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EXHIBIT 10(o)
EMPLOYMENT AGREEMENT
THIS AGREEMENT, made and entered into as of the 3rd day of November,
1997, by and between RARE HOSPITALITY INTERNATIONAL, INC., a Georgia corporation
(hereinafter referred to as the "Company"), and WILLLIAM X. XXXXXXX, a resident
of the State of Georgia (hereinafter referred to as the "Executive");
WITNESSETH:
The Company is engaged in the business of owning, operating and
franchising the operation of restaurants under the names LongHorn Steakhouse(R),
The Capital Grille(R), Bugaboo Creek Steak House(R) and others. The Company
desires to continue to employ Executive in an executive capacity and to be
assured of his services in such capacity on the terms and conditions set forth
in this Agreement. Executive desires to accept such continued employment on such
terms and conditions.
Executive has been employed by the Company since 1994. The Company and
Executive desire to continue Executive's employment by the Company which
employment shall be on the terms and conditions set forth in this Agreement from
and after the date hereof.
In the course of Executive's employment, Executive has gained and will
gain knowledge of the business, affairs, customers, franchisees, plans and
methods of the Company, has been and will be trained at the expense of the
Company in the development, opening, operation and management of the Company's
restaurants through the use of techniques, systems, practices and methods used
and devised by the Company, has had and will have access to information relating
to the Company's customers and their preferences and dining habits and has and
will become personally known to and acquainted with the Company's suppliers and
managers in the Restricted Area thereby establishing a personal relationship
with such suppliers and managers for the benefit of the Company.
The Company would suffer irreparable harm if Executive were to use such
knowledge, information and personal relationships related to the Company and its
business other than in the proper performance of his duties for the Company.
In consideration of the sum of $1.00 in hand paid by the Company to
Executive, the receipt and sufficiency of which are hereby acknowledged, and the
mutual covenants and obligations contained herein, the Company and Executive
hereby agree as follows:
1. Employment. The Company hereby employs Executive and Executive
hereby accepts such employment and agrees to perform his duties and
responsibilities hereunder, in accordance with the terms and conditions
hereinafter set forth.
1.1. Employment Term. The employment term of this
Agreement shall commence on the date hereof (the "Commencement Date") and shall
continue as employment at will until terminated by the Company or Executive. The
period from the
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Commencement Date until the employment term is terminated by the Company or
Executive is hereinafter referred to as the "Employment Term."
1.2. Duties of Executive. Executive agrees that during the
Employment Term, he will devote his full professional and business-related time,
skills and best efforts to the business of the Company, initially in the
capacity of Executive Vice President for The Capital Grille and Bugaboo Creek
Steak House. In addition, Executive shall devote his full time and his best
efforts in the performance of any other reasonable duties as may be assigned to
him from time to time by the Company. Executive shall devote all of his full
professional and business-related skills solely to the affairs of the Company,
and shall not, during his employment, unless otherwise agreed to in advance in
writing by the Company, seek or accept other employment, become self-employed in
any other capacity during the term of his employment, or engage in any
activities which are detrimental to the business of the Company. Notwithstanding
the foregoing, Executive may engage in personal investment activities provided
such activities do not interfere with Executive's performance of his full-time
employment duties under this Agreement. Executive acknowledges that he shall be
required to perform his duties from the offices of the Company located in
metropolitan Atlanta, Georgia. Executive acknowledges that the discharge of his
duties for the Company will involve travel on a regular basis from the Company's
offices in Atlanta, Georgia.
2. Compensation and Benefits.
2.1. Base Compensation. For all the services rendered by
Executive hereunder, the Company shall pay Executive an annual salary at the
rate of $160,000 for each full year of the Employment Term, plus such additional
amounts, if any as may be approved by the Company's Board of Directors ("Base
Compensation), payable in installments at such times as the Company customarily
pays its other senior officers (but in any event no less often than monthly).
The Company agrees that the Executive's salary will be reviewed at least
annually by the Compensation Committee of the Company's Board of Directors to
determine if an increase is appropriate, which increase shall be in the sole
discretion of the Company's Board of Directors. Executive's salary shall be
prorated for any partial calendar year during which this Agreement remains in
effect.
2.2. Bonus Awards. In addition to the Base Compensation,
during the Employment Term Executive shall be eligible for a bonus determined
and paid in accordance with the bonus program for executive officers of the
Company as approved by the Company's Board of Directors from time to time.
Executive must be employed by the Company on December 31 of a year in order to
be entitled to a bonus for that year.
2.3. Stock Options. (a) The Company shall grant to
Executive, effective as of the Commencement Date, the following options to
acquire shares of the Company's common stock:
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(i) 50,000 shares with an exercise price equal to
the fair market value of the Company's common stock on the date of
grant, which option shall become exercisable on the first anniversary
of the date of this Agreement; and
(ii) 25,000 shares with an exercise price of $12.00
per share, which option shall become exercisable on the second
anniversary of the date of this Agreement; and
(iii) 21,032 shares with an exercise price of $15.00
per share, which option shall become exercisable on the third
anniversary of the date of this Agreement; and
(iv) 19,445 shares with an exercise price of $18.00
per share, which option shall become exercisable on the fourth
anniversary of the date of this Agreement; and
(v) 20,239 shares with an exercise price of $21.00
per share, which option shall become exercisable on the fifth
anniversary of the date of this Agreement.
Those options granted to Executive in this Section 2.3(a) shall be granted to
Executive pursuant to the Company's 1997 Long-Term Incentive Plan and the terms
and conditions governing such options shall be as set forth in the form of the
Stock Option Agreement attached hereto as Exhibit A and made a part hereof.
(b) The Company shall grant to Executive, effective as of the
Commencement Date, the following incentive stock options to acquire shares of
the company's common stock;
(i) 3,698 shares with an exercise price of $15.00
per share, which option shall become exercisable with respect to all of
such shares on the third anniversary of the date of this Agreement;
(ii) 5,555 shares with an exercise price of $18.00
per share, which option shall become exercisable with respect to all of
such shares on the fourth anniversary of the date of this Agreement;
and
(iii) 4,761 shares with an exercise price of $21.00
per share, which option shall become exercisable with respect to all of
such shares on the fifth anniversary of the date of this Agreement.
The terms and conditions governing the options described in this Section 2.3(b)
shall be as set forth in the form of the Stock Option Agreement attached hereto
as Exhibit B and made a part hereof.
2.4. Other Benefits. In addition to all other compensation
paid or payable from the Company to Executive hereunder, during the Employment
Term Executive shall be entitled to participate in any and all other employee
benefit programs maintained by the
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Company for the benefit of its executive employees generally, in accordance with
and subject to the terms and conditions of such programs. Executive acknowledges
that the Company is discontinuing automobile allowances for its executive
employees and that Executive will not be entitled to any automobile allowance
from the Company.
2.5. Expenses. In addition to the compensation described in
this Agreement, the Company shall promptly reimburse Executive for all
reasonable expenses incurred by him in the performance of his duties under this
Agreement and vouched to the reasonable satisfaction of the Board of Directors
or appropriate officers of the Company, pursuant to established procedures.
