EXHIBIT 10.2
November 11, 2004
O'Charley's Inc.
0000 Xxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
Ladies and Gentlemen:
In consideration of my employment as Chief Financial Officer, Secretary
and Treasurer for O'Charley's Inc. effective November 15, 2004 and the benefits
I derive from Paragraph J hereof (but without thereby creating any fixed or
contractual employment term, understanding that my employment can be terminated,
with or without cause and with or without notice, at any time at the option of
either the Company or me), I hereby agree with the Company (for purposes of this
letter agreement, the "Company" shall mean O'Charley's Inc. or any of its
present or future direct or indirect parents or subsidiaries or affiliated
entities by which I am employed or on behalf of which I provide service(s)) as
follows:
A. During the term of my employment I will not compete, directly or
indirectly, with the Company. In accordance with this restriction, but without
limiting its terms, I will not:
(a) enter into or engage in any business which competes with the
business of the Company; or
(b) promote or assist, financially or otherwise, any person, firm,
association or corporation or any other entity engaged in any business
which competes with the business of the Company.
B. For a period of twelve (12) months following termination of my
employment with the Company, I will not enter into or engage in any business
that competes with the Company's business.
C. For a period of twelve (12) months following termination of my
employment with the Company, I will not promote or assist financially or
otherwise, any person, firm, association, partnership, corporation, or any other
entity engaged in any business which competes with the Company's business.
D. For the purposes of Paragraphs A through C, inclusive, I understand
that I will be competing if I engage in any or all of the activities set forth
therein directly as an individual on my own account, or indirectly as a partner,
joint venturer, employee, agent, consultant, officer and/or director of any
firm, association, corporation, or other entity, or as a stockholder of any
corporation in which I own, directly or indirectly, individually or in the
aggregate, more than one percent (1%) of the outstanding stock; provided
however, that at such time as I am no longer employed by the Company, my direct
or indirect ownership as a stockholder of less than five
percent (5%) of the outstanding stock of any publicly traded corporation
shall not by itself constitute a violation of Paragraphs B through C.
E. For the purposes of Paragraphs B through C, inclusive, the Company's
business is defined as owning, operating and/or franchising restaurants in the
casual dining segment of the restaurant industry and such other segments of the
restaurant industry in which the Company shall own, operate or franchise
restaurants as of the date of termination of my employment with the Company.
F. I understand that the activities set forth in Paragraphs B through C,
inclusive, shall be prohibited only within the United States.
G. If it shall be judicially determined that I have violated any of my
obligations under Paragraphs B through C, inclusive, then the period applicable
to the obligation which I shall have been determined to have violated shall
automatically be extended by a period of time equal in length to the period
during which said violation(s) occurred.
H. I also agree that I will not directly or indirectly at any time solicit
or induce or attempt to solicit or induce any employee(s) (at the level of
director or above) of the Company or any of its parent, subsidiary or affiliate
entities to terminate their employment with the Company or such entity.
I. During the period of my employment and at any time thereafter, I will
not disclose, furnish, disseminate, make available or, except in the ordinary
course of performing my duties on behalf of the Company, use any trade secrets
or confidential business and technical information of the Company, or its
parent, subsidiaries or affiliated entities without limitation as to when it was
acquired by me or whether it was compiled or obtained by, or furnished to me
while I was employed by the Company. Such trade secrets and confidential
business and technical information are considered to include, without
limitation, development plans, financial statistics, research data, or any other
statistics and plans contained in monthly and annual review books, profit plans,
capital plans, critical issues plans, strategic plans, or marketing, real
estate, or store operations plans. I specifically acknowledge that all such
information, whether reduced to writing or maintained in my mind or memory and
whether compiled by the Company and/or me derives independent economic value
from not being readily known to or ascertainable by proper means by others who
can obtain economic value from its disclosure or use, that reasonable efforts
have been put forth by the Company to maintain the secrecy of such information,
that such information is and will remain the sole property of the Company and
that any retention and use of such information during or after the termination
of my relationship with the Company (except in the course of performing my
duties) shall constitute a misappropriation of the Company's trade secrets;
provided, however, that this restriction shall not apply to information which is
in the public domain or otherwise made public by others through no fault of
mine.
