Executive employment agreement
PARTIES: Xxx X. Xxxxx
("Executive")
CBRL Group, Inc.
a Tennessee corporation
("Company")
SUBJECT: Employment for a Specified Term
POSITION: Chairman of the Board of Directors
of the Company
LOCATION: Lebanon, Tennessee
DATE: August 4, 2001
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This Agreement, dated for reference purposes August 4, 2001, is made by
CBRL Group, Inc., a Tennessee corporation (the "Company"), and by Xxx X. Xxxxx,
an individual, (the "Executive").
BACKGROUND FACTS
A. The Executive has previously been employed by the Company as its
Chairman and Chief Executive Officer and as an officer of certain subsidiaries.
B. The Board of Directors of the Company (the "Board") recognizes that the
Executive's contribution to the growth and success of the Company during the
past 32 years has been substantial. The Board now desires, and deems it to be in
the best interests of the Company and its shareholders, to provide for the
continued employment of the Executive and to make certain changes in the
Executive's employment arrangements with the Company which the Board has
determined will reinforce and encourage the Executive's continued attention and
dedication to the Company.
C. The Executive is willing to commit himself to continue to serve the
Company on the specified terms and conditions.
D. In order to effect those purposes, the Company and the Executive wish to
enter into an employment agreement on the terms and conditions set forth below.
Therefore, in consideration of the mutual promises in this Agreement, the
Company and the Executive agree as follows:
AGREEMENT
1. EMPLOYMENT.
The Company employs the Executive and the Executive accepts employment
from the Company upon the terms and conditions of this Agreement.
2. DURATION OF AGREEMENT.
This employment shall begin as of the effective date of this Agreement,
August 4, 2001, and shall continue until it terminates pursuant to this
Agreement. Unless earlier terminated pursuant to Article 6, this Agreement, and
the Executive's employment, will automatically terminate at November 22, 2005.
3. DUTIES.
3.01 In General. Subject to the ultimate direction and control of the
Company's Board of Directors, the Executive shall devote all of his efforts on a
full-time basis to the business and affairs of the Company with such duties and
responsibilities as the Board shall designate, and he shall not engage in any
activities, or render services to or become associated with any other business
that in the reasonable judgment of the Board violates Article 8 of this
Agreement or interferes with the full and proper performance of the Executive's
duties. The parties acknowledge and agree that community service, charitable
activities, and reasonable participation in unrelated business activities, which
do not adversely affect the Executive's employment duties, are not prohibited or
restricted by this Section.
3.02 Specific Duties. The Executive will serve as Chairman of the Board
of Directors of the Company, and as Chairman of its Executive Committee. The
Executive will provide vision and leadership to oversee the development of the
Company's strategic plan, with particular attention to the Company's core
Cracker Barrel Old Country Store(R) concept.
4. COMPENSATION AND BENEFITS.
4.01 Compensation Package. In full consideration for all services
rendered by the Executive under this Agreement, including service on the
Company's Board of Directors, and in accordance with its payroll practices for
executives, the Company shall pay the Executive an annual salary, and in
appropriate specified circumstances, a bonus, and the Company will provide
employment benefits all as set forth in Exhibit A attached to and, made a part
of this Agreement. Exhibit A will remain in effect until altered by mutual
agreement or until this Agreement is terminated.
4.02 Benefits Distinct from Salary. Nothing paid to the Executive under
any benefit plan or arrangement presently in effect or made available in the
future shall be deemed to be in lieu of the salary payable to the Executive
pursuant to this Article 4 and Exhibit A.
4.03 Prorations. Any payments or benefits payable to the Executive in
respect of any 12-month period during which the Executive is employed by the
Company for less than the entire 12-month period shall, unless otherwise
provided in the applicable plan or arrangement, be prorated in accordance with
the actual number of days within the 12-month period during which he is
employed.
