Exhibit 10(p)
October 13, 1999
Xxxxxxx X. Xxxxxxxxx
000 Xxxxxxxxx Xxxx
Xxxxxxx, XX 00000
Re: Employee Retention Agreement
Dear Xxxx:
The Board of Directors of the CBRL Group, Inc. recognizes the
contribution that you have made to CBRL Group, Inc. or one of its
direct or indirect subsidiaries (collectively, the "Company") and
wishes to ensure your continuing commitment to the Company and its
business operations. Accordingly, in exchange for your continuing
commitment to the Company, and your energetic focus on continually
improving operations, the Company promises you the following
benefits if your employment with the Company is terminated in
certain circumstances:
1. DEFINITIONS. As used in this Agreement, the following terms
have the following meanings which are equally applicable to both
the singular and plural forms of the terms defined:
1.1 "Cause" means any one of the following:
(a) personal dishonesty;
(b) willful misconduct;
(c) breach of fiduciary duty; or
(d) conviction of any felony or crime involving moral turpitude.
1.2 "Change in Control" means: (a) that after the date of this
Agreement, a person becomes the beneficial owner, directly or
indirectly, of securities of the Company representing 20% or more
of the combined voting power of the Company's then outstanding
voting securities, unless that acquisition was approved by a vote
of at least 2/3 of the directors in office immediately prior to
the acquisition; (b) that during any period of 2 consecutive years
following the date of this Agreement, individuals who at the
beginning of the period constitute members of the Board of
Directors of the Company cease for any reason to constitute a
majority of the Board unless the election, or the nomination for
election by the Company's shareholders, of each new director was
approved by a vote of at least 2/3 of the directors then still in
office who were directors at the beginning of the 2-year period;
(c) a merger, consolidation or reorganization of the Company (but
this provision does not apply to a recapitalization or similar
financial restructuring which does not involve a material change
in ownership of equity of the Company and which does not result in
a change in membership of the Board of Directors); or (d) a sale
of all or substantially all of the Company's assets.
1.3 "Change in Control Period" means a 2-year year period
beginning the day after a Change in Control occurs.
1.4 "Change in Duties or Compensation" means any one of: (a) a
material change in your duties and responsibilities for the
Company (without your consent) from those duties and
responsibilities for the Company in effect at the time a Change in
Control occurs, which change results in the assignment of duties
and responsibilities inferior to your duties and responsibilities
at the time such Change in Control occurs (it being understood and
acknowledged by you that a Change in Control that results in two
persons of which you are one having similar or sharing duties and
responsibilities shall not be a material change in your duties and
responsibilities); (b) a reduction in your salary or a material
change in benefits (excluding discretionary bonuses), from the
salary and benefits in effect at the time a Change in Control
occurs; or (c) a change in the location of your work assignment
from your location at the time a Change in Control occurs to any
other city or geographical location that is located further than
50 miles from that location.
2. TERMINATION OF EMPLOYMENT; SEVERANCE. Your immediate
supervisor or the Company's Board of Directors may terminate your
employment, with or without cause, at any time by giving you
written notice of your termination, such termination of employment
to be effective on the date specified in the notice. You also may
terminate your employment with the Company at any time. The
effective date of termination (the "Effective Date") shall be the
last day of your employment with the Company, as specified in a
notice by you, or if you are terminated by the Company, the date
that is specified by the Company in its notice to you. The
following subsections set forth your rights to severance in the
event of the termination of your employment in certain
circumstances by either the Company or you. Section 5 also sets
forth certain restrictions on your activities if your employment
with the Company is terminated, whether by the Company or you.
That section shall survive any termination of this Agreement or
your employment with the Company.
2.1 Termination by the Company for Cause. If you are terminated
for Cause, the Company shall have no further obligation to you,
and your participation in all of the Company's benefit plans and
programs shall cease as of the Effective Date. In the event of a
termination for Cause, you shall not be entitled to receive
severance benefits described in Section 3.