The above restrictions on disclosure and use of confidential information
shall not prevent me from: (i) using or disclosing information in the good faith
performance of my duties on behalf of the Company; (ii) using or disclosing
information to another employee to whom disclosure is required to perform in
good faith the duties of either of us on behalf of the
Company; (iii) using or disclosing information to another person or entity bound
by a duty or an agreement of confidentiality as part of the performance in good
faith of my duties on behalf of the Company or as authorized in writing by the
Company; (iv) at any time after the period of my employment using or disclosing
information to the extent such information is, through no fault or disclosure of
my own, generally known to the public; (v) using or disclosing information which
was not disclosed to me by the Company or otherwise during the period of my
employment which is then disclosed to me after termination of my employment with
the Company by a third party who is under no duty or obligation not to disclose
such information; or (vi) disclosing information as required by law. If I become
legally compelled to disclose any of the confidential information, I shall (i)
provide the Company with reasonable prior written notice of the need for such
disclosure such that the Company may obtain a protective order; (ii) if
disclosure is required, furnish only that portion of the confidential
information which, in the written opinion of my counsel delivered to the
Company, is legally required; and (iii) exercise reasonable efforts to obtain
reliable assurances that confidential treatment will be accorded to the
confidential information.
J. It is further understood and agreed that if my employment with the
Company should be terminated at any time prior to the third anniversary of the
date of this agreement as a result of a Termination Without Cause (defined
below) or a Termination With Good Reason (defined below), and if I am not then
or thereafter in material breach of this agreement, and upon the execution and
delivery to the Company by me of an agreement, in a form presented by the
Company and accepted by me, which acceptance shall not be unreasonably withheld
or delayed, releasing all claims which I may have against the Company (other
than claims for indemnification pursuant to Paragraph L hereunder), I will
receive, in full and complete settlement of any claims for compensation which I
may have, and in lieu of any severance pay under any policy of the Company or
otherwise, the following:
(i) continued monthly payments, in accordance with the Company's
regular payroll practices, for a period of twelve (12) months after the
date of termination equal to the sum of (1) one-twelfth (1/12) of my
annual base salary at the highest rate in effect at any time during the
twelve (12)-month period prior to my date of termination, and (2)
one-twelfth (1/12) of my target annual bonus for the fiscal year in which
the date of termination occurs; and
(ii) any payments and benefits which I, my spouse, dependents,
beneficiaries or estate would have been entitled to receive pursuant to
any employee benefit plan or program of the Company during the twelve
(12)-month period following my termination had I remained an employee
during that period, with such benefits provided to me at no less than the
same coverage level and at no more of a cost to me as in effect as of the
date of my termination subject to such reduction in coverage or increases
in cost as shall become in effect for senior executive employees of the
Company generally, provided however, that such continued payments and
benefits shall terminate on the date or dates I receive equivalent
coverage and benefits, without waiting period or pre-existing condition
limitations, under the plans and programs of a subsequent employer (such
coverage and benefits to be determined on a coverage-by-coverage or
benefit-by-benefit basis).
As used herein, "Termination Without Cause" means any termination of my
employment by the Company other than a Termination With Cause (defined below).
As used herein, "Termination With Cause" means termination by the Company
of my employment at any time after the Company believes in good faith it has
actual knowledge of the occurrence of any of the following events: gross neglect
of duty, material breach of this agreement, a material act of dishonesty or
disloyalty, the inability to discharge my material duties due to alcohol or drug
addiction, or gross misconduct inimical to the best interests of the Company;
provided however, that termination of employment due to unsatisfactory job
performance shall not be considered Termination for Cause; provided further,
however, that "Cause" shall not be deemed existing unless and until the Company
has delivered to me a copy of a resolution duly adopted by the Company's Board
of Directors at a meeting of the Board duly called (after reasonable (but in no
event less than seven (7) days) notice to me and an opportunity for me, together
with my counsel, to be heard before the Board), finding that in the good faith
opinion of the Board, I had engaged in the conduct set forth above and
specifying the particulars thereof in reasonable detail.
As used herein, "Termination with Good Reason" means my termination of
employment at any time after I have actual knowledge of the occurrence, without
my written consent, of one of the following events: (i) a reduction in my base
compensation or a reduction in the health and welfare insurance, retirement and
car benefits available to me as of the commencement of employment, except for
reductions in such benefits applicable generally to executives at my level and
below: (ii) the reassignment of me to a position resulting in my not being the
Company's Chief Financial Officer or a comparable position, or a reporting
relationship other than to the CEO, President or COO of the Company; or (iii)
the location of my principal office is relocated to a location more than fifty
(50) miles from Nashville, Tennessee.
It is understood and agreed that in the event of any termination of my
employment following a Change in Control (as defined in the Severance
Compensation Agreement dated the date hereof between me and the Company (the
"Change in Control Severance Agreement")), the provisions of the Change in
Control Severance Agreement shall control and the provisions in this Paragraph J
shall be void and of no further force or effect.
