EMPLOYMENT AGREEMENT
THIS AGREEMENT is made as of the 19th day of June, 1999, by
and between RUBY TUESDAY, INC., a Georgia corporation, (the "Company") and
XXXXXX X. XXXXX, III, a resident of the State of Tennessee (the "Executive").
RECITALS:
The Company desires to continue the employment of the
Executive as its Chief Executive Officer on the terms and conditions set
forth herein and the Executive desires to accept such employment.
In consideration of the above premises and the mutual
agreements hereinafter set forth, the parties hereby agree as follows:
1. Duties.
1.1 Positions. The Executive shall serve as the Chief
Executive Officer of the Company and, for all periods that the Executive
occupies a seat on the Board of Directors of the Company, shall serve as
the Chairman of the Board of Directors of the Company. In carrying out
his duties under this Agreement, the Executive shall report to the Board
of Directors of the Company.
1.2 Primary Responsibilities. The Executive shall lead the
Company in the development of goals and operating plans and policies and
shall be responsible for the successful implementation of programs that
support the objectives identified. The Executive shall coordinate the
activities of management according to the Company's business plan with a
focus on achieving desired levels of growth, profitability and return on
invested capital.
2. Term. Except as otherwise provided herein, the term of this
Agreement shall commence as of the Effective Date and shall continue until
June 18, 2006. The Agreement may continue for any subsequent renewal
periods agreed to by the Executive and the Company. The period described
herein, as the same may be renewed as provided for herein, shall be
referred to as the "Term".
3. Compensation. During the Term, the Executive shall receive the
following salary and benefits:
3.1 Base Salary. The Executive shall be compensated at a base
salary rate equal to $860,000. The base salary rate shall be adjusted
annually by an amount equal to the greater of (a) four percent (4%) of the
base salary then in effect, or (b) an amount determined by the Board of
Directors of the Company, or appropriate committee thereof, based upon
peer group competitive market data (as so adjusted from time to time, the
"Base Salary"). Base Salary shall be payable in accordance with the
Company's normal payroll practices.
3.2 Incentive Compensation.
(a) The Executive shall be entitled to an annual bonus
opportunity pursuant to the terms of the Ruby Tuesday, Inc. Chief Executive
Officer's Incentive Bonus Plan, based upon performance criteria approved by
the Board of Directors of the Company, or appropriate committee thereof, with
a target bonus equal to fifty percent (50%) of Base Salary and a maximum
bonus equal to one hundred and twenty-five percent (125%) of Base Salary.
(b) The Executive shall also be entitled to participate in such
long-term incentive compensation programs as may be developed from time to
time for the senior management of the Company, including annual grants of
stock options under the Company's Executive Stock Option Plan. Such grants
shall be awarded to Executive according to the same criteria pursuant to
which such grants are awarded to other senior executives of the Company.
If target performance is achieved, Executive's annual grants are estimated to
be as shown on Schedule 3.2(b).
3.3 Benefits. The Executive shall be entitled both to such
additional pension and welfare benefits as may be provided from time to
time to employees generally and to such additional pension and welfare
benefits as may be provided only to executives generally.
3.4 Vacation. On a non-cumulative basis, the Executive shall be
entitled to four (4) weeks (or such greater time as may be agreed between
the Executive and the Company's Board of Directors) of vacation in each
successive twelve-month period during the Term, during which his
compensation shall be paid in full.
3.5 Life Insurance. The Company shall provide the Executive with
life insurance coverage providing a death benefit of not less than four
(4) times Base Salary, payable to such beneficiary or beneficiaries as the
Executive may designate. This obligation may be satisfied in whole or in
part by the Executive's participation in the Ruby Tuesday, Inc. Executive
Life Insurance Plan.
