O’CHARLEY’S INC. AMENDED AND RESTATED EXECUTIVE EMPLOYMENT AGREEMENT (the “Agreement”) O’CHARLEY’S INC. (the “Company”) and August 10, 2011 (“Effective Date”) BACKGROUND
Exhibit 10.1
Execution Version
O’CHARLEY’S INC.
(the “Company”)
(the “Company”)
and
R. Xxxxxxx Xxxxxxxx
(“Executive”)
(“Executive”)
August 10, 2011
(“Effective Date”)
(“Effective Date”)
BACKGROUND
A. Executive is currently employed as the Company’s Interim Chief Financial Officer and
Treasurer, in addition to Executive’s position as Principal Accounting Officer, Corporate
Controller and Assistant Secretary.
B. Executive and the Company are currently parties to that certain: (i) Executive Employment
Agreement dated as of December 13, 2007 (as amended, the “Employment Agreement”); and (ii) Tuition
Reimbursement Agreement dated as of August 1, 2009 (the “Tuition Agreement”).
C. On the date hereof, the Company’s Board of Directors has appointed Executive to be the
Company’s Chief Financial Officer, Treasurer and Assistant Secretary, and in connection therewith,
the Company desires to amend and restate the Employment Agreement as more fully provided herein.
NOW, THEREFORE, in consideration of the promises contained herein, and for good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the Company and
Executive agree as follows:
ARTICLE I.
EMPLOYMENT, DUTIES AND TERM
EMPLOYMENT, DUTIES AND TERM
1.1 Employment. Upon the terms and conditions set forth in this Agreement, the Company hereby
employs Executive as Chief Financial Officer, Treasurer and Assistant Secretary. Additionally,
Executive agrees to continue to function in the capacity of Principal Accounting Officer and
Corporate Controller until Executive’s successor is duly named and appointed or Executive is
relieved of such responsibilities by the Company’s Chief Executive Officer. The position is based
in Nashville, Tennessee; and accordingly, the Executive shall maintain Executive’s domicile in the
greater metropolitan Nashville, Tennessee area for the duration of the Term (with the determination
of “domicile” to be made by the Company in the reasonable exercise of its discretion, considering
all relevant and appropriate factors and circumstances).
1.2 Duties. Executive shall devote Executive’s full-time and best efforts to the Company and
to fulfilling the duties of Executive’s position, which shall include such duties as may from time
to time be assigned to Executive by the Company. The Executive may devote reasonable time and
attention to civic, charitable, business and social organizations so long as such activities do not
interfere with the performance of Executive’s obligations and responsibilities under this Agreement
and provided that
Executive shall obtain the prior written approval of the Company’s Chief Executive Officer
prior to joining the Board of Directors or other governing body of any such entity, including any
civic, charitable, business or social organization. Executive shall comply with the Company’s
policies and procedures to the extent they are not inconsistent with this Agreement, and in the
case of such inconsistency, the provisions of this Agreement shall prevail. The Executive agrees
to serve as requested without any additional compensation as an officer and/or director of the
board of directors of any subsidiary of the Company as requested. If the Executive’s employment
terminates for any reason, the Executive shall resign as an officer of the Company and as an
officer and director of all of its subsidiaries, such resignation to be effective no later than the
date of termination of Executive’s employment hereunder.
1.3 Term. Subject to the provisions of Articles III, IV and V herein,
this Agreement and Executive’s employment shall continue until September 30, 2014 (the “Initial
Term”) and shall automatically renew for successive one year periods (each, a “Renewal Term”) upon
all terms, conditions and obligations set forth herein unless either party shall provide written
notice to the other not less than ninety (90) days nor more than one hundred eighty (180) days
prior to the expiration of the Initial Term or any Renewal Term, as applicable (the “Notice of
Non-Renewal”). For purposes hereof, the Initial Term, together with any Renewal Term, are
hereinafter referred to as the “Term.”
ARTICLE II.
COMPENSATION AND EXPENSES
COMPENSATION AND EXPENSES
2.1 Base Salary. For services rendered under this Agreement during the Term, the Company
shall pay Executive a base salary at the rate of $300,000 per annum commencing on the Effective
Date, pro-rated for the balance of the 2011 fiscal year, and to also remain fixed for the Company’s
2012 fiscal year. Executive’s base salary shall be reviewed annually by the Compensation and Human
Resources Committee of the Board (the “Committee”), with the first such review effective for the
Company’s 2013 fiscal year, and may be increased in the sole discretion of the Committee (such base
salary, as it may be increased from time to time during the Term, is hereinafter referred to as the
“Base Salary”).
