Exhibit 10.04 (b) +
AMENDED AND RESTATED
CHANGE OF CONTROL AGREEMENT
Reference is made to that certain Change of Control Agreement (the
"Original Agreement"), dated December 15, 1994, by and between XXXXXX'X
RESTAURANT GROUP, INC., a Delaware corporation (the "Company"), and Xxxxxx X.
Xxxxxxx (the "Executive"). The Company and the Executive, being all parties to
the Original Agreement, hereby amend and restate the Original Agreement as
follows. THIS AMENDED AND RESTATED CHANGE OF CONTROL AGREEMENT (this
"Agreement") shall be dated as of the 1st day of March, 2001.
The Board of Directors of the Company (the "Board") has determined
that it is in the best interests of the Company and its shareholders to assure
that the Company and its subsidiaries will have the continued dedication of the
Executive, notwithstanding the possibility, threat, or occurrence of a Change of
Control (as defined below) of the Company. The Board believes it is imperative
to diminish the inevitable distraction of the Executive by virtue of the
personal uncertainties and risks created by a pending or threatened Change of
Control, to encourage the Executive's full attention and dedication to the
Company, and to provide the Executive with compensation and benefits
arrangements upon a Change of Control. Therefore, in order to accomplish these
objectives, the Board has caused the Company to enter into this Agreement.
1. Certain Definitions.
(a) The "Effective Date" shall be the first date on which a
Change of Control occurs during the "Change of Control Period" (as defined in
Section 1(b)). Anything in this Agreement to the contrary notwithstanding, if
the Executive's employment with the Company is terminated prior to the date on
which a Change of Control occurs, and it is reasonably demonstrated that such
termination of employment (i) was at the request of a third party who has taken
steps reasonably calculated to effect the Change of Control, or (ii) otherwise
arose in connection with or in anticipation of the Change of Control, then for
all purposes of this Agreement, the "Effective Date" shall mean the date
immediately prior to the date of such termination of employment.
(b) The "Change of Control Period" is the period commencing on
the date hereof and ending on the third anniversary of such date; provided,
however, that commencing on the date one year after the date hereof, and on each
annual anniversary of such date (the "Renewal Date"), the Change of Control
Period shall be automatically extended so as to terminate on the third
anniversary of such Renewal Date, unless at least 60 days prior to the Renewal
Date the Company shall give notice to the Executive that the Change of Control
Period shall not be so extended.
(c) "Affiliate" means, with respect to any Person, any other
Person directly or indirectly controlling (including but not limited to all
directors and officers of such Person), controlled by, or under direct or
indirect common control with, such Person. A Person shall be deemed to control a
corporation if such person possesses, directly or indirectly, the
power to (i) vote 15% or more of the securities having ordinary voting power for
the election of directors of such corporation, or (ii) direct or cause the
direction of the management and policies of such corporation, whether through
the ownership of voting securities, by contract or otherwise.
(d) "Person" means any individual, partnership, firm, trust,
corporation or similar entity. When two or more Persons act as a partnership,
limited partnership, syndicate or other group for the purpose of acquiring,
holding or disposing of securities of the Company, such partnership, limited
partnership, syndicate or group shall be deemed a "Person."
(e) "Termination Date" means the date of receipt of written
notice of termination or any later date specified in such written notice, as the
case may be.
2. Change of Control. For the purpose of this Agreement, a "Change
of Control" shall mean any of the following events:
(a) the acquisition by any Person who is not an Affiliate of
the Company as of the date hereof of beneficial ownership, directly or
indirectly, of 50% or more of the combined voting power of the then outstanding
voting securities of the Company, except pursuant to a public offering of
securities of the Company;
(b) the sale or other transfer of all or substantially all of
the assets of the Company to a Person who is not an Affiliate of the Company as
of the date hereof;
(c) a merger, consolidation or other reorganization of the
Company with a Person who is not an Affiliate of the Company as of the date
hereof, and in which the Company is not the surviving entity; or
(d) individuals who, as of the date hereof, constitute the
Board (the "Incumbent Directors") cease for any reason to constitute at least a
majority of the Board; provided, that any individual who becomes a director
after the date hereof whose election, or nomination for election by the
Company's stockholders, was approved by a vote or written consent of at least
two-thirds of the directors then comprising the Incumbent Directors shall be
considered as though such individual were an Incumbent Director, but excluding,
for this purpose, any such individual whose initial assumption of office is in
connection with an actual or threatened election contest relating to the
election of the directors of the Company.
