Exhibit 10.26





Exhibit 10.26




MARC A. BUEHLER

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”).



Recitals




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 Company’s 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. Definitions.



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 Executive’s 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 Executive’s breach of any restrictive covenant set
forth in Section 8 of this Agreement, or (e) the Executive’s 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 Company’s
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 Company’s 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 Company’s 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
Company’s 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 Company’s 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 Company’s 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 Executive’s 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 Executive’s condition constitutes “Disability” for purposes
of this Agreement.



1.5 “Good Reason” means and will be deemed to exist if, without the Executive’s
consent, (a) the Executive suffers a material diminution in the Executive’s duties,
responsibilities or effective authority or any adverse changes in the Executive’s titles or
positions or Executive is required to relocate (other than from Executive’s 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 Executive’s 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 Executive’s 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.


 


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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 Executive’s employment under this Agreement shall be at-will. Executive’s
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 Executive’s 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 Executive’s 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 Company’s 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”).


 


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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 Executive’s 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 Executive’s 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 Executive’s 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
Company’s 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 Executive’s 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.


 


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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 Executive’s incurred housing
expenses in the Phoenix, Arizona metropolitan area. The housing reimbursements will cease
immediately upon the earlier of the date of Executive’s 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
Executive’s 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 Executive’s 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.


 


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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 Executive’s acts or omissions undertaken
during the course and scope of his employment.



6. Termination. Upon the occurrence of any termination of the Executive’s 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 Executive’s death, the Company will
terminate the Executive’s employment hereunder and the Executive’s 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 Company’s
normal payroll procedures; and (c) any other payments and/or benefits which the Executive or the
Executive’s 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 Executive’s Disability. If Executive’s condition meets the
definition of Disability above, the Company may terminate Executive’s 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 Executive’s 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 Company’s normal payroll
procedures; and



(c) any other payments and/or benefits which the Executive or the Executive’s legal
representative is entitled to receive under any of the Benefit Plans or otherwise in accordance
with the terms of such plan or arrangement.


 


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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
Executive’s 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 Company’s 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 Executive’s employment without Cause (as provided under
Section 6.3) if the Executive’s condition does not meet the definition of Disability at the
time of termination, or (ii) terminate the Executive’s employment due to Disability (as provided
under this Section) if the Executive’s 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 Executive’s 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 Executive’s 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 Executive’s 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 Executive’s
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 Company’s 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.


 


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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 Executive’s 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 Company’s business and/or assets that such successor is willing as of
the closing to assume and agree to perform the Company’s 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 Company’s 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 Executive’s 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 Executive’s
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 Executive’s 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 Executive’s 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 Company’s normal
payroll procedures; and (iv) all of Executive’s 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 Executive’s employment
with the Company.


 


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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. Successors.



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
Executive’s 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 Executive’s
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 Executive’s employment terminates, regardless of the reason for such
termination.


 


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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 Executive’s employment terminates, or at such earlier time or times as the
Board or its designee may specify, all Documents then in Executive’s 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 Executive’s 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.


 


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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
Executive’s 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 Executive’s activities may
constitute a violation of Executive’s 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 Executive’s 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.


 


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10. Miscellaneous.



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
Executive’s 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

Suite 220

Scottsdale, AZ 85251

Attn: Mark Robinow




If to the Executive:

Marc A. Buehler

9720 Kennemer Dr

Plano, TX 75025




or to such other address as (a) indicated in the Company’s 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.


 


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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 Executive’s 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 Executive’s 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 	 
	 
	 	EXECUTIVE:

 	 
	 	/s/ Marc A. Buehler
 	 
	 	Marc A. Buehler 	 




 


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