[Letterhead of CBRL Group, Inc.]
January 27, 2000
PERSONAL AND CONFIDENTIAL
-------------------------
Xx. Xxxxx Xxxxxxx
Executive Vice President & COO
Xxxxx'x Roadhouse, Inc.
000 Xxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxxxx 00000
RE: Employment Agreement
-------------------
Dear Xxxxx:
This will serve to memorialize the agreement reached in your recent
discussions with Xxxx Xxxxxxxxx. CBRL Group, Inc., as parent of Xxxxx'x
Roadhouse, Inc., has agreed to extend the term of your existing Amended and
Restated Employment Agreement, dated December 10, 1998, as further amended by
letter dated November 1, 1999 (the "existing Agreement").
In order to demonstrate the corporation's commitment to you and to
allow you to focus exclusively on operations of the Xxxxx'x Roadhouse
business, without the need to worry about the expiration of your employment
contract, the corporation has determined to extend your existing Agreement
for an additional year.
Specifically, the following changes apply. The employment term
specified in Section 6 of the existing Agreement is extended to January 14,
2002. All the terms and conditions of the existing Agreement which are not
specifically changed by this letter agreement remain in full force.
It is intended by us that when executed by you, this letter will
serve as an amendment to the existing Agreement, and it should be attached to
it and made a part of that document. Except as specifically modified in this
letter, all other currently effective terms and conditions of the existing
Agreement remain in effect.
Xx. Xxxxx Xxxxxxx
January 27, 2000
Page 2
We very much appreciate your talent and commitment to Xxxxx'x
Roadhouse, Inc. and we look forward to working with you into the future.
Thank you.
Very truly yours,
/s/ Xxxxxxx Xxxxxxxxx
Xxxxxxx X. Xxxxxxxxx
Executive Vice President & COO
CBRL Group, Inc., and as Director,
Xxxxx'x Roadhouse, Inc.
cc: Xxx Xxxxx
Xxxxx X. Xxxxxxxxxx, Esq.
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
This Amended and Restated Employment Agreement (the "Agreement")
entered into as of the 10th day of December, 1998, between Xxxxx'x Roadhouse,
Inc., a Tennessee corporation (the "Company"), and Xxxxx Xxxxxxx
("Employee").
W I T N E S S E T H:
-------------------
WHEREAS, the Company, which maintains its principal executive offices
at 000 Xxxxxxxx Xxxxx, Xxxxx 000, Xxxxxxxxx, Xxxxxxxxx 00000, owns and
operates casual dining restaurants under the name "Xxxxx'x Roadhouse":
WHEREAS, the Company desires to employ Employee and Employee desires
to accept such employment by the Company subject to the terms and conditions
contained herein;
WHEREAS, in serving as an employee of the Company, Employee will
participate in the use and development of confidential proprietary
information about the Company, its customers and suppliers, and the methods
used by the Company and its employees in competition with other companies, as
to which the Company desires to protect fully its rights; and
WHEREAS, the Company and Employee entered into that certain
Employment Agreement on January 14, 1998, which each of the Company and
Employee desires to amend and restate hereby to provide for certain
modifications.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements herein set forth, the parties hereto agree as
follows:
1. Employment. The Company hereby employs Employee and Employee
accepts such employment with the Company, subject to the terms and conditions
set forth herein. Employee shall be employed as Executive Vice President and
Chief Operating Officer of the Company, shall perform all duties and services
incident to such positions, and such other duties and services as may be
prescribed by the Bylaws of the Company or established by the Board of
Directors of the Company from time to time; provided, however, that without
Employee's written consent, the duties and services of Employee hereunder
shall not be materially increased or altered in a manner inconsistent with
Employee's position and original duties hereunder. During his employment
hereunder, Employee shall devote his best efforts and attention, on a full-
time
basis, to the performance of the duties required of him an employee of the
Company.
2. Compensation. As compensation for services rendered by
Employee hereunder, Employee shall receive:
(a) An annual salary of $200,000, or such higher salary
as shall be approved unanimously by the Compensation Committee of the
Board of Directors, which salary shall be payable in arrears in equal
biweekly installments, plus insurance, a reasonable car allowance and
other benefits equivalent to the benefits provided other executives
of the Company, which are set forth in Appendix I hereto;
(b) Three (3) weeks of compensated vacation time, to be
taken at any time during each year of the term of this Agreement;
(c) Bonus compensation to be determined in accordance
with the terms and conditions of the Company's Executive Bonus Plan;
and
(d) Reimbursement for all reasonable expenses incurred
by Employee in the performance of his duties under this Agreement,
provided that Employee submits verification of such expenses in
accordance with the policies of the Company.
