CHANGE IN CONTROL BENEFITS AGREEMENT
EXHIBIT
10.33
This
Change in Control Benefits Agreement (“Agreement”) is made and entered into as
of November 7, 2007, by and between The Steak N Shake Company, an Indiana
corporation (hereinafter referred to as the “Company”), and Xxxx X.
Xxxxxxxx (hereinafter referred to as “Executive”).
WITNESSETH
WHEREAS,
Executive is an executive officer of the Company; and
WHEREAS,
the Company believes that Executive has made and will continue to make valuable
contributions to the productivity and profitability of the Company;
and
WHEREAS,
the Company desires to encourage Executive to continue to make such
contributions and not to seek or accept employment elsewhere; and
WHEREAS,
the Company, therefore, desires to assure Executive of certain benefits in
the
event there is a Change in Control of the Company;
NOW,
THEREFORE, in consideration of the foregoing and of the mutual covenants herein
contained and the mutual benefits herein provided, the Company and Executive
hereby agree as follows:
1. The
term of this Agreement shall be from the date hereof through November 7,
2008.
2. As
used in this Agreement, “Change in Control” of the Company means:
(A) The
acquisition, within a 12-month period ending on the date of the most recent
acquisition, by any individual, entity or group (within the meaning of
Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934,
as amended (the “Exchange Act”) (a “Person”) of beneficial ownership (within the
meaning of Rule 13d-3 promulgated under the Exchange Act as in effect from
time to time) of fifty percent (50%) or more of the combined voting power of
the
then outstanding voting securities of the Company entitled to vote generally
in
the election of directors; provided, however, that the following acquisitions
shall not constitute an acquisition of control: (i) any
acquisition by a Person who, immediately before the commencement of the 12-month
period, already held beneficial ownership of fifty percent (50%) or more of
that
combined voting power; (ii) any acquisition directly from the Company (excluding an acquisition by virtue of
the exercise of a
conversion privilege), (iii) any acquisition by the Company, (iv) any
acquisition by any employee benefit plan (or related trust) sponsored or
maintained by the Company or any corporation controlled by the Company, or
(v) any acquisition by any corporation pursuant to a reorganization, merger
or consolidation, if, following such reorganization, merger or consolidation,
the conditions described in clauses (i), (ii) and (iii) of
subsection (C) of this definition are satisfied;
(B) The
replacement of a majority of members of the Board of Directors during any
12-month period, by members whose appointment or election is not endorsed by
a
majority of the members of the Board of Directors prior to the date of the
appointment or election;
(C) A
reorganization, merger or consolidation, in each case, unless, following such
reorganization, merger or consolidation, (i) more than sixty percent (60%)
of, respectively, the then outstanding shares of common stock of the corporation
resulting from such reorganization, merger or consolidation and the combined
voting power of the then outstanding voting securities of such corporation
entitled to vote generally in the election of directors is then beneficially
owned, directly or indirectly, by all or substantially all of the individuals
and entities who were the beneficial owners, respectively, of the outstanding
Company common stock and outstanding Company voting securities immediately
prior
to such reorganization, merger or consolidation in substantially the same
proportions as their ownership, immediately prior to such reorganization, merger
or consolidation, of the outstanding Company stock and outstanding Company
voting securities, as the case may be, (ii) no Person (excluding the
Company, any employee benefit plan or related trust of the Company or such
corporation resulting from such reorganization, merger or consolidation and
any
Person beneficially owning, immediately prior to such reorganization, merger
or
consolidation, directly or indirectly, twenty-five percent (25%) or more of
the
outstanding Company common stock or outstanding voting securities, as the case
may be) beneficially owns, directly or indirectly, twenty-five percent (25%)
or
more of, respectively, the then outstanding shares of common stock of the
corporation resulting from such reorganization, merger or consolidation or
the
combined voting power of the then outstanding voting securities of such
corporation entitled to vote generally in the election of directors and
(iii) at least a majority of the members of the board of directors of the
corporation resulting from such reorganization, merger or consolidation were
members of the Incumbent Board at the time of the execution of the initial
agreement providing for such reorganization, merger or
consolidation;
(D) A
complete liquidation or dissolution of the Company; or
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(E) The
