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EXHIBIT 10(n)
EMPLOYMENT AGREEMENT
THIS AGREEMENT, made and entered into as of the 16th day of October,
1997, by and between RARE HOSPITALITY INTERNATIONAL, INC., a Georgia corporation
(hereinafter referred to as the "Company"), and XXXXXX X. XXX, a resident of the
Commonwealth of Massachusetts (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 is currently employed by the Company as Executive Vice
President of its Bugaboo Creek Steak House business on terms described in a
letter from the Company to Executive dated December 28, 1996 (the "Offer
Letter"). The Company and Executive desire to terminate the Offer Letter and the
terms of employment described therein and to continue Executive's employment by
the Company on the terms and conditions set forth in this Agreement.
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, other than the Executive's
Information Base, related to the Company and its business that are obtained and
developed in the course of Executive's employment with the Company 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.
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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 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, Operations of the Company's LongHorn
Steakhouse business. 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, and Executive will
therefore be required to move his residence to 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.
1.3. Termination of Offer Letter. The Offer Letter is hereby
terminated, and from and after the Commencement Date the terms and conditions of
Executive's employment by the Company shall be solely as provided in this
Agreement.
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
$185,000 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. Notwithstanding
the foregoing,
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Executive's bonus for the 1997 calendar year shall be not less than $30,000.
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:
(i) 40,910 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) 41,667 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) 43,334 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
Those options granted to Executive in this Section 2.3(a) shall be granted to
Executive pursuant to the Company's Amended and Restated 1992 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) 9090 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) [8,333] shares with an exercise price of $12.00
per share, which option shall become exercisable with respect to all
of such shares on the second anniversary of the date of this
Agreement; and
(iii) [6,666] 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;
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
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be entitled to participate in any and all other employee benefit programs
maintained by the 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, including but not limited to the
automobile allowance previously paid to him by the Company.
2.5. Expenses. (a) 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.
(b) The Company shall promptly reimburse Executive for the following
expenses incurred by Executive in connection with the relocation of his
residence from metropolitan Boston, Massachusetts to Atlanta, Georgia, which
expenses shall be documented to the reasonable satisfaction of the Company:
(i) Real estate sales commission, not to exceed seven
percent (7%) of the sales price, incurred by Executive in connection
with the sale of Executive's current residence in metropolitan
Boston, Massachusetts;
(ii) Real estate loan closing costs, not to exceed two
and one-half percent (2.5%) of the purchase price (including an
origination fee not to exceed one percent (1%)), incurred in
connection with the financing of the purchase of a new residence by
Executive in metropolitan Atlanta, Georgia on or before January 31,
1998;
(iii) Moving expenses incurred in connection with moving
Executive's family and household possessions from metropolitan
Boston, Massachusetts to metropolitan Atlanta, Georgia; and
(iv) In addition to the specific expenses described in
clauses (i)through (iii) above, an amount equal to $2,000 to cover
other miscellaneous relocation expenses.
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
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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.
(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(f) 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 twelve (12) months. Such
payment shall be made as and when otherwise due under this Agreement.
(e) In the event that at any time that is more than two (2) years
following the Commencement Date the Company terminates Executive's employment
other than for Cause, unless the provisions of Section 3.2(f) 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
at the rate of 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.
(f) In the event that the Company terminates Executive's employment
other than for Cause within eighteen (18) months following the occurrence of a
Change in Control (as defined in Exhibit C attached hereto), in lieu of the
amounts payable pursuant to Section 3.2(d) or (e) 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) his annual Base
Compensation as of the date of termination of such employment plus (y) an amount
equal to 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.
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(g) 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
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"). The Company acknowledges that information in
Executive's Information Base is not 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
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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 (i) Executive's use or
disclosure of Executive's Information Base or (ii) 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 Confidential Information shall not include any
information (a) known by Executive prior to the date of 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. Executive's Information Base means Executive's
experience in the development, opening, operation and management of restaurants,
and professional relationships with clients, customers, suppliers and other
individuals within the restaurant industry, to the extent that such experience
and relationships were developed by Executive prior to his original employment
by the Company in January 1997.
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.
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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 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
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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 Executive Vice President, Operations of the Company's LongHorn
Steakhouse business 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 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:
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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: Xxxxxx X. Xxx
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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 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
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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. XxXxxxxx, Xx.
