constitutes the entire agreement between
the parties with respect to the subject matter hereof and supersedes all prior
agreements between the parties concerning its subject matter.

 

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13.       Assignment. This Agreement shall be binding upon the Company and any
successors and assigns of the Company, including any corporation with which, or
into which, the Company may be merged or which may succeed to the Company’s
assets or business. In the event that the Company sells or transfers all or
substantially all of the assets of the Company, or in the event of any merger or
consolidation of the Company, the Company shall use reasonable efforts to cause
such assignee, transferee, or successor to assume the liabilities, obligations
and duties of the Company hereunder. Notwithstanding the foregoing, if for any
reason an assignee, transferee, or successor does not assume the full extent of
the Company’s liabilities, obligations and duties of the Company hereunder, such
event or nonoccurence shall trigger a termination without Cause under this
Agreement. Neither this Agreement nor any right or obligation hereunder may be
assigned by the Executive; provided, however, that this provision shall not
preclude the Executive from designating one or more beneficiaries to receive any
amount that may be payable after his death and shall not preclude his executor
or administrator from assigning any right hereunder to the person or persons
entitled hereto.

 

14.       Enforceability. If any portion or provision of this Agreement
(including, without limitation, any portion or provision of any section of this
Agreement) shall to any extent be declared illegal or unenforceable by a court
of competent jurisdiction, then the remainder of this Agreement, or the
application of such portion or provision in circumstances other than those as to
which it is so declared illegal or unenforceable, shall not be affected thereby,
and each portion and provision of this Agreement shall be valid and enforceable
to the fullest extent permitted by law. Moreover, if any one or more of the
provisions contained in this Agreement is held to be excessively broad as to
duration, scope or activity, that provision shall be construed by limiting and
reducing it so as to be enforceable to the maximum extent compatible with
applicable New York law.

 

15.       Survival. The provisions of this Agreement shall survive the
termination of this Agreement and/or the termination of the Executive’s
employment to the extent necessary to effectuate the terms contained in this
Agreement, including without limitation, the terms of Sections 5, 6, 7, 8, 9, 10
and 11.

 

16.       Waiver. No waiver of any provision hereof shall be effective unless
made in writing and signed by the waiving party. The failure of any party to
require the performance of any term or obligation of this Agreement, or the
waiver by any party of any breach of this Agreement, shall not prevent any
subsequent enforcement of such term or obligation or be deemed a waiver of any
subsequent breach.

 

17.       Notices. Any notices, requests, demands and other communications
provided for by this Agreement shall be sufficient if in writing and delivered
in person or sent by a nationally recognized overnight courier service or by
registered or certified mail, postage prepaid, return receipt requested, to the
Executive at the last address the Executive has filed in writing with the
Company, or, in the case of the Company, to 413 West 14th Street, New York, NY
10014 Attention: General Counsel, Fax No. (212) 255-9715, with a copy to Kenneth
Koch, Esq., Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C., 666 Third
Avenue, New York, NY 10017, Fax No. (212) 983-3115.

 

18.       Amendment. This Agreement may be amended or modified only by a written
instrument signed by the Executive and by a duly authorized representative of
the Company.

 

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19.       Nondisparagement. The Executive agrees to refrain from (i) making,
directly or indirectly, any derogatory comments concerning the Company or its
Subsidiaries or any current or former officers, directors, employees or
shareholders thereof or (ii) taking any other action with respect to the Company
or its Subsidiaries which is reasonably expected to result, or does result in,
damage to the business or reputation of the Company, its Subsidiaries or any of
its current or former officers, directors, employees or shareholders.
Notwithstanding anything to the contrary contained herein, nothing in this
Agreement shall prohibit or restrict Executive from, truthfully and in good
faith: (i) making any disclosure of information required by law; (ii) providing
information to, or testifying or otherwise assisting in any investigation or
proceeding brought by, any federal, state or local regulatory or law enforcement
agency or legislative body, any self-regulatory organization, or the Executive’s
designated legal, compliance or human resources officers; or (iii) filing,
testifying, participating in or otherwise assisting in a proceeding relating to
an alleged violation of any federal, state or municipal law relating to fraud,
or any rule or regulation of the Securities and Exchange Commission or any
self-regulatory organization.

 

20.       Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed and delivered shall be taken to be
an original; but such counterparts shall together constitute one and the same
document.