5. CHANGE IN CONTROL.
The Executive and the Company are parties to a separate agreement
concerning changes in control of the Company. That agreement is specified in a
letter dated October 8, 1999 from the Company to the Executive with a subject
styled: "Employee Retention Agreement" (the "Letter Agreement"). A copy of the
Letter Agreement comprises Exhibit B, which is attached to and is made part of
this Agreement. The Letter Agreement supersedes this Agreement and controls all
issues between these parties that may be affected by a change in control of the
Company, as defined in the Letter Agreement (a "Change in Control").
6. TERMINATION OF EMPLOYMENT OR SEVERANCE.
6.01 Termination by Company Without Cause. The Board of Directors may
terminate the Executive's employment, with or without cause, at any time by
giving written notice of termination to the Executive, that termination of
employment to be effective on a date specified in the notice. In the event of a
termination without cause, the Executive shall be entitled to receive:
a. the unpaid amount due the Executive for annual base salary during the
employment term prior to the date of termination;
b. initially, 3 times the annual base +salary in effect at the date of
termination, but this amount shall be automatically and appropriately reduced so
that if it is paid, the amount paid shall not exceed the total annual base
salary which could have been earned by the Executive during the remaining period
prior to the established date of his mandatory retirement; and
c. subject to other specific provisions of this Agreement and the
specific terms and conditions of each award or grant, appropriate stock options
and restricted stock.
Payments with respect to base salary shall be made in cash in a single payment
within 5 business days of the date of termination. The Executive's participation
in all benefit programs other than life, medical and disability insurance shall
cease as of the date of termination. The Executive's participation in the life,
medical and disability insurance programs shall continue until the earlier of
the time the Executive is employed by another employer and is covered or
permitted to be covered by that employer's benefit plans without regard to the
extent of such coverage, the Company no longer provides such benefit plans to
the Executive's management employees, or the expiration of the term of this
Agreement (as in effect at the time of termination). This provision supersedes
any other severance program or policy that may be offered by the Company (except
for the Letter Agreement) and is in lieu of, rather than in addition to other
severance plans that may be in place, except with regard to any rights the
Executive may have pursuant to COBRA or the Letter Agreement.
6.02 Termination by Company for Cause. If the Executive is terminated
for cause, the Company shall have no further obligation to the Executive under
this Agreement, and the Executive's participation in all benefit programs
controlled by this Agreement shall cease as of the date of termination. For
purposes of this Agreement, "cause" shall mean only any one or more of the
following: (a) the Executive's personal dishonesty in connection with his duties
to the Company; (b) the Executive's willful misconduct in the performance of his
duties with the Company; (c) breach of fiduciary duty to the Company involving
personal profit by the Executive; (d) conviction of the Executive for any felony
or crime involving moral turpitude; (e) material intentional breach by the
Executive of any provision of this Agreement; or (f) unsatisfactory performance
by the Executive of the duties designated for the Executive by the Company's
Board of Directors as a result of alcohol or drug use by the Executive.
6.03 Termination by Executive After Change in Control. If a Change
in Control occurs, the Executive will have the rights, subject to the specified
terms and conditions, set forth in the Letter Agreement.
6.04 Termination by Executive Other Than After Change in Control. The
Executive may terminate his employment with the Company at any time without
further obligation by either party under this Agreement (except for the
obligations and covenants of the Executive pursuant to Article 8, which shall
survive termination as specified in this Agreement) by giving not less than 60
nor more than 180 days prior written notice of termination to the Company.
6.05 Effect of Termination on Stock Options.
a. General Effect. Subject to the terms, conditions and
provisions of the Company's separate Long-Term Incentive Plan and the cash and
stock awards made under that plan, upon any termination of the Executive's
employment and this Agreement, all stock options and restricted stock held by
the Executive that are vested prior to the effective date of the termination
shall be exercisable in accordance with their terms, and all stock options and
restricted stock held by the Executive that are not vested prior to the
effective date of the termination shall lapse and be void.
