AGREEMENT
Exhibit 10.90
AGREEMENT between CHART HOUSE ENTERPRISES, INC. (the "Company") and XXXXXX X.
XXXXXXX and XXXXXXX X. XXXXXX (each referred to below as a "Participant") dated
as of February 12, 2002.
1. PURPOSE
The purpose of this Agreement is to provide incentive compensation (the
"Incentive Compensation") to the Participants upon the completion of a
transaction that improves the capital structure of the Company.
2. QUALIFYING TRANSACTION
A "Qualifying Transaction" is a sale of any equity interest by the Company to a
third party that meets the following conditions:
(a) The transaction must be approved by the Company's Board of Directors
(the "Board").
(b) The transaction must close no later than December 31, 2003.
(c) The transaction is not required to result in the receipt of cash by the
Company or any equity holder. For example, the transaction may take the
form of an exchange of debt for debt with warrants/options, convertible
debt, or other similar transaction.
Only the first such transaction occurring after the date of this Agreement will
be treated as a "Qualifying Transaction" for purposes of the payment of the
Incentive Compensation.
3. DETERMINATION OF THE ENTERPRISE VALUE OF THE COMPANY
The "Enterprise Value of the Company" is the value of the Company as determined
by the Board based solely upon the value of the equity interest sold in a
"Qualifying Transaction." In the event that the Board is not able to precisely
determine the Enterprise Value of the Company because of the form of the
Qualifying Transaction, then the parties shall agree to a reasonable method for
establishing the Enterprise Value of the Company based upon the Qualifying
Transaction.
Page 1 of 5
4. DETERMINATION OF COMMON VALUE; COMMON VALUE PER SHARE
(a) The Common Value shall be equal to:
The Enterprise Value of the Company
REDUCED BY
- The total amount of the Company's senior secured debt
pursuant to that certain Revolving Credit and Term
Loan Agreement dated as of April 26, 1999, as
amended, immediately prior to the Qualifying
Transaction closing date;
- The total amount of the Company's subordinated debt
with EGI-Fund Investors, L.L.C. immediately prior to
the Qualifying Transaction closing date;
- The total equity value of the Company's Preferred
Stock, $1.00 par value, outstanding immediately prior
to the Qualifying Transaction closing date; and
- The total amount of the Incentive Compensation
payable under this Agreement.
(b) The Common Value per Share shall be determined by dividing the Common
Value as determined above by the number of shares the Company's Common
Stock outstanding as of the Qualifying Transaction closing date.
5. AMOUNT OF INCENTIVE COMPENSATION
The amount of the Incentive Compensation payable to each Participant shall be
determined in accordance with the following table:
---------------------------------------------------------------------------------------------------------------
COMMON VALUE PER SHARE AMOUNT OF INCENTIVE COMPENSATION PAYABLE TO EACH PARTICIPANT
---------------------------------------------------------------------------------------------------------------
Less than $1.00 The Executive Committee of the Board, in its sole discretion, shall
determine whether Incentive Compensation will be payable, and the
amount of any such Incentive Compensation.
---------------------------------------------------------------------------------------------------------------
$1.00 to $1.24 $175,000
---------------------------------------------------------------------------------------------------------------
$1.25 to $1.49 $225,000
---------------------------------------------------------------------------------------------------------------
$1.50 to $1.74 $275,000
---------------------------------------------------------------------------------------------------------------
$1.75 to $1.99 $350,000
---------------------------------------------------------------------------------------------------------------
$2.00 $425,000
---------------------------------------------------------------------------------------------------------------
More than $2.00 $425,000
- PLUS -
additional $35,000 for each $.10 increment in excess of $2.00
Common Value per Share
---------------------------------------------------------------------------------------------------------------
Page 2 of 5
6. CONDITIONS FOR PAYMENT OF INCENTIVE COMPENSATION
(a) Except as otherwise provided in this Section 6, a Participant will not
be entitled to payment of the Incentive Compensation under this
Agreement unless he is actively employed by the Company on the
Qualifying Transaction closing date.
(b) In the event that a Participant's employment is terminated prior to the
Qualifying Transaction closing date (i) involuntarily by the Company
for reasons other than "Cause", or (ii) by reason of the Participant's
death or total disability, the Participant will be entitled to payment
of the Incentive Compensation. If the Participant's employment is
terminated prior to the closing date for any other reason, the
Participant will forfeit all rights to payment of the Incentive
Compensation under this Agreement, unless the Board in its sole
discretion provides otherwise.
(c) Termination of employment by the Company for Cause shall be deemed to
have occurred only if such termination directly results from: (i)
conviction of a crime (including conviction on a nolo contendere plea)
involving the commission by the Participant of a felony or of a
criminal act involving, in the good faith judgment of the Board, fraud,
dishonesty, or moral turpitude but excluding any conviction which
results solely from the Participant's title or position with the
Company and is not based on his personal conduct; (ii) deliberate and
continual refusal to perform employment duties reasonably requested by
the Company after thirty (30) days' written notice by certified mail of
such failure to perform, specifying that the failure constitutes cause
(other than as a result of vacation, sickness, illness or injury);
(iii) fraud or embezzlement determined in accordance with the Company's
normal, internal investigative procedures consistently applied in
comparable circumstances; (iv) gross misconduct or gross negligence in
connection with the business of the Company which has a substantial
adverse effect on the Company.