2.2 Bonus and Incentive. The Executive shall be eligible to participate in such bonus and
incentive plans during the Term as the Committee, in the sole exercise of its discretion, may
determine appropriate. For the balance of the Company’s 2011 fiscal year, Executive’s bonus plan
shall remain fixed at the current percentage of Base Salary for those levels of Company
performance/bonus previously established by the Committee (which percentages shall be calculated
based on Base Salary referenced in Section 2.1 herein), and commencing with the Company’s 2012
fiscal year, Executive’s bonus plan shall be increased to 60% of Base Salary at the “Target” level
of performance, with the calculation of “Target” together with the performance and relevant
parameters and metrics in determining bonus eligibility, being on such terms as may from time to
time be determined by the Committee in the sole exercise of its discretion. All bonuses (including
bonuses for the 2011 fiscal year) shall be payable in accordance with the Company’s then current
policies and procedures, which shall include, without limitation, that Executive be an employee in
good standing on the date such bonuses are paid (which date is currently within the first two weeks
in February following the fiscal year in which such bonuses were earned, but is subject to change
in the Committee’s sole discretion).
2.3 Long-Term Incentive. On the date of this Agreement, Executive shall be granted a
restricted stock award (the “RSA”) pursuant to the Company’s 2008 Equity and Incentive Plan (the
“Plan”) equal to 30,000 shares of the Company’s common stock. The RSA shall “cliff” vest on the
third (3rd) anniversary of the Effective Date. The full terms and conditions with
respect to the RSA shall be as set forth herein, in the Plan, and in the award agreement evidencing
the grant thereunder. Without limiting the generality of the foregoing, it shall be a condition
precedent to the vesting of the RSA that Executive be employed with the Company on the date the RSA
is scheduled to vest.
2
2.4 Business Expenses. The Company shall, consistent with its policies in effect from time to
time, bear all ordinary and necessary business expenses incurred by Executive in performing
Executive’s duties as an employee of the Company, provided, that Executive incurs and
accounts promptly for such expenses to the Company in accordance with the Company’s policies in
place from time to time during the Term. Executive shall submit all expense reimbursement requests
to the Chief Executive Officer for approval.
2.5 Benefits. During the Term, the Company shall provide Executive with those health, life,
disability and other benefits provided generally to members of senior management (subject to change
or revision as applicable to other senior executives generally).
2.6 Additional Perquisites. During the Term, the Company shall also provide Executive with a
car allowance in the amount of $25,000 annually (and pro-rated for the balance of the 2011 fiscal
year).
ARTICLE III.
SEVERANCE PRIOR TO CHANGE IN CONTROL
SEVERANCE PRIOR TO CHANGE IN CONTROL
3.1 Severance. This Article III shall not apply to termination following a Change in
Control (as hereinafter defined), which is governed solely by Article IV.
3.2 Severance Payment.
(a) It is understood and agreed that, except as provided in Section 3.2(b) below, if
Executive’s employment with the Company should be terminated at any time prior to the expiration of
the Term as a result of a Termination Without Cause (defined below) or a Termination With Good
Reason (defined below), and if Executive is not then or thereafter in material breach of this
Agreement, and upon the execution and delivery to the Company by Executive of an agreement, in a
form presented by the Company and accepted by Executive, which acceptance shall not be unreasonably
withheld or delayed, releasing all claims which Executive may have against the Company (other than
claims for indemnification pursuant to Section 6.7 hereunder, claims under this Agreement,
claims for vested benefits including deferred compensation and 401k balances, claims under COBRA,
and claims for any vested equity interests in the Company) (the “Severance Agreement”), Executive
shall receive (commencing with the first pay period following the execution of the Severance
Agreement), in full and complete settlement of any claims for compensation which Executive may
have, and in lieu of any severance pay under any policy of the Company or otherwise, the following:
(i) continued weekly payments, in accordance with the Company’s regular payroll
practices, for a period of fifty-two (52) weeks equal to one-fifty second
(1/52nd) of Executive’s then current Base Salary (less all applicable withholding
and deductions); and
(ii) any payments and benefits which Executive or Executive’s spouse, dependents,
beneficiaries or estate would have been entitled to receive pursuant to any employee health
benefit plan of the Company for a twelve (12)-month period had Executive remained an
employee during that period, with such benefits provided to Executive at no less than the
same coverage level and at no more of a cost to Executive as in effect as of the date of
Executive’s termination subject to such reduction in coverage or increases in cost as shall
become in effect for senior executive employees of the Company generally (“Health Benefit
Continuation”), provided, however, that such continued payments and benefits
shall terminate on the date or dates Executive receives substantially similar coverage and
benefits, without waiting period or pre-existing condition limitations, under the plans and
programs of a subsequent employer (such coverage and benefits to be determined on a
coverage-by-coverage or benefit-by-benefit basis).