b. Option Treatment Upon Termination Without Cause. Upon a
termination of the Executive's employment without cause pursuant to Section
6.01, in addition to any other rights of the Executive under this Agreement, the
Executive shall receive, within 30 days after the termination, a lump sum cash
distribution equal to: (a) the number of shares of the Company's common stock
that is subject to options held by the Executive which are not vested on the
date of termination of employment but which would otherwise vest during the
original term; multiplied by (b) the difference between: (i) the closing price
of a share of the Company's common stock as of the day prior to the effective
date of termination of employment (or, if the United States securities trading
markets are closed on that date, on the last preceding date on which the United
States securities trading markets were open for trading), and (ii) the
applicable exercise prices of the non-vested shares.
c. Effect Upon Change in Control. In the event of termination
following a Change in Control, the terms and conditions expressed in the Letter
Agreement will control with respect to stock options.
6.06 Death of Executive. If the Executive dies during the employment
term, this Agreement and the Executive's employment shall terminate upon the
Executive's death. With respect to cash compensation, the Executive's estate
shall be entitled to any annual base salary earned but not paid plus any bonus
accrued by the Company for the Executive through the date of death plus an
additional amount equal to the annual base salary in effect for the Executive at
the date of the death of the Executive. This payment shall be paid in a lump sum
to the Executive's estate within 90 days after the Company is given notice of
the Executive's death. With respect to stock options and restricted stock, the
specific terms, conditions and provisions of those awards will determine their
disposition and vesting upon death of the Executive.
6.07 Disability of Executive. The Company has disability insurance
insuring individuals holding management positions, and the Executive is included
under that disability insurance. During any period that the Executive fails to
perform his duties as a result of a disability, the Executive shall continue to
receive his full salary at the rate then in effect pursuant to Exhibit A until
his employment is terminated by death or the expiration of this Agreement.
Payments made to the Executive during the disability period shall be reduced by
the amounts, if any, payable to the Executive under disability benefit plans of
the Company. The Executive's year-end bonus shall be paid in a pro rata amount
to compensate the Executive proportionately for days worked prior to the
beginning of his disability period. For purposes of this Agreement, unless and
except as otherwise specifically defined by the Company in its insurance plans,
a "disability" of the Executive shall occur if the Executive suffers any mental
or physical condition that impairs the Executive's ability to perform the
essential functions of his duties for a period of 180 consecutive days or more,
and if within 30 days after the Executive receives written notice from the
Company requesting that the Executive resume his duties under this Agreement,
the Executive is unable or refuses to do so.
7. INDEMNIFICATION.
7.01 Executive's Indemnification. The Company shall indemnify and hold
the Executive harmless to the maximum extent permitted by law against judgments,
fines, amounts paid in settlement and reasonable expenses, including attorneys'
fees incurred by the Executive, in connection with the defense of, or as a
result of any action or proceeding (or any appeal from any action or proceeding)
in which the Executive is made or is threatened to be made a party by reason of
the fact that he is or was an officer of the Company.
7.02 Insurance. The Company agrees that the Executive is and shall
continue to be covered and insured up to the maximum limits provided by all
insurance which the Company maintains to indemnify its directors and officers
(and to indemnify the Company for any obligations which it incurs as a result of
its undertaking to indemnify its officers and directors) and that the Company
will exert its best efforts to maintain such insurance, in not less than its
present limits, in effect throughout the term of the Executive's employment.
8. LIMITS ON COMPETITION.
8.01 No Competing Activities. While this Agreement is in effect, and
during the time period specified in Section 8.03, the Executive shall not
directly or indirectly, either as an employee, employer, officer, director,
agent, consultant, partner or other investor (except for investments no greater
than 5% of any entity) or in any other individual or representative capacity,
engage or participate in any business or profession that is in substantial
direct competition with the business of the Company. For the purposes of this
paragraph, a business enterprise with which the Executive becomes associated as
an employee, employer, officer, director, agent, consultant, partner or other
investor shall be considered in "substantial direct competition" with the
Company if it is engaged in the restaurant or gift shop business. This Section
does not prohibit the Executive from engaging in any transaction which is
approved in writing by the Board of Directors of the Company.