2.6. Additional, One-Time Payment. In addition to the other
compensation described in this Agreement, the Company shall pay Executive, on a
one-time basis only, the sum of Twenty-Five Thousand Dollars ($25,000) payable
within forty-five (45) days following the date of this Agreement.
3. Payment upon Termination.
(a) Upon termination of the Employment Term for any reason
other than (i) Executive's death, or (ii) by the Company other than for Cause
(as defined in Exhibit C attached hereto) or during Executive's Disability (as
defined in Exhibit C attached hereto), Executive shall be entitled to receive
the compensation owed to Executive but unpaid for performance rendered under
this Agreement as of the date of termination and any additional compensation he
may be entitled to receive under the terms of any employee benefit plan.
(b) Upon termination of the Employment Term by the death of
Executive, Executive's estate shall be entitled to receive the compensation
under Section 2.1 as calculated and owed to Executive but unpaid for performance
rendered under this Agreement as of the date of termination and any additional
compensation he may be entitled to receive under the terms of any employee
benefit plan plus the Company will pay to the personal representative of
Executive, a lump sum amount equal to one-half of Executive's annual Base
Compensation under Section 2.1 as in effect on the date of his death.
(c) In the event that during the Employment Term Executive
becomes Disabled and the Company thereafter terminates Executive's employment
during the continuation of such Disability, Executive shall be entitled to
receive the compensation under Section 2.1 as calculated and owed to Executive
but unpaid for performance rendered under this Agreement as of the date of
termination and any additional compensation he may be entitled to receive under
the terms of any employee benefit plan. In addition, the Company shall pay to
Executive, for up to ninety (90) days, an amount equal to the difference between
the amount of Executive's then level of Base Compensation payable pursuant to
Section 2.1 and 150% of the amount paid to Executive under any short-term
disability insurance policy obtained by the Executive and paid by the Company
through the Company's group coverage until the Company's long-term disability
insurance begins to pay.
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(d) In the event that within two (2) years following the
Commencement Date the Company terminates Executive's employment other than for
Cause, unless the provisions of Section 3.2(e) apply, Executive shall be
entitled to receive the compensation under Section 2.1 as calculated and owed to
Executive but unpaid for performance rendered under this Agreement as of the
date of termination and the Company will be obligated to pay Executive his
annual Base Compensation under Section 2.1 as of the date of termination of such
employment from the date of such termination for six (6) months. Such payment
shall be made as and when otherwise due under this Agreement.
(e) In the event that (i) within two (2) years following the
Commencement Date a Change in Control (as defined in Exhibit C attached hereto)
shall occur and (ii) the Company terminates Executive's employment other than
for Cause within eighteen (18) months following the occurrence of the Change in
Control, in lieu of the amounts payable pursuant to Section 3.2(d) Executive
shall be entitled to receive the compensation under Section 2.1 as calculated
and owed to Executive but unpaid for performance rendered under this Agreement
as of the date of termination of such employment and the Company will be
obligated to pay Executive an additional amount equal to the sum of (x) one-half
of his annual Base Compensation as of the date of termination of such employment
plus (y) an amount equal to one-half of the bonus paid to Executive pursuant to
Section 2.2 for the calendar year immediately preceding the calendar year in
which the termination of employment occurs. Such payment shall be made within
thirty (30) days following termination of Executive's employment.
(f) Payments made pursuant to this Section 3.2 are in lieu of
any other obligations to Executive pursuant to the terms of this Agreement.
4. Noncompetition. Executive covenants and agrees that during the
term of his employment by the Company and for a period of one (1) year
immediately following the termination of Executive's employment by the Company
for any reason whatsoever, Executive will not, within the area described on
Exhibit E hereto (the "Restricted Area") directly or indirectly compete with the
Company by carrying on a business any significant portion of which involves the
development, opening, operation or franchising of restaurants that derive more
than thirty percent (30%) of their food sales from steak products, if the
Company is still engaged in such business in such area.
4.1. Definition of "Compete." For the purposes of this
Agreement, the term "compete" shall mean the providing of general management or
supervisory services for the development or operation or franchising of
restaurants that derive more than thirty percent (30%) of their food sales from
steak products.
4.2. Direct or Indirect Competition. For the purposes of
this Agreement, the words "directly or indirectly" as they modify the word
"compete" shall mean (i) acting as an agent, representative, consultant,
officer, director, independent contractor, or employee engaged in a management
capacity with any entity or enterprise which is carrying on a business any
significant portion of which involves the development, opening, or operation of
restaurants offering steak as a principal portion of their menu, (ii)
participating in any such competing entity or enterprise as an owner, partner,
limited partner, joint
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venturer, creditor or stockholder (except as a stockholder holding less than one
percent (1%) interest in a corporation whose shares are actively traded on a
regional or national securities exchange or in the over-the-counter market), and
(iii) communicating to any such competing entity or enterprise the names or
addresses or any other information concerning any employee or supplier of the
Company or any successor to the goodwill of the Company with respect to the
business of the Company.
5. Confidentiality. Executive recognizes and acknowledges that by
reason of his employment by and service to the Company, he will have access to
all trade secrets and other confidential information of the Company including,
but not limited to, confidential: pricing information, marketing information,
sales techniques of the Company, confidential records, the Company's expansion
plans, restaurant development and marketing techniques, operating procedures,
training programs and materials, business plans, franchise arrangements, plans
and agreements, information regarding suppliers, product quality and control
procedures, financial statements and projections and other information regarding
the operation of the Company's restaurants (hereinafter referred to as the
"Confidential Information"). Executive acknowledges that such Confidential
Information is a valuable and unique asset of the Company and covenants that he
will not, either during the term of his employment by the Company or for a
period of two (2) years thereafter, disclose any such Confidential Information
to any person for any reason whatsoever (except as his duties for the Company
may require) without the prior written authorization of the Company's Board of
Directors. Executive agrees that he will not copy any Confidential Information
except as the performance of his duties for the Company may require and that
upon the termination of his employment by the Company, he shall return all
Confidential Information and any copies thereof in his possession to the
Company. Executive hereby acknowledges and agrees that the prohibitions against
disclosure of Confidential Information recited herein are in addition to, and
not in lieu of, any rights or remedies which the Company may have available
pursuant to the laws of any jurisdiction or at common law to prevent the
disclosure of trade secrets or proprietary information, and the enforcement by
the Company of its rights and remedies pursuant to this Agreement shall not be
construed as a waiver of any other rights or available remedies which it may
possess in law or equity absent this Agreement. Notwithstanding the foregoing,
the Company acknowledges and agrees that nothing contained herein shall restrict
or otherwise prohibit or prevent disclosure of Confidential Information pursuant
to legal proceedings, subpoena, civil investigative demand or other similar
process. Executive agrees that if disclosure of Confidential Information is
requested or required pursuant to any such process, he shall provide the Company
with prompt written notice of any such request or requirement so that the
Company may seek a protective order or other appropriate remedy and/or waive
compliance with the provisions of this Agreement. If, in the absence of a
protective order or other remedy or the receipt of a waiver by the Company,
Executive is nonetheless, legally compelled to disclose Confidential Information
to any tribunal or other agency, Executive may, without liability hereunder,
disclose to such tribunal or other agency only that portion of the Confidential
Information which Executive is legally required to disclose, Executive agrees to
cooperate with the Company to obtain an appropriate protective order or other
reliable assurance that such tribunal or other agency will accord the
Confidential Information confidential treatment. The Company also acknowledges
and agrees that
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Confidential Information shall not include any information (a) known by
Executive prior to his employment by the Company and learned by Executive other
than as a result of his employment relationship with the Company, (b)
independently developed by the Executive outside of the scope of his employment
relationship with the Company or (c) is or becomes publicly available through no
breach by the Executive of his obligation to the Company.