 

 

 

[signature page follows]

 

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IN WITNESS WHEREOF, the patties have executed this Agreement effective on the
Effective Date.

 

  THE ONE GROUP HOSPITALITY, INC.               By: /s/ Jonathan Segal     Name:
Jonathan Segal   Title: Chief Executive Officer               EMANUEL HILARIO  
            /s/ Emanuel Hilario  

 

 

 

 

 

 

[Signature Page to Emanuel Hilario Employment Agreement]

   

 

 

Exhibit A – Release

  

1.       Executive, individually and on behalf of his heirs and assigns, hereby
releases, waives and discharges Company, and all subsidiary, parent or
affiliated companies and corporations, and their present, former or future
respective subsidiary, parent or affiliated companies or corporations, and their
respective present or former directors, officers, shareholders, trustees,
managers, supervisors, employees, partners, attorneys, agents, representatives
and insurers, and the respective successors, heirs and assigns of any of the
above described persons or entities (hereinafter referred to collectively as
“Released Parties”), from any and all claims, causes of action, losses, damages,
costs, and liabilities of every kind and character, whether known or unknown
(“Claims”), that Executive may have or claim to have, in any way relating to or
arising out of, in whole or in part, (a) any event or act of omission or
commission occurring on or before the Termination Date, including Claims arising
by reason of the continued effects of any such events or acts, which occurred on
or before the Termination Date, or (b) Executive’s employment with Company or
the termination of such employment with Company, including but not limited to
Claims arising under federal, state, or local laws prohibiting disability,
handicap, age, sex, race, national origin, religion, retaliation, or any other
form of discrimination, such as the Americans with Disabilities Act, 42 U.S.C.§§
12101 et seq.; the Age Discrimination in Employment Act, as amended, 29 U.S.C.
§§ 621 et seq.; and Title VII of the 1964 Civil Rights Act, as amended, 42
U.S.C. §§ 2000e et seq.; Claims for intentional infliction of emotional
distress, tortious interference with contract or prospective advantage, and
other tort claims; and Claims for breach of express or implied contract; with
the exception of Employee’s capacity as a shareholder of the Company as well as
vested rights, if any, under Company retirement plans. Executive hereby warrants
that he has not assigned or transferred to any person any portion of any claim
that is released, waived and discharged above. Executive understands and agrees
that by signing this Agreement he is giving up his right to bring any legal
claim against any Released Party concerning, directly or indirectly, Executive’s
employment relationship with the Company, including his separation from
employment, and/or any and all contracts between Executive and Company, express
or implied. Executive agrees that this legal release is intended to be
interpreted in the broadest possible manner in favor of the Released Parties, to
include all actual or potential legal claims that Executive may have against any
Released Party, except as specifically provided otherwise in this Agreement.
This release does not cover Claims relating to the validity or enforcement of
this Agreement. Further, Executive has not released any claim for indemnity or
legal defense available to him due to his service as a board member, officer or
director of the Company, as provided by the certificate of incorporation or
bylaws of the Company, or by any applicable insurance policy, or under any
applicable corporate law.

 

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2.       Executive agrees and acknowledges that he: (i) understands the language
used in this Agreement and the Agreement’s legal effect; (ii) understands that
by signing this Agreement he is giving up the right to sue the Company for age
discrimination; (iii) will receive compensation under this Agreement to which he
would not have been entitled without signing this Agreement; (iv) has been
advised by Company to consult with an attorney before signing this Agreement;
and (v) was given no less than twenty-one days to consider whether to sign this
Agreement. For a period of seven days after the effective date of this
Agreement, Executive may, in his sole discretion, rescind this Agreement, by
delivering a written notice of rescission to the Board. If Executive rescinds
this Agreement within seven calendar days after the effective date, this
Agreement shall be void, all actions taken pursuant to this Agreement shall be
reversed, and neither this Agreement nor the fact of or circumstances
surrounding its execution shall be admissible for any purpose whatsoever in any
proceeding between the parties, except in connection with a claim or defense
involving the validity or effective rescission of this Agreement. If Executive
does not rescind this Agreement within seven calendar days after the Effective
Date, this Agreement shall become final and binding and shall be irrevocable.

 

3.       Capitalized terms not defined herein have the meaning specified in the
Employment Agreement between the Company and the Executive dated October 30,
2017.

 

 

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