2.2 Termination by the Company Without Cause Other Than During a
Change in Control Period. If your employment with the Company is
terminated by the Company without Cause at a time other than
during a Change in Control Period, you shall be entitled to only
those severance benefits provided by the Company's severance
policy or policies then in effect. You shall not be entitled to
receive benefits pursuant to Section 3 of this Agreement.
2.3 Termination by the Company Without Cause During a Change in
Control Period. If your employment with the Company is terminated
by the Company without Cause during a Change in Control Period,
you shall be entitled to receive Benefits pursuant to Section 3. A
termination within 90 days prior to a Change in Control which
occurs solely in order to make you ineligible for the benefits of
this Agreement shall be considered a termination without Cause
during a Change in Control Period.
2.4 Termination By You For Change in Duties or Compensation During
a Change in Control Period. If during a Change in Control Period
there occurs a Change in Duties or Compensation you may terminate
your employment with the Company at any time within 30 days after
the occurrence of the Change in Duties or Compensation, by giving
to the Company not less than 120 nor more than 180 days notice of
termination. During the notice period that you continue to work,
any reduction in your Compensation will be restored. At the
option of the Company, following receipt of this notice, it may:
(a) change or cure, within 15 days, the condition that you claim
has caused the Change in Duties or Compensation, in which case,
your rights to terminate your employment with the Company pursuant
to this Section 2.4 shall cease (unless there occurs thereafter
another Change in Duties or Compensation) and you shall continue
in the employment of the Company notwithstanding the notice that
you have given; (b) allow you to continue your employment through
the date that you have specified in your notice; or (c)
immediately terminate your employment pursuant to Section 2.3. If
you terminate your employment with the Company pursuant to this
Section 2.4, you shall be entitled to receive Benefits pursuant to
Section 3. Your failure to provide the notice required by this
Section 2.4 shall result in you having no right to receive any
further compensation from the Company except for any base salary
or vacation earned but not paid, plus any bonus earned and accrued
by the Company through the Effective Date.
3. SEVERANCE BENEFITS. If your employment with the Company is
terminated as described in Section 2.3 or 2.4, you shall be
entitled to the benefits specified in subsections 3.1, 3.2, and
3.3 (the "Benefits") for the period of time set forth in the
applicable section.
3.1 Salary Payment or Continuance. You will be paid a single lump
sum payment in an amount equal to 2.99 times the average of your
annual base salary and any bonus payments for the 3 years
immediately preceding the Effective Date. The determination of
the amount of this payment shall be made by the Company's
actuaries and benefit consultants and, absent manifest error,
shall be final, binding and conclusive upon you and the Company.
3.2 Continuation of Benefits. During the 2 years following the
Effective Date (the "Severance Period") that results in benefits
under this Article 3, you shall continue to receive the medical,
prescription, dental, employee life and group life insurance
benefits at the levels to which you were entitled on the day
preceding the Effective Date, or reasonably equivalent benefits,
to the extent continuation is not prohibited or limited by
applicable law. In no event shall substitute plans, practices,
policies and programs provide you with benefits which are less
favorable, in the aggregate, than the most favorable of those
plans, practices, policies and programs in effect for you at any
time during the 120-day period immediately preceding the Effective
Date. However, if you become reemployed with another employer and
are eligible to receive medical or other welfare benefits under
another employer-provided plan, Company payments for these medical
and other welfare benefits shall cease.