3.6 Reimbursement of Expenses. The Company agrees to reimburse
the Executive for all reasonable and necessary business (including travel)
expenses incurred by him in the performance of his duties hereunder;
provided, however, that the Executive shall, as a condition of
reimbursement, submit verification of the nature and amount of such
expenses in accordance with reimbursement policies from time to time
adopted by the Company and in sufficient detail to comply with rules and
regulations promulgated by the Internal Revenue Service.
3.7 Stock Options. The Company agrees to grant the Executive a
non-qualified stock option award to acquire 78,000 shares of the Company's
common stock under the Company's 1996 Stock Incentive Plan at a per share
exercise price equal to the fair market value of a share of the Company's
common stock determined as of the close of business on the day before the
Company and the Executive have executed this Agreement (the "1999
Option"). The 1999 Option shall vest on July 1, 2006 and shall expire on
December 18, 2008; provided, however, the 1999 Option shall expire earlier
immediately upon any termination of the Executive's employment, other than
a termination or resignation pursuant to Section 4.1, 4.2, 4.7 or 4.8
hereof. In addition, the Company agrees to grant the Executive a second
non-qualified stock option award to acquire a number of shares of the
Company's common stock under the Company's 1996 Stock Incentive Plan at a
per share exercise price equal to the fair market value of a share of the
Company's common stock determined as of the close of business on the day
before the date of grant determined as described
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below, which shall be the date of the Board of Directors meeting that
immediately follows the regular annual meeting of shareholders to be held in
the year 2000 (the "2000 Option"). The 2000 Option also shall vest on July
1, 2006 and shall expire on December 18, 2008; provided, however, the 2000
Option shall expire earlier immediately upon any termination of the Executive's
employment, other than a termination or resignation pursuant to Section
4.1, 4.2, 4.7 or 4.8 hereof. Notwithstanding the foregoing, the 2000
Option shall not be granted if the Executive is no longer employed by the
Company as of the grant date, other than a termination or resignation
pursuant to Section 4.1, 4.2, 4.7 or 4.8 hereof, and its granting shall
also be conditioned upon the approval at the regular 2000 meeting of
shareholders of the Company of appropriate amendments to the 1996 Stock
Incentive Plan, including an increase of the per employee fiscal year
limit from 250,000 to not less than 350,000. The number of shares to be
included in the 2000 Option is intended to be the number of shares
necessary to create a present value, as of September, 1999, of $1,500,000,
when the 2000 Option is aggregated with the 1999 Option, using the Black-
Sholes model to calculate present value. In the event the aforementioned
amendments to the 1996 Stock Incentive Plan are not approved by the
Company's shareholders, the obligations of the Company under this Section
3.7 shall be extended from year to year until sufficient options have been
granted to create such present value. The Executive agrees not to
purchase any shares of the Company's common stock under the terms of the
Management Stock Option Program during fiscal 2000.
3.8 Withholding. The Company may deduct from each payment of
compensation hereunder all amounts required to be deducted and withheld in
accordance with applicable federal and state income, FICA and other
withholding requirements.
3.9 Existing and Future Stock Options. The Company and the
Executive agree that, subject to the approval by the Company's
Compensation and Stock Option Committee of the Board of Directors, options
previously granted to the Executive to acquire the common stock of the
Company shall be amended to provide, or shall provide if granted in the
future, that (a) such options which have not then vested shall vest in
full upon the death or Disability of the Executive; upon the involuntary
termination of the Executive's employment by the Company without Cause;
upon the Executive's retirement on or after satisfying the Rule of 90 set
forth in the Ruby Tuesday, Inc. Executive Supplemental Pension Plan; or
upon a Change of Control; and (b) the term within which vested options may
be exercised shall be the maximum stated term except as follows: such
option(s) shall expire no later than ninety (90) days following a
voluntary resignation by the Executive (unless the resignation qualifies
as a Qualified Termination) prior to Executive qualifying for the Rule of
90 under Company's Executive Supplemental Pension Plan; no later than
ninety (90) days following an involuntary termination of the Executive's
employment by the Company without Cause with respect to options which vest
prior to normal vesting as a result of such involuntary termination
without Cause or, with respect to the portion of any option which has then
previously vested, no later than one (1) year following any other
involuntary termination of Executive's employment, prior to a Change of
Control, without Cause; and no later than fifteen (15) days following an
involuntary termination of the Executive's employment by the Company for
Cause, or in each case the expiration of the stated term of such option,
whichever first occurs.