3. Continuation Period; Terms of Employment. The Company hereby
agrees to continue the Executive in its employ, and the Executive hereby
agrees to remain in the employ of the Company, for the period commencing on
the Effective Date and ending on the third anniversary of such date (the
"Continuation Period"). During the Continuation Period, except as otherwise
provided herein, the terms of the Executive's employment by the Company shall
be as set forth in the Employment Agreement dated as of March 1st, 2001,
between the Company and the Executive, as such agreement may be amended or
restated from time to time (the "Employment Agreement"). In the event that
the Employment Agreement shall be terminated prior to the end of the
Continuation Period and no other employment agreement between the Executive
and the Company shall then exist, the Executive's position, salary, bonus,
fringe benefits and vacation privileges, and entitlement to participate in
incentive, retirement, savings
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and welfare benefit plans, for the balance of the Continuation Period shall be
at least commensurate in all material respects with the most favorable of those
held or enjoyed at any time during the one-year period immediately preceding the
Effective Date.
4. Termination of Employment.
(a) Cause. The Executive's employment may be terminated during
the Continuation Period by the Company for Cause. "Cause" shall have the meaning
given such term in the Employment Agreement; provided, that, in the event that
the Employment Agreement shall be terminated prior to the end of the
Continuation Period and no other employment agreement between the Executive and
the Company shall then exist, "Cause" shall mean: (i) conviction of the
Executive in a court of law of theft, embezzlement, fraud or any other felony
which involves dishonesty or moral turpitude; or (ii) the Executive's habitual
neglect of the Executive's duties (other than on account of the Executive's
disability).
(b) Good Reason. The Executive's employment may be terminated
during the Continuation Period by the Executive for Good Reason. For purposes of
this Agreement, "Good Reason" shall have the meaning given such term in the
Employment Agreement; provided, that, in the event that the Employment Agreement
shall be terminated prior to the end of the Continuation Period and no other
employment agreement between the Executive and the Company shall then exist,
"Good Reason" shall mean any one of the following events:
(i) the assignment to the Executive of any duties
inconsistent in any respect with the Executive's position (including status,
offices, titles, reporting requirements or responsibilities), authority or
duties, or any other action by the Company which results in a diminution or
other material adverse change in such position, authority or duties, excluding
for this purpose an isolated, insubstantial and inadvertent action not taken in
bad faith and which is remedied by the Company promptly after receipt of notice
thereof given by the Executive; or
(ii) the Company's requiring the Executive to be based
at any office or location other than the office and location at which the
Executive is currently based; or
(iii) any failure by the Company to comply with and
satisfy Section 8(c) of this Agreement.
For purposes of this Section 4(b), any good faith determination of
"Good Reason" made by the Executive shall be conclusive.
(c) Notice of Termination. Any termination of the Executive's
employment by the Company for Cause or by the Executive for Good Reason pursuant
to this Agreement shall be communicated by written notice to the other party
hereto given in accordance with Section 9(f) of this Agreement at least 10 days
prior to such termination of employment.
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5. Obligations of the Company upon Termination.