4. EFFECT OF TERMINATION ON STOCK OPTIONS AND RESTRICTED STOCK. In
the event of any termination of your employment, all stock options
and restricted stock held by you that are vested prior to the
Effective Date shall be owned or exercisable in accordance with
their terms; all stock options held by you that are not vested
prior to the Effective Date shall lapse and be void; however, if
your employment with the Company is terminated as described in
Sections 2.3 or 2.4, then, if your option or restricted stock
grants provide for immediate vesting in the event of a Change in
Control, the terms of your option or restricted stock agreement
shall control. If your option or restricted stock agreement does
not provide for immediate vesting, you shall receive, within 30
days after the Effective Date, a lump sum cash distribution equal
to: (a) the number of shares of the Company's ordinary shares that
are subject to options or restricted stock grants held by you that
are not vested as of the Effective Date multiplied by (b) the
difference between: (i) the closing price of a share of the
Company's ordinary shares on the NASDAQ National Market System as
reported by The Wall Street Journal as of the day prior to the
Effective Date (or, if the market is closed on that date, on the
last preceding date on which the market was open for trading), and
(ii) the applicable exercise prices or stock grant values of those
non-vested shares.
5. DISCLOSURE OF INFORMATION. You recognize and acknowledge that,
as a result of your employment by the Company, you have or will
become familiar with and acquire knowledge of confidential
information and certain trade secrets that are valuable, special,
and unique assets of the Company. You agree that all that
confidential information and trade secrets are the property of the
Company. Therefore, you agree that, for and during your
employment with the Company and continuing following the
termination of your employment for any reason, all confidential
information and trade secrets shall be considered to be
proprietary to the Company and kept as the private records of the
Company and will not be divulged to any firm, individual, or
institution, or used to the detriment of the Company. The parties
agree that nothing in this Section 6 shall be construed as
prohibiting the Company from pursuing any remedies available to it
for any breach or threatened breach of this Section 6, including,
without limitation, the recovery of damages from you or any person
or entity acting in concert with you.
6. GENERAL PROVISIONS.
6.1 Other Plans. Nothing in this Agreement shall affect your
rights during your employment to receive increases in
compensation, responsibilities or duties or to participate in and
receive benefits from any pension plan, benefit plan or profit
sharing plans except plans which specifically address benefits of
the type addressed in Sections 3 and 4 of this Agreement.
6.2 Death During Severance Period. If you die during the Severance
Period, any Benefits remaining to be paid to you shall be paid to
the beneficiary designated by you to receive those Benefits (or in
the absence of designation, to your surviving spouse or next of
kin).
6.3 Notices. Any notices to be given under this Agreement may be
effected by personal delivery in writing or by mail, registered or
certified, postage prepaid with return receipt requested. Mailed
notices shall be addressed to the parties at the addresses
appearing on the first page of this Agreement (to the attention of
the Secretary in the case of notices to the Company), but each
party may change the delivery address by written notice in
accordance with this Section 7.3. Notices delivered personally
shall be deemed communicated as of actual receipt; mailed notices
shall be deemed communicated as of the second day following
deposit in the United States Mail.
6.4 Entire Agreement. This Agreement supersedes all previous oral
or written agreements, understandings or arrangements between the
Company and you regarding a termination of your employment with
the Company or a change in your status, scope or authority and the
salary, benefits or other compensation that you receive from the
Company as a result of the termination of your employment with the
Company (the "Subject Matter"), all of which are wholly terminated
and canceled. This Agreement contains all of the covenants and
agreements between the parties with respect to the Subject Matter.
Each party to this Agreement acknowledges that no representations,
inducements, promises, or agreements, orally or otherwise, have
been made with respect to the Subject Matter by any party, or
anyone acting on behalf of any party, which are not embodied in
this Agreement. Any subsequent agreement relating to the Subject
Matter or any modification of this Agreement will be effective
only if it is in writing signed by the party against whom
enforcement of the modification is sought.
6.5 Partial Invalidity. If any provision in this Agreement is held
by a court of competent jurisdiction to be invalid, void, or
unenforceable, the remaining provisions shall nevertheless
continue in full force without being impaired or invalidated in
any way.
6.6 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Tennessee,
and it shall be enforced or challenged only in the courts of the
State of Tennessee.
6.7 Waiver of Jury Trial. The Company and you expressly waive any
right to a trial by jury in any action or proceeding to enforce or
defend any rights under this Agreement, and agree that any such
action or proceeding shall be tried before a court and not a jury.
