Exhibit
10.1


 


 


 


EMPLOYMENT AGREEMENT


 


THIS
AGREEMENT is entered into effective the 11th day of September, 2007,
by and between WESTERN SIZZLIN CORPORATION (“Company”), and Robyn B. Mabe (“Executive”).


 


WHEREAS,
Company is a corporation organized under the laws of the State of Delaware,
with its principal place of business in Roanoke, Virginia; and


 


WHEREAS,
Executive is now and desires to continue to be employed by the Company on the
terms set forth in this Agreement; and


 


WHEREAS,
the Board of Directors of the Company has determined that appropriate steps
should be taken to reinforce and encourage the continued attention, and
dedication of members of the Company’s management, including Executive, to
their assigned duties without distraction.


 


NOW,
THEREFORE, in consideration of the above premises and the mutual covenants
contained in this Agreement and other good and valuable consideration, the
parties agree as follows:


 


1.             Duties
and Obligations.  The Company and Executive agree that
Executive shall serve as Vice President and Chief Financial Officer of the
Company and its wholly-owned subsidiaries. Such duties and powers shall be
consistent with those normally expected of persons holding similar
positions.  Executive’s duties, however,
are subject to reasonable modifications based on future developments of the
Company.


 


2.             Compensation
and Bonus.  Executive’s base salary is at the current
rate of $125,000 per annum. Executive’s base salary will be determined by the
Board, but shall not be less than $125,000 per annum.  Executive’s base salary shall be paid in
twenty-six (26) equal bi-weekly payments.


 


In
addition to base salary, Executive will be eligible to receive an annual bonus,
determined annually by the Board of Directors of Company.


 


3.             Benefits.  In addition to salary, Executive
shall be entitled to participate in benefit plans which Company adopts and
offers to employees, subject to the same terms, conditions and eligibility
requirements as other Company employees, including, without limitation health
insurance, and retirement, whether pension or profit sharing, plans.  Executive’s participation 


 

















 


under any group
insurance programs, retirement plans, or other benefit programs, shall be
subject to the applicable terms and conditions of the particular plans or
programs.


 


4.             Term and Termination. The term of this Agreement shall be one (1) year from the date
hereof.  Unless otherwise terminated in
accordance with this Agreement, the Agreement shall automatically renew for
subsequent one year terms (“Renewal Terms”) unless either party provides
written notice of termination to the other party more than 30 days in advance
of the beginning of any Renewal Term.


 


Executive’s
employment shall be terminated only in one of the following ways:


 


A.                                   At any time by mutual written agreement of both parties to this
Agreement; or


 


B.                                     Upon thirty (30) days written notice from the Company to Executive; or


 


C.                                     Automatically and immediately should one of the following events occur:


 


1.                                       Death.  Executive dies; or


 


2.                                       Disability.  Executive becomes totally and permanently
disabled, meaning Executive’s inability for a period of three (3) months, to
perform her duties contemplated by this Agreement, such that she does not
constitute a Qualified Individual with a Disability under the terms of the
Americans with Disabilities Act of 1990. 
Such total and permanent disability shall be determined by the Company
based on medical and other evidence satisfactory to it; or


 


D.                                    For Cause.  At any time by the Company, by written notice
to Executive, terminating this Agreement and discharging Executive for Cause,
as defined in this section of this Agreement.


 


1.                                       Cause.    Termination by the Company of Executive’s employment for “Cause”
means:


 


i.                                          Executive has materially breached this Agreement.  A material breach of this Agreement shall
include but shall not be limited to a habitual or repeated neglect of Executive’s
duties (illness, injury or incapacity of the Executive, or Executive’s failure
to meet the performance criteria established for and communicated to Executive,
in writing, by the 


 


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                                                Company shall not constitute “Cause”);


 


ii.                                       Executive has breached her duty of loyalty to the Company;


 


iii.                                    Executive has committed an act of gross negligence, in connection with
the performance of her duties that is injurious to the business of the Company;


 


iv.                                   Executive has committed an act of gross misconduct relating to her
employment or the Company’s business, including, but not limited to, theft or
embezzlement of the Company’s property or money, or an act of fraud against the
Company;


 


v.                                      Executive is convicted of a felony, or a crime involving moral turpitude.


