EXHIBIT 10.66
October 3, 2005
O'Charley's Inc.
0000 Xxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
Ladies and Gentlemen:
In consideration of my employment as Chief Human Resources Officer for
O'Charley's Inc. effective October 3, 2005 and the benefits I derive from
Paragraph J hereof (but without thereby creating any fixed or contractual
employment term, understanding that my employment can be terminated, with or
without cause and with or without notice, at any time at the option of either
the Company or me), I hereby agree with the Company (for purposes of this letter
agreement, the "Company" shall mean O'Charley's Inc. or any of its present or
future direct or indirect parents or subsidiaries or affiliated entities by
which I am employed or on behalf of which I provide service(s)) as follows:
A. During the term of my employment I will not compete, directly
or indirectly, with the Company. In accordance with this restriction, but
without limiting its terms, I will not:
(a) enter into or engage in any business which competes
with the business of the Company; or
(b) 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 my
employment with the Company, I will not enter into or engage in any business
that competes with the Company's business.
C. For a period of twelve (12) months following termination of my
employment with the Company, I will 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 Paragraphs A through C, inclusive, I
understand that I will be competing if I engage in any or all of the activities
set forth therein directly as an individual on my 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 I own, directly or indirectly, individually or in the
aggregate, more than one percent (1%) of the outstanding stock.
E. For the purposes of Paragraphs A through C, inclusive, the
Company's business is defined as owning, operating and/or franchising
restaurants in the casual dining segment of the
O'Charley's Inc.
October 3, 2005
Page 2
restaurant industry and such other segments of the restaurant industry in which
the Company shall own, operate or franchise restaurants as of the date of
termination of my employment with the Company.
F. I understand that the activities set forth in Paragraphs B
through C, inclusive, shall be prohibited only within the United States.
G. If it shall be judicially determined that I have violated any
of my obligations under Paragraphs B through C, inclusive, then the period
applicable to the obligation which I 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.
H. I also agree that I will 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.
I. During the period of my employment and at any time thereafter,
I will not disclose, furnish, disseminate, make available or, except in the
ordinary course of performing my 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 me or whether it was compiled or obtained by, or furnished to me
while I 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, human resources, or store operations plans. I specifically acknowledge
that all such information, whether reduced to writing or maintained in my mind
or memory and whether compiled by the Company and/or me 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 will remain the sole property of
the Company and that any retention and use of such information during or after
the termination of my relationship with the Company (except in the course of
performing my duties) shall constitute a misappropriation of the Company's trade
secrets.
The above restrictions on disclosure and use of confidential
information shall not prevent me from: (i) using or disclosing information in
the good faith performance of my 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 of us 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 my
duties on behalf of the Company or as authorized in writing by the Company; (iv)
at any time after the period of my employment using or disclosing information to
the extent such information is, through no fault or disclosure of my own,
generally known to the public; (v) using or disclosing information which
O'Charley's Inc.
October 3, 2005
Page 3
was not disclosed to me by the Company or otherwise during the period of my
employment which is then disclosed to me after termination of my 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 I become
legally compelled to disclose any of the confidential information, I 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 my counsel delivered to the
Company, is legally required; and (iii) exercise reasonable efforts to obtain
reliable assurances that confidential treatment will be accorded to the
confidential information.
J. It is further understood and agreed that if my employment with
the Company should be terminated at any time prior to the third anniversary of
the date of this agreement as a result of a Termination Without Cause (defined
below) or a Termination With Good Reason (defined below), and if I am not then
or thereafter in material breach of this agreement, and upon the execution and
delivery to the Company by me of an agreement, in a form presented by the
Company and accepted by me, which acceptance shall not be unreasonably withheld
or delayed, releasing all claims which I may have against the Company (other
than claims for indemnification pursuant to Paragraph L hereunder), I will
receive, in full and complete settlement of any claims for compensation which I
may have, and in lieu of any severance pay under any policy of the Company or
otherwise, the following:
(i) continued monthly payments, in accordance with the
Company's regular payroll practices, for a period of twelve (12) months
after the date of termination equal to the sum of (1) one-twelfth
(1/12) of my annual base salary at the highest rate in effect at any
time during the twelve (12)-month period prior to my date of
termination, and (2) one-twelfth (1/12) of my target annual bonus for
the fiscal year in which the date of termination occurs; and
(ii) any payments and benefits which I, my spouse,
dependents, beneficiaries or estate would have been entitled to receive
pursuant to any employee benefit plan or program of the Company during
the twelve (12)-month period following my termination had I remained an
employee during that period, with such benefits provided to me at no
less than the same coverage level and at no more of a cost to me as in
effect as of the date of my termination subject to such reduction in
coverage or increases in cost as shall become in effect for senior
executive employees of the Company generally, provided however, that
such continued payments and benefits shall terminate on the date or
dates I receive 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).