You irrevocably waive, to the fullest extent permitted by law, any
objection that you may have now or hereafter to the specified
venue of any such action or proceeding and any claim that any such
action or proceeding has been brought in an inconvenient forum.
6.8 Miscellaneous. Failure or delay of either party to insist upon
compliance with any provision of this Agreement will not operate
as and is not to be construed to be a waiver or amendment of the
provision or the right of the aggrieved party to insist upon
compliance with the provision or to take remedial steps to recover
damages or other relief for noncompliance. Any express waiver of
any provision of this Agreement will not operate, and is not to be
construed, as a waiver of any subsequent breach, irrespective of
whether occurring under similar or dissimilar circumstances. You
may not assign any of your rights under this Agreement. The
rights and obligations of the Company under this Agreement shall
benefit and bind the successors and assigns of the Company. The
Company agrees that if it assigns this Agreement to any successor
company, it will ensure that its terms are continued.
6.9 Certain Additional Payments by the Company.
The Company will pay you an amount (the "Additional Amount") equal
to the excise tax under the United States Internal Revenue Code of
1986, as amended (the "Code"), if any, incurred by you by reason
of the payments under this Agreement and any other plan, agreement
or understanding between you and the Company or its parent,
subsidiaries or affiliates (collectively, "Separation Payments")
constituting excess parachute payments under Section 280G of the
Code (or any successor provision). In addition, the Company will
pay an amount equal to all excise taxes and federal, state and
local income taxes incurred by you with respect to receipt of the
Additional Amount. All determinations required to be made under
this Section 6.9 including whether an Additional Amount is
required and the amount of any Additional Amount, will be made by
the independent auditors engaged by the Company immediately prior
to the Change in Control (the "Accounting Firm"), which will
provide detailed supporting calculations to the Company and you.
In computing taxes, the Accounting Firm will use the highest
marginal federal, state and local income tax rates applicable to
you and will assume the full deductibility of state and local
income taxes for purposes of computing federal income tax
liability, unless you demonstrate that you will not in fact be
entitled to such a deduction for the year of payment.
The Additional Amount, computed assuming that all of the
Separation Payments constitute excess parachute payments as
defined in Section 280G of the Code (or any successor provision),
will be paid to you at the time that the payments made pursuant to
Section 3.1 is made unless the Company, prior to the Severance
Period, provides you with an opinion of the Accounting Firm that
you will not incur an excise tax on part or all of the Separation
Payments. That opinion will be based upon the applicable
regulations under Sections 280G and 4999 of the Code (or any
successor provisions) or substantial authority within the meaning
of Section 6662 of the Code. If that opinion applies only to part
of the Separation Payments, the Company will pay you the
Additional Amount with respect to the part of the Separation
Payments not covered by the opinion.
The amount of the Additional Amount and the assumptions to be
utilized in arriving at the determination, shall be made by the
Company's Accounting Firm, whose decision shall be final and
binding upon both you and the Company. You must notify the
Company in writing no later than 30 days after you are informed of
any claim by the Internal Revenue Service that, if successful,
would require the payment by the Company of the Additional Amount.
You must also cooperate fully with the Company and give the
Company any information reasonably requested relating to the
claim, and take all action in connection with contesting the claim
as the Company reasonably requests in writing from time to time.
If all of the terms and conditions in this Agreement are agreed to
by you, please signify your agreement by executing the enclosed
duplicate of this letter and returning it to us. At the date of
your return, this letter shall constitute a fully enforceable
Agreement between us.
CBRL GROUP, INC.
By: /s/ Xxx X. Xxxxx
Xxx X. Xxxxx
Chairman and Chief Executive Officer
The foregoing is fully agreed to and accepted by:
Company Employee' s Signature: ________________________
Please Print or Type Name: ___________________________
Please Print or Type Title: ____________________________