6. Non-Solicitation of Employees. Executive covenants that during
the term of his employment by the Company, and during the two (2) year period
immediately following the termination of such employment, Executive will neither
directly nor indirectly induce or attempt to induce any employee of the Company
to terminate his or her employment to go to work for any other employer in a
business competing with that of the Company.
7. Hiring of Employees. Executive covenants that during the term
of his employment by the Company, and during the one (1) year period immediately
following the termination of such employment, Executive will neither directly
nor indirectly hire any management level employee of the Company.
8. Property of Company. Executive acknowledges that from time to
time in the course of providing services pursuant to this Agreement he shall
have the opportunity to inspect and use certain property, both tangible and
intangible, of the Company, and Executive hereby agrees that said property shall
remain the exclusive property of the Company and the Executive shall have no
right or proprietary interest in such property, whether tangible or intangible,
including, without limitation, the Company's franchise and supplier lists,
contract forms, books of account, training and operating materials and similar
property.
9. Developments. All developments, including inventions, whether
patentable or otherwise, trade secrets, discoveries, improvements, ideas and
writings which either directly or indirectly relate to or may be useful in the
business of the Company or any of its affiliates (the "Developments") which
Executive, either by himself or in conjunction with any other person or persons,
has conceived, made, developed, acquired or acquired knowledge of during his
employment by the Company or which Executive, either by himself or in
conjunction with any other person or persons, shall conceive, make, develop,
acquire or acquire knowledge of during the Employment Term, shall become and
remain the sole and exclusive property of the Company. Executive hereby assigns,
transfers and conveys, and agrees to so assign, transfer and convey, all of his
right, title and interest in and to any and all such Developments and to
disclose fully as soon as practicable, in writing, all such Developments to the
Chairman of the Company. At any time and from time to time, upon the request and
at the expense of the Company, Executive will execute and deliver any and all
instruments, documents and papers, give evidence and do any and all other acts
which, in the opinion of counsel for the Company, are or may be necessary or
desirable to document such transfer or to enable the Company to file and
prosecute applications for and to acquire, maintain and enforce any and all
patents, trademark registrations or copyrights under United States or foreign
law with respect to any such Developments or to obtain any extension,
validation, reissue, continuance or renewal of any such patent, trademark or
copyright. The Company will be responsible for the preparation of any such
instruments, documents and papers and for the prosecution of any such
proceedings and will reimburse
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Executive for all reasonable expenses incurred by him in compliance with the
provisions of this Section.
10. Reasonableness. The restrictions contained in Sections 4,5,6
and 7 are considered by the parties hereto to be fair and reasonable and
necessary for the protection of the legitimate business interests of the
Company.
11. Equitable Relief. Executive acknowledges that the services to
be rendered by him are of a special, unique, unusual, extraordinary, and
intellectual character, which gives them a peculiar value, and the loss of which
cannot reasonably or adequately be compensated in damages in an action at law;
and that a breach by him of any of the provisions contained in Sections 4, 5, 6
and 7 of this Agreement will cause the Company irreparable injury and damage.
Executive further acknowledges that he possesses unique skills, knowledge and
ability and that any material breach of the provisions of Sections 4, 5, 6 and 7
of this Agreement would be extremely detrimental to the Company. By reason
thereof, Executive agrees that the Company shall be entitled, in addition to any
other remedies it may have under this Agreement or otherwise, to injunctive and
other equitable relief to prevent or curtail any breach of the provisions of
Sections 4, 5, 6 and 7 of this Agreement by him.
12. Survival of Provisions. The provisions of Sections 4 through
14 , inclusive, of this Agreement shall survive the termination of this
Agreement to the extent required to give full effect to the covenants and
agreements contained in those sections. All provisions of this Agreement which
contemplate the making of payments or the provision of consideration or other
items of economic value by the Company to the Executive after the termination of
this Agreement shall likewise survive the termination of this Agreement to the
extent required to give full effect to such undertakings or obligations of the
Company to Executive hereunder.
13. Warranties and Representations. In order to induce the Company
to enter into this Employment Agreement, Executive hereby warrants and
represents to the Company that Executive is not under any obligation,
contractual or otherwise, to any party which would prohibit or be contravened by
Executive's acceptance of employment by the Company and the performance of
Executive's duties as Vice President of Operations for The Capital Grille and
Bugaboo Creek Steak House or the performance of Executive's obligations under
this Agreement.
14. Successors Bound; Assignability. This Agreement shall be
binding upon Executive, the Company and their successors in interest, including
without limitation, any corporation into which the Company may be merged or by
which it may be acquired. This Agreement is nonassignable except that the
Company's rights, duties and obligations under this Agreement may be assigned to
the Company's acquiror in the event the Company is merged, acquired or sells
substantially all of its assets.
15. Severability. In the event that any one or more of the
provisions of this Agreement or any word, phrase, clause, sentence or other
portion thereof shall be deemed to be illegal or unenforceable for any reason,
such provision or portion thereof shall be
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modified or deleted, to the extent permissible under applicable law, in such a
manner so as to make this Agreement as modified legal and enforceable to the
fullest extent permitted under applicable laws.
16. Withholding. Notwithstanding any of the terms or provisions
of this Agreement, all amounts payable by the Company hereunder shall be subject
to withholding of such sums related to taxes as the Company may reasonably
determine it should withhold pursuant to applicable law or regulation.
17. Headings. The headings and captions used in this Agreement
are for convenience of reference only, and shall in no way define, limit, expand
or otherwise affect the meaning or construction of any provision of this
Agreement.
18. Notices. Any notice required or permitted to be given
pursuant to this Agreement shall be deemed sufficiently given when delivered in
person or when deposited in the United States mail, registered or certified
mail, postage prepaid, addressed as follows:
If to the Company, to: RARE Hospitality International, Inc.
0000 Xxxxxxx Xxxx
Xxxxxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attention: Chairman
With a copy to: Xxxxxx & Bird
One Atlantic Center
0000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000-0000
Attention: Xxxxxxx X. Xxxxx
If to Executive, to: Xxxxxxx X. Xxxxxxx
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With a copy to:
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Any party may by written notice change the address to which notices to such
party are to be delivered or mailed.