4. Termination. During the Term, the employment of the Executive under
this Agreement may be terminated only as follows:
4.1 Death. In the event of the Executive's death, this
Agreement shall terminate and the Company shall have no further
obligations hereunder except as follows: (a) immediate payment of any
obligations accrued but unpaid as of the date of death; (b) payment of
that portion of Base Salary payable through the end of the calendar month
in which the death occurs; (c) payment of earned but unused vacation
through
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the end of the calendar month in which the death occurs; and (d) payment of a
pro rata portion of the annual bonus, if any, payable for the fiscal year in
which the death occurs with such pro rata portion paid when and as such
annual bonus would normally be determined. Payment of obligations under any
other employee benefit plans shall be determined in accordance with the
provisions of those plans.
4.2 Disability. In the event of the Executive's Disability,
this Agreement shall terminate and the Company shall have no further
obligations hereunder except as follows: (a) immediate payment of any
obligations accrued but unpaid as of the date of Disability; (b) payment
of that portion of Base Salary payable through the end of the calendar
month in which the Disability occurs; (c) payment of an amount equal to
thirty (30) days of sick pay; (d) payment of earned but unused vacation
through the end of the calendar month in which the Disability occurs; and
(e) payment of a pro rata portion of the annual bonus, if any, payable for
the fiscal year in which the Disability occurs with such pro rata portion
paid when and as such annual bonus would normally be determined. Payment
of obligations under any other employee benefit plans shall be determined
in accordance with the provisions of those plans.
4.3 Normal Retirement. In the event of the Executive's Normal
Retirement, this Agreement shall terminate and the Company shall have no
further obligations hereunder except as follows: (a) immediate payment of
any obligations accrued but unpaid as of the date of Normal Retirement;
(b) payment of that portion of Base Salary payable through the end of the
calendar month in which the Normal Retirement occurs; ( c) payment of
earned but unused vacation through the end of the calendar month in which
the Normal Retirement occurs; and (d) payment of a pro rata portion of the
annual bonus, if any, payable for the fiscal year in which the Normal
Retirement occurs with such pro rata portion paid when and as such annual
bonus would normally be determined. Payment of obligations under any
other employee benefit plans shall be determined in accordance with the
provisions of those plans.
4.4 Early Retirement. In the event of the Executive's Early
Retirement, this Agreement shall terminate and the Company shall have no
further obligations hereunder except as follows: (a) immediate payment of
any obligations accrued but unpaid as of the date of Early Retirement
except that no payment shall be made for any annual bonus that may have
been earned but remained unpaid as of the date of the Early Retirement;
(b) payment of earned but unused vacation through the end of the calendar
month in which the Early Retirement occurs; and( c) payment of that
portion of Base Salary payable through the end of the calendar month in
which the Early Retirement occurs. Payment of obligations under any other
employee benefit plans shall be determined in accordance with the
provisions of those plans.
4.5 Voluntary Resignation Prior to Early Retirement. In the
event the Executive resigns voluntarily prior to his eligibility for Early
Retirement, this Agreement shall terminate and the Company shall have no
further obligations hereunder except as follows: (a) immediate payment of
any obligations accrued but unpaid as of the date of resignation except
that no payment shall be made for any annual bonus that may have been
earned but remained unpaid as of the date of the resignation; (b) payment
of earned but unused vacation through the end of the calendar month in
which the resignation occurs; and (c) payment of that portion of Base
Salary payable through the end of the calendar month in which the
resignation occurs. Payment of obligations under any other employee
benefit plans shall be determined in accordance with the provisions of
those plans.