In the event I voluntarily terminate my employment for any reason other
than as a result of a Termination with Good Reason or following a Change in
Control (as defined in the Change in Control Severance Agreement) prior to the
third anniversary of the date of this agreement, I agree to reimburse the
Company for any and all amounts reimbursed by the Company or paid by the Company
in respect of my relocation to Nashville, Tennessee pursuant to the offer of
employment from the Company dated November 8, 2004.
The amounts payable to me under this Paragraph J are not eligible earnings
under any pension, savings, deferred compensation, bonus, incentive,
supplemental retirement benefit or other benefit plan of the Company.
K. I expressly agree and understand that the remedy at law for any breach
by me of this agreement will be inadequate and that the damages flowing from
such breach are not readily susceptible to being measured in monetary terms.
Accordingly, it is acknowledged that upon any violation of any provision of this
agreement, the Company shall be entitled to immediate
injunctive relief and may obtain a temporary order restraining any threatened or
further breach without the necessity of proof of actual damage. Nothing in this
agreement shall be deemed to limit the Company's remedies at law or in equity
for any breach by me of any of the provisions of this agreement which may be
pursued or availed of by the Company.
L. It is understood and agreed that the Company will indemnify me
(including advancing expenses) to the fullest extent permitted by Tennessee law
and the Company's Charter and Bylaws for any judgments, amounts paid in
settlement and reasonable expenses, including reasonable attorneys' fees,
incurred by me in connection with the defense of any lawsuit or other claim to
which I am made a party by reason of being an officer, director or employee of
the Company or any of its subsidiaries.
M. This agreement is not assignable by either party without the prior
written consent of the other except that the Company may assign it without such
consent to any parent, subsidiary or affiliated entity, and upon such entity's
assumption of the Company's duties and obligations hereunder, such entity shall
succeed to each of the Company's rights hereunder. Upon such assignment and
assumption, I agree to and will become an employee of such entity, and all
references to the Company in this agreement shall, as the context requires, be
deemed to be to the entity to which such assignment, assumption and employment
relate.
N. No modification, waiver, amendment or addition to any of the terms of
this agreement shall be effective, except as set forth in a writing signed by me
and the Company. The failure of the Company to enforce any provision of this
agreement shall not be construed to be a waiver of such provision or of the
right of the Company thereafter to enforce each and every provision.
O. This agreement and any amendments thereto shall become effective on the
date of acceptance by the Company and shall be governed by, and construed in
accordance with, the internal, substantive laws of the State of Tennessee. I
agree that the state and federal courts located in the State of Tennessee shall
have jurisdiction in any action, suit or proceeding against me arising out of
this agreement and I hereby: (a) submit to the personal jurisdiction of such
courts; (b) consent to service of process in connection with any action, suit or
proceeding against me; and (c) waive any other requirement (whether imposed by
statute, rule of court or otherwise) with respect to personal jurisdiction,
venue or service of process.
P. This agreement and the Change in Control Severance Agreement supersede
the provisions of each and every other agreement or understanding, whether oral
or written, between the undersigned and the Company relating to the subject
matter contained herein, and any such agreement or understanding shall be of no
further force and effect. The provisions of this agreement are severable and if
any one or more provisions may be determined to be illegal or otherwise
unenforceable, in whole or in part, the remaining provisions and any partially
unenforceable provision, to the extent enforceable in any jurisdiction, shall,
nevertheless, be binding and enforceable. The parties hereto agree that when
fully executed, the foregoing shall constitute a legally enforceable agreement
between us, which also shall inure to the benefit of the Company's successors
and assigns.
Finally, I represent that prior to signing this agreement, I have read,
fully understand and voluntarily agree to the terms and conditions as stated
above, that I was not coerced to sign this agreement, that I was not under
duress at the time I signed this agreement and that, prior to signing this
agreement, I had adequate time to consider entering into this agreement,
including without limitation, the opportunity to discuss the terms and
conditions of this agreement, as well as its legal consequences, with an
attorney of my choice.
This agreement shall become effective as of the commencement date of my
employment by the Company.
Very truly yours,
By: /s/ Xxxxxxxx X. Xxxxx
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Xxxxxxxx X. Xxxxx
Acknowledged and agreed to
as of this 11th day of November, 2004
O'CHARLEY'S INC.
By: /s/ Xxxxxxx X. Xxxxx
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Title: CEO
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