EXHIBIT 10.70
SEVERANCE COMPENSATION AGREEMENT dated as of January 22, 2006, between
O'Charley's Inc., a Tennessee corporation (the "Company"), and Xxxx X. Xxxxx
(the "Executive").
The Company's Board of Directors has determined that it is appropriate
to reinforce and encourage the continued attention and dedication of certain
members of the Company's senior management, including the Executive, to their
assigned duties without distraction in potentially disturbing circumstances
arising from the possibility of a change in control of the Company.
This Agreement sets forth the severance compensation which the Company
agrees it will pay to the Executive if the Executive's employment with the
Company terminates under one of the circumstances described herein following a
Change In Control of the Company (as defined herein).
1. TERM. This Agreement shall become effective upon the commencement of
Executive's employment with the Company. This Agreement shall terminate, except
to the extent that any obligation of the Company hereunder remains unpaid as of
such time, upon the earliest of (i) three years from the date hereof if a Change
in Control of the Company has not occurred prior to such date; (ii) the
termination of the Executive's employment with the Company based on death,
Disability (as defined in Section 3(b)), Retirement (as defined in Section 3(c))
or Cause (as defined in Section 3(d)) or by the Executive other than for Good
Reason (as defined in Section 3(e)); and (iii) eighteen months from the date of
a Change in Control of the Company.
2. CHANGE IN CONTROL. No compensation shall be payable under this
Agreement unless and until (a) there shall have been a Change in Control of the
Company while the Executive is still an employee of the Company and (b) the
Executive's employment by the Company thereafter shall have been terminated in
accordance with Section 3. For purposes of this Agreement, a Change in Control
means the happening of any of the following:
(i) any person or entity, including a "group" as defined in
Section 13(d)(3) of the Securities Exchange Act of 1934, other than the
Company, a wholly-owned subsidiary thereof, any employee benefit plan
of the Company or any of its Subsidiaries becomes the beneficial owner
of the Company's securities having 30% or more of the combined voting
power of the then outstanding securities of the Company that may be
cast for the election of directors of the Company (other than as a
result of an issuance of securities initiated by the Company in the
ordinary course of business); or
(ii) as the result of, or in connection with, any cash tender
or exchange offer, merger or other business combination, sale of assets
or contested election, or any combination of the foregoing
transactions, less than a majority of the combined voting power of the
then outstanding securities of the Company or any successor corporation
or entity entitled to vote generally in the election of the directors
of the Company or such other corporation or entity after such
transaction are held in the aggregate by the holders of the Company's
securities entitled to vote generally in the election of directors of
the Company immediately prior to such transaction; or
(iii) during any period of two consecutive years, individuals
who at the beginning of any such period constitute the Board cease for
any reason to constitute at least a majority thereof, unless the
election, or the nomination for election by the Company's shareholders,
of each director of the Company first elected during such period was
approved by a vote of at least two-thirds of the directors of the
Company then still in office who were directors of the Company at the
beginning of any such period.
3. TERMINATION FOLLOWING CHANGE IN CONTROL. (a) If a Change in Control
of the Company shall have occurred while the Executive is still an employee of
the Company, the Executive shall be entitled to the compensation provided in
Section 4 upon the subsequent termination of the Executive's employment with the
Company by the Executive or by the Company within eighteen months of the Change
in Control of the Company unless such termination is as a result of (i) the
Executive's death; (ii) the Executive's Disability (as defined in Section (3)(b)
below); (iii) the Executive's Retirement (as defined in Section 3(c) below);
(iv) the Executive's termination by the Company for Cause (as defined in Section
3(d) below); or (v) the Executive's decision to terminate employment other than
for Good Reason (as defined in Section 3(e) below).
(b) DISABILITY. If, as a result of the Executive's incapacity
due to physical or mental illness, the Executive shall have been absent from his
duties with the Company on a full-time basis for six months and within 30 days
after written notice of termination is thereafter given by the Company the
Executive shall not have returned to the full-time performance of the
Executive's duties, the Company may terminate this Agreement for "Disability."
(c) RETIREMENT. The term "Retirement" as used in this
Agreement shall mean termination by the Company or the Executive of the
Executive's employment based on the Executive's having reached age 65 or such
other age as shall have been fixed in any arrangement established with the
Executive's consent with respect to the Executive.
(d) CAUSE. The Company may terminate the Executive's
employment for Cause. For purposes of this Agreement only, the Company shall
have "Cause" to terminate the Executive's employment hereunder only on the basis
of fraud, misappropriation or embezzlement on the part of the Executive.