The Participant's employment shall in no event be considered to have
been terminated by the Company for Cause if the act or failure to act
upon which such termination is based was done or omitted to be done as
a result of bad judgment or negligence on the Participant's part, or
without intent of gaining therefrom directly or indirectly or
indirectly a profit to which the Participant was not legally entitled,
or as a result of the Participant's good faith belief that such act or
failure to act not opposed to the interests of the Company.
All determinations of "Cause" hereunder shall be made by duly adopted
resolution of the Board.
7. PAYMENT OF INCENTIVE COMPENSATION
(a) Except as otherwise provided in (b) below, the Company will pay the
Incentive Compensation to the Participant in a single lump payment
within five (5) business days following the close of the Qualifying
Transaction.
(b) In the event that the Qualifying Transaction closes in multiple stages,
the Company, at its sole discretion, may pay the Incentive Compensation
either in a single lump sum payment or in installments over a period
not exceeding six (6) months following the initial close of the
Qualifying Transaction.
8. WITHHOLDING TAXES
The Company may withhold from any benefits payable under this Agreement all
applicable federal, state, local or other taxes as shall be required pursuant to
any law or governmental regulation or ruling.
Page 3 of 5
9. NO RIGHT TO CONTINUED EMPLOYMENT
Nothing in this Agreement shall confer upon a Participant any right to
continuance of employment by the Company or any of its affiliates nor shall it
interfere in any way with the right of the Company or any affiliate to terminate
a Participant's employment at any time.
10. NO CLAIM AGAINST ASSETS
Nothing in this Agreement shall be construed as giving a Participant, his legal
representative, or designated beneficiary, any claim against any specific assets
of the Company or any affiliate or as imposing any trustee relationship upon the
Company or any affiliate in respect of the Participant. The Company and its
affiliates shall not be required to segregate any assets in order to provide for
the satisfaction of the obligations hereunder. If and to the extent that a
Participant or his legal representative or designated beneficiary acquires a
right to receive any payment pursuant to this Agreement, such right shall be no
greater than the right of an unsecured general creditor of the Company and its
affiliates.
11. NON-TRANSFERABILITY OF RIGHTS
A Participant's rights and interests under the Plan may not be assigned or
transferred in whole or in part either directly or by operation of law or
otherwise (except in an event of the Participant's death), including, but not
limited to, by way of execution, levy, garnishment, attachment, pledge,
bankruptcy or in any other manner, and no such rights or interests of a
Participant under this Agreement shall be subject to any obligation or liability
of such Participant other than any obligations or liabilities owed by the
Participant to the Company.
12. NO EFFECT UPON OTHER BENEFITS
Neither this Agreement nor any Incentive Compensation payable under this
Agreement will affect any benefits to which a Participant may be entitled
pursuant to any plan, policy or agreement of the Company related to
compensation, including, but not limited, any plan, policy or agreement relating
to severance benefits.
13. GOVERNING LAW
The Plan and all actions taken pursuant thereto shall be governed by, and
construed in accordance with, the laws of the State of
Illinois applied without
regard to conflict of law principles.
14. ENTIRE AGREEMENT; AMENDMENT
This Agreement constitutes the entire understanding of the parties relating to
the subject matter hereof and supersedes all prior agreements, understandings
and representations, whether oral or written, relating to the benefits described
herein. It may not be amended, modified, or terminated except by a written
agreement signed by the parties.
15. MISCELLANEOUS PROVISIONS
(a) In the event of a Participant's death or Total Disability, payment of
the Participant's incentive compensation shall be made to a beneficiary
(or beneficiaries) designated by the Participant in the form and manner
prescribed by the Company, or to the Participant's legal
representative. If a Participant does not have a properly designated
beneficiary, payment shall be made to the Participant's estate.
Page 4 of 5
(b) The failure of a party to insist upon strict adherence to any term of
this Agreement on any occasion shall not be considered a waiver thereof
or deprive that party of the right thereafter to insist upon strict
adherence to that term or any other term of this Agreement.
(c) If any term or provision of this Agreement or the application thereof
to any person or circumstance shall to any extent be invalid or
unenforceable, the remainder of this Agreement or the application of
such term or provision to persons or circumstances other than those as
to which it is held invalid or unenforceable shall not be affected
thereby, and each term and provision of this Agreement shall be valid
and enforceable to the fullest extent permitted by law.
(d) Section headings are used herein for convenience of reference only and
shall not affect the meaning of any provision of this Agreement.
(e) This Agreement may be executed in two counterparts each of which shall
constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have executed this Agreement effective as of the
date set forth above:
CHART HOUSE ENTERPRISES, INC.
By: /S/ XXXXXXX X. XXXXXXXXXXXX III /S/ XXXXXX X. XXXXXXX
------------------------------- ---------------------
Xxxxxx X. Xxxxxxx
Name: Xxxxxxx X. Xxxxxxxxxxxx III
Title: Director, Chairman of Compensation /S/ XXXXXXX X. XXXXXX
---------------------
Committee Xxxxxxx X. Xxxxxx
Page 5 of 5