 


2.                                       If Company believes Cause exists, as defined herein, a written notice
will be delivered to Executive by the Chairman of the Board or of the
Compensation Committee, that specifically identifies the manner in which the
Chairman believes that Executive has given the Company Cause for termination of
Executive’s employment, and giving Executive an opportunity for Executive,
together with Executive’s counsel, to be heard before the Board of Directors of
the Company.  The meeting of the Board of
Directors shall not be sooner than fifteen (15) calendar days from the date of
the written notice and shall be at a location determined by the Board of
Directors, or via telephone, in either case within the discretion of the
Board.  After granting Executive the
opportunity to be heard, the Board of Directors of the Company may then make a
finding that, in the good faith opinion of a majority of the Board of Directors
the Executive acted (or failed to act when she should have acted) in a manner
constituting Cause as defined herein, and specifying the particulars of that
finding.  Following the opportunity for
the Executive, together with the Executive’s counsel, to be heard, the Board of
Directors may excuse the Executive from any further Board of Directors’
proceeding where the finding is discussed or made.  Pending an opportunity for Executive,
together with Executive’s counsel, to be heard before the Board of Directors of
the Company, Executive may be immediately placed upon an indefinite suspension
without pay and shall be required to immediately leave the Company’s
premises.  In the event that a majority
of the Board of Directors (excluding the Executive if she is then a 


 


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Director),
do not find that Executive acted (or failed to act when she should have acted)
in a manner constituting Cause as defined herein, then Executive shall be
reimbursed for any compensation lost during said suspension.


 


In
the event Executive’s employment is terminated at any time by mutual written
agreement of both parties, voluntarily terminated by Executive, automatically
and immediately terminated upon Executive’s death or total and permanent
disability, or terminated for “Cause”, as defined in this Agreement, then
following termination, Executive shall not be entitled to payment of further
compensation (whether salary or bonus) or benefits of any type (other Executive’s
right to “vested” benefits under the Company’s benefit plans or continuing
insurance coverage under the Company’s Health Benefit Plan pursuant to the
Consolidated Omnibus Budget Reconciliation Act (“COBRA”) at Executive’s sole
expense) under this Agreement.  In the
event Executive’s employment is terminated by the Company without “Cause,” as
defined in this Agreement, then Executive shall be entitled to a Severance
Benefit as set forth in Section 5, below. 
If the Company terminates this Agreement without Cause, the Company
shall have the right at its option, to require Executive to immediately leave
the Company’s premises.


 


In
the event that Employee is successful in subsequently challenging the Company’s
final determination to terminate her employment for Cause, her damages shall be
limited solely to that compensation she would have received hereunder had her
employment been terminated without Cause. 
To the maximum extent permitted by law, the Company shall not be liable
for any special, incidental, indirect, consequential, punitive, or exemplary
damages, whether based upon contract, tort, negligence, short liability, or
otherwise, even if the Company has been advised of the possibility of such
damages.


 


5.                                      Severance for Termination Without Cause.  In the event that the Company
terminates Executive’s employment at any time, upon thirty (30) days’ written
notice, without Cause and not under circumstances amounting to a Change in
Control, then Executive’s sole remedy shall be payment of the following “Severance
Benefit”.


 


A.                                   If the Company terminates this Agreement without Cause, the Company shall
have the right at its option, to require Executive to immediately leave the
Company’s premises; provided, that the Company shall be obligated to pay (as
additional severance) Executive’s base salary during the 30-day notice period.


 


B.                                     Executive shall be entitled to a severance payment in an amount equal to
six (6) months base salary at the rate then in effect.  If the Company terminates this Agreement
without Cause, the Company shall have the right at its option, to require
Executive to immediately leave the Company’s premises; provided, that the 


 


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Company shall be obligated to pay (as additional
severance) Executive’s base salary during the 30-day notice period.


 


C.                                     Executive shall not be entitled to, and shall not receive any cash bonus
paid for any year in which the termination occurs, on a pro rata basis or
otherwise.  The base salary portion of
the severance shall be payable, at the Executive’s option, in a lump sum or in
equal monthly installments consistent with the Company’s ordinary payroll
practices.


 


D.                                    In the event Executive elects continuing insurance coverage under the
Company’s Health Benefit Plan pursuant to the Consolidated Omnibus Budget
Reconciliation Act (“COBRA”) following any Termination Without Cause, then, in
addition to payment of salary as set forth above, the Company shall reimburse
Executive for all premiums paid by Executive for said continuation coverage for
a period of six (6) months.


