EXECUTIVE EMPLOYMENT AGREEMENT (the “Agreement”) between O’CHARLEY’S INC. (the “Company”) and Gregory L. Burns (“Executive”) March 10, 2008 BACKGROUND
Exhibit 10.1
EXECUTIVE EMPLOYMENT AGREEMENT
(the “Agreement”)
(the “Agreement”)
between
O’CHARLEY’S INC.
(the “Company”)
(the “Company”)
and
Xxxxxxx X. Xxxxx
(“Executive”)
(“Executive”)
March 10, 2008
BACKGROUND
| A. | Executive is currently employed as the Company’s Chief Executive Officer and President and is party to an Amended and Restated Severance Compensation Agreement dated February 22, 2007 (the “Change in Control Agreement”). |
| B. | The Company and Executive desire to incorporate the terms of Executive’s employment in a single agreement that replaces and supersedes any and all existing employment-related agreements, including the Change in Control Agreement. |
ARTICLE I.
EMPLOYMENT, DUTIES AND TERM
EMPLOYMENT, DUTIES AND TERM
1.1 Employment. Upon the terms and condition set forth in this Agreement, the
Company hereby employs Executive as the Chief Executive Officer and President, and Executive
accepts such employment.
1.2 Duties. Executive shall devote his full-time and best efforts to the Company
and to fulfilling the duties of his position, which shall include such duties as may from time to
time be assigned to him 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 responsibilities under this Agreement and provided, that
Executive shall obtain the prior approval of the Company’s Nominating and Corporate Governance
Committee prior to joining the board of directors or other governing body of any such civic,
charitable, business or social organization in addition to any such board of directors or governing
body on which Executive serves as of the date of this Agreement. Executive shall comply with the
Company’s policies and procedures to the extent they are not inconsistent with this Agreement, in
which case the provisions of this Agreement shall prevail. The Executive agrees to serve without
any additional compensation as a member of the board of directors of the Company and 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 and
director of the Company and all of its subsidiaries, such resignation to be effective no later than
the Date of Termination (as hereinafter defined) of the Executive’s employment with the Company.
1.3 Term. Subject to the provisions of Articles III, IV and
V herein, this Agreement and Executive’s employment shall continue until August 29, 2010
(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 prior to the expiration of
the Initial Term or any Renewal Term, as applicable. 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 in effect on the date hereof. Executive’s
base salary shall be reviewed annually by the Compensation and Human Resources Committee (the
“Committee”) 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 may determine appropriate.
2.3 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 the manner prescribed by the
Company.
2.4 Benefits. During the Term, the Company shall provide Executive with those
benefits provided generally to members of senior management, including a car allowance in an amount
at least equal to the amount as in effect on the date hereof.
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 Obligations.
(a) It is understood and agreed that 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 for 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 and claims under this Agreement), Executive shall 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, the following:
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(i) an amount, payable in a lump sum in cash on the fifth day following the
Date of Termination, equal to the sum of (x) 200% of the Base Salary and (y) 200% of the
average bonus paid (or earned with respect to any bonus earned, but not yet paid, for the
fiscal year immediately preceding the fiscal year in which the Date of Termination occurs)
to Executive in respect of the three fiscal years immediately preceding the fiscal year in
which Executive’s employment terminates hereunder;
(ii) health insurance benefits substantially commensurate with the Company’s
standard health insurance benefits for the Executive and the Executive’s spouse and
dependents through the second anniversary of 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);
(iii) any other unpaid benefits to which the Executive is otherwise entitled under any
plan, policy or program of the Company applicable to the Executive as of the Date of
Termination (including any bonus earned, but not yet paid, for the fiscal year immediately
preceding the fiscal year in which the Date of Termination occurs); and
(iv) notwithstanding any provisions to the contrary contained in any agreements
evidencing equity awards granted to the Executive outstanding at the Date of Termination
under the Company’s 1990 Employee Stock Plan or 2000 Stock Incentive Plan or any successor
plan (collectively, the “Company’s Equity Incentive Plans”), in the event Executive is
entitled to receipt of payments under this Section 3.2, immediately prior to the
Date of Termination all awards granted to Executive and then outstanding under the Company’s
Equity Incentive Plans shall be amended to provide as follows:
(A) any award which provides for time based vesting shall vest in full on the Date
of Termination and shall be exercisable for the lesser of one year from the Date of
Termination and the expiration of the remaining term of such award, whichever first
occurs; and
(B) any award which provides for performance-based vesting shall vest in an amount
equal to the product of (x) the number of shares available for vesting under the
award on the Date of Termination and (y) a fraction, the denominator of which is the
number of months in the remaining vesting period contained in the award, and the
numerator of which is the number of months that has elapsed between the start of
such remaining vesting period and the Date of Termination. The portion of such
award which is exercisable on the Date of Termination shall remain exercisable for
the lesser of one year from the Date of Termination and the expiration of the term
of such award, whichever first occurs.