sale or other disposition of all or substantially all of the assets of the
Company, other than any of the following dispositions: (i) to a corporation
with
respect to which following such sale or other disposition (1) more than
sixty percent (60%) of, respectively, the then outstanding shares of common
stock of such corporation and the combined voting power of the then outstanding
voting securities of such corporation entitled to vote generally in the election
of directors is then beneficially owned, directly or indirectly, by all or
substantially all of the individuals and entities who were the beneficial
owners, respectively, of the outstanding Company common stock and outstanding
Company voting securities immediately prior to such sale or other disposition
in
substantially the same proportion as their ownership, immediately prior to
such
sale or other disposition, of the outstanding Company common stock and
outstanding Company voting securities, as the case may be, (2) no Person
(excluding the Company and any employee benefit plan or related trust of the
Company or such corporation and any Person beneficially owning, immediately
prior to such sale or other disposition, directly or indirectly, twenty-five
percent (25%) or more of the outstanding Company common stock or outstanding
Company voting securities, as the case may be) beneficially owns, directly
or
indirectly, twenty-five percent (25%) or more of, respectively, the then
outstanding shares of common stock of such corporation and the combined voting
power of the then outstanding voting securities of such corporation entitled
to
vote generally in the election of directors and (3) at least a majority of
the members of the board of directors of such corporation were members of the
Incumbent Board at the time of the execution of the initial agreement or action
of the Board providing for such sale or other disposition of assets of the
Company; (ii) to a shareholder of the Company in exchange for or with
respect to its stock; (iii) to a Person that owns, directly or indirectly,
fifty percent (50%) or more of the total value or voting power of all
outstanding stock of the Company; or (iv) to an entity, at least fifty
percent (50%) or more of the total value or voting power of which is owned,
directly or directly, by the Company or by a Person described in
(iii).
Despite
any other provision of this definition to the contrary, an occurrence shall
not
constitute a Change in Control if it does not constitute a change in the
ownership or effective control, or in the ownership of a substantial portion
of
the assets of, the Company within the meaning of Section 409A(a)(2)(A)(v) of
the
Internal Revenue Code of 1986, as amended (the “Code”) and its interpretive
regulations.
3.
Should Executive be employed by Company on the date of any Change in Control
of
the Company that occurs on or prior to November 7, 2008 then Company shall
pay
to Executive in a lump sum on the date of the Change in Control or as soon
thereafter as is reasonably practical, an amount equal to 30% of Executive’s
then-current annual salary (the “Salary”) on the date of the Change in
Control. In computing the amount to be paid, the Salary shall not be
less than Executive’s annual salary on the date of this
Agreement. The payment contemplated in this Section 7 shall be
reduced by any tax or other withholdings required by law or elected by
Executive.
4. Executive
acknowledges and agrees that the Company’s payment of the severance compensation
pursuant to Section 3 of this Agreement shall be deemed to constitute a full
settlement and discharge of any and all obligations of the Company to Executive
arising out of this Agreement, Executive’s employment with the Company and/or
the termination of Executive’s employment with the Company, except for any
vested rights Executive may have under any insurance, stock option or equity
compensation plan or any other employee benefit plans sponsored by the
Company. Executive further acknowledges and agrees that as a
condition to receiving any of the severance compensation pursuant to
Section 3 of this Agreement, Executive will execute and deliver to the
Company a release agreement in form and substance reasonably satisfactory to
the
Company pursuant to which Executive will release and waive any and all claims
against the Company (and its officers, directors, shareholders, employees and
representatives) arising out of this Agreement, Executive’s employment with the
Company, and/or the termination of Executive’s employment with the Company,
including without limitation claims under all federal, state and local laws;
provided, however, that such Release Agreement shall not affect or relinquish
(a) any vested rights Executive may have under any insurance, stock option
or equity compensation plan, or other employee benefit plan sponsored by the
Company, (b) any claims for reimbursement of business expenses incurred
prior to the employment termination date, or (c) any rights to severance
compensation under Section 6 of this Agreement.