 


6.                                      Severance for Termination in Connection with Change in Control.


 


A.                                   Change in Control.


 


The Company recognizes that,
as is the case with many publicly held corporations, the possibility of a
change in control exists, and that possibility, along with the uncertainty and
questions which may arise among management, may result in the departure or
distraction of management personnel to the detriment of the Company and its
shareholders.  In order to induce
Executive to remain in its employ, the Company agrees to provide Executive the
payments and benefits described in this Agreement if Executive’s employment with the Company is
terminated subsequent to a “Change in Control” of the Company as defined in
Section 6B, under the circumstances described in Section 6C.


 


B.                                     Definition of Change in Control.


 


For purposes of this
Agreement, a Change in Control of the Company means the occurrence of any of
the following events during the period in which this Agreement remains in
effect.  A Change in Control will be
deemed to occur on the date the event occurs:


 


1.                                       Change in
Voting Power. Any person or persons acting together which would
constitute a “group” for purposes of Section 13(d) of the Exchange Act (other
than the Company, or any Subsidiary, or any entity beneficially owned by any of
the foregoing) beneficially own (as defined in Rule 13(d)-3 under the Exchange
Act) without Board approval or consent, directly or indirectly, at least thirty  percent (30%) of the total 


 


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voting power of the Company
entitled to vote generally for the election of the Board.


 


2.                                       Change in Board
of Directors. Either:


 


i.                                          the Current
Directors (as hereinafter defined) cease for any reason to constitute at least
a majority of the members of the Board (for these purposes, a “Current Director”
means any member of the Board as of the date of this Agreement, and any
successor of a Current Director whose election or nomination for election by
the Company’s stockholders was approved by at least a majority of the Current
Directors then on the Board); or


 


ii.                                       at any meeting
of the stockholders of the Company called for the purpose of electing
Directors, a majority of the persons nominated by the Board for election as
Directors fail to be elected; or


 


3.                                       Liquidation,
Merger or Consolidation. The stockholders of the Company approve:


 


i.                                          a plan of
complete liquidation of the Company; or


 


ii.                                       an agreement
providing for the merger or consolidation of the Company (i) in which the
Company is not the continuing or surviving corporation (other than
consolidation or merger with a wholly owned subsidiary of the Company in which
all shares outstanding immediately prior to the effectiveness thereof are
changed into or exchanged for the same consideration) or (ii) pursuant to
which the shares are converted into cash, securities or other property, except
a consolidation or merger of the Company in which the holders of the shares immediately
prior to the consolidation or merger have, directly or indirectly, at least a
majority of the common stock of the continuing or surviving corporation
immediately after such consolidation or merger, or in which the Board
immediately prior to the merger or consolidation would, immediately after the
merger or consolidation, constitute a majority of the board of directors of the
continuing or surviving corporation; or


 


4.                                       Sale of Assets. The
stockholders of the Company approve an agreement (or agreements) providing for
the sale or other disposition (in one transaction or a series of transactions)
of 


 


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all or substantially all of
the assets of the Company.


 


C.                                     Termination Following Change in Control.


 


If
any of the events described in Section 6B constituting a Change in Control
occur, Executive will be entitled to the payments and benefits provided for in
Section 6D if a subsequent termination of Executive’s employment occurs within one (1) year from the date of that
Change in Control, unless that termination is otherwise pursuant to Section 4C
or D.


 


Those payments and benefits
will be in lieu of any severance payments Executive would otherwise receive in
accordance with Section 5 of this Agreement.


 


D.                                    Payments and Benefits Upon Certain Terminations Following a Change in
Control.


 


If
within one (1) year following the Change in Control, Executive’s employment is terminated other than
for Death, Disability or Cause, then the following provisions will apply:


 


1.                                       Compensation
Through Date of Termination. The Company will pay
Executive within thirty (30) days after termination:


 


i.                                          Any unpaid
amount of Executive’s base salary through the Date of Termination; and


 


ii.                                       With respect to
any year then completed, any unpaid amount of her bonus accrued to Executive.


 


2.                                       Additional
Severance. In lieu of any further salary and bonus payments
to Executive for periods subsequent to the date of termination, or other
severance payments, the Company will pay as severance pay to Executive the additional
sum equal to:  Executive’s annual base salary as of the date
of Change in Control, or as of the date of termination, whichever is greater.


 


The
severance pay provided for in this Section 6D shall be transferred to a “Rabbi
Trust,” effective as of the Date of Termination, and paid to Executive in
twelve (12) equal monthly installments commencing on the first day of the next
month following the date of termination, and on the first day of each
subsequent month, until fully paid.