(b) 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).
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(c) 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: gross neglect of
duty, material breach of this Agreement, a material act of dishonesty or disloyalty, the inability
by Executive to discharge Executive’s 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; and, provided further, that a “Termination With Cause” shall not be
deemed existing unless and until there has been delivered to Executive a copy of a resolution duly
adopted by the Company’s Board of Directors at a meeting of the Board (after reasonable notice to
Executive and an opportunity for Executive, together with Executive’s counsel, to be heard before
the Board), finding that in the good faith opinion of the Board, Executive had engaged in the
conduct described above in this Section 3.2(c) and specifying the particulars thereof in
reasonable detail.
(d) As used in this Article III, “Termination for Good Reason” means
Executive’s termination of employment following expiration of the Term by reason of the Company
providing notice of non-renewal in accordance with Section 1.3 or at any time within the
earlier of two (2) years after Executive has actual knowledge of the occurrence, without
Executive’s written consent, of one of the following events: (i) 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 commencement of employment, except for reductions
in such benefits as shall become in effect for senior executive employees of the Company generally;
(ii) the reassignment of Executive to a position resulting in Executive not being the Company’s
Chief Executive Officer and resulting in a material diminution in Executive’s authority, duties or
responsibilities, or a reporting relationship other than to the Company’s Board of Directors; 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 a
condition described in items (i), (ii) or (iii) 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. For the avoidance of doubt,
subsequent occurrences of these events shall start new time periods described in this paragraph.
(e) 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.
(f) Date of Termination. As used in this Article III, “Date of
Termination” means (a) if Executive’s employment is terminated by the Company, the date on which a
notice of termination is given, or (b) in the event of a Termination for Good Reason, the
expiration of the thirty (30) day cure period without the Company remedying the applicable
condition described in Section 3.2(d)(i) to (iii).
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
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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 30% 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;
or
(c) during any period of two consecutive years, individuals who at the beginning of
any such period constitute the Board cease for any reason to constitute at least a majority
thereof, unless the election, or the nomination for election by the Company’s shareholders, of each
director of the Company first elected during such period was approved by a vote of at least
two-thirds of the directors of the Company then still in office who were directors of the Company
at the beginning of any such period.
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 termination of Executive’s employment with the Company by Executive or by the Company
within twenty-four (24) 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 his regular duties and responsibilities due to physical or mental illness
which has lasted for six months and within thirty (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.
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(c) As used in this Article IV, “Termination With Cause” means the
termination of the Executive’s employment on the basis of fraud, misappropriation or embezzlement
on the part of Executive. Notwithstanding the foregoing, the termination of Executive’s employment
shall not be deemed to have been a Termination With Cause unless and until there shall have been
delivered to Executive a copy of a resolution duly adopted by the affirmative vote of not less than
three-quarters of the membership of the Company’s Board of Directors (excluding Executive if
Executive is then a member of the Board of Directors) at a meeting of the Board (after reasonable
notice to Executive and an opportunity for Executive, together with Executive’s counsel, to be
heard before the Board), finding that in the good faith opinion of the Board, Executive was guilty
of conduct set forth in the first sentence of this Section 4(c) and specifying the
particulars thereof in detail.