19. Entire Agreement. This Agreement, together with Exhibits A, B,
C and D hereto which are incorporated herein by this reference, constitutes the
entire Agreement
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between the parties hereto with regard to the subject matter hereof, and there
are no agreements, understandings, specific restrictions, warranties or
representations relating to said subject matter between the parties other than
those set forth herein or herein provided for.
20. Counterparts. This Agreement may be executed in two or more
counterparts, each of which will take effect as an original and all of which
shall evidence one and the same Agreement.
21. Amendment, Modification and Waiver. This Agreement may only
be amended, modified or terminated prior to the end of its term by the mutual
agreement of the parties. The waiver by either party to this Agreement of a
breach of any of the provisions of this Agreement shall not operate or be
construed as a waiver of any subsequent or simultaneous breach.
22. Mitigation. Executive shall have no duty to attempt to
mitigate the compensation or level of benefits payable by the Company to him
hereunder and the Company shall not be entitled to set off against the amounts
payable by the Company to Executive hereunder any amounts received by the
Executive from any other source, including any subsequent employer. 23.
Governing Law. All of the terms and provisions of this Agreement shall be
construed in accordance with and governed by the applicable laws of the State of
Georgia.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
RARE HOSPITALITY INTERNATIONAL, INC.
By: /s/ Xxxxxx X. Xxxxxx, Xx.
-------------------------------------
Title: President and COO
EXECUTIVE
/s/ Xxxxxxx X. Xxxxxxx
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XXXXXXX X. XXXXXXX
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INDEX TO EXHIBITS
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EXHIBIT DESCRIPTION
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A NON-QUALIFIED STOCK OPTION AGREEMENT
B INCENTIVE STOCK OPTION AGREEMENT
C DEFINITION OF CHANGE IN CONTROL
D RESTRICTED AREA
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EXHIBIT A
NON-QUALIFIED STOCK OPTION AGREEMENT
under the
RARE HOSPITALITY INTERNATIONAL, INC.
1997 LONG-TERM INCENTIVE PLAN
This Stock Option Agreement is made as of the ____ day of _________
1997 by and between RARE HOSPITALITY INTERNATIONAL, INC., a Georgia corporation
(hereinafter referred to as the "Corporation"), and XXXXXXX X. XXXXXXX, a
resident of the State of Georgia (hereinafter referred to as the "Optionee").
1. Grant of Option. The Corporation hereby grants to the Optionee,
under the RARE Hospitality International, Inc. 1997 Long-Term Incentive Plan
(the "Plan"), a Non-Qualified Stock Option to purchase, on the terms and
conditions set forth in this agreement (this "Option Agreement"), 135,716 shares
of the Corporation's no par value common stock (the "Stock"), at the exercise
prices per share set forth below (the "Option"):
(a) 50,000 shares at $ ____ per share;
(b) 25,000 shares at $12.00 per share;
(c) 21,032 shares at $15.00 per share;
(d) 19,445 shares at $18.00 per share; and
(e) 20,239 shares at $21.00 per share.
Capitalized terms used herein and not otherwise defined shall have the meanings
assigned such terms in the Plan.
2. Vesting of Option. Unless the exercisability of the Option is
accelerated in accordance with Article 13 of the Plan or as provided in Section
5 hereof, the Option shall vest (become exercisable) only in cumulative periodic
installments as follows:
(a) During the first year following the date of this
Agreement, the Option shall be exercisable as to none of the shares
subject to the Option;
(b) During the period beginning one year after the date
of this Agreement and for a period of one year thereafter, the Option
shall be exercisable as to the shares described in paragraph 1(a)
above, minus the number of shares, if any, as to which the Option has
been previously exercised;
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(c) During the period beginning two years after the date
of this Agreement and for a period of one year thereafter, the Option
shall be exercisable with respect to the shares described in paragraphs
1(a) and (b) above, minus the number of shares, if any, as to which the
Option has been previously exercised;
(d) During the period beginning three years after the
date of this Agreement and for a period of one year thereafter, the
Option shall be exercisable as to the shares described in paragraphs
1(a), (b) and (c) above, minus the number of shares, if any, as to
which the Option has been previously exercised;
(e) During the period beginning four years after the date
of this Agreement and for a period of one year thereafter, the Option
shall be exercisable as to the shares described in paragraphs 1(a),
(b), (c), and (d) above, minus the number of shares, if any, as to
which the Option has been previously exercised; and
(f) During the period beginning five years after the date
of this Agreement and for the remainder of its term, the Option shall
be exercisable with respect to all of the shares minus the number of
shares, if any, as to which the Option has been previously exercised.
3. Period of Option and Limitations on Right to Exercise. The
Option will, to the extent not previously exercised, lapse under the earliest of
the following circumstances; provided, however, that the Committee may, prior to
the lapse of the Option under the circumstances described in paragraphs (b), (c)
and (d) below, provide in writing that the Option will extend until a later
date:
(a) The Option shall lapse as of 5:00 p.m., Eastern Time,
on the day immediately prior to the tenth anniversary of the date of
grant (the "Expiration Date").
(b) The Option shall lapse three months after the
Optionee's termination of employment for any reason other than the
Optionee's death or Disability; provided, however, that if the
Optionee's employment is terminated by the Corporation for cause or by
the Optionee without the consent of the Corporation, the Option shall
lapse immediately.
(c) If the Optionee's employment terminates by reason of
Disability, the Option shall lapse one year after the date of the
Optionee's termination of employment.
(d) If the Optionee dies while employed, or during the
three-month period described in subsection (b) above or during the
one-year period described in subsection (c) above and before the Option
otherwise lapses, the Option shall lapse one year after the date of the
Optionee's death. Upon the Optionee's death, the Option may be
exercised by the Optionee's beneficiary.
If the Optionee or his beneficiary exercises an Option after
termination of employment, the Option may be exercised only with respect to the
shares that were otherwise vested on the Optionee's
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termination of employment (including vesting by acceleration in accordance with
Article 13 of the Plan or Section 5 hereof).
4. Exercise of Option. The Option shall be exercised by written
notice directed to the Secretary of the Corporation at the principal executive
offices of the Corporation, in substantially the form attached hereto as Exhibit
A, or such other form as the Committee may approve. Such written notice shall be
accompanied by full payment in cash, shares of Stock previously acquired by the
Optionee, or any combination thereof, for the number of shares specified in such
written notice; provided, however, that if shares of Stock are used to pay the
exercise price, such shares must have been held by the Optionee for at least six
months. The Fair Market Value of the surrendered Stock as of the date of the
exercise shall be determined in valuing Stock used in payment of the exercise
price. To the extent permitted under Regulation T of the Federal Reserve Board,
and subject to applicable securities laws, the Option may be exercised through a
broker in a so-called "cashless exercise" whereby the broker sells the Option
shares and delivers cash sales proceeds to the Corporation in payment of the
exercise price. The Committee may, in the exercise of its discretion, but need
not, allow the Optionee to pay the exercise price by directing the Corporation
to withhold from the shares of Stock that would otherwise be issued upon
exercise of the Option that number of shares having a Fair Market Value on the
exercise date equal to the exercise price, all as determined pursuant to rules
and procedures established by the Committee.