(a) Termination of Employment for Good Reason or Other Than
for Cause. If, during the Continuation Period, the Executive's employment with
the Company is terminated other than for Cause, or the Executive shall terminate
employment under this Agreement for Good Reason, the Company shall pay to the
Executive in a lump sum in cash within 10 days after the Termination Date an
amount equal to the product of (i) 2.99, multiplied by (ii) the "Base Amount,"
as defined in Section 280G(b)(3) of the Internal Revenue Code of 1986, as
amended (the "Code"); provided, however, that to the extent any amounts payable
to the Executive in connection with a Change of Control (whether pursuant to
this Agreement or under any other employment agreement, employment arrangement
or similar plan, contract or program of severance, collectively, the "Total
Severance Benefits") would constitute "Parachute Payments," as defined in
Section 280G(b)(2) of the Code, the Total Severance Benefits payable to the
Executive shall be reduced to the extent necessary such that the Total Severance
Benefits no longer constitute Parachute Payments. The Executive may elect, in
his sole discretion, which of the Total Severance Benefits shall be eliminated
or reduced (as long as after such election the Total Severance Benefits no
longer constitute Parachute Payments). Except to the extent provided above,
nothing in this Agreement shall require any reduction in amounts due to the
Executive under his Employment Agreement. Any amounts payable under this Section
5(a) shall be reduced by any amounts paid or payable to the Executive pursuant
to any provision of the Employment Agreement providing for payment to the
Executive in connection with the Executive terminating his employment for Good
Reason or the Company terminating his employment without Cause (discounting
amounts payable over time under the Employment Agreement to their present
value); provided, however, that in the event that (i) the amounts paid or
payable under such provision of the Employment Agreement are reduced by reason
of the Executive acquiring alternative employment, and (ii) after taking such
reduced amounts into account (discounting the reduced amounts payable over time
under the Employment Agreement to their present value) the amounts paid or
payable under such provision of the Employment Agreement are less than the
amounts payable under the first sentence of this Section 5(a), the Company shall
be obligated to pay to the Executive an amount which results in aggregate
payments to the Executive (discounting amounts payable over time under the
Employment Agreement to their present value) which are equal to the amount
payable under the first sentence of this Section 5(a). For purposes of this
Section 5(a), the determination of whether payments to the Executive would
constitute Parachute Payments shall be made by the Executive, in good faith.
(b) Termination of Employment for Cause or Other Than for Good
Reason. If, during the Continuation Period, the Executive's employment is
terminated by the Company for Cause, or is terminated by the Executive for other
than Good Reason, this Agreement shall terminate without further obligation to
the Executive, other than the obligation to pay to the Executive in a lump sum
in cash within 30 days of the Termination Date, the Executive's salary through
the Termination Date, plus the amount of all previously earned and accrued
entitlements and benefits from the Company, including any such entitlements and
benefits under the Company's pension, disability and life insurance plans,
policies and programs.
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6. Certain Additional Payments by the Company.
(a) If applicable, in the case of compensation previously
deferred by the Executive under any plan or program of deferred compensation
maintained by the Company, the Company shall pay to the Executive all amounts
previously deferred (together with any accrued earnings thereon) and not yet
paid by the Company, and any accrued vacation pay not yet paid by the Company in
a lump sum in cash within 10 days after the Termination Date.
(b) If, during the Continuation Period, the Executive is
terminated by the Company without Cause, or the Executive terminates employment
with the Company for Good Reason, for a period of three years after the
Termination Date, or such longer period as any plan, program, practice or policy
may provide, the Company shall continue to provide at no cost to the Executive,
except a cost equal to the lesser of (i) the cost to the Executive immediately
prior to the Termination Date, or (ii) the cost to the Executive immediately
prior to the Effective Date, all welfare benefits (including, but without
limitation, medical, prescription, dental, disability, salary continuance,
employee life, group life, accidental death and travel accident insurance plans
and programs) to the Executive and/or the Executive's family which are at least
as favorable as the most favorable plans, practices, programs or policies of the
Company applicable to other peer Executives, but which are in no event less
favorable than the most favorable plans, practices, programs or policies of the
Company applicable to other peer Executives and their families during the 90-day
period immediately preceding the Effective Date.
7. Full Settlement. The Company's obligation to make the payments
provided for in this Agreement and otherwise to perform its obligations
hereunder shall not be affected by any circumstances, including, without
limitation, set-off, counterclaim, recoupment, defense or other claim, right or
action which the Company may have against the Executive or others. In no event
shall the Executive be obligated to seek other employment or take any other
action by way of mitigation of the amounts payable to the Executive under any of
the provisions of this Agreement, nor shall the amount of any payment hereunder
be reduced by any compensation earned by the Executive as result of employment
by another employer. In the event any amount due to the Executive under this
Agreement is not paid within 10 days of request therefore, the Executive shall
be entitled to receive interest at the highest interest rate applicable to the
Company in its borrowing of funds from any third party during the period of
nonpayment and if such rate is not determinable, or if higher, then at a rate
two percent above the prime commercial lending rate announced by Citibank, N.A.
in effect from time to time during the period of such nonpayment.
8. Successors.
(a) This Agreement is personal to the Executive and without
the prior written consent of the Company shall not be assignable by the
Executive otherwise than by will or the laws of descent and distribution. This
Agreement shall inure to the benefit of and be enforceable by the Executive's
legal representatives.