(d) As used in this Article IV, “Termination for Good Reason” means a
termination by the Executive upon the occurrence of any of the following (without Executive’s
express written consent):
(i) the assignment to Executive by the Company of duties that constitute a
material diminution of Executive’s position, duties, responsibilities and status with the
Company immediately prior to a Change in Control of the Company, or a change in Executive’s
titles or offices as in effect immediately prior to a Change in Control of the Company, or
any removal of Executive from or any failure to reelect Executive to any of such positions,
except in connection with a Termination by Reason of Disability, a Termination by Reason of
Retirement, a Termination With Cause, a termination by the Executive other than a
Termination for Good Reason or as a result of Executive’s death (each as defined in this
Article IV);
(ii) a material reduction by the Company in Executive’s Base Salary or a
material reduction in the health and welfare insurance, retirement and other benefits
available to Executive as of immediately prior to the Change in Control, except for
reductions in such benefits as shall become in effect for senior executive employees of the
Company generally;
(iii) a relocation of the Company’s principal executive offices to a location
more than fifty (50) miles from Nashville, Tennessee, or Executive’s relocation to any place
other than the location at which Executive performed Executive’s duties prior to a Change in
Control of the Company, except for required travel by Executive on the Company’s business to
an extent substantially consistent with Executive’s business travel obligations at the time
of a Change in Control of the Company;
(iv) any material breach by the Company of any provision of this Agreement;
or
(v) any failure by the Company to obtain the assumption of this Agreement by
any successor or assign of the Company;
provided that Executive shall have notified the Company of the existence of a condition described
in items (i), (ii) or (iii), 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
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within thirty (30) days of receiving such notice. 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. For purposes of this Article IV, “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 (b) if Executive terminates his employment pursuant to
Section 4.2(d), the date of termination or, if applicable, the expiration of the thirty
(30) day cure period without the Company remedying the applicable condition described in
Section 4.2(d)(i) to (iii).
4.3 Compensation Upon Termination of Employment.
(a) If the Company shall terminate Executive’s employment within twenty-four (24)
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 his employment within twenty-four (24) months
following a Change in Control by reason of a Termination for Good Reason, then the Company shall
pay to Executive as severance pay in a lump sum, in cash, on the fifth day following the Date of
Termination, an amount equal to the sum of (i) 300% of the average of the Base Salary paid to
Executive by the Company during the three calendar years preceding the Change in Control and (ii)
300% of the highest bonus compensation paid to Executive for any of the three calendar years
preceding the Change in Control; provided, 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”)), 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.
(b) In addition to the lump sum payment provided in Section 4.3(a), if the
Company shall terminate Executive’s employment within twenty-four (24) 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 his employment within twenty-four (24) months following a Change in
Control by reason of a Termination for Good Reason, then the Company shall provide to Executive:
(i) health insurance equivalent to that provided to Executive immediately prior
to the Date of Termination until the earlier of: (i) twenty-four months following
the Date of Termination or (ii) such time as Executive is employed by another
employer and is covered or permitted to be covered by benefit plans of another
employer providing substantially similar coverage; and
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(ii) any other unpaid benefits to which the Executive is otherwise entitled
under any plan, policy or program of the Company applicable to the Executive as of
the Date of Termination (including any bonus earned, but not yet paid, for the
fiscal year immediately preceding the fiscal year in which the Date of Termination
occurs), provided, however, that, notwithstanding any other
provisions of this Agreement or of any of the Company’s Equity Incentive Plans, upon
a Change in Control, regardless of whether the Executive is terminated, all of
Executive’s then unvested options and stock awards issued prior to the date of this
Agreement pursuant to the Company’s Equity Incentive Plans (whether time-base vested
or performance-base vested) shall immediately vest and be exercisable for the lesser
of one year following the Date of Termination and the expiration of the remaining
term of such award, whichever first occurs.
