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EXHIBIT 10(p)
EMPLOYMENT AGREEMENT
THIS AGREEMENT, made and entered into as of the 23rd day of March,
1998, by and between RARE HOSPITALITY INTERNATIONAL, INC., a Georgia
corporation (hereinafter referred to as the "Company"), and W. XXXXXXX XXXX, a
resident of the State of Georgia (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 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.
In the course of Executive's employment, Executive will gain knowledge
of the business, affairs, customers, franchisees, plans and methods of the
Company, 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,
will have access to information relating to the Company's customers and their
preferences and dining habits 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 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.
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."
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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 and Chief Financial Officer of the Company.
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. Unless Executive
agrees otherwise, Executive shall perform his duties under this Agreement in the
Atlanta, Georgia metropolitan area. Executive acknowledges that the discharge of
his duties for the Company will involve reasonable travel from the Company's
offices in Atlanta, Georgia.
2. Compensation and Benefits.
2.1 Base Compensation. For all the services rendered by
Executive hereunder, the Company shall pay Executive a salary at the rate of
$131,250 per year from the Commencement Date through April 12, 1998 and $175,000
for each full year of the Employment Term thereafter, 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. During the term
of this Agreement, Executive's maximum bonus potential under such bonus program
shall not be less than fifty percent (50%) of Executive's base compensation for
the fiscal year as described in Section 2.1. Notwithstanding the foregoing,
Executive's bonus for the 1998 fiscal year shall be not less than $25,000.
Executive must be employed by the Company on the last day of a fiscal 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) 54,959 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
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(ii) 16,667 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) 17,858 shares with an exercise price of $14.00
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 1997 Long-Term 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) 8,791 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) 7,142 shares with an exercise price of $14.00
per share, which option shall become exercisable with respect to all of
such shares on the third anniversary of the date of this Agreement;
Those options granted to Executive in this Section 2.3(b) shall be granted to
Executive pursuant to the Company's 1997 Long-Term Incentive Plan and 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
ExhibitB 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 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.
2.5 Expenses. 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.
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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 (iii) by the Company 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 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 plus, to
the extent reasonably calculable under any bonus program then applicable to
Executive, a prorata portion (calculated as of the date of Executive's death) of
the bonus that Executive would have earned if Executive had remained employed by
the Company at the end of the fiscal year in which his death occurred.
(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 plus, to the extent reasonably calculable
under any bonus program then applicable to Executive, a prorata portion
(calculated as of the date of Executive's Disability) of the bonus that
Executive would have earned if Executive had remained employed by the Company at
the end of the fiscal year in which his Disability occurred. 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(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)
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months. Such payment shall be made as and when otherwise due under this
Agreement. In addition, to the extent reasonably calculable under any bonus
program then applicable to Executive, the Company shall pay Executive a prorata
portion (calculated as of the date of such termination of Executive's
employment) of the bonus that Executive would have earned if Executive had
remained employed by the Company at the end of the fiscal year in which his
employment terminated.
(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(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. In addition, to the extent reasonably calculable under any bonus
program then applicable to Executive, the Company shall pay Executive a prorata
portion (calculated as of the date of such termination of Executive's
employment) of the bonus that Executive would have earned if Executive had
remained employed by the Company at the end of the fiscal year in which his
employment terminated.
(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(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.
(g) Payments made pursuant to this Section 3 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 D
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.
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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"). 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 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) disclosure of Confidential Information
pursuant
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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.
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.
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
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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 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
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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 and Chief Financial Officer of the Company 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:
If to the Company, to: RARE Hospitality International, Inc.
0000 Xxxxxxx Xxxx
Xxxxxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attention: Chairman
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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: W. Xxxxxxx Xxxx
0000 Xxxxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxx 00000
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 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.
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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. Xxxxxx, Xx.
---------------------------------
Title: President
EXECUTIVE
/s/ W. Xxxxxxx Xxxx
------------------------------------
W. XXXXXXX XXXX
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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 DEFINITIONS
D RESTRICTED AREA
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EXHIBIT A
NON-QUALIFIED STOCK OPTION AGREEMENT
under the
RARE HOSPITALITY INTERNATIONAL, INC.
1997 LONG-TERM INCENTIVE PLAN
This Stock Option Agreement is made as of the ___ day of ______ 199_ by
and between RARE HOSPITALITY INTERNATIONAL, INC., a Georgia corporation
(hereinafter referred to as the "Corporation"), and W. XXXXXXX XXXX, a resident
of the State of Georgia (hereinafter referred to as the "Optionee").
Simultaneously with the execution and delivery of this Option
Agreement, the Corporation and the Optionee have entered into an agreement
pursuant to which the Optionee will become an employee of the Corporation as of
March 23, 1998 (the "Employment Agreement").
In order to induce the Optionee to enter into the Employment Agreement
and to become an employee of the Corporation and in consideration of the
Optionee's entering into the Employment Agreement, accepting employment with the
Corporation and performing services on behalf of the Corporation, the
Corporation desires to grant to Optionee options to purchase shares of the
Corporation's common stock on the terms, and subject to the conditions contained
in this Agreement.