(b) This Agreement shall inure to the benefit of and be
binding upon the Company and its successors and assigns.
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(c) The Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company to assume
expressly 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
had taken place. As used in this Agreement, "Company" shall mean the Company as
hereinbefore defined and any successor to its business and/or assets as
aforesaid which assumes and agrees to perform this Agreement by operation of law
or otherwise, and the Company and such successor shall be jointly and severally
liable hereunder.
9. Miscellaneous.
(a) If the Executive dies prior to receiving amounts to which
the Executive is entitled hereunder, such amounts shall be paid in a lump sum
payment to the beneficiary designated in writing by the Executive and if no such
beneficiary is designated, to the Executive's estate.
(b) Benefits payable under this Agreement shall not be subject
in any manner to anticipation, alienation, sale, transfer, assignment, pledge,
encumbrance, charge, garnishment, execution or levy of any kind, either
voluntary or involuntary, prior to actually being received by the Executive, and
any such attempt to dispose of any right to benefits payable hereunder shall be
void.
(c) The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement.
(d) This Agreement shall not be altered, amended or modified
except by written instrument executed by the Company and Executive. A waiver of
any term, covenant, agreement or condition contained in this Agreement shall not
be deemed a waiver of any other term, covenant, agreement or condition, and any
waiver of any default in any such term, covenant, agreement or condition shall
not be deemed a waiver of any later default thereof or of any other term,
covenant, agreement or condition.
(e) The Executive and the Company acknowledge that prior to
the Effective Date the employment of the Executive may be terminated pursuant to
the provisions of the Employment Agreement, or if the Employment Agreement shall
be terminated and no other employment agreement between the Executive and the
Company shall then exist, by either party at will. Subject to Section 1(a) of
this Agreement, upon a termination of the Executive's employment or upon the
Executive's ceasing to be an officer of the Company, in each case, prior to the
Effective Date, there shall be no further rights under this Agreement.
(f) All notices and other communications hereunder shall be in
writing and delivered by hand or by first class registered or certified mail,
return receipt requested, postage prepaid, addressed as follows:
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If to the Executive:
Xxxxxx X. Xxxxxxx
Xxxxxx'x Restaurant Group, Inc.
0000 Xxx Xxxx Xxxx Xxxx
Xxx Xxxx Xxxx, Xxx Xxxx 00000
with a copy to:
Salamon, Gruber, Xxxxxx & Blaymore, P.C.
00 Xxxxxxxxxx Xxxx
Xxxxxx Xxxxxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxx, P.C.
If to the Company:
Xxxxxx'x Restaurant Group, Inc.
0000 Xxx Xxxx Xxxx Xxxx
Xxx Xxxx Xxxx, Xxx Xxxx 00000
Attn: Chief Executive Officer
or to such other address as either party shall have furnished to the other in
writing in accordance herewith, and in each case with a copy to Xxxxxxx Xxxx &
Xxxxx LLP, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxx
Xxxxxxxxxx, Esq. Notice and communications shall be effective when actually
received by the addressee.
(g) This Agreement may be executed in multiple counterparts,
each of which shall be deemed to be an original but all of which together will
constitute one and the same instrument originals.
(h) This Agreement shall be interpreted and construed in
accordance with the laws of the State of New York, without regard to its choice
of law principles. The captions of this Agreement are not part of the provisions
hereof and shall have no force or effect.
(i) The Company may withhold from any amounts payable under
this Agreement such federal, state or local taxes as shall be required to be
withheld pursuant to any applicable law or regulation.
(j) The Executive's failure to insist upon strict compliance
with any provision hereof shall not be deemed to be a waiver of such provision
or any other provision thereof.
(k) This Agreement contains the entire understanding of the
Company and the Executive with respect to the subject matter hereof.
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IN WITNESS WHEREOF, the Executive has hereunto set his hand
and, pursuant to the authorization from its Board, the Company has caused these
presents to be executed in its name on its behalf, all as of the day and year
first above written.
/s/ Xxxxxx X. Xxxxxxx
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XXXXXX X. XXXXXXX
Executive Vice President
and Chief Financial Officer
XXXXXX'X RESTAURANT GROUP, INC.
By: /s/ Xxxxx X. Xxxxxxxxx
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Name: Xxxxx X. Xxxxxxxxx
Title: Chairman of the Board
President
Chief Executive Officer
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