Notwithstanding the foregoing, the Executive shall not be deemed to have been
terminated for Cause unless and until there shall have been delivered to the
Executive a copy of a resolution duly adopted by the affirmative vote of not
less than three-quarters of the membership of the Company's Board of Directors
(excluding the Executive if the Executive is then a member of the Board of
Directors) at a meeting of the Board called and held for the purpose (after
reasonable notice to the Executive and an opportunity for the Executive,
together with the Executive's counsel, to be heard before the Board), finding
that in the good faith opinion of the Board the Executive was guilty of conduct
set forth in the second sentence of this Section 3(d) and specifying the
particulars thereof in detail.
(e) GOOD REASON. The Executive may terminate the Executive's
employment for Good Reason at any time during the term of this Agreement. For
purposes of this Agreement
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"Good Reason" shall mean any of the following (without the Executive's express
written consent):
(i) the assignment to the Executive by the Company of duties
inconsistent with the Executive's position, duties, responsibilities
and status with the Company immediately prior to a Change in Control of
the Company, or a change in the Executive's titles or offices as in
effect immediately prior to a Change in Control of the Company, or any
removal of the Executive from or any failure to reelect the Executive
to any of such positions, except in connection with the termination of
his employment for Disability, Retirement or Cause or as a result of
the Executive's death or by the Executive other than for Good Reason;
(ii) a reduction by the Company in the Executive's base salary
as in effect on the date hereof or as the same may be increased from
time to time during the term of this Agreement;
(iii) a relocation of the Company's principal executive
offices to a location outside of Nashville, Tennessee, or the
Executive's relocation to any place other than the location at which
the Executive performed the Executive's duties prior to a Change in
Control of the Company, except for required travel by the Executive on
the Company's business to an extent substantially consistent with the
Executive's business travel obligations at the time of a Change in
Control of the Company;
(iv) any material breach by the Company of any provision of
this Agreement;
(v) any failure by the Company to obtain the assumption of
this Agreement by any successor or assign of the Company; or
(vi) any purported termination of the Executive's employment
by the Company which is not effected pursuant to a Notice of
Termination satisfying the requirements of Section 3(f), and for
purposes of this Agreement, no such purported termination shall be
effective.
(f) NOTICE OF TERMINATION. Any termination by the Company
pursuant to Section 3(b), 3(c) or 3(d) or by the Executive pursuant to Section
3(e) shall be communicated by a Notice of Termination. For purposes of this
Agreement, a "Notice of Termination" shall mean a written notice which indicates
those specific termination provisions in this Agreement relied upon and which
sets forth in reasonable detail the facts and circumstances claimed to provide a
basis for termination of the Executive's employment under the provisions so
indicated. For purposes of this Agreement, no such purported termination by the
Company or by the Executive shall be effective without such Notice of
Termination.
(g) DATE OF TERMINATION. "Date of Termination" shall mean (a)
if this Agreement is terminated by the Company for Disability, 30 days after
Notice of Termination is given to the Executive (provided that the Executive
shall not have returned to the performance of the Executive's duties on a
full-time basis during such 30-day period), (b) if the Executive's employment is
terminated by the Company for any other reason, the date on which a Notice of
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Termination is given, or (c) if the Executive terminates his employment pursuant
to Section 3(e), the date on which a Notice of Termination is given.
4. SEVERANCE COMPENSATION UPON TERMINATION OF EMPLOYMENT. (a) If the
Company shall terminate the Executive's employment within eighteen months
following a Change in Control other than pursuant to Section 3(b), 3(c) or 3(d)
or if the Executive shall terminate his employment within eighteen months
following a Change in Control for Good Reason, then the Company shall pay to the
Executive as severance pay in a lump sum, in cash, on the fifth day following
the Date of Termination, an amount equal to the sum of (i) 150% of the average
of the aggregate annual base salary paid to the Executive by the Company during
the three calendar years preceding the Change in Control of the Company and (ii)
150% of the highest bonus compensation paid to the Executive for any of the
three calendar years preceding the Change in Control of the Company; provided,
however, that if the lump sum severance payment under this Section 4, either
alone or together with other payments which the Executive has the right to
receive from the Company, would constitute a "parachute payment" (as defined in
Section 280G of the Internal Revenue Code of 1986, as amended (the "Code")),
such lump sum severance payment shall be reduced to the largest amount as will
result in no portion of the lump sum severance payment under this Section 4
being subject to the excise tax imposed by Section 4999 of the Code.
