EXHIBIT 10.1
SEVERANCE AGREEMENT AND GENERAL RELEASE
THIS SEVERANCE AGREEMENT AND GENERAL RELEASE ("Agreement") is made and
entered into this 29th day of October, 2004, by and between A. XXXX XXXXXXXX
(hereinafter referred to as "Xx. Xxxxxxxx") and O'CHARLEY'S INC. and its
subsidiaries and related entities (hereinafter collectively referred to as
"O'Charley's").
W I T N E S S E T H:
WHEREAS, Xx. Xxxxxxxx currently serves as Chief Financial Officer,
Secretary and Treasurer for O'Charley's and has expressed his desire to resign
his employment, effective October 29, 2004 (the "Effective Date");
WHEREAS, O'Charley's has expressed its willingness to accept Xx.
Xxxxxxxx'x resignation from employment upon the following terms and conditions;
and
WHEREAS, after a period of negotiations between them, the parties have
reached an agreement by which Xx. Xxxxxxxx will resign his employment on the
Effective Date.
NOW, THEREFORE, in consideration of the premises and mutual promises
herein contained, it is agreed as follows:
1. The recitals set forth above are true and accurate, and by signing this
Agreement, Xx. Xxxxxxxx hereby resigns his employment effective October
29, 2004 (the "Effective Date").
2. This Agreement is not and shall not be construed as an admission by
O'Charley's of any fact or conclusion of law. Without limiting the
general nature of the previous sentence, this Agreement shall not be
construed as an admission that O'Charley's, its subsidiaries, related
entities, or any of its or their officers, directors, managers, agents,
or employees have violated any law or regulation or have violated any
contract, express or implied.
3. Xx. Xxxxxxxx represents and warrants that he has no actual knowledge of
any practice engaged in by O'Charley's, its subsidiaries or related
entities that is or was a violation in any material respect of any
applicable state law or regulations or of any federal law or
regulations including, but not by way of limitation, the Securities Act
of 1933, as amended, and the Securities Exchange Act of 1934, as
amended, and the regulations promulgated thereunder.
4. Xx. Xxxxxxxx represents and warrants that he has not filed any
complaint(s) or charge(s) against O'Charley's with the Equal Employment
Opportunity Commission or the state commission empowered to investigate
claims of employment discrimination, the United States Department of
Labor, the Office of Federal Contract Compliance Programs, or with any
other local, state or federal agency or court, and that if any such
agency or court assumes jurisdiction of any complaint(s) or charge(s)
against O'Charley's on behalf of
Xx. Xxxxxxxx, Xx. Xxxxxxxx will request such agency or court to
withdraw from the matter, and Xx. Xxxxxxxx will refuse any benefits
derived therefrom. This Agreement will not affect Xx. Xxxxxxxx'x right
to hereafter file a charge with or otherwise participate in an
investigation or proceeding conducted by the Equal Employment
Opportunity Commission regarding matters which arose after this date
and which are not the subject of this Agreement.
5. Xx. Xxxxxxxx represents and agrees that Xx. Xxxxxxxx is fully aware of
his rights and is advised to discuss any and all aspects of this
Agreement with his attorney, that Xx. Xxxxxxxx has consulted with his
attorney regarding this Agreement, or has chosen voluntarily not to do
so, that he has carefully read and fully understands all of the
provisions of this Agreement, and that, in consideration of the
provisions hereof, Xx. Xxxxxxxx agrees to enter into this Agreement.
Xx. Xxxxxxxx represents and acknowledges that prior to the execution of
this Agreement, he has been provided a period of twenty-one (21) days
within which to consider the Agreement.
6. Xx. Xxxxxxxx hereby irrevocably and unconditionally releases, acquits
and forever discharges O'Charley's, its subsidiaries, and related
entities, and each of their respective shareholders, successors,
assigns, agents, directors, officers, employees, representatives, and
attorneys, and all persons acting by, through, under or in concert with
any of them (collectively, the "Released Parties"), or any of them,
from any and all charges, complaints, claims, liabilities, obligations,
promises, agreements, controversies, damages, actions, causes of
action, suits, rights, demands, costs, losses, debts and expenses
(including attorney's fees and costs actually incurred), of any nature
whatsoever, known or unknown ("Claims"), which Xx. Xxxxxxxx now has,
owns, holds, or claims to have, own, or hold, or which Xx. Xxxxxxxx at
any time heretofore had, owned, or held, or claimed to have, own, or
hold. Such Claims include those under local, state or federal law,
Executive Order, or at common law including, but not limited to, the
Age Discrimination in Employment Act (ADEA). This provision does not
include the release of future charges before the Equal Employment
Opportunity Commission regarding matters which arose after this date
and which are not the subject of this Agreement. This provision further
does not include the release of Claims with respect to any vested
benefits under a plan governed by the Employee Retirement Income
Security Act ("ERISA") or any Claim related to the rights and benefits
granted by the express terms of this Agreement.