 


3.                                       Benefit Plans.  In the event of a Change in Control, unless
Executive’s employment is
terminated for Cause, the


 


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Company will, at the Company
expense, maintain in full force and effect for Executive’s continued benefit, for a period of one (1) year following the
date of termination, the health, dental, disability and other welfare benefits,
plan, programs and arrangements substantially equivalent to the most valuable
coverage provided under any plan maintained by the Company from time to time
during such period.  In addition,
Executive will continue to be provided during the one (1) year following the
date of termination, with the same life insurance coverage maintained on her
life immediately prior to the date of termination.  These benefits shall be reduced by the amount
of similar benefits provided to Executive during such period by a subsequent
employer, as determined solely by the Board. 
For the purposes of enforcing this offset provision, Executive shall
notify the Board as to the terms and conditions of any subsequent employment
and the corresponding benefits received pursuant thereto, and shall provide, or
cause to provide the Board, correct, complete, and timely information
concerning the same.


 


4.                                       No Mitigation
Required.  Executive
will not be required to mitigate the amount of any payment provided for in this
Section 6D by seeking other employment or otherwise, nor will the amount of any
payment provided for in this Section 6D be reduced by any compensation earned
by Executive as the result of employment with another employer after the date
of termination or otherwise, except for a reduction in benefits as set forth in
subsection 3.


 


5.                                       Tax Gross-up
Payment.  If any payments or benefits
provided pursuant to this Section 6D are subject to an excise tax on an “excess
parachute payment” under Section 4999 of the Internal Revenue Code of 1986 (the
“Code”), or any successor provision of the Code, or are subject to an excise or
penalty tax under any similar provision of any other revenue system to which
Executive may be subject, the Company will provide a gross-up payment to
Executive in order to place Executive in the same after-tax position Executive
would have been in had no excise or penalty tax become due and payable under
Code Section 4999 (or any successor provision) or any similar provision of
another revenue system.  No gross-up
payment will be made for any excise or penalty tax attributable to any stock
options granted to Executive, or for any other payments or benefits provided to
Executive under other sections of this Agreement.


 


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7.             Working
Facility.


 


Executive will perform her
services hereunder at the principal office of the Company, located in Roanoke,
Virginia, except as travel to other locations is warranted by the business of
the Company.  The Company shall provide
Executive with such office space, secretarial help, and other facilities and
services as may be suitable to her position and appropriate for the performance
of her duties.


 


8.             Modification and Waiver.


 


No
provision of this Agreement may be modified, waived or discharged unless that
waiver, modification or discharge is agreed to in writing by Executive and such
officer as may be specifically designated by the Board of Directors of the
Company. No waiver by either party at any time of any breach by the other party
of, or compliance with, any condition or provision of this Agreement to be
performed by that other party will be deemed a waiver of similar or dissimilar
provisions or conditions at the time or at any prior or subsequent time.


 


9.             Severability.


 


If
any one or more of the provisions of this Agreement, including but not limited
to Section 12 hereof, or any word, phrase, clause, sentence or other portion of
a provision is deemed illegal or unenforceable for any reason, that provision
or portion will be modified or deleted in such a manner as to make this
Agreement as modified legal and enforceable to the fullest extent permitted
under applicable laws. The validity and enforceability of the remaining
provisions or portions will remain in full force and effect.


 


10.          Counterparts.


 


This
Agreement may be executed in two or more identical counterparts, each of which
will take effect as an original and all of which will evidence one and the same
agreement.


 


11.          Arbitration.


 


Except
for the rights and duties of the parties set forth in Section 12 of this
Agreement, any dispute or controversy arising under or in connection with this
Agreement shall be settled exclusively by arbitration in Roanoke, Virginia,
according to the rules of the American Arbitration Association then in effect.
Judgment may be entered on the arbitrator’s award in any court having jurisdiction; provided, however, that
Executive shall be entitled to seek specific performance of her right to be
paid for all periods up to the date of termination during the pendency of any
dispute or controversy arising under or in connection with this Agreement.


 


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12.          Restrictive
Covenant.


 


A.                                   Need for
Protection.  Executive
acknowledges that, because of her senior executive position with the Company,
her knowledge of the affairs of the Company and her relations with its
suppliers and customers, she could do serious damage to the financial welfare
of the Company, should she compete or assist others in competing with the
business of the Company.  Accordingly,
the parties agree as follows:


 


B.                                     Confidential
Information.


 


1.                                       Non-Disclosure.  Except as the Company may permit or direct in
writing, during the term of this Agreement and thereafter, Executive agrees
that she will never disclose to any person or entity any confidential or
proprietary information, knowledge, or data of the Company, which she may have
obtained while in the employ of the Company, relating to any customers,
customer lists, methods of distribution, sales, prices, profits, costs, contracts,
inventories, suppliers, dealers, distributors, business prospects, business
methods, formulas, plans or techniques, research, trade secrets, or know how of
the Company.