4.6 Involuntary Termination for Cause. In the event the Company
terminates the Executive's employment for Cause, this Agreement shall
terminate and the Company shall have no further obligations hereunder
except as follows: (a) immediate payment of any obligations accrued
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but unpaid as of the date of termination except that no payment shall be made
for any annual bonus that may have been earned but remained unpaid as of
the date of the termination; (b) payment of earned but unused vacation
through the end of the calendar month in which the termination occurs; and
(c) payment of that portion of Base Salary payable through the end of the
calendar month in which the termination occurs. Payment of obligations
under any other employee benefit plans shall be determined in accordance
with the provisions of those plans.
4.7 Involuntary Termination other than for Cause. In the
event the Company terminates the Executive's employment other than for
Cause, this Agreement shall terminate and the Company shall have no
further obligations hereunder except as follows: (a) immediate payment of
any obligations accrued but unpaid as of the date of termination; (b)
payment of Base Salary then in effect for a period equal to twenty-four
(24) months (the "Severance Period"); (c) payment of annual bonuses (or
pro rata portion thereof), if any, payable for each of those fiscal years
that overlap, in whole or in part, with the Severance Period, with such
amounts paid when and as such annual bonuses would normally be determined;
(d) payment of earned but unused vacation through the end of the calendar
month in which the termination occurs; and (e) the provision of health,
life and disability coverages to the Executive and eligible dependents for
the Severance Period at active employee rates (or cash equal to the cost
of any such coverage to the extent such continued coverage can not be
provided pursuant to any underlying insurance policy then in effect or
where such continued coverage would have adverse tax effects to the
Executive or other plan participants). Payment of obligations under any
other employee benefit plans shall be determined in accordance with the
provisions of those plans. Company and Executive agree that the failure
of the Board of Directors of the Company to elect, or the action of the
Board of Directors to remove, Executive as Chairman of the Board shall, in
the absence of Cause, permit Executive to terminate this Agreement within
sixty (60) days of such event and such termination shall be deemed to
constitute an involuntary termination other than for cause by Company
pursuant to this Section 4.7.
4.8 Qualified Termination following a Change of Control. In the
event of a Qualified Termination of the Executive's employment following a
Change of Control, this Agreement shall terminate and the Company shall
have no further obligations hereunder except as follows: (a) immediate
payment of any obligations accrued but unpaid as of the date of
termination; (b) immediate payment of a lump sum amount equal to the
product of three (3), multiplied by the sum of (i) Base Salary then in
effect, plus (ii) the greater of (A) the target annual bonus for the
fiscal year in which the Qualified Termination occurs, or (B) the average
of the last three annual bonuses earned by the Executive; (c) immediate
payment of a pro rata portion of the target annual bonus for the fiscal
year in which the Qualified Termination occurs; and (d) the provision of
health, life and disability coverages to the Executive and eligible
dependents for a period of thirty-six (36) months at active employee rates
(or cash equal to the cost of any such coverage to the extent such
continued coverage can not be provided pursuant to any underlying
insurance policy then in effect or where such continued coverage would
have adverse tax effects to the Executive or other plan participants).
Payment of obligations under any other employee benefit plans shall be
determined in accordance with the provisions of those plans; provided,
however, that the Executive's accrued benefit under the Ruby Tuesday, Inc.
Executive Supplemental Pension Plan shall be determined by increasing the
Executive's actual years of "Continuous Service" (as defined therein) by
an additional three (3) full years.