----------------------------
Title: Chairman / CEO
EXECUTIVE
/s/ Xxxxxx X. Xxx
------------------------------------
XXXXXX X. XXX
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INDEX TO EXHIBITS
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.
AMENDED AND RESTATED 1992 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 "Company"), and XXXXXX X. XXX, a resident of the
State of Georgia (hereinafter referred to as the "Optionee").
1. Grant of Option. The Company hereby grants to the Optionee, under
the RARE Hospitality International, Inc. Amended and Restated 1992 Plan (the
"Plan"), a Non-Qualified Stock Option to purchase, on the terms and conditions
set forth in this agreement (this "Option Agreement"), 125,911 shares of the
Company's no par value common stock (the "Stock"), at the exercise prices per
share set forth below (the "Option"):
(a) 40,910 shares at $____ per share;
(b) 41,667 shares at $12.00 per share; and
(c) 43,334 shares at $15.00 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 Section 1.7 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 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;
(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 1(b) above, minus the number of shares, if any, as to which the
Option has been previously exercised; and
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(d) During the period beginning three years after the date of
this Agreement and for the remainder of its term, the Option shall be
exercisable with respect to the shares described in paragraphs 1(a),
1(b) and 1(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:
(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 Company for cause or by the Optionee without the
consent of the Company, 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 Section 1.7 of the Plan and
Section 5 hereof.
4. Exercise of Option. The Option shall be exercised by written notice
directed to the Secretary of the Company at the principal executive offices of
the Company, 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
-2-
15
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 Company 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 Company 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 Company.
5. Acceleration of Exercisability Upon Certain Change in Control.
In the event that a Change in Control (as defined in Exhibit B attached
hereto and incorporated herein) 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 Company'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
Company 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 Company 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 Company or any
Subsidiary.
7. Stock Reserve. The Company 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 Company in a workmanlike manner and to
promote the Company'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 Company
or a Parent or Subsidiary, or be subject to any lien, obligation, or liability
of the Optionee to any other party other than the Company 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;
-3-
16
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 Company, 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
Company 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 Company 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 Company, or at any other address given
by the Optionee in a written notice to the Company.
-4-
17
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:
-----------------------------------------
XXXXXX X. XXX
-5-
18
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. Amended and Restated 1992 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.
-6-
19
[ ] 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: _________________________________
-7-
20
EXHIBIT B
to
RARE HOSPITALITY, INC.
STOCK OPTION AGREEMENT
"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
21
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 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.
-2-
22
EXHIBIT B
INCENTIVE STOCK OPTION AGREEMENT
under the
RARE HOSPITALITY INTERNATIONAL, INC.
AMENDED AND RESTATED 1992 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 XXXXXX X. XXX, 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. Amended and Restated 1992 Incentive Plan
(the "Plan"), an Incentive Stock Option to purchase, on the terms and conditions
set forth in this agreement (this "Option Agreement"), 24,089 shares of the
Corporation's no par value common stock (the "Stock"), at the exercise prices
per share set forth below (the "Option"):
(a) 9,090 shares at $____ per share;
(b) 8,333 shares at $12.00 per share; and
(c) 6,666 shares at $15.00 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 Section 1.7 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;
(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 initial option
has been previously exercised; and
23
(d) during the period beginning three years after the date of this
Agreement and for the remainder of its term, the Option shall be
exercisable with respect to the shares described in paragraphs 1(a), 1(b)
and 1(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 Section 1.7 of the Plan
and 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
-2-
24
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 (as defined in Exhibit B attached hereto and
incorporated herein) 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
Company'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. To the extent that this provision
causes Incentive Stock Options to exceed the dollar limitation set forth in
Section 2.3 of the Plan, the excess Options shall be deemed to be Non-Qualified
Stock Options.
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 Parent or Subsidiary, or be subject to any lien, obligation, or
liability of the Optionee to any
-3-
25
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-
26
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:
--------------------------------------------
XXXXXX X. XXX
-5-
27
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. Amended and Restated 1992 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.
-6-
28
[ ] 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:
--------------------------------
-7-
29
EXHIBIT B
TO
RARE HOSPITALITY, INC.
STOCK OPTION AGREEMENT
"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
-8-
30
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 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.
-9-
31
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.
32
"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-
33
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.
34
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
F-1
35
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
F-2
36
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.
F-3