3
(b) The provisions of Section 3.2(a) above notwithstanding, should the Company provide the
Executive with a Notice of Non-Renewal, and thereafter elect to terminate Executive’s employment
with the Company on or prior to the expiration of the Term, Executive shall be entitled to the
following benefits and concessions upon the execution of a Severance Agreement if such termination
is a Termination Without Cause and if Executive is not then or thereafter in material breach of
this Agreement: (i) continued weekly payments of Base Salary and the provision of health benefits
from the date of termination through the stated expiration date of the Agreement, as fully as if
the Company had not elected to terminate Executive; and (ii) commencing upon the stated expiration
of the Agreement, the following: (X) continued weekly payments, in accordance with the Company’s
regular payroll practices, for a period of twenty-six (26) weeks, equal to one-fifty second (1/52)
of Executive’s then current Base Salary (less all applicable withholding and deductions), (Y) the
Health Benefit Continuation as set forth in Section 3.2(a)(ii) above but for a period of twenty-six
weeks; and (Z) a reduction in the non-compete restriction in Section 5.2(b) from fifty-two (52)
weeks to twenty-six (26 weeks). Additionally, should the Company provide Executive with a Notice
of Non-Renewal but not elect to terminate Executive on or prior to the expiration of the Term, then
upon any subsequent termination of Executive by Company, where the same is deemed to be a
Termination Without Cause, Executive shall receive the greater of those benefits referenced in this
subsection (b)(ii)(X) and (Y) or those benefits provided by any formal severance policy of the
Company in effect at the time of such termination; provided that, such benefits
shall be conditioned upon the parties’ execution of a Severance Agreement.
(c) As used in this Article III, “Termination Without Cause” means any termination of
Executive’s employment by the Company other than a Termination With Cause (defined below).
(d) As used in this Article III, “Termination With Cause” means termination
by the Company of Executive’s employment at any time after the Company believes in good faith it
has actual knowledge of the occurrence of any of the following events on the part of Executive:
indictment or conviction for fraud, misappropriation or embezzlement (or any other felony or crime
of moral turpitude), gross neglect of duty, material breach of this Agreement, a material act of
dishonesty or disloyalty, the inability by Executive to discharge Executive’s material duties due
to alcohol or drug addiction, or gross misconduct inimical to the best interests of the Company;
provided, however, that termination of employment solely due to unsatisfactory job
performance shall not be considered a Termination With Cause.
(e) As used in this Article III, “Termination with Good Reason” means Executive’s
termination of employment at any time after Executive has actual knowledge of the occurrence,
without Executive’s written consent, of a material reduction in Executive’s Base Salary or a
material reduction in the health and welfare insurance, retirement and other benefits available to
Executive as of the Effective Date, except for reductions in such benefits as shall become in
effect for senior executive employees of the Company generally; provided that Executive shall have
notified the Company of the existence of the condition described above within ninety (90) days of
Executive’s actual knowledge of the initial existence of the condition, and the Company shall have
failed to remedy the condition within thirty (30) days of receiving such notice (and any such
election on the part of Executive to thereafter terminate employment for “Good Reason” as
contemplated under this subsection 3.2(e) must occur within ten (10) days following the Company’s
failure to remedy such condition, or Executive’s rights thereafter to terminate on account of such
condition shall be waived). For the avoidance of doubt, subsequent occurrences of these events
shall start new time periods described in this paragraph.
(f) In the event Executive’s employment pursuant to this Agreement terminates for any reason
other than a Termination Without Cause or a Termination With Good Reason, Executive shall be
entitled to receive, in full and complete settlement of any claims for compensation which Executive
may have, and in lieu of any severance pay under any policy of the Company or otherwise, Base
Salary and benefits to be paid or provided by the Company through the date of termination. The
parties agree and acknowledge that the Company may from time to time elect to amend or restate its
senior executives’
4
contracts at the expiration of any Initial Term or Renewal Term, and a decision to extend the
Executive’s term of employment but on terms and conditions which do not vary in any manner which is
materially adverse to the Executive from the terms and conditions set forth in this Agreement shall
not constitute an election on the part of the Company (constructively or otherwise) not to extend
any Initial Term or Renewal Term hereunder. The amounts payable to Executive under this Article
III are not eligible earnings under any pension, savings, deferred compensation, bonus,
incentive, supplemental retirement benefit or other benefit plan of the Company.
ARTICLE IV.