8.02 Confidentiality. In consideration of his employment and the
compensation to be paid to him the Executive specifically covenants and agrees
that he will regard and preserve as confidential all trade secrets and all
non-public information pertaining to the Company's or its subsidiaries'
businesses that have been or may be obtained by him. The Executive will not
reveal, allow release of, nor disclose any Company confidential information.
This prohibition on disclosure and release applies whether or not the
information which is confidential may be classified as a trade secret. The
confidential information of the Company which the Executive will not reveal,
disclose or release to any person includes, but is not limited to, all
technology, recipes and business systems of the Company at the date of this
Agreement as well as all recipes, customer lists, business systems and styles
developed during the course of this employment, and all other Company
proprietary business information not generally known to the public. The
Executive shall not use any confidential information except in the course of
employment. The Executive will not use any of the confidential information after
his employment by the Company is terminated, and the Executive will not take
away or retain after termination of employment any of the Company's recipes,
business systems, business styles or specifications, Company proprietary
information, customer lists, or other documents or things relating to those
matters. This provision does not apply to information voluntarily disclosed by
the Company to the public, independently developed and disclosed by others, or
otherwise lawfully in the public domain.
8.03 Survival of Obligations. If the Executive's employment is
terminated for cause pursuant to Section 6.02, or if the Executive voluntarily
terminates his employment prior to the end of the specified term of this
Agreement, the non-competition requirements of this Article 8 will remain in
force for 1 year following the date of the termination. In all cases, the
confidentiality requirements of this Article 8 shall survive any expiration or
termination of this Agreement or the Executive's employment pursuant to it.
9. MISCELLANEOUS TERMS.
9.01 Annual Performance Review. The Executive will report regularly
to the Board of Directors and the Board will conduct an annual review of the
Executive's performance prior to each Annual Shareholders Meeting.
9.02 Location of Employment. The Executive shall be employed at the
Company's headquarters office in the city of Lebanon, TN, but the Executive
shall travel to and carry out his duties wherever reasonably necessary for
Company business, to an extent substantially consistent with business travel
obligations at the date of this Agreement.
9.03 Compliance with Law. The Executive shall always, and when
appropriate, at Company expense, endeavor to comply with all applicable federal,
State and local laws, ordinances, rules, and regulations in the performance of
all work and other activities carried out in the name of or on behalf of the
Company.
9.04 Notices. All notices, requests, demands and other communications,
under this Agreement shall be in writing and shall be duly given on the date of
delivery if served personally on the party, or delivered by overnight courier,
or 3 days after mailing if mailed to the party by first class mail, registered
or certified, postage fully prepaid, and properly addressed as specified on the
signature page of this Agreement. Any party may change its address by giving the
other parties written notice of the new address in the manner set forth in this
Section.
9.05 Entire Agreement. This Agreement, including the Letter Agreement
and its other Exhibits, supersedes all other agreements, either oral or in
writing, between the parties with respect to employment of the Executive by the
Company. It contains all the promises between parties with respect to that
employment. No representations, inducements, promises or other agreements, oral
or otherwise, have been made by any party or any one acting on behalf of any
party, and no agreement, statement or promise not contained in this Agreement is
valid. Any modification of this Agreement must be in writing.
9.06 Partial Invalidity. If any provision in this agreement is
held by a court of competent jurisdiction to be void or unenforceable, the
remaining provisions shall continue in full force without being
invalidated in any way.
9.07 Binding Effect. The provisions of this Agreement benefit
and bind the Executive's heirs, representatives, and successors, and the
Company's successors, transferees and assigns.
9.08 No Assignment. The Executive and the Company each acknowledges and
agrees that the services to be rendered by the Executive are unique and
personal. This Agreement is, therefore, personal to the parties and it, and the
rights and obligations created by it, may not be assigned by the Executive, or
except to corporations which are part of a consolidated group for tax purposes,
by the Company.
9.09 Attorneys' Fees. If either party brings suit to compel performance
of, to interpret, or to recover damages for the breach of this Agreement, the
finally prevailing party shall be entitled to reasonable attorneys' fees in
addition to costs and necessary disbursements otherwise recoverable.