As used herein, "Termination Without Cause" means any termination of my
employment by the Company other than a Termination With Cause (defined below).
O'Charley's Inc.
October 3, 2005
Page 4
As used herein, "Termination With Cause" means termination by the
Company of my 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 to discharge my material duties due to alcohol or
drug addiction, or gross misconduct inimical to the best interests of the
Company; provided, however, that "Cause" shall not be deemed existing unless and
until the Company has delivered to me a copy of a resolution duly adopted by the
Company's Board of Directors at a meeting of the Board duly called (after
reasonable (but in no event less than seven (7) days) notice to me and an
opportunity for me, together with my counsel, to be heard before the Board),
finding that in the good faith opinion of the Board, I had engaged in the
conduct set forth above and specifying the particulars thereof in reasonable
detail.
As used herein, "Termination with Good Reason" means my termination of
employment at any time after I have actual knowledge of the occurrence, without
my written consent, of one of the following events: (i) a reduction in my base
compensation or a material reduction in the health and welfare insurance,
retirement and other benefits available to me 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 me
to a position resulting in my not being the Company's Chief Human Resources
Officer or a comparable position, or a reporting relationship other than to the
Chief Executive Officer, President or Chief Operating Officer of the Company; or
(iii) the location of my principal office is relocated to a location more than
fifty (50) miles from Nashville, Tennessee.
It is understood and agreed that in the event of any termination of my
employment following a Change in Control (as defined in the Severance
Compensation Agreement dated the date hereof between me and the Company (the
"Change in Control Severance Agreement")), the provisions of the Change in
Control Severance Agreement shall control and the provisions in this Paragraph J
shall be void and of no further force or effect.
In the event I voluntarily terminate my employment for any reason other
than as a result of a Termination with Good Reason or following a Change in
Control (as defined in the Change in Control Severance Agreement) prior to the
third anniversary of the date of this agreement, I agree to reimburse the
Company for any and all amounts reimbursed by the Company or paid by the Company
in respect of my relocation to Nashville, Tennessee pursuant to the offer of
employment from the Company dated August 25, 2005.
The amounts payable to me under this Paragraph J are not eligible
earnings under any pension, savings, deferred compensation, bonus, incentive,
supplemental retirement benefit or other benefit plan of the Company.
K. I expressly agree and understand that the remedy at law for
any breach by me of this agreement 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 agreement, the Company shall 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
O'Charley's Inc.
October 3, 2005
Page 5
limit the Company's remedies at law or in equity for any breach by me of any of
the provisions of this agreement which may be pursued or availed of by the
Company.
L. It is understood and agreed that the Company will indemnify me
(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 me in connection with the defense of any lawsuit or other claim to
which I am made a party by reason of being an officer, director or employee of
the Company or any of its subsidiaries.
M. 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, I agree to and will become 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.
N. No modification, waiver, amendment or addition to any of the
terms of this agreement shall be effective, except as set forth in a writing
signed by me and the Company. The failure of the Company to enforce any
provision of this agreement shall not be construed to be a waiver of such
provision or of the right of the Company thereafter to enforce each and every
provision.
O. This agreement and any amendments thereto shall become
effective on the date of acceptance by the Company and shall be governed by, and
construed in accordance with, the internal, substantive laws of the State of
Tennessee. I agree that any and all claims and disputes hereunder shall be
covered by that certain Arbitration Agreement between the Company and me dated
October 3, 2005 (the "Arbitration Agreement").
P. This agreement, the Change in Control Severance Agreement and
the Arbitration Agreement supersede 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, 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 us, which also shall
inure to the benefit of the Company's successors and assigns.
Finally, I represent that prior to signing this agreement, I have read,
fully understand and voluntarily agree to the terms and conditions as stated
above, that I was not coerced to sign this agreement, that I was not under
duress at the time I signed this agreement and that, prior to signing this
agreement, I had adequate time to consider entering into this agreement,
including
O'Charley's Inc.
October 3, 2005
Page 6
without limitation, the opportunity to discuss the terms and conditions of this
agreement, as well as its legal consequences, with an attorney of my choice.
This agreement shall become effective as of the commencement date of my
employment by the Company.
Very truly yours,
By: /s/
----------------------------------
XXXXXXX X. XXXXXX
Acknowledged and agreed to
as of this ____ day of October, 2005.
O'CHARLEY'S INC.
By: /s/
-----------------------------------
Title:
--------------------------------