CHANGE IN CONTROL
CHANGE IN CONTROL
4.1 Change In Control. No compensation shall be payable under this Article IV unless
and until (a) there shall have been a Change in Control of the Company during the Term and (b)
Executive’s employment by the Company thereafter shall have been terminated in accordance with
Section 4.2. For purposes of this Agreement, a Change in Control means the happening of any
of the following:
(a) any person or entity, including a “group” as defined in Section 13(d)(3) of the Securities
Exchange Act of 1934, other than the Company, a wholly-owned subsidiary thereof, any employee
benefit plan of the Company or any of its Subsidiaries becomes the beneficial owner of the
Company’s securities having 50% or more of the combined voting power of the then outstanding
securities of the Company that may be cast for the election of directors of the Company (other than
as a result of an issuance of securities initiated by the Company in the ordinary course of
business); or
(b) as the result of, or in connection with, any cash tender or exchange offer, merger or
other business combination, sale of assets or contested election, or any combination of the
foregoing transactions, less than a majority of the combined voting power of the then outstanding
securities of the Company or any successor corporation or entity entitled to vote generally in the
election of the directors of the Company or such other corporation or entity after such transaction
are held in the aggregate by the holders of the Company’s securities entitled to vote generally in
the election of directors of the Company immediately prior to such transaction.
4.2 Termination. If a Change in Control of the Company shall have occurred during the Term,
Executive shall be entitled to the compensation provided in Section 4.3 upon the
subsequent: (i) expiration of this Agreement (if the expiration occurs within eighteen months of
the Change of Control and the Company, as opposed to Executive, elects not to extend the Term for a
period at least equal to eighteen months following a Change of Control), or (ii) termination of
Executive’s employment with the Company by Executive or by the Company within eighteen months of
the Change in Control of the Company unless such termination is as a result of (I) Executive’s
death; (II) Termination by Reason of Disability (as defined in Section 4.2(a)); (III)
Termination by Reason of Retirement (as defined in Section 4.2(b); (IV) Termination With
Cause (as defined in Section 4.2(c)); or (V) termination by the Executive other than a
Termination for Good Reason (as defined in Section 4.2(d)).
(a) As used in this Article IV, “Termination by Reason of Disability” means a
termination of the Executive by the Company by reason of Executive’s inability, as determined by
the Board, to perform Exective’s regular duties and responsibilities due to physical or mental
illness which has lasted for six months and, within 30 days after written notice of termination is
thereafter given by the Company, Executive shall not have returned to the full-time performance of
Executive’s duties.
(b) As used in this Article IV, “Termination by Reason of Retirement” means a
termination by the Company or Executive of Executive’s employment based on Executive’s having
reached age 65 or such other age as shall have been fixed in any arrangement established with
Executive’s consent with respect to Executive; and in all instances subject to applicable law.
5
(c) As used in this Article IV, “Termination With Cause” means the termination by the
Company of Executive’s employment at any time after the Company believes in good faith it has
actual knowledge of the occurrence of any of the following events on the part of Executive:
indictment or conviction for fraud, misappropriation or embezzlement (or any other felony or crime
of moral turpitude), gross neglect of duty, material breach of this Agreement, a material act of
dishonesty or disloyalty, the inability by Executive to discharge Executive’s material duties due
to alcohol or drug addiction, or gross misconduct inimical to the best interests of the Company;
provided, however, that termination of employment solely due to unsatisfactory job
performance shall not be considered a Termination With Cause.
(d) As used in this Article IV, “Termination for Good Reason” means a termination by
the Executive upon the occurrence of (without Executive’s express written consent): (i) the failure
of a successor entity to assume the Company’s obligations under this Agreement (as more fully
provided in Section 6.8 hereunder), (ii) a material reduction in Executive’s Base Salary or a
material reduction in the health and welfare insurance, retirement and other benefits available to
Executive as of the Effective Date, except for reductions in such benefits as shall become in
effect for senior executive employees of the Company generally, or (iii) the relocation of
Executive’s principal office to a location more than fifty (50) miles from Nashville, Tennessee;
provided that Executive shall have notified the Company of the existence of the condition(s)
referenced above within ninety (90) days of Executive’s actual knowledge of the initial existence
of such condition, and the Company shall have failed to remedy such condition within thirty (30)
days of receiving such notice (and any such election on the part of Executive to thereafter
terminate employment for “Good Reason” as contemplated under this subsection 4.2(d) must occur
within ten (10) days following the Company’s failure to remedy such condition, or Executive’s
rights thereafter to terminate on account of such condition shall be waived). For the avoidance of
doubt, subsequent occurrences of these events shall start new time periods described in this
paragraph.