(b) In addition to the lump sum payment provided in Section
4(a), if the Company shall terminate the Executive's employment within eighteen
months following a Change in Control other than pursuant to Section 3(b), 3(c)
or 3(d) or if the Executive shall terminate his employment within eighteen
months following a Change in Control for Good Reason, then the Company shall
provide to the Executive health insurance equivalent to that provided to the
Executive immediately prior to termination until the earlier of: (i) eighteen
months following the Date of Termination or (ii) such time as Executive is
employed by another employer and is covered or permitted to be covered by
benefit plans of another employer providing substantially similar coverage.
5. NO OBLIGATION TO MITIGATE DAMAGES; NO EFFECT ON OTHER CONTRACTUAL
RIGHTS. (a) The Executive shall not be required to mitigate damages or the
amount of any payment provided for under this Agreement by seeking other
employment or otherwise, nor shall the amount of any payment provided for under
this Agreement be reduced by any compensation earned by the Executive as the
result of employment by another employer after the Date of Termination, or
otherwise.
(b) The provisions of this Agreement, and any payment provided
for hereunder, shall not reduce any amounts otherwise payable, or in any way
diminish the Executive's existing rights, or rights which would accrue solely as
a result of the passage of time, under any benefit plan, incentive plan or stock
option plan, employment agreement or other contract, plan or arrangement.
6. SUCCESSOR TO THE COMPANY. (a) The Company will require any successor
or assign (whether direct or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all of the business and/or assets of the
Company, by agreement in form and
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substance satisfactory to the Executive, expressly, absolutely and
unconditionally to assume and agree to perform this Agreement in the same manner
and to the same extent that the Company would be required to perform it if no
such succession or assignment had taken place. Any failure of the Company to
obtain such agreement prior to the effectiveness of any such succession or
assignment shall be a material breach of this Agreement and shall entitle the
Executive to terminate the Executive's employment for Good Reason. As used in
this Agreement, "Company" shall mean the Company as hereinbefore defined and any
successor or assign to its business and/or assets as aforesaid which executes
and delivers the agreement provided for in this Section 6 or which otherwise
becomes bound by all the terms and provisions of this Agreement by operation of
law. If at any time during the term of this Agreement the Executive is employed
by any corporation, a majority of the voting securities of which is then owned
by the Company, "Company" as used in Sections 3, 4, 11 and 12 hereof shall in
addition include such employer. In such event, the Company agrees that it shall
pay or shall cause such employer to pay any amounts owed to the Executive
pursuant to Section 4 hereof.
(b) This Agreement shall inure to the benefit of and be
enforceable by the Executive's personal and legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees. If the
Executive should die while any amounts are still payable to him hereunder, all
such amounts, unless otherwise provided herein, shall be paid in accordance with
the terms of this Agreement to the Executive's devisee, legatee, or other
designee or, if there be no such designee, to the Executive's estate.
7. NOTICE. For purposes of this Agreement, notices and all other
communications provided for in the Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by United States
registered mail, return receipt requested, postage prepaid, as follows:
If to the Company:
O'Charley's Inc.
0000 Xxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
Attention: President
If to the Executive:
0000 Xxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
or such other address as either party may have furnished to the other in writing
in accordance herewith, except that notices of change of address shall be
effective only upon receipt.
8. MISCELLANEOUS. No provisions of this Agreement may be modified,
waived or discharged unless such waiver, modification or discharge is agreed to
in a writing signed by the Executive and the Company. No waiver by either party
hereto at any time of any breach by the
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other party hereto of, or compliance with, any condition or provision of this
Agreement to be performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or at any prior or
subsequent time. No agreements or representations, oral or otherwise, express or
implied, with respect to the subject matter hereof have been made by either
party which are not set forth expressly in this Agreement. This Agreement shall
be governed by and construed in accordance with the laws of the State of
Tennessee.
9. VALIDITY. The invalidity or unenforceability of any provisions of
this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, which shall remain in full force and effect.
10. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
11. LEGAL FEES AND EXPENSES. In the event either party hereto shall
institute litigation against the other party hereto relating to the
interpretation or enforcement of this Agreement, the prevailing party in such
litigation shall be entitled to recover from the other party any and all
attorneys' and related fees and expenses incurred by the prevailing party in
such litigation.
12. CONFIDENTIALITY. The Executive shall retain in confidence any and
all confidential information known to the Executive concerning the Company and
its business so long as such information is not otherwise publicly disclosed.
The provisions of this Section 12 are not intended to restrict the ability of
the Executive following termination of employment for any reason to engage in
any business which is, directly or indirectly, competitive with the business
conducted by the Company.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
O'CHARLEY'S INC.
By: /s/
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Name:
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Title:
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/s/
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XXXX X. XXXXX
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