Subject to the terms of this Option Agreement, the Option may be
exercised at any time and without regard to any other option held by the
Optionee to purchase stock of the Corporation.
5. Acceleration of Exercisability Upon Certain Change in Control. In the
event that a Change in Control shall occur within two (2) years following the
date of this Agreement, upon the occurrence of such Change in Control, the
Option shall become fully exercisable with respect to all shares of Stock, other
than those with respect to which the Option has previously been exercised;
provided, however, that such acceleration will not occur if, in the opinion of
the Corporation's accountants, such acceleration would preclude the use of
"pooling of interest" accounting treatment for a Change In Control transaction
that (a) would otherwise qualify for such accounting treatment, and (b) is
contingent upon qualifying for such accounting treatment.
6. Limitation of Rights. The Option does not confer to the
Optionee or the Optionee's personal representative any rights of a shareholder
of the Corporation unless and until shares of Stock are in fact issued to such
person in connection with the exercise of the Option. Nothing in this Option
Agreement shall interfere with or limit in any way the right of the Corporation
or any Subsidiary to terminate the Optionee's employment at any time, nor confer
upon the Optionee any right to continue in the employ of the Corporation or any
Subsidiary.
7. Stock Reserve. The Corporation shall at all times during the
term of this Option Agreement reserve and keep available such number of shares
of Stock as will be sufficient to satisfy the requirements of this Option
Agreement.
8. Optionee's Covenant. The Optionee hereby agrees to use his
best efforts to provide services to the Corporation in a workmanlike manner and
to promote the Corporation's interests.
- 3 -
15
9. Restrictions on Transfer and Pledge. The Option may not be
pledged, encumbered, or hypothecated to or in favor of any party other than the
Corporation or a Parent or Subsidiary, or be subject to any lien, obligation, or
liability of the Optionee to any other party other than the Corporation or a
Parent or Subsidiary. The Option is not assignable or transferable by the
Optionee other than by will or the laws of descent and distribution; provided,
however, that the Committee may (but need not) permit other transfers where the
Committee concludes that such transferability (i) does not result in accelerated
taxation and (ii) is otherwise appropriate and desirable, taking into account
any state or federal tax or securities laws applicable to transferable options.
The Option may be exercised during the lifetime of the Optionee only by the
Optionee.
10. Restrictions on Issuance of Shares. If at any time the Board
shall determine in its discretion, that listing, registration or qualification
of the shares of Stock covered by the Option upon any securities exchange or
under any state or federal law, or the consent or approval of any governmental
regulatory body, is necessary or desirable as a condition to the exercise of the
Option, the Option may not be exercised in whole or in part unless and until
such listing, registration, qualification, consent or approval shall have been
effected or obtained free of any conditions not acceptable to the Board.
11. Plan Controls. The terms contained in the Plan are
incorporated into and made a part of this Option Agreement and this Option
Agreement shall be governed by and construed in accordance with the Plan. In the
event of any actual or alleged conflict between the provisions of the Plan and
the provisions of this Option Agreement, the provisions of the Plan shall be
controlling and determinative.
12. Successors. This Option Agreement shall be binding upon any
successor of the Corporation, in accordance with the terms of this Option
Agreement and the Plan.
13. Severability. If any one or more of the provisions contained
in this Option Agreement are invalid, illegal or unenforceable, the other
provisions of this Option Agreement will be construed and enforced as if the
invalid, illegal or unenforceable provision had never been included.
14. Notice. Notices and communications under this Option
Agreement must be in writing and either personally delivered or sent by
registered or certified United States mail, return receipt requested, postage
prepaid. Notices to the Corporation must be addressed to:
RARE Hospitality International, Inc.
0000 Xxxxxxx Xxxx
Xxxxxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attention: Chief Financial Officer
or any other address designated by the Corporation in a written notice to the
Optionee. Notices to the Optionee will be directed to the address of the
Optionee then currently on file with the Corporation, or at any other address
given by the Optionee in a written notice to the Corporation.
- 4 -
16
IN WITNESS WHEREOF, RARE Hospitality International, Inc., acting by and
through its duly authorized officers, has caused this Option Agreement to be
executed, and the Optionee has executed this Option Agreement, all as of the day
and year first above written.
RARE HOSPITALITY INTERNATIONAL, INC.
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
OPTIONEE:
----------------------------------------
Xxxxxxx X. Xxxxxxx
- 5 -
17
EXHIBIT A
NOTICE OF EXERCISE OF OPTION TO PURCHASE
COMMON STOCK OF
RARE HOSPITALITY INTERNATIONAL, INC.
Name
------------------------------------
Address:
----------------------------------------
----------------------------------------
Date
------------------------------------
RARE Hospitality International, Inc.
0000 Xxxxxxx Xxxx
Xxxxxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attention: Chief Financial Officer
Re: Exercise of Non-Qualified Stock Option
I elect to purchase ______________ shares of Common Stock of RARE
Hospitality International, Inc. ("RARE") pursuant to the RARE Hospitality
International, Inc. Non-Qualified Stock Option Agreement dated ______________
and the RARE Hospitality International, Inc. 1997 Long-Term Incentive Plan. The
purchase will take place on the Exercise Date which will be as soon as
practicable following the date this notice and all other necessary forms and
payments are received by RARE, unless I specify a later date (not to exceed 30
days following the date of this notice).
On or before the Exercise Date, I will pay the full exercise price in
the form specified below (check one):
[ ] Cash Only: by delivering a check to RARE Hospitality
International, Inc. for $___________.
[ ] Cash and Shares: by delivering a check to RARE Hospitality
International, Inc. for $_________ for the part of the
exercise price. I will pay the balance of the exercise price
by delivering to RARE a stock certificate with my endorsement
for shares of RARE Stock that I have owned for at least six
months. If the number of shares of RARE Stock represented by
such stock certificate exceeds the number needed to pay the
exercise price, RARE will issue me a new stock certificate for
the excess.
F-1
18
[ ] Shares Only: by delivering to RARE a stock certificate with
my endorsement for shares of RARE Stock that I have owned for
at least six months. If the number of shares of RARE Stock
represented by such stock certificate exceeds the number
needed to pay the exercise price, RARE will issue me a new
stock certificate for the excess.
[ ] Cash From Broker: by delivering the purchase price from
_______________________, a broker, dealer or other "creditor"
as defined by Regulation T issued by the Board of Governors of
the Federal Reserve System (the "Broker"). I authorize RARE to
issue a stock certificate in the number of shares indicated
above in the name of the Broker in accordance with
instructions received by RARE from the Broker and to deliver
such stock certificate directly to the Broker (or to any other
party specified in the instructions from the Broker) upon
receiving the exercise price from the Broker.