Prior to the end of each fiscal year of the Company, the Compensation
Committee or Board of Directors shall review Employee's salary and benefits
payable hereunder. Any increases in salary or changes in fringe benefits
determined by the Compensation Committee or the Board of Directors at such
annual review shall become effective the following month unless otherwise
determined by the Company.
3. Confidential Information and Trade Secrets.
------------------------------------------
3.1 Employee recognizes that Employee's position with
the Company requires considerable responsibility and trust, and, in reliance
on Employee's loyalty, the Company may entrust Employee with highly sensitive
confidential, restricted and proprietary information involving Trade Secrets
and Confidential Information.
3.2 For purposes of this Agreement, a "Trade Secret" is
any specific or technical information, design, process, procedure, formula or
improvement that is valuable and not generally known to competitors of the
Company. "Confidential Information" is any data or information, other than
2
Trade Secrets, that is important, competitively sensitive, and not generally
known by the public, including, but not limited to, the Company's business
plan, training manuals, product development plans, pricing procedures, market
strategies, internal performance statistics, financial data, confidential
personnel information concerning employees of the Company, supplier data,
operational or administrative plans, policy manuals, and terms and conditions
of contracts and agreements. The terms "Trade Secret" and "Confidential
Information" shall not apply to information which is (i) made available to
the general public without restriction by the Company, (ii) obtained from a
third party by Employee in the ordinary course of Employee's employment by
the Company, or (iii) required to be disclosed by Employee pursuant to
subpoena or other lawful process, provided that Employee notifies the Company
in a timely manner to allow the Company to appear to protect its interests.
3.3 Except as required to perform Employee's duties
hereunder, Employee will not use or disclose any Trade Secrets or
Confidential Information of the Company during employment, at any time after
termination of employment and prior to such time as they cease to be Trade
Secrets or Confidential Information through no act of Employee in violation
of this Agreement.
3.4 Upon the request of the Company and, in any event,
upon the termination of employment hereunder, Employee will surrender to the
Company all memoranda, notes, records, manuals or other documents pertaining
to the Company's business or Employee's employment (including all copies
thereof). Employee will also leave with the Company all materials involving
any Trade Secrets or Confidential Information of the Company. All such
information and materials, whether or not made or developed by Employee,
shall be the sole and exclusive property of the Company, and Employee hereby
assigns to the Company all of Employee's right, title and interest in and to
any and all of such information and materials.
4. Covenant Not to Compete.
-----------------------
4.1 Employee hereby covenants and agrees with the
Company that during the term hereof and for a period expiring 12 months after
a termination of this Agreement pursuant to Sections 8 or 9 hereof, Employee
will not directly or indirectly (i) operate, develop or own any interest
(other than the ownership of less than 5% of the equity securities of a
publicly traded company other than the Company or any entity controlling the
Company) in any business which has significant (viewed in relation to the
business of the Company) activities relating to the ownership, management or
operation of, or consultation regarding a casual dining restaurant of which
steak sales constitute 35% or more of total restaurant sales (a
"Restaurant"); (ii) compete with the Company or its subsidiaries and
affiliates in the operation or
3
development of any Restaurant within the 48 contiguous states of the United
States of America; (iii) be employed by or consult with any business which
owns, manages or operates a Restaurant; (iv) interfere with, solicit, disrupt
or attempt to disrupt any past, present or prospective relationship,
contractual or otherwise, between the Company, or its subsidiaries or
affiliates, and any customer, client, supplier or employee of the Company, or
its subsidiaries or affiliates; or (v) solicit any present or known
prospective management employee (including all corporate officers and
managers, all area or divisional directors and all restaurant general
managers) of the Company, or its subsidiaries or affiliates, to leave their
employment with the Company or its subsidiaries or affiliates, or hire any
management employee who was employed by the Company within six months prior
to the date of such hiring to work in any capacity.
4.2 If a judicial determination is made that any of the