 


2.                                       Return of
Records.  All records, documents,
software, computer disks, and any other form of information relating to the
business of the Company, which are or were prepared or created by Executive, or
which may or did come into her possession during the term of her employment
with the Company, including any and all copies thereof, shall be returned to
the Company, or as the case may be, shall remain in the possession of the
Company, upon termination of employment for any reason.


 


3.                                       Future
Employment.  Nothing in
this section shall limit the Executive’s right to carry Executive’s accumulated
career knowledge and professional skills to any future employment, subject to
the specific limitations of the foregoing provisions of this section and the
covenants set forth below.


 


C.                                     Non-Competition.


 


1.                                       Scope of
Operations.  The parties
hereto acknowledge that the Company’s operations are within the continental
United States, and that it conducts business throughout the continental United
States, thus, the Company’s need for 


 


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                                                protection against
unfair competition is throughout the continental United States.


 


2.                                       Covenant Not To
Compete.  Executive agrees that she will
not, during the term of this Agreement and for a period of six (6) months after
her employment with the Company has terminated:


 


i.                                          engage directly
or indirectly, for her own personal benefit or the benefit of any person or
entity other than the Company, which would result in direct competition with
the Company, anywhere in the continental United States; or


 


ii.                                       develop,
promote, invest in, provide financing for, be employed by, or operate any
business on her own behalf, or for any other person or entity, which would
result in direct competition with the Company, or, assist any other person in
doing so.


 


iii.                                    For the
purposes of this Section 12C the phrase “direct competition” shall mean
employment with a restaurant or chain providing family steaks and/or buffet.


 


D.                                    Termination
Without Cause.  It is
understood and agreed that in the event the Company terminates Executive’s
employment without Cause, Section 12C hereof shall be null and void.  Notwithstanding the foregoing provision,
however, if Executive’s employment is terminated under circumstances which
entitle her to receive the payments and benefits provided in Section 6 of this
Agreement, then in such event, the provisions of Section 12C hereof shall
remain in full force and effect.


 


E.                                      Judicial
Modification.  In the
event that any court of law or equity shall consider or hold any aspect of this
Section 12 to be unreasonable or otherwise unenforceable, the parties hereto
agree that the aspects of this section so found may be reduced, reformed or
modified by appropriate order of the court, and shall thereafter continue, as
so modified, in full force and effect.


 


F.                                      Injunctive Relief.  The parties hereto acknowledge that the
remedies at law for breach of this section will be inadequate, and the Company
shall be entitled to injunctive relief for violation thereof; provided,
however, that nothing herein shall be construed as prohibiting the Company from
pursing any other remedies available for such breach or threatened breach,
including the recovery of damages from Executive.


 


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13.          Exclusivity
of Services.


 


Executive
agrees that her employment with the Company will be full time, and that she
will devote her best efforts and attention to the business of the Company.


 


14.          Applicable
Law.  The validity and construction of this
Agreement or any of its provisions shall be governed by and determined in
accordance with the laws of the State of Virginia.


 


15.          Notices.  Any notice to be delivered under
this Agreement shall be given in writing and delivered, personally, via telefax
or similar electronic transmission, or by certified mail, postage prepaid,
addressed to the Company or to Executive at its or his last known address.  Any such notice shall be deemed given when
actually received by the party to whom the notice is directed.


 


16.          Survival.  The provisions of this agreement
shall survive the termination of Executive’s employment.


 


17.          Review
and Execution.  Executive acknowledges that she has read and
understands all of the terms of this Agreement, that she is executing the
Agreement voluntarily with full knowledge of its significance.


 


18.          Termination
of Change in Control Agreement.  This Agreement replaces that certain Change
in Control Agreement between Executive and the Company dated September 7, 2004,
which is hereby terminated.


 


	
   

  	
  Western Sizzlin Corporation

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Sardar Biglari

  
	
   

  	
   

  	
   

  
	
   

  	
  Its:

  	
  Chairman and Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ROBYN B. MABE

  
	
   

  	
   

  	
   

  
	
   

  	
  /s/ Robyn B. Mabe

  



 


 


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