(e) Notice of Termination. Any termination by the Company under this Article
IV shall be communicated by a Notice of Termination. For purposes of this Agreement, a “Notice
of Termination” shall mean a written notice which indicates those specific termination provisions
in this Agreement relied upon and which sets forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination of Executive’s employment under the provisions so
indicated. For purposes of this Agreement, no such purported termination by the Company shall be
effective without such Notice of Termination.
(f) Date of Termination. “Date of Termination” shall mean (a) if Executive’s
employment is terminated by the Company, the date on which a Notice of Termination is given (or if
the Agreement expires, the last day of the Term), or (b) if Executive terminates Executive’s
employment pursuant to Section 4.2(d), the expiration of the thirty (30) day cure period
without the Company remedying the applicable condition described in Section 4.2(d)
(provided Executive has timely elected to terminate employment following such thirty (30) day
cure period having passed without appropriate remedy).
4.3 Compensation Upon Termination of Employment / Expiration of Agreement.
If the Company shall terminate Executive’s employment within eighteen months following a
Change in Control other than pursuant to Section 4.2(a), 4.2(b) or 4.2(c)
or if Executive shall terminate Executive’s employment within eighteen months following a Change in
Control by reason of a Termination for Good Reason (as defined in Section 4.2(d)), or if the
Company permits the Agreement to expire within eighteen months following a Change in Control, then
the Company shall:
(i) pay to Executive as severance pay in a lump sum, in cash (minus applicable
withholdings and deductions), on the fifth day following the Date of Termination, an amount
equal to one hundred fifty percent (150%) of Executive’s then current Base Salary;
provided,
6
however, that if the lump sum severance payment under this Section 4.3,
either alone or together with other payments which Executive has the right to receive from
the Company, would constitute a “parachute payment” (as defined in Section 280G of the
Internal Revenue Code of 1986, as amended (the “Code”)), at the written election of the
Executive such lump sum severance payment shall be reduced to the largest amount as shall
result in no portion of the lump sum severance payment under this Section 4.3 being
subject to the excise tax imposed by Section 4999 of the Code; and
(ii) provide Executive with the Health Benefit Continuation Benefit for a period of
twelve (12) months following the Date of Termination; provided however, that
such continued benefits shall terminate on the date or dates Executive receives
substantially similar coverage and benefits, without waiting period or pre-existing
condition limitations, under the plans and programs of a subsequent employer (such coverage
and benefits to be determined on a coverage-by-coverage or benefit-by-benefit basis).
ARTICLE V.
NONCOMPETITION, NONSOLICITATION AND CONFIDENTIALITY
NONCOMPETITION, NONSOLICITATION AND CONFIDENTIALITY
5.1 Noncompetition.
(a) So long as Executive remains employed by the Company, Executive shall not compete,
directly or indirectly, with the Company. In accordance with this restriction, but without limiting
its terms, Executive shall not:
(i) enter into or engage in any business which competes with the business of the
Company; or
(ii) promote or assist, financially or otherwise, any person, firm, association or
corporation or any other entity engaged in any business which competes with the business of
the Company.
(b) For a period of twelve (12) months following termination of Executive’s employment with
the Company for any reason (the “Non-compete Period”), Executive shall not enter into or engage in
any business that competes with the Company’s business; provided however, upon the
occurrence of the condition noted in Section 3.2(b) hereunder, the Non-compete Period shall be
shortened to twenty-six (26) weeks following the termination of Executive’s employment.
(c) During the Non-compete Period, Executive shall not promote or assist financially or
otherwise, any person, firm, association, partnership, corporation, or any other entity engaged in
any business which competes with the Company’s business.
(d) For the purposes of this Section 5.1, Executive understands that Executive shall
be competing if Executive engages in any or all of the activities set forth herein directly as an
individual on Executive’s own account, or indirectly as a partner, joint venturer, employee, agent,
consultant, officer and/or director of any firm, association, corporation, or other entity, or as a
stockholder of any corporation in which Executive owns, directly or indirectly, individually or in
the aggregate, more than one percent (1%) of the outstanding stock; provided,
however, that at such time as Executive is no longer employed by the Company, Executive’s
direct or indirect ownership as a stockholder of less than five percent (5%) of the outstanding
stock of any publicly traded corporation shall not by itself constitute a violation of this
Section 5.1.