Notwithstanding any other provision of this Agreement to the
contrary, if the aggregate amount provided for in this Agreement and any
other payments and benefits which the Executive has the right to receive
from the Company and its Affiliates (determined without regard to the
provisions of this paragraph) would subject the Executive to an excise tax
under Section 4999
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of the Internal Revenue Code (or any successor federal tax law), or any
interest or penalties are incurred or paid by the Executive with respect to
such excise tax (any such excise tax, together with any such interest and
penalties, are hereinafter collectively referred to as the "Excise Tax"),
then the Executive shall be entitled to an additional payment from the
Company as is necessary (after taking into account all federal, state and
local taxes (regardless of type, whether income, excise or otherwise) imposed
upon the Executive as a result of the receipt of the payment contemplated by
this Agreement) to place the Executive in the same after-tax position the
Executive would have been in had no Excise Tax been imposed or incurred or
paid by the Executive. Ernst & Young LLP (or its successor) or any other
certified public accounting firm agreed to by the Company and the
Executive shall determine the extent, if any, of the Company's obligations
pursuant to this paragraph after receipt of notice from either the Company
or the Executive that a payment has been made that may subject the
Executive to the Excise Tax. The accounting firm shall make its
determination within thirty (30) days after the receipt of any such
notice. The Company shall pay to the Executive in cash in a lump sum any
amount that the accounting firm determines is due pursuant to this
paragraph not later than five (5) business days prior to the date that the
Executive must file the Executive's federal income tax return which
reflects the payment that subjects the Executive to the Excise Tax.
4.9 Severance Amounts and the Executive Supplemental Pension
Plan. Notwithstanding any possible interpretation to the contrary, for
purposes of determining the Executive's accrued benefit under the Ruby Tuesday,
Inc. Executive Supplemental Pension Plan, no amounts payable to the
Executive pursuant to Section 4 hereof shall increase his "Annual Base
Salary" (as defined therein).
5. Confidentiality.
5.1 Ownership of Information. All Company Information received or
developed by the Executive while employed by the Company will remain the sole
and exclusive property of the Company.
5.2 Obligations of Executive. Executive agrees (a) to hold
Company Information in strictest confidence, and (b) not to use, duplicate,
reproduce, distribute, disclose or otherwise disseminate Company
Information or any physical embodiments thereof and may in no event take
any action causing or fail to take any action necessary in order to
prevent any Company Information from losing its character or ceasing to
qualify as Confidential Information or a Trade Secret. In the event that
Executive is required by law to disclose any Company Information,
Executive will not make such disclosure unless and until prior written
notice is given to the Company to enable it to seek protection against
disclosure, as the Company deems necessary. This Section shall survive
for a period of two (2) years following termination of this Agreement with
respect to Confidential Information, and shall survive termination of this
Agreement with respect to Trade Secrets for so long as the information
qualifies as a trade secret under applicable law.
5.3 Delivery upon Request or Termination. Upon request by the
Company, and in any event upon termination of his employment with the
Company, the Executive will promptly
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deliver to the Company all property belonging to the Company, including
without limitation all Company Information then in his possession or control.
6. Non-Competition. The Executive agrees that during his employment
by the Company and for a period of two years thereafter, he will not
(except on behalf of or with the prior written consent of the Company),
within the United States, either directly or indirectly, on his own behalf
or in the service or on behalf of others, as a principal, partner,
officer, director, manager, supervisor, administrator, consultant,
executive employee or in any other capacity which involves duties and
responsibilities similar to those undertaken for the Company, engage in
any business which is the same as or essentially the same as the Business
of the Company. For purposes of this Section, the term "Business of the
Company" shall mean any multi-unit, multi-state foodservice business that
is of a character and concept similar to the restaurants operated by the
Company including, but not limited to, a casual dining restaurant business
with a generic, broad-based menu similar in concept to restaurants
operated by the Company (such as Ruby Tuesday, American Cafe, and Tia's),
serving soups, sandwiches, chicken, ethnic cuisine, health or fitness
oriented dishes and a full bar. Company and Executive expressly agree
that the restaurant concept know as "Truffles" (currently operating in
Hilton Head, South Carolina) is excluded from the covenants in this
Section 6 for so long as there are no more than five (5) units of such
restaurant concept.