In consideration of Optionee's entering into the Employment Agreement
and the services of the Optionee for the Corporation, the receipt and
sufficiency of which are hereby acknowledged, the Corporation and the Optionee
hereby agree as follows:
1. Grant of Option. The Corporation hereby grants to the Optionee,
under the RARE Hospitality International, Inc. 1997 Long-Term Incentive Plan
(the "Plan"), a Non-Qualified Stock Option to purchase, on the terms and
conditions set forth in this agreement (this "Option Agreement"), 54,959 shares
of the Company's no par value common stock (the "Stock"), at the exercise prices
per share set forth below (the "Option"):
(a) 54,959 shares at $11.38 per share;
(b) 16,667 shares at $12.00 per share; and
(c) 17,658 shares at $14.00 per share.
Capitalized terms used herein and not otherwise defined shall have the meanings
assigned such terms in the Plan.
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2. Vesting of Option. Unless the exercisability of the Option is
accelerated in accordance with Article 13 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
(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 Corporation for cause or by the Optionee without
reason and 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.
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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 Article 13 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 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 shall occur within three (3) 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 Corporation'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
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.
-3-
16
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 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 or pursuant
to a domestic relations order that would satisfy Section 414(p)(1)(A) of the
Code if such Section applied to the Option; 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. The
Company shall be responsible for (i) reasonably and promptly pursuing,
prosecuting and obtaining any listing, registration, qualification, consent or
approval required hereunder on a timely basis in accordance with all applicable
laws and (ii) all costs or expenses incurred in connection therewith.
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.
-4-
17
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.
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:
------------------------------------
W. Xxxxxxx Xxxx
-5-
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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. 1997 Long-Term 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.
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:
----------------------------------
-2-
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EXHIBIT B
INCENTIVE STOCK OPTION AGREEMENT
under the
RARE HOSPITALITY INTERNATIONAL, INC.
1997 LONG-TERM INCENTIVE PLAN
This Stock Option Agreement is made as of the ___ day of ______ 199_ by
and between RARE HOSPITALITY INTERNATIONAL, INC., a Georgia corporation
(hereinafter referred to as the "Corporation"), and W. XXXXXXX XXXX, a resident
of the State of Georgia (hereinafter referred to as the "Optionee").
Simultaneously with the execution and delivery of this Option
Agreement, the Corporation and the Optionee have entered into an agreement
pursuant to which the Optionee will become an employee of the Corporation as of
March 23, 1998 (the "Employment Agreement").
In order to induce the Optionee to enter into the Employment Agreement
and to become an employee of the Corporation and in consideration of the
Optionee's entering into the Employment Agreement, accepting employment with the
Corporation and performing services on behalf of the Corporation, the
Corporation desires to grant to Optionee options to purchase shares of the
Corporation's common stock on the terms, and subject to the conditions contained
in this Agreement.
In consideration of Optionee's entering into the Employment Agreement
and the services of the Optionee for the Corporation, the receipt and
sufficiency of which are hereby acknowledged, the Corporation and the Optionee
hereby agree as follows:
1. Grant of Option. The Corporation hereby grants to the Optionee,
under the RARE Hospitality International, Inc. 1997 Long-Term Incentive Plan
(the "Plan"), Incentive Stock Option to purchase, on the terms and conditions
set forth in this agreement (this "Option Agreement"), 8,791 shares of the
Company's no par value common stock (the "Stock"), at the exercise prices per
share set forth below (the "Option"):
(a) 8,791 shares at $11.38 per share;
(b) 8,333 shares at $12.00 per share; and
(c) 7,142 shares at $14.00 per share.
Capitalized terms used herein and not otherwise defined shall have the meanings
assigned such terms in the Plan.
21
2. Vesting of Option. Unless the exercisability of the Option is
accelerated in accordance with Article 13 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
(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 the Option is exercised after the date 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
reason and 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
-2-
22
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 Article 13 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 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 shall occur within three (3) 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 Corporation'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 7.2(d) 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
-3-
23
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 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; 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, (ii) does not cause any Option intended to be an incentive stock
option to fail to be described in Code Section 422(b), and (iii) is otherwise
appropriate and desirable, taking into account any state or federal tax or
securities laws applicable to transferable Awards. 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. The
Company shall be responsible for (i) reasonably and promptly pursuing,
prosecuting and obtaining any listing, registration, qualification, consent or
approval required hereunder on a timely basis in accordance with all applicable
laws and (ii) all costs or expenses incurred in connection therewith.
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.
-4-
24
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 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:
------------------------------------
W. Xxxxxxx Xxxx
-5-
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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. Incentive Stock Option Agreement dated ______________ and
the RARE Hospitality International, Inc. 1997 Long-Term 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.
26
[ ] 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-
27
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 notice to the
Executive of the termination of Employee's employment for Cause 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.
28
"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-
29
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.
-3-
30
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
31
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
-2-
32
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.
-3-