7
(e) For the purposes of this Section 5.1, the Company’s business is defined as
owning, operating and/or franchising restaurants in either the service casual dining segment,
steakhouse segment (with an average check in excess of $25.00), high-end / polished casual segment
of the restaurant industry, or any other segment of the restaurant industry in which the Company
shall own, operate or franchise restaurants during the Term and as of the date of termination of
Executive’s employment with the Company. Executive understands that the activities described in
this Section 5.1, shall be prohibited only to the extent that the company or concept
competing / potentially competing with the Company has a restaurant operating or under development
(or contemplated for development) within the parameters set forth above and within a 25 mile radius
of any Company restaurant in operation, franchised or actively under development or contemplated
for development by the Company at any relevant time of determination. If it shall be judicially
determined that Executive has violated any of Executive’s obligations under this Section
5.1, then the period applicable to the obligation which Executive shall have been determined to
have violated shall automatically be extended by a period of time equal in length to the period
during which said violation(s) occurred.
5.2 Nonsolicitation. Executive agrees that, for a period of eighteen (18) months following
Executive’s termination of employment with the Company for any reason, Executive shall not directly
or indirectly at any time solicit or induce or attempt to solicit or induce any employee(s) of the
Company or any of its parent, subsidiary or affiliate entities to terminate their employment with
the Company or such entity; provided such limitation shall only apply to those employees of
the Company who are at the level of director or above.
5.3 Confidentiality.
(a) During the Term and at any time thereafter, Executive shall not disclose, furnish,
disseminate, make available or, except in the ordinary course of performing Executive’s duties on
behalf of the Company, use any intellectual property, trade secrets or confidential or proprietary
business and technical information of the Company, or its parent, subsidiaries or affiliated
entities without limitation as to when it was acquired by Executive or whether it was compiled or
obtained by, or furnished to Executive while Executive was employed by the Company. Such
intellectual property, trade secrets and confidential or proprietary business and technical
information are considered to include, without limitation, development plans, financial statistics,
research data, or any other statistics and plans contained in monthly and annual review books,
profit plans, capital plans, critical issues plans, strategic plans, or marketing, real estate, or
store operations plans. Any such information created by Executive during Executive’s tenure,
whether alone or in collaboration with other employees of the Company, shall constitute a “work
made for hire”, shall be owned solely and exclusively by the Company (and afforded the protection
of the confidentiality provisions herein), and the Executive hereby assigns any and all right,
title and interest in and to the same to the Company, and shall execute any such assignments,
certificates, instruments or documents which the Company may reasonably request to document and
effect the provisions of this paragraph. Executive specifically acknowledges that all such
information, whether reduced to writing or maintained in Executive’s mind or memory and whether
compiled by the Company and/or Executive derives independent economic value from not being readily
known to or ascertainable by proper means by others who can obtain economic value from its
disclosure or use, that reasonable efforts have been put forth by the Company to maintain the
confidentiality of such information, that such information is and shall remain the sole property of
the Company and that any retention and use of such information during or after the termination of
Executive’s relationship with the Company (except in the course of Executive’s performance of
Executive’s duties during the Term) shall constitute a misappropriation of the Company’s trade
secrets and related intellectual property and confidential information; provided, however, that
this restriction shall not apply to information which is in the public domain or otherwise made
public by others through no fault of Executive.
(b) The above restrictions on disclosure and use of confidential information shall not prevent
Executive from: (i) using or disclosing information in the good faith performance of Executive’s
8
duties on behalf of the Company; (ii) using or disclosing information to another employee to
whom disclosure is required to perform in good faith the duties of either person on behalf of the
Company; (iii) using or disclosing information to another person or entity bound by a duty or an
agreement of confidentiality as part of the performance in good faith of Executive’s duties on
behalf of the Company or as authorized in writing by the Company; (iv) at any time after the period
of Executive’s employment using or disclosing information to the extent such information is,
through no fault or disclosure of Executive, generally known to the public; (v) using or disclosing
information which was not disclosed to Executive by the Company or otherwise during the period of
Executive’s employment which is then disclosed to Executive after termination of Executive’s
employment with the Company by a third party who is under no duty or obligation not to disclose
such information; or (vi) disclosing information as required by law. If Executive becomes legally
compelled to disclose any of the confidential information, Executive shall (i) provide the Company
with reasonable prior written notice of the need for such disclosure such that the Company may
obtain a protective order; (ii) if disclosure is required, furnish only that portion of the
confidential information which, in the written opinion of Executive’s counsel delivered to the
Company, is legally required; and (iii) exercise reasonable efforts to obtain reliable assurances
that confidential treatment shall be accorded to the confidential information.