7. O'Charley's hereby irrevocably and unconditionally releases, acquits
and forever discharges Xx. Xxxxxxxx from any and all charges,
complaints, claims, liabilities, obligations, promises, agreements,
controversies, damages, actions, causes of action, suits, rights,
demands, costs, losses, debts and expenses (including attorney's fees
and costs actually incurred), of any nature whatsoever, known or
unknown ("Claims"), which O'Charley's now has, owns, holds, or claims
to have, own, or hold, or which O'Charley's at any time heretofore had,
owned, or held, or claimed to have, own, or hold; provided, the
provisions of this paragraph 7 shall not apply to any Claim (i) arising
out of the commission by Xx. Xxxxxxxx of any act of fraud, embezzlement
or material dishonesty, or
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(ii) any Claim related to any breach of the representations, warranties
or covenants of Xx. Xxxxxxxx provided for by the express terms of the
Agreement.
8. Xx. Xxxxxxxx agrees that, as of the date of the signing of this
Agreement, Xx. Xxxxxxxx will not, without O'Charley's prior written
consent, directly or indirectly, solicit to hire or hire (or cause to
leave the employ of O'Charley's) (i) for a period ending on April 30,
2006, any salaried employee of O'Charley's or its subsidiaries. The
agreements set forth in this paragraph 8, together with those contained
in paragraphs 9 and 10, are sometimes hereinafter collectively referred
to as the "Restrictive Agreements."
9. Xx. Xxxxxxxx also recognizes that, as Chief Financial Officer,
Secretary and Treasurer he has had access to, was provided in detail
with, and used throughout his employment with O'Charley's, certain
confidential and proprietary business information. Such information
includes but is not limited to business strategy, pricing information,
branding strategy, budgets, site location, vendor information, market
analysis and evaluation, and other such proprietary and confidential
business information as defined under Tennessee law as a trade secret
(hereinafter "Confidential and Proprietary Business Information"). Xx.
Xxxxxxxx agrees that, without O'Charley's prior written consent, he
will not divulge, disclose, publish or disseminate in any manner,
directly or indirectly, any such Confidential and Proprietary Business
Information to any other person or entity.
10. Xx. Xxxxxxxx agrees that, as of the date of the signing of this
Agreement and for a period ending on April 30, 2006, Xx. Xxxxxxxx shall
not, directly or indirectly, for himself or through, on behalf of or in
conjunction with any person, persons or entity, own, maintain, operate,
engage in, or have any financial or beneficial interest in (other than
as a holder of not more than one percent of the outstanding stock of
any corporation, which stock is publicly traded), advise, assist or
make loans to, any business that is of a character and concept similar
to the O'Charley's or Ninety-Nine Restaurant & Pub concepts operated by
O'Charley's, including, without limitation, a full service varied menu
casual dining restaurant which serves alcoholic beverages through a
full-service bar, and which business is located within the United
States.
11. Xx. Xxxxxxxx agrees that the Restrictive Agreements are reasonable and
supported by adequate consideration, which but for his agreement
herein, Xx. Xxxxxxxx would not be entitled to receive. Xx. Xxxxxxxx
further agrees that the Restrictive Agreements are necessary for the
protection of O'Charley's, its business and its employees, and properly
balance his personal interest in future employment and the various
interests related to O'Charley's, its business and its employees. Xx.
Xxxxxxxx further agrees that if he breaches any of the Restrictive
Agreements, such breach likely will not have an adequate remedy at law
and that O'Charley's shall be entitled, in addition to all other legal
remedies available to it, to apply to and obtain from a court of
competent jurisdiction an injunction against any violation thereof with
the prevailing party entitled to recover all costs of such action,
including reasonable attorneys' fees. These rights and remedies shall
be cumulative and not alternative.
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12. Xx. Xxxxxxxx agrees to indemnify and hold each and all of the Released
Parties harmless from and against any and all loss, costs, damage, or
expense, including, without limitation, attorneys fees, incurred by the
Released Parties, or any of them, arising out of Xx. Xxxxxxxx'x breach
of the representations, warranties and covenants made by Xx. Xxxxxxxx
in paragraphs 1, 3, 4, 5, 6, 8, 9, 10, 11, 13, 15, 16, 17, and 18 of
this Agreement or the fact that any representation made by him herein
was false when made; provided that Xx. Xxxxxxxx'x maximum liability
under this paragraph shall be the amount of the consideration paid by
O'Charley's to Xx. Xxxxxxxx pursuant to this Agreement.
13. Given the nature of his position with O'Charley's, Xx. Xxxxxxxx likely
has been privy to information and events during his tenure with
O'Charley's that may not be documented. Xx. Xxxxxxxx agrees to provide
such information and assistance as O'Charley's and its legal counsel
shall reasonably request regarding matters related to his
responsibilities while employed by O'Charley's, it being understood
that such assistance shall not unreasonably interfere with Xx.
Xxxxxxxx'x other business responsibilities following the date hereof.