Please deliver the stock certificate to me (unless I have chosen to pay
the purchase price through a broker).
Very truly yours,
---------------------------------------
AGREED TO AND ACCEPTED:
RARE HOSPITALITY INTERNATIONAL, INC.
By:
-------------------------------
Title:
----------------------------
Number of Option Shares
Exercised:
------------------------
Number of Option Shares
Remaining:
------------------------
Date:
-----------------------------
F-2
19
EXHIBIT B
INCENTIVE STOCK OPTION AGREEMENT
under the
RARE HOSPITALITY INTERNATIONAL, INC.
1997 LONG-TERM INCENTIVE PLAN
This Stock Option Agreement is made as of the ____ day of October 1997
by and between RARE HOSPITALITY INTERNATIONAL, INC., a Georgia corporation
(hereinafter referred to as the "Corporation"), and XXXXXXX X. XXXXXXX, a
resident of the State of Georgia (hereinafter referred to as the "Optionee").
1. Grant of Option. The Corporation hereby grants to the Optionee,
under the RARE Hospitality International, Inc. 1997 Long-Term Incentive Plan
(the "Plan"), an Incentive Stock Option to purchase, on the terms and conditions
set forth in this agreement (this "Option Agreement"), 14,284 shares of the
Corporation's no par value common stock (the "Stock"), at the exercise prices
per share set forth below (the "Option"):
(a) 3,968 shares at $15.00 per share;
(b) 5,555 shares at $18.00 per share; and
(c) 4,761 shares at $21.00 per share.
Capitalized terms used herein and not otherwise defined shall have the meanings
assigned such terms in the Plan.
2. Vesting of Option. Unless the exercisability of the Option is
accelerated in accordance with Article 13 of the Plan or as provided in Section
5 hereof, the Option shall vest (become exercisable) only in cumulative periodic
installments as follows:
(a) during the first three years following the date
of this Agreement, the Option shall be exercisable as to none of the
shares subject to the Option;
(b) during the period beginning three years after the
date of this Agreement and for a period of one year thereafter, the
Option shall be exercisable as to the shares described in paragraph
1(a) above, minus the number of shares, if any, as to which the Option
has been previously exercised;
(c) during the period beginning four years after the
date of this Agreement and for a period of one year thereafter, the
Option shall be exercisable with respect to
20
the shares described in paragraphs 1(a) and (b) above, minus the number
of shares, if any, as to which the initial option has been previously
exercised;
(d) during the period beginning five years after the date
of this Agreement and for a period of one year thereafter, the Option
shall be exercisable as to the shares described in paragraphs 1(a), (b)
and (c) above, minus the number of shares, if any, as to which the
Option has been previously exercised.
3. Period of Option and Limitations on Right to Exercise. The
Option will, to the extent not previously exercised, lapse under the earliest of
the following circumstances; provided, however, that the Committee may, prior to
the lapse of the Option under the circumstances described in paragraphs (b), (c)
and (d) below, provide in writing that the Option will extend until a later
date, but if Option is exercised after the dates specified in paragraphs (b),
(c) and (d) above, it will automatically become a Non-Qualified Stock Option:
(a) The Option shall lapse as of 5:00 p.m., Eastern Time,
on the day immediately prior to the tenth anniversary of the date of
grant (the "Expiration Date").
(b) The Option shall lapse three months after the
termination of Optionee's employment for any reason other than the
Optionee's death or Disability; provided, however, that if the
Optionee's employment is terminated by the Corporation for cause or by
the Optionee without the consent of the Corporation, the Option shall
lapse immediately.
(c) If the Optionee's employment terminates by reason of
Disability, the Option shall lapse one year after the date of the
Optionee's termination of employment.
(d) If the Optionee dies while employed, or during the
three-month period described in subsection (b) above or during the
one-year period described in subsection (c) above and before the Option
otherwise lapses, the Option shall lapse one year after the date of the
Optionee's death. Upon the Optionee's death, the Option may be
exercised by the Optionee's beneficiary.
If the Optionee or his beneficiary exercises an Option after
termination of employment, the Option may be exercised only with respect to the
shares that were otherwise vested on the Optionee's termination of employment
(including vesting by acceleration in accordance with Article 13 of the Plan or
Section 5 hereof).
4. Exercise of Option. The Option shall be exercised by written
notice directed to the Secretary of the Corporation at the principal executive
offices of the Corporation, in substantially the form attached hereto as Exhibit
A, or such other form as the Committee may approve. Such written notice shall be
accompanied by full payment in cash, shares of Stock previously acquired by the
Optionee, or any combination thereof, for the number of shares specified in such
written notice; provided, however, that if shares of Stock are used to pay the
- 2 -
21
exercise price, such shares must have been held by the Optionee for at least six
months The Fair Market Value of the surrendered Stock as of the date of the
exercise shall be determined in valuing Stock used in payment of the exercise
price. To the extent permitted under Regulation T of the Federal Reserve Board,
and subject to applicable securities laws, the Option may be exercised through a
broker in a so-called "cashless exercise" whereby the broker sells the Option
shares and delivers cash sales proceeds to the Corporation in payment of the
exercise price. The Committee may, in the exercise of its discretion, but need
not, allow the Optionee to pay the exercise price by directing the Corporation
to withhold from the shares of Stock that would otherwise be issued upon
exercise of the Option that number of shares having a Fair Market Value on the
exercise date equal to the exercise price, all as determined pursuant to rules
and procedures established by the Committee.
Subject to the terms of this Option Agreement, the Option may be
exercised at any time and without regard to any other option held by the
Optionee to purchase stock of the Corporation.
5. Acceleration of Exercisability Upon Certain Change in Control. In the
event that a Change in Control shall occur within two (2) years following the
date of this Agreement, upon the occurrence of such Change in Control, the
Option shall become fully exercisable with respect to all shares of Stock, other
than those with respect to which the Option has previously been exercised;
provided, however, that such acceleration will not occur if, in the opinion of
the Corporation's accountants, such acceleration would preclude the use of
"pooling of interest" accounting treatment for a Change In Control transaction
that (a) would otherwise qualify for such accounting treatment, and (b) is
contingent upon qualifying for such accounting treatment.
6. Limitation of Rights. The Option does not confer to the
Optionee or the Optionee's personal representative any rights of a shareholder
of the Corporation unless and until shares of Stock are in fact issued to such
person in connection with the exercise of the Option. Nothing in this Option
Agreement shall interfere with or limit in any way the right of the Corporation
or any Subsidiary to terminate the Optionee's employment at any time, nor confer
upon the Optionee any right to continue in the employ of the Corporation or any
Subsidiary.
7. Stock Reserve. The Corporation shall at all times during the
term of this Option Agreement reserve and keep available such number of shares
of Stock as will be sufficient to satisfy the requirements of this Option
Agreement.
8. Optionee's Covenant. The Optionee hereby agrees to use his
best efforts to provide services to the Corporation in a workmanlike manner and
to promote the Corporation's interests.