7. Non-Solicitation of Employees. The Executive agrees that during his
employment by the Company and for a period of two years thereafter, he
will not, on his own behalf or in the service or on behalf of others,
solicit or recruit any employee of the Company with whom the Executive
worked or had dealings in the course of his employment with the Company.
8. Non-Disparagement. The Executive agrees that at any time during or
after his employment with the Company, he shall not make any disparaging
remarks to the public regarding the Company or otherwise attempt to cast
the Company in an unfavorable light.
9. Remedies. The Executive agrees that the covenants contained in
Sections 5 through 9 of this Agreement are of the essence of this
Agreement; that each of the covenants is reasonable and necessary to
protect the business, interests and properties of the Company; and that
irreparable loss and damage will be suffered by the Company should he
breach any of the covenants. Therefore, the Executive agrees and consents
that, in addition to all the remedies provided by law or in equity, the
Company shall be entitled to a temporary restraining order and temporary
and permanent injunctions to prevent a breach or contemplated breach of
any of the covenants. The Company and the Executive agree that all
remedies available shall be cumulative.
10. Severability. The parties agree that each of the provisions
included in this Agreement is separate, distinct and severable from the
other provisions of this Agreement and that the invalidity or
unenforceability of any Agreement provision shall not affect the validity
or enforceability of any other provision of this Agreement. Further, if
any provision of this Agreement is ruled invalid or unenforceable by a
court of competent jurisdiction because of a conflict between the
provision and any applicable law or public policy, the provision shall be
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redrawn to make the provision consistent with and valid and enforceable
under the law or public policy.
11. Applicable Law and Choice of Forum. This Agreement shall be
construed and enforced under and in accordance with the laws of the State
of Tennessee. The parties agree that any appropriate state or federal
court located in Xxxx or Xxxxxx County, Tennessee, shall have exclusive
jurisdiction of any case or controversy arising under or in connection
with Sections 5 through 9 of this Agreement and shall be a proper forum in
which to adjudicate such case or controversy. The parties consent and
waive any objection to the jurisdiction or venue of such courts.
12. No Set-Off by the Executive. The existence of any claim, demand,
action or cause of action by the Executive against the Company, or any
Affiliate of the Company, whether predicated upon this Agreement or
otherwise, shall not constitute a defense to the enforcement by the
Company of any of its rights hereunder.
13. Notice. All notices and other communications required or permitted
under this Agreement shall be in writing and, if mailed by prepaid first-
class mail or certified mail, return receipt requested, shall be deemed to
have been received on the earlier of the date shown on the receipt or
three (3) business days after the postmarked date thereof. In addition,
notices hereunder may be delivered by hand, facsimile transmission or
overnight courier, in which event the notice shall be deemed effective
when delivered or transmitted. All notices and other communications under
this Agreement shall be given to the parties hereto at the following
addresses:
(a) If to the Company, to it at:
Ruby Tuesday, Inc.
c/o General Counsel
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
(b) If to the Executive, to him at:
0000 Xxxx Xxxxxx'x Xxxx
Xxxxxxx, XX 00000
14. Assignment/Successors. Neither party hereto may assign or delegate
this Agreement or any of its rights and obligations hereunder without the
written consent of the other party hereto. This Agreement shall inure to
the benefit of and be binding upon the successors of the Company.
15. Waiver. A waiver by the Company of any breach of this Agreement by
the Executive shall not be effective unless in writing, and no waiver
shall operate or be construed as a waiver of the same or another breach on
a subsequent occasion.
16. Indemnification. During the Term, the Company shall maintain
directors and officers liability insurance coverage that covers the
Executive.
17. Arbitration. Except for matters contemplated by Section 11 above,
any controversy or claim
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arising out of or relating to this contract, or the breach thereof, shall be
settled by binding arbitration in accordance with the Commercial Arbitration
Rules of the American Arbitration Association. The decision of the
arbitrator shall be final and binding on the parties and judgment upon the
award rendered by the arbitrator may be entered in any federal or state court
located in Xxxx or Xxxxxx County, Tennessee. The Company and the Executive
agree to share equally the fees and expenses associated with the arbitration
proceedings.