14. O'Charley's will provide to Xx. Xxxxxxxx the following:
(a) Eighteen months of salary continuation, including car and gas
allowance at the existing rate, at the rate of $4,903.08 per
week, to be paid weekly, for the period from the Effective
Date to April 30, 2006, and from which O'Charley's will make
applicable legal withholdings.
(b) If Xx. Xxxxxxxx elects to continue health insurance coverage
pursuant to his "COBRA" right after the Effective Date,
O'Charley's will pay the premiums for such coverage during the
twelve month period following the Effective Date ending
October 31, 2005.
(c) O'Charley's will reimburse Xx. Xxxxxxxx for the fees of legal
counsel engaged by Xx. Xxxxxxxx to review the terms of this
Agreement, not to exceed $3,500.
15. Attached as Schedule A is a listing of all stock options and restricted
stock awards held by Xx. Xxxxxxxx as of the Effective Date which are
exercisable in whole or in part on the Effective Date. Xx. Xxxxxxxx
agrees that Schedule A accurately reflects all equity awards and their
respective terms held by him as of the date hereof and which are
exercisable in whole or in part on the Effective Date. All such awards
were granted pursuant to the terms of the O'Charley's 2000 Stock
Incentive or O'Charley's 1990 Employee Stock Plan. Pursuant to such
plans, upon the Effective Date, each of the stock options and
restricted stock awards would automatically terminate; however,
notwithstanding the provisions of such plans, O'Charley's agrees that
4,444 of the 10,580 shares subject to the Restricted Stock Award dated
February 19, 2003 shall vest as of the Effective Date and O'Charley's
agrees to extend until October 31, 2005 the time within which Xx.
Xxxxxxxx shall have the right to exercise any and all stock options
listed on Schedule A to the extent they are exercisable as of the
Effective Date (it being understood that all or any portion of any
stock options, restricted stock awards or other equity based awards
which
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are not exercisable or vested as of the Effective Date shall terminate
as of such date in accordance with their terms).
16. Xx. Xxxxxxxx represents that he has not heretofore assigned or
transferred, or purported to assign or transfer to any person or
entity, any claim or any portion thereof or interest therein.
17. Xx. Xxxxxxxx represents and acknowledges that in executing this
Agreement he does not rely and has not relied upon any other
representation or statement made by any of the Released Parties or by
any of the Released Parties' agents, representatives or attorneys,
except as set forth herein, with regard to the subject matter, basis or
effect of this Agreement.
18. Xx. Xxxxxxxx agrees to maintain absolute confidentiality and secrecy
concerning the terms of this Agreement, and he will not reveal, or
disseminate by publication in any manner whatsoever, this document or
any matter pertaining to it to any other person, including, but not
limited to, any past or present employees of O'Charley's or any media
representative except as required by legal process. This
confidentiality provision does not apply to communications necessary
between legal and financial planners or tax preparers or spouse so long
as Xx. Xxxxxxxx requires those persons to accept the terms of this
confidentiality agreement before being provided the information
contained herein.
19. This Agreement shall be binding upon O'Charley's, Xx. Xxxxxxxx and upon
Xx. Xxxxxxxx'x heirs, administrators, representatives, executors,
successors, and assigns, and shall inure to the benefit of the Released
Parties and each of them, and to their heirs, administrators,
representatives, executor, successors and assigns.
20. This Agreement shall in all respects be interpreted, enforced and
governed under the laws of the State of Tennessee. If either party
files suit to enforce the terms of this Agreement, the prevailing party
shall be entitled to its reasonable attorneys' fees and costs.
21. Xx. Xxxxxxxx shall have seven (7) days following the execution of this
Agreement during which to revoke the Agreement. This Agreement shall
become effective and irrevocable only after the seven (7) day period
has expired and only absent a timely and effective revocation.
22. Should any provision of this Agreement be declared or be determined by
any court to be illegal or invalid, the validity of the remaining
parts, terms, or provisions shall not be affected thereby and said
illegal or invalid part, term or provision shall be deemed not to be a
part of this Agreement.
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23. This Agreement sets forth the entire agreement between the parties
hereto.
O'CHARLEY'S INC.
By: /s/ Xxxxxxx X. Xxxxx
-----------------------------------
Title: CEO
A. XXXX XXXXXXXX
/s/ A. Xxxx Xxxxxxxx
---------------------------------------
Date: 10/29/04
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Schedule A
LIST OF EQUITY AWARDS
NUMBER OF
SHARES
SHARES EXERCISABLE
GRANT EXERCISE SUBJECT TO ON EFFECTIVE
TYPE OF AWARD DATE PRICE AWARD DATE
-------------------------- ---------- -------- ---------- ------------
Non-Qualified Stock Option 02/18/1998 $12.08 37,500 35,719
Non-Qualified Stock Option 02/17/1999 $15.25 25,000 17,563
Non-Qualified Stock Option 02/15/2000 $11.88 10,000 4,900
Non-Qualified Stock Option 2/19/2003 $21.19 21,160 5,290
Restricted Stock Award 2/19/2003 N/A 10,580 4,444