9. Restrictions on Transfer and Pledge. The Option may not be
pledged, encumbered, or hypothecated to or in favor of any party other than the
Corporation or a
- 3 -
22
Parent or Subsidiary, or be subject to any lien, obligation, or liability of the
Optionee to any other party other than the Corporation or a Parent or
Subsidiary. The Option is not assignable or transferable by the Optionee other
than by will or the laws of descent and distribution. The Option may be
exercised during the lifetime of the Optionee only by the Optionee.
10. Restrictions on Issuance of Shares. If at any time the Board
shall determine in its discretion, that listing, registration or qualification
of the shares of Stock covered by the Option upon any securities exchange or
under any state or federal law, or the consent or approval of any governmental
regulatory body, is necessary or desirable as a condition to the exercise of the
Option, the Option may not be exercised in whole or in part unless and until
such listing, registration, qualification, consent or approval shall have been
effected or obtained free of any conditions not acceptable to the Board.
11. Plan Controls. The terms contained in the Plan are
incorporated into and made a part of this Option Agreement and this Option
Agreement shall be governed by and construed in accordance with the Plan. In the
event of any actual or alleged conflict between the provisions of the Plan and
the provisions of this Option Agreement, the provisions of the Plan shall be
controlling and determinative.
12. Successors. This Option Agreement shall be binding upon any
successor of the Corporation, in accordance with the terms of this Option
Agreement and the Plan.
13. Severability. If any one or more of the provisions contained
in this Option Agreement are invalid, illegal or unenforceable, the other
provisions of this Option Agreement will be construed and enforced as if the
invalid, illegal or unenforceable provision had never been included.
14. Notice. Notices and communications under this Option
Agreement must be in writing and either personally delivered or sent by
registered or certified United States mail, return receipt requested, postage
prepaid. Notices to the Corporation must be addressed to:
RARE Hospitality International, Inc.
0000 Xxxxxxx Xxxx
Xxxxxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attention: Chief Financial Officer
or any other address designated by the Corporation in a written notice to the
Optionee. Notices to the Optionee will be directed to the address of the
Optionee then currently on file with the Corporation, or at any other address
given by the Optionee in a written notice to the Corporation.
15. Interpretation. It is the intent of the parties hereto that
the Option qualify for incentive stock option treatment pursuant to, and to the
extent permitted by, Section 422 of the Code. All provisions hereof are intended
to have, and shall be construed to have, such
- 4 -
23
meanings as are set forth in applicable provisions of the Code and Treasury
Regulations to allow the Option to so qualify.
IN WITNESS WHEREOF, RARE Hospitality International, Inc., acting by and
through its duly authorized officers, has caused this Option Agreement to be
executed, and the Optionee has executed this Option Agreement, all as of the day
and year first above written.
RARE HOSPITALITY INTERNATIONAL, INC.
By:
-------------------------------------
Name:
Title:
OPTIONEE:
----------------------------------------
XXXXXXX X. XXXXXXX
- 5 -
24
EXHIBIT A
NOTICE OF EXERCISE OF OPTION TO PURCHASE
COMMON STOCK OF
RARE HOSPITALITY INTERNATIONAL, INC.
Name
------------------------------------
Address:
----------------------------------------
----------------------------------------
Date
------------------------------------
RARE Hospitality International, Inc.
0000 Xxxxxxx Xxxx
Xxxxxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attention: Chief Financial Officer
Re: Exercise of Incentive Stock Option
I elect to purchase ______________ shares of Common Stock of RARE
Hospitality International, Inc. pursuant to the RARE Hospitality International,
Inc. Incentive Stock Option Agreement dated ______________ and the RARE
Hospitality International, Inc. 1997 Long-Term Incentive Plan. The purchase will
take place on the Exercise Date which will be as soon as practicable following
the date this notice and all other necessary forms and payments are received by
RARE, unless I specify a later date (not to exceed 30 days following the date of
this notice).
On or before the Exercise Date, I will pay the full exercise price in
the form specified below (check one):
[ ] Cash Only: by delivering a check to RARE Hospitality
International, Inc. for $___________.
[ ] Cash and Shares: by delivering a check to RARE Hospitality
International, Inc. for $_________ for the part of the
exercise price. I will pay the balance of the exercise price
by delivering to RARE a stock certificate with my endorsement
for shares of RARE Stock that I have owned for at least six
months. If the number of shares of RARE Stock represented by
such stock certificate exceeds the number needed to pay the
exercise price, RARE will issue me a new stock certificate for
the excess.
25
[ ] Shares Only: by delivering to RARE a stock certificate with
my endorsement for shares of RARE Stock that I have owned for
at least six months. If the number of shares of RARE Stock
represented by such stock certificate exceeds the number
needed to pay the exercise price, RARE will issue me a new
stock certificate for the excess.
[ ] Cash From Broker: by delivering the purchase price from
_______________________, a broker, dealer or other "creditor"
as defined by Regulation T issued by the Board of Governors of
the Federal Reserve System (the "Broker"). I authorize RARE to
issue a stock certificate in the number of shares indicated
above in the name of the Broker in accordance with
instructions received by RARE from the Broker and to deliver
such stock certificate directly to the Broker (or to any other
party specified in the instructions from the Broker) upon
receiving the exercise price from the Broker.
Please deliver the stock certificate to me (unless I have chosen to pay
the purchase price through a broker).
Very truly yours,
---------------------------------------
AGREED TO AND ACCEPTED:
RARE HOSPITALITY INTERNATIONAL, INC.
By:
-------------------------------
Title:
----------------------------
Number of Option Shares
Exercised:
------------------------
Number of Option Shares
Remaining:
------------------------
Date:
-----------------------------
- 2 -
26
EXHIBIT C
DEFINITIONS
As used in Section 3 of this Agreement, the following terms shall have
the meanings ascribed to each below:
"Cause" means:
(A) Commission by Executive of a willful or grossly negligent act
which causes material harm to the Company,
(B) The commission or perpetration by Executive of any criminal
act involving a felony for which Executive is indicted or with
respect to which Executive pleads nolo contendere (or any
similar response), any act of moral turpitude, or any fraud
upon the Company,
(C) Habitual and unauthorized absenteeism by reason other than
physical or mental illness, chronic alcoholism or other form
of substance abuse resulting in material harm or actual or
potential physical danger to the Company or its employees,
(D) Any material violation by Executive of his obligations under
this Agreement, or
(E) Any misrepresentation or breach by Executive of warranty
contained in Section 13 of this Agreement;
provided, however, that if the cause specified in such notice is such
that there is a reasonable prospect that it can be cured with diligent
effort within a reasonable time, Executive shall have such reasonable
time (having regard for the nature of the cause) to cure such cause,
which time shall not in any event exceed thirty (30) days from the date
of such notice, and Executive's employment shall continue in effect
during such reasonable time so long as Executive makes diligent efforts
during such time to cure such cause. If such cause shall be cured by
Executive during such reasonable time his employment and the
obligations of the Company hereunder shall not terminate as a result of
the notice which has been given with respect to such cause. Cure of any
cause with or without notice from the Company shall not relieve
Executive from any obligations to the Company under this Agreement or
otherwise and shall not affect the Company's rights upon the
reoccurrence of the same, or the occurrence of any other, cause. If
such cause shall not be cured within such reasonable time the
employment of Executive under this Agreement shall terminate upon the
expiration of such reasonable time.