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 (the “Non-compete Period”), Executive shall not enter into or engage in
any business that competes with the Company’s business.
(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 he
shall be competing if he engages in any or all of the activities set forth herein directly as an
individual on his 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 he 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.
(e) For the purposes of this Section 5.1, the Company’s business is defined
as owning, operating and/or franchising restaurants in the casual dining segment of the restaurant
industry and such other segments of the restaurant industry in which the Company shall own,
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operate or franchise restaurants during the Term and as of the Date of Termination of
Executive’s employment. Executive understands that the activities described in this Section
5.1, shall be prohibited only within the United States. If it shall be judicially determined
that Executive has violated any of his 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 he shall not directly or indirectly at
any time solicit or induce or attempt to solicit or induce any employee(s) (at the level of
director or above) of the Company or any of its parent, subsidiary or affiliate entities to
terminate their employment with the Company or such entity.
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 his duties on
behalf of the Company, use any trade secrets or confidential 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 he was employed by the Company. Such trade secrets and confidential 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. 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 secrecy 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 his duties) shall
constitute a misappropriation of the Company’s trade secrets.
(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
his 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
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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: Chair, Compensation and | ||
| Human Resources Committee | ||
If to Executive:
|
Xxxxxxx X. Xxxxx | |
| 0000 Xxxxx 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. 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 the subject matter hereof have been made by either party that
are not set forth expressly in this Agreement.
6.3 Validity. 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.
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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 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 (or having been) an
officer, director or employee of the Company, its parent (if applicable) 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 in connection with any sale, transfer or other disposition of all or
substantially all of its business and assets. The Company may also assign this Agreement without
Executive’s 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, provided, however, that no such assignment to any
parent, subsidiary or affiliated entity of the Company shall relieve the Company of its obligations
for the due performance of all of the terms, covenants and conditions of this Agreement to be
complied with and performed by the Company. In the event of any such assignment, the term
“Company” when used in a section of this Agreement shall mean the entity that actually employs
Employee. Upon such assignment and assumption, Executive agrees to and becomes an employee of such
entity, subject to Executive’s rights under Article IV hereof if such assignment shall be
incident to a Change of Control under Section 4.1(b) hereof, 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
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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 him hereunder, all such amounts,
unless otherwise provided 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; Jurisdiction. 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 agrees that the state and federal courts located in the State
of Tennessee shall have jurisdiction in any action, suite or proceeding against Executive arising
out of this Agreement and Executive hereby: (a) submits to the personal jurisdiction of such
courts; (b) consents to service of process in connection with any action, suite or proceeding
against Executive; and (c) waives any other requirement (whether imposed by statute, rule of court
or otherwise) with respect to personal jurisdiction, venue or service of process.
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. 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 the Change in Control Agreement, and any
such agreement or understanding shall be of no further force and effect, provided, the
provisions of this Agreement, and any payment provided for hereunder, shall not reduce any amounts
otherwise payable, or in any way diminish Executive’s existing rights, or rights which would accrue
solely as a result of the passage of time, under any benefit plan,
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incentive plan or stock option plan or agreement. 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.
6.12 Review of Agreement by Executive. Executive represents that prior to signing
this Agreement, he has read, fully understood and voluntarily agrees to the terms and conditions as
stated above, that he was not coerced to sign this agreement, that Executive was not under duress
at the time he 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. This Agreement shall become effective as of the date
hereof.
[Signature Page Follows]
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above
written.
| O’CHARLEY’S INC. |
||||
| By: | /s/ Xxxxxxx Xxxxx, Xx. | |||
| Name: | Xxxxxxx Xxxxx, Xx. | |||
| Title: | Chair, Compensation and Human Resources Committee | |||
| EXECUTIVE |
||||
| /s/ Xxxxxxx X. Xxxxx | ||||
| Name: | Xxxxxxx X. Xxxxx | |||
| Title: | Chief Executive Officer and President | |||
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