18. Entire Agreement. This Agreement embodies the entire and final
agreement of the parties on the subject matter stated in the Agreement.
No amendment or modification of this Agreement shall be valid or binding
upon the Company or the Executive unless made in writing and signed by
both parties. All prior understandings and agreements relating to the
subject matter of this Agreement are hereby expressly terminated.
19. Survival. The obligations of the Executive pursuant to Sections 5
through 9 shall survive the termination of the employment of the Executive
hereunder for the period designated under each of those respective
sections.
20. Definitions. Whenever used in this Agreement, the following terms
and their variant forms shall have the meanings set forth below:
20.1 "Affiliate" shall mean any business entity which
controls the Company, is controlled by or is under common control with the
Company.
20.2 "Agreement" shall mean this Agreement with any amendments
hereto made in the manner described in this Agreement.
20.3 "Cause" shall mean, with respect to termination of the
Executive's employment by the Company:
(a) the Executive's conviction of a felony;
(b) conduct by the Executive constituting a
willful refusal to perform any material duty assigned by the Board of
Directors of the Company;
(c) conduct by the Executive that amounts to
fraud against the Company or its Affiliates;
(d) a breach of the terms of this Agreement by
the Executive that is materially injurious to the Company or its Affiliates;
or
(e) conduct by the Executive that amounts to
willful gross neglect or willful gross misconduct resulting in
material economic harm to the Company or its Affiliate.
20.4 "Change of Control" means any one of the following events:
(a) the acquisition by any individual, entity or
"group" (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the
Securities Exchange Act of 1934, as amended) (a "Person") of beneficial
ownership (within the meaning of Rule 13d-3 promulgated under such Act) of
voting securities of the Company where such acquisition causes any such
9
Person to own twenty-five percent (25%) or more of the combined voting power
of the then outstanding voting securities then entitled to vote generally in
the election of directors (the "Outstanding Voting Securities"); provided,
however, that for purposes of this Section 20.4, the following shall not
constitute a Change of Control: (i) any acquisition directly from
the Company, unless such a Person subsequently acquires additional
shares of Outstanding Voting Securities other than from the Company;
or (ii) any acquisition by any employee benefit plan (or related
trust) sponsored or maintained by the Company or any Affiliate.
(b) within any twelve-month period (beginning on
or after the Effective Date), the persons who were directors of the Company
immediately before the beginning of such twelve-month period (the "Incumbent
Directors") shall cease to constitute at least a majority of the Board of
Directors of the Company; provided that any director who was not a director
as of the Effective Date shall be deemed to be an Incumbent Director if that
director was elected to the Board of Directors by, or on the recommendation
of or with the approval of, at least two-thirds of the directors who then
qualified as Incumbent Directors; and provided further that no director whose
initial assumption of office is in connection with an actual or threatened
election contest (as such terms are used in Rule 14a-11 of Regulation 14A
promulgated under the Securities Exchange Act of 1934) relating to the
election of directors shall be deemed to be an Incumbent Director;
(c) the approval by the stockholders of theCompany of
a reorganization, merger or consolidation, with respect to whichpersons who
were the stockholders of the Company immediately prior to such
reorganization, merger or consolidation do not, immediately thereafter, own
more than fifty percent (50%) of the combined voting power entitled to vote
in the election of directors of the reorganized, merged or consolidated
company's then outstanding voting securities;
(d) the sale, transfer or assignment of all or
substantially all of the assets of the Company and its Affiliates to
any third party; or
(e) the liquidation or dissolution of the Company.
20.5 "Company Information" means Confidential Information
and Trade Secrets.
20.6 "Confidential Information" means data and information
relating to the Company or the business of the Company (which does not
rise to the status of a Trade Secret) which is or has been disclosed to
the Executive or of which the Executive became aware as a consequence of
or through the Executive's relationship to the Company and which has value
to the Company and is not generally known to its competitors.