5. In
order to induce the Company to enter into this Agreement, Executive hereby
agrees he will keep confidential and not improperly divulge for the benefit
of
any other party any of the Company’s confidential information and business
secrets including, but not limited to, confidential information and business
secrets relating to such matters as the Company’s finances and
operations. All of the Company’s confidential information and
business secrets shall be the sole and exclusive property of the
Company. In the event of a breach or threatened breach by Executive
of the provisions of this Section 5, the Company shall be entitled to an
injunction restraining Executive from committing or continuing such
breach. Nothing herein contained shall be construed as prohibiting
the Company from pursuing any other remedies available to it for such breach
or
threatened breach including the recovery of damages from
Executive. The covenants of this Section 5 shall run not only in
favor of the Company and its successors and assigns, but also in favor of its
subsidiaries and their respective successors and assigns and shall survive
the
termination of this Agreement.
6. Should
Executive die while any amounts are payable to him hereunder, this Agreement
shall inure to the benefit of and be enforceable by Executive’s executors,
administrators, heirs, distributees, devisees and legatees and all amounts
payable hereunder 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 his estate.
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7. For
purposes of this Agreement, notices and all other communications provided for
herein shall be in writing and shall be deemed to have been given when delivered
or mailed by United States registered or certified mail, return receipt
requested, postage prepaid, addressed as follows:
If
to
Executive:
If
to the
Company:
The
Steak
N Shake Company
500
Century Building
00
Xxxxx
Xxxxxxxxxxxx Xxxxxx
Xxxxxxxxxxxx,
Xxxxxxx 00000
Attention: Chief
Executive Officer
Copy
to: General Counsel
or
to
such other address as any party may have furnished to the other party in writing
in accordance herewith, except that notices of change of address shall be
effective only upon receipt.
8. The
validity, interpretation, and performance of this Agreement shall be governed
by
the laws of the State of Indiana. The parties agree that all legal
disputes regarding this Agreement will be resolved in Indianapolis, Indiana,
and
irrevocably consent to service of process in such City for such
purpose.
9. No
provision of this Agreement may be modified, waived or discharged unless such
waiver, modification or discharge is agreed to in writing signed by Executive
and the Company. No waiver by any party hereto at any time of any
breach by any 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 any
prior or subsequent time. No agreements or representation, oral or
otherwise, express or implied, with respect to the subject matter hereof have
been made by any party which are not set forth expressly in this
Agreement.
10. 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.
11. This
Agreement may be executed in one or more counterparts, each of which shall
be
deemed an original but all of which together will constitute one and the same
Agreement.
12. This
Agreement is personal in nature and neither of the parties hereto shall, without
the consent of the other, assign or transfer this Agreement or any rights or
obligations hereunder, except as provided in Section 6
above. Without limiting the foregoing, Executive’s right to receive
payments hereunder shall not be assignable or transferable, whether by pledge,
creation of a security interest or otherwise, other than a transfer by will
or
by the laws of descent and distribution as set forth in Section 6 hereof,
and in the event of any attempted assignment or transfer contrary to this
Section 12, the Company shall have no liability to pay any amount so
attempted to be assigned or transferred.
13. Any
benefits payable under this Agreement shall be paid solely from the general
assets of the Company. Neither Executive nor Executive’s beneficiary
shall have interest in any specific assets of the Company under the terms of
this Agreement. This Agreement shall not be considered to create an
escrow account, trust fund or other funding arrangement of any kind or a
fiduciary relationship between Executive and the Company.
14. This
Agreement shall be interpreted and applied in a manner consistent with any
applicable standards for nonqualified deferred compensation plans established
by
Section 409A of the Code and its interpretive regulations and other regulatory
guidance. To the extent that any terms of this Agreement would
subject Executive to gross income inclusion, interest, or additional tax
pursuant to Section 409A of the Code, those terms are to that extent superseded
by, and shall be adjusted to the minimum extent necessary to satisfy, the
applicable Section 409A of the Code standards.
15. This
Agreement completely supersedes and replaces any other employment agreement
or
other agreement covering the same terms and conditions of this Agreement whether
written or oral, between Company and Executive which was entered into prior
to
the date of this Agreement.
IN
WITNESS WHEREOF, the parties have caused this Agreement to be executed and
delivered as of the day and year first above set forth.
THE
STEAK
N SHAKE COMPANY
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By:
/s/ Xxxx X.
Xxxxxx
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Xxxx
X. Xxxxxx, Interim Chief Executive
Officer
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/s/
Xxxx X.
Xxxxxxxx
Executive
Vice President, Development
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