(c) Executive expressly agrees and understands that the remedy at law for any breach by
Executive of this Article V will be inadequate and that the damages flowing from such
breach are not readily susceptible to being measured in monetary terms. Accordingly, it is
acknowledged that upon any violation of any provision of this Article V, the Company will
be entitled to immediate injunctive relief and may obtain a temporary order restraining any
threatened or further breach without the necessity of proof of actual damage. Nothing in this
Agreement shall be deemed to limit the Company’s remedies at law or in equity for any further
breach by Executive of any of the provisions of this Agreement which may be pursued or availed of
by the Company.
ARTICLE VI.
MISCELLANEOUS
MISCELLANEOUS
6.1 Notice. For purposes of this Agreement, notices and all other communications provided for
in the Agreement shall be in writing and shall be deemed to have been duly given when delivered or
mailed by United States registered mail, return receipt requested, postage prepaid, as follows:
If to the Company:
|
O’Charley’s Inc. | |
| 0000 Xxxxx Xxxxx | ||
| Xxxxxxxxx, Xxxxxxxxx 00000 | ||
| Attention: Chief Executive Officer | ||
If to Executive:
|
R. Xxxxxxx Xxxxxxxx | |
| 0000 Xxxxxx Xxxxx | ||
| Xxxxxxxxx, Xxxxxxxxx 00000 |
or such other address as either party may have furnished to the other in writing in accordance
herewith, except that notices of change of address shall be effective only upon receipt.
6.2 Modification / Integration. No provisions of this Agreement may be modified, waived or
discharged unless such waiver, modification or discharge is agreed to in a writing signed by
Executive and the Company. No waiver by either party hereto at any time of any breach by the other
party hereto of, or compliance with, any condition or provision of this Agreement to be performed
by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at
the same or at any prior or subsequent time. No agreements or representations, oral or otherwise,
express or implied, with respect to
9
the subject matter hereof have been made by either party that are not set forth expressly in
this Agreement.
6.3 Validity / Survival. The invalidity or unenforceability of any provisions of this
Agreement shall not affect the validity or enforceability of any other provision of this Agreement,
which shall remain in full force and effect. The provisions of Section 3.2(b), Section 4.3 and
Article 5 shall continue in full force and effect following the expiration or earlier termination
of this Agreement.
6.4 Counterparts. This Agreement may be executed in one or more counterparts, each of which
shall be deemed to be an original but all of which together shall constitute one and the same
instrument.
6.5 Legal Fees and Expenses. In the event either party hereto shall institute litigation
against the other party hereto relating to the interpretation or enforcement of this Agreement, the
prevailing party in such litigation (as determined following a final, nonappealable judgment by a
court of competent jurisdiction) shall be entitled to recover from the other party any and all
attorneys’ and related fees and expenses incurred by the prevailing party in such litigation.
6.6 No Obligation to Mitigate Damages; No Effect on Other Contractual Rights. Executive shall
not be required to mitigate damages or the amount of any payment provided for under this Agreement
by seeking other employment or otherwise, nor shall the amount of any payment provided for under
this Agreement be reduced by any compensation earned by Executive as the result of employment by
another employer after the Term, or otherwise.
6.7 Indemnification. It is understood and agreed that the Company will indemnify Executive
(including advancing expenses) to the fullest extent permitted by Tennessee law and the Company’s
Charter and Bylaws for any judgments, amounts paid in settlement and reasonable expenses, including
reasonable attorneys’ fees, incurred by Executive in connection with the defense of any lawsuit or
other claim to which Executive is made a party by reason of being an officer, director or employee
of the Company or any of its subsidiaries.
6.8 Assignment; Successor to the Company. This Agreement is not assignable by either party
without the prior written consent of the other except that the Company may assign it without such
consent to any parent, subsidiary or affiliated entity, and upon such entity’s assumption of the
Company’s duties and obligations hereunder, such entity shall succeed to each of the Company’s
rights hereunder. Upon such assignment and assumption, Executive agrees to and becomes an employee
of such entity, and all references to the Company in this Agreement shall, as the context requires,
be deemed to be to the entity to which such assignment, assumption and employment relate. The
Company will require any successor or assign (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the business and/or assets of the
Company, by agreement in form and substance satisfactory to the Executive, expressly, absolutely
and unconditionally to assume and agree to perform this Agreement in the same manner and to the
same extent that the Company would be required to perform it if no such succession or assignment
had taken place. Any failure of the Company to obtain such agreement prior to the effectiveness of
any such succession or assignment shall be a material breach of this Agreement and shall entitle
the Executive to terminate the Executive’s employment and such termination shall constitute a
Termination for Good Reason under Article IV. As used in this Agreement, “Company” shall
mean the Company as hereinbefore defined and any successor or assign to its business and/or assets
as aforesaid which executes and delivers the agreement provided for in this Section 6.8 or which
otherwise becomes bound by all the terms and provisions of this Agreement by operation of law.