27
"Change in Control" means and includes each of the following:
(1) The acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the 1934 Act) (a "Person") of
beneficial ownership (within the meaning of Rule 13d-3 promulgated under
the 0000 Xxx) of 25% 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 (the "Outstanding Company Voting Securities");
provided, however, that for purposes of this subsection (1), the following
acquisitions shall not constitute a Change of Control: (i) any acquisition
by a Person who is on the date of this Agreement (the "Effective Date") the
beneficial owner of 25% or more of the Outstanding Company Voting
Securities, (ii) any acquisition by the Company, (iii) any acquisition by
any employee benefit plan (or related trust) sponsored or maintained by the
Company or any corporation controlled by the Company, or (iv) any
acquisition by any corporation pursuant to a transaction which complies
with clauses (i), (ii) and (iii) of subsection (3) of this definition; or
(2) Individuals who, as of the Effective Date, constitute the Board of
Directors of the Company (the "Incumbent Board") cease for any reason to
constitute at least a majority of the Board of Directors of the Company;
provided, however, that any individual becoming a director subsequent to
October 1, 1997 whose election, or nomination for election by the Company's
shareholders, was approved by a vote of at least a majority of the
directors then comprising the Incumbent Board shall be considered as though
such individual were a member of the Incumbent Board, but excluding, for
this purpose, any such individual whose initial assumption of office occurs
as a result of an actual or threatened election contest with respect to the
election or removal of directors or other actual or threatened solicitation
of proxies or consents by or on behalf of a Person other than the Board of
Directors of the Company; or
(3) Consummation of a reorganization, share exchange, merger or
consolidation or sale or other disposition of all or substantially all of
the assets of the Company (a "Business Combination"), in each case, unless,
following such Business Combination, (i) all or substantially all of the
individuals and entities who were the beneficial owners of the Outstanding
Company Voting Securities immediately prior to such Business Combination
beneficially own, directly or indirectly, more than 50% of the combined
voting power of the then outstanding voting securities entitled to vote
generally in the election of directors of the corporation resulting from
such Business Combination (including, without limitation, a corporation
which as a result of such transaction owns the Company or all or
substantially all of the Company's assets either directly or through one or
more subsidiaries) in substantially the same proportions as their
ownership, immediately prior to such Business Combination of the
Outstanding Company Voting Securities, and (ii) no Person (excluding any
corporation resulting from such Business Combination or any employee
benefit plan (or related trust) of the Company or such corporation
resulting from such Business Combination) beneficially owns, directly or
indirectly, 25% or more of the combined voting power of the then
- 2 -
28
outstanding voting securities of such corporation except to the extent that
such ownership existed prior to the Business Combination, and (iii) at
least a majority of the members of the board of directors of the
corporation resulting from such Business Combination were members of the
Incumbent Board at the time of the execution of the initial agreement, or
of the action of the Board of Directors of the Company, providing for such
Business Combination; or
(4) approval by the shareholders of the Corporation of a complete
liquidation or dissolution of the Corporation.
"Disability" or "Disabled" means that by reason of any physical or mental
incapacity Executive has been unable, or it is reasonably expected that he will
be unable, for a period of at least one hundred and eighty (180) substantially
continuous days to perform his regular duties and responsibilities hereunder. In
the event of any disagreement between Executive and the Company as to whether
Executive is physically or mentally incapacitated, the question of such
incapacity shall be submitted to an impartial and reputable physician for
determination, selected by mutual agreement of Executive and the Company or,
failing such agreement, selected by two physicians (one of which shall be
selected by the Company and the other by Executive), and such determination of
the question of such incapacity by such physician shall be final and binding on
Executive and the Company. The Executive shall pay the fees and expenses of such
physician.
- 3 -
29
EXHIBIT D
The area within the Metropolitan Statistical Area ("MSA") surrounding each city
listed below, as said MSA is determined from time to time by the U. S. Bureau of
the Census, or for each city with no MSA within fifty (50) miles of the city
limits.
Alabama Florida
Birmingham Altamonte Springs
Dothan Boynton Beach
Mobile Xxxxxxx
Xxxxxxxxxx Coral Springs
Davie
California Destin
San Francisco Ft. Lauderdale
Ft. Xxxxx
Connecticut Jacksonville Beach
Manchester Jacksonville
Xxxxxx Beach
Delaware Kissimmee
Newark Xxxx Xxxx
Largo
District of Columbia Xxxxxxx Island
Miami
Ocala
Orlando
Sarasota
St. Augustine
St. Petersburg
Tallahassee
Tampa
30
Georgia Maine
Albany Bangor
Athens Seakonk
Atlanta South Portland
Augusta
Austell Maryland
Cartersville Gaithersburg
Chamblee
College Park Massachusetts
Columbus Boston
Conyers Braintree
Douglasville Chestnut Hill
Duluth Peabody
Gainesville Farmington
Jonesboro Watertown
Kennesaw
Lawrenceville Michigan
Xxxxx Xxxx
Xxxxxxxx
Xxxxxxxxxx Minnesota
Peachtree City Minneapolis
Rome
Roswell Missouri
Savannah Florissant
Snellville
Xxxxxx Nevada
Valdosta Las Vegas
Illinois New Hampshire
Chicago Newington
Kentucky New York
Xxxxxxxx Albany
Poughkeepsie
Rochester
- 2 -
31
North Carolina Pennsylvania
Burlington Philadelphia
Charlotte
Concord Rhode Island
Gastonia Providence
Greensboro Warwick
High Point
Huntersville South Carolina
Pineville Columbia
Ohio Greenville
Cincinnati Hilton Head
Cleveland Spartanburg
Columbus
Cuyahoga Falls Tennessee
Dublin Antioch
Fairview Park Chattanooga
Xxxxxxxx Heights Hermitage
Mentor Knoxville
North Canton Nashville
Xxxxx Xxxxxxx
Springdale
Strongsville Texas
Houston
Xxxxxxxx
Xxxxxxxxxxx
Executive acknowledges and agrees that the geographical area described above is
the area in which Executive will initially perform his services for the Company,
and that the area in which such services are performed is intended to expand as
the business of the Company grows. Executive and the Company agree that as the
geographical area in which the Company conducts its business expands, the list
of cities described on this Exhibit D shall be deemed to be amended, from time
to time, without any further consent, action or notice on the part of the
Company or Executive, to include each additional city in which the Company
operates a restaurant or a franchisee of the Company operates a restaurant under
the terms of a franchise from the Company. Executive agrees to execute one or
more amendments hereto upon the request of the Company from time to time in
order to confirm such amended list.
- 3 -