Confidential Information shall not include any data or information that
has been voluntarily disclosed to the public by the Company (except where
such public disclosure has been made by the Executive without
authorization) or that has been independently developed and disclosed by
others, or that otherwise enters the public domain through lawful means.
20.7 "Disability" shall mean the total inability of the
Executive to perform his duties under this Agreement for the duration of
the short-term disability period (but not less than six [6] months) under
the Company's short-term disability policy then in effect as certified by
a physician chosen by the Company and reasonably acceptable to the
Executive.
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20.8 "Early Retirement" shall mean a voluntary termination of
employment by the Executive on or after attaining age 55 but prior to
attaining age 65.
20.9 "Effective Date" means the date first set forth above.
20.10 "Normal Retirement" shall mean a voluntary termination
of employment by the Executive on or after attaining age 65.
20.11 "Qualified Termination" shall mean, during the Term,
any one of the following events: (a) an involuntary termination of the
Executive's employment by the Company other than for Cause; (b) a
resignation by the Executive for any reason within twelve (12) months
following a Change of Control; or (c) a resignation by the Executive
following a Change of Control for any one of the following reasons:
(i) a reduction in the Executive's then
current Base Salary or a reduction in the Executive's target bonus
opportunity, expressed as a percentage of Base Salary;
(ii) a failure to elect or reelect the Executive to
the positions of Chief Executive Officer and Chairman of the Board of Directors;
(iii) a material diminution in the Executive's duties
or responsibilities; or
(iv) a change in supervisory authority such that the
Executive no longer reports directly to the Board of Directors of the Company.
20.12 "Trade Secrets" means information, without regard to form,
which (a) derives economic value, actual or potential, from not being
generally known to, and not being readily ascertainable by other persons
who can obtain economic value from its disclosure or use; and (b) is the
subject of efforts that are reasonable under the circumstances to maintain
its secrecy, including, but not limited to, formulas, patterns,
compilations, programs, devices, methods, techniques, processes, financial
data, financial plans or product plans.
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IN WITNESS WHEREOF, the Company and the Executive have executed
and delivered this Agreement as of the date first shown above.
COMPANY:
RUBY TUESDAY, INC.
By: /s/ J. XXXXXXX XXXXXXXXXX By: /s/ DOLPH W. VON ARX
J. Xxxxxxx Xxxxxxxxxx Dolph W. von Arx
Senior Vice President & Chairman,
Chief Financial Officer Compensation &
Stock Option
Committee
EXECUTIVE:
/s/ XXXXXX X. XXXXX, III
XXXXXX X. XXXXX, III
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SCHEDULE 3.2(b)
FISCAL ESOP MSOP SPECIAL TOTAL ESOP ESOP
YEAR END(1) GRANT(2) XXXXX XXXXX (3) VESTING DATE EXPIRATION DATE
2000 172,000 0 78,000 250,000 10/02 4/05
2001 184,000 8,200 87,653(4) 279,853 10/03 4/06
2002 197,000 7,600 N/A 204,600 10/04 4/07
2003 211,000 7,200 N/A 218,200 10/05 4/08
2004 226,000 6,800 N/A 232,800 6/06 4/09
2005 242,000 6,400 N/A 248,400 6/06 4/10
2006 259,000 6,000 N/A 265,000 6/06 4/11
(1) Assumes stock option grants continue through year of
retirement.
(2) Assumes a 7% increase in the number of options granted each
year from ESOP.
(3) Assumes 250,000 limit on option grants in any fiscal year
is increased.
(4) To the extent the actual number of options necessary to
deliver the desired value is in excess of the new limit on
option grants, this option grant will not take the total
options granted over the limit in place at that time.
Rather, the Company will make an additional option grant in
fiscal year 2002 to deliver the remaining value.
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