9.10 Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Tennessee.
IN WITNESS WHEREOF, the parties have executed this Agreement on January
15, 2002.
ADDRESSES: COMPANY:
000 Xxxxxx Xxxxxxx Xxxxxx Xxxxx XXXX Group, Inc.
Xxxxxxx, Xxxxxxxxx 00000 a Tennessee corporation
By: /s/Xxxxxxx X. Xxxxxxxxx
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Xxxxxxx X. Xxxxxxxxx, President
By: /s/Xxxxx X. Xxxxxxxxxx
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Xxxxx X. Xxxxxxxxxx, Secretary
EXECUTIVE:
0000 Xxxxx Xxxx Xxxx Xxx X. Xxxxx
Xxxxxxx, Xxxxxxxxx 00000
By: /s/Xxx X. Xxxxx
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Xxx X. Xxxxx
January 15, 2002
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Approved.
/s/Xxxxxx X. Xxxx
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Xxxxxx X. Xxxx,
Chairman Compensation & Stock Option Committee
Xxx X. Xxxxx Agreed Salary and Benefits
Effective Date Executive Annual Base Salary Bonus Base
-------------- ----------------- ------------------ ----------------------
August 4, 0000 Xxx X. Xxxxx $500,000 100% of base salary
1. Salary. The annual base salary for the Executive will be paid in arrears
semi-monthly, in equal installments on or about the 15th and last day of
each calendar month. This salary may be increased from time to time in
accordance with normal business practices of the Company, and if so
increased, shall not thereafter during the term of this Agreement be
decreased. Compensation of the Executive by salary payments shall not be
deemed exclusive and shall not prevent the Executive from participating in
any other compensation or benefit plan of the Company.
2. Benefits. The Company shall maintain in full force, and the Executive
shall be entitled to continue to participate in, all of its employee
benefit plans and arrangements in force on the effective date of this
Exhibit A in which the Executive now participates (or it will implement
plans or arrangements providing the Executive with at least equivalent
benefits). The Company shall not make any changes in those plans and
arrangements which would adversely affect the Executive's rights or
benefits, unless the change occurs pursuant to a program applicable to all
officers of the Company and does not result in a proportionately greater
reduction in the rights of or benefits to the Executive as compared with
any other officers of the Company. The Executive shall be entitled to
participate in or receive benefits under any employee benefit plan or
arrangement made available by the Company in the future to its officers and
key management employees, subject to and on a basis consistent with the
terms, conditions and overall administration of those plans and
arrangements.
3. Options. The Executive is currently a participant in the Company's existing
long term incentive arrangement and the Executive will have an opportunity
each year to receive an annual grant of options for shares of Company
common stock in the same manner stock options are granted to senior
management employees of the Company. All option grants are subject to
annual review and approval by the Company's Board of Directors.
4. Bonus. As part of this employment Agreement, the Executive will participate
in a company bonus plan substantially similar in terms and conditions to
the Company Management Incentive "MIP" Program, with a base bonus amount
established at 100% of annual base salary. This bonus, or a portion of it,
is earned if, and as, annually specified Company and personal target goals
are achieved in each fiscal year. Any bonus earned will be paid after the
close of each fiscal year.
EXHIBIT A
5. Expenses. The Executive shall be entitled to receive prompt reimbursement
for all reasonable expenses incurred by him in performing his services,
including all expenses of travel and living expenses while away from home
on business or at the request of and in the service of the Company,
provided that those expenses are incurred and accounted for in accordance
with the policies and procedures established by the Company from time to
time.
6. Health Insurance. The Executive will be provided with health, life, and
disability insurance benefits of the same kinds and at the same levels as
are available to senior management employees of the Company throughout the
term of his employment.
7. Retirement Savings. The Executive will be eligible to participate in
Company-sponsored retirement savings plans of the same kind and at the same
level as are available to senior management employees of the Company
throughout the term of his employment.
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