Notwithstanding anything to the contrary herein, this Agreement, in the event of the death of
Executive, shall inure to the benefit of and be enforceable by Executive’s personal and legal
representatives, executors, administrators, successors, heirs, distributes, devisees and legatees.
If Executive should die while any amounts are still payable to Executive hereunder, all such
amounts, unless otherwise provided
10
herein, shall be paid in accordance with the terms of this Agreement to Executive’s devisee,
legatee, or other designee or, if there be no such designee, to Executive’s estate.
6.9 Governing Law; Arbitration. This Agreement and any amendments thereto shall become and
shall be governed by, and construed in accordance with, the internal, substantive laws of the State
of Tennessee. Executive acknowledges that any action for breach of this Agreement or of any term of
this Agreement is subject to that certain Arbitration Agreement in effect between Executive and
Company and executed prior to the date hereof (the “Arbitration Agreement”). Executive reaffirms
the enforceability of the Arbitration Agreement both with respect to this Agreement and his
employment with Company, and agrees not to challenge the enforceability of the same.
6.10 Section 409A Provisions. It is intended that (i) each payment or installment of payments
provided under this Agreement is a separate “payment” for purposes of Section 409A of the Code and
(ii) that the payments satisfy, to the greatest extent possible, the exemptions from the
application of Code Section 409A, including those provided under Treasury Regulations
1.409A-1(b)(4) (regarding short-term deferrals), 1.409A-1(b)(9)(iii) (regarding the two-times, two
year exception), and 1.409A-1(b)(9)(v) (regarding reimbursements and other separation pay).
Notwithstanding anything to the contrary in this Agreement, if the Company determines (i) that on
the date of Executive’s termination of employment or at such other time that the Company determines
to be relevant, the Executive is a “specified employee” (as such term is defined under Treasury
Regulation 1.409A-1(i)(1)) of the Company and (ii) that any payments to be provided to the
Executive pursuant to this Agreement are or may become subject to the additional tax under Code
Section 409A(a)(1)(B) or any other taxes or penalties imposed under Code Section 409A (“Section
409A Taxes”) if provided at the time otherwise required under this Agreement, then (A) such
payments shall be delayed until the date that is six (6) months after the date of the Executive’s
termination of employment with the Company, or such shorter period that, as determined by the
Company, is sufficient to avoid the imposition of Section 409A Taxes (the “Payment Delay Period”).
Any payments delayed pursuant to this Section 6.10 shall be made in a lump sum on the first day of
the seventh month following the Executive’s termination of employment, or such earlier date that,
as determined by the Company, is sufficient to avoid the imposition of any Section 409A Taxes.
6.11 Entire Agreement. With the exception of the Tuition Agreement and the Arbitration
Agreement which shall not in any manner be affected, modified or revised by the terms of this
Agreement, this Agreement supersedes the provisions of each and every other agreement or
understanding, whether oral or written, between the undersigned and the Company relating to the
subject matter contained herein (including without limitation, the Employment Agreement), and any
such agreement or understanding shall be of no further force and effect. The provisions of this
Agreement are severable and if any one or more provisions may be determined to be illegal or
otherwise unenforceable, in whole or in part, the remaining provisions and any partially
unenforceable provision, to the extent enforceable in any jurisdiction, shall, nevertheless, be
binding and enforceable. The parties hereto agree that when fully executed, the foregoing shall
constitute a legally enforceable agreement between the parties, which also shall inure the benefit
of the Company’s successors and assigns and Executive’s heirs and personal representatives.
6.12 Review of Agreement by Executive. Executive represents that prior to signing this
Agreement, Executive has read, fully understands and voluntarily agrees to the terms and conditions
as stated above, that Executive was not coerced to sign this agreement, that Executive was not
under duress at the time Executive signed this Agreement and that, prior to signing this Agreement,
Executive had adequate time to consider entering into this Agreement, including without limitation,
the opportunity to discuss the terms and conditions of this Agreement, as well as its legal
consequences, with an attorney of his choice (and at Executive’s sole expense). This Agreement
shall become effective as of the date hereof.
[Signature Page Follows]
11
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above
written.
| O’CHARLEY’S INC. | ||||
| By: | /s/ Xxxxx Xxxx | |||
| Name: Xxxxx Xxxx | ||||
| Title: President and Chief Executive Officer | ||||
| EXECUTIVE | ||||
| /s/ R. Xxxxxxx Xxxxxxxx | ||||
| Name: R. Xxxxxxx Xxxxxxxx | ||||
Signature Page to O’Charley’s Inc. Executive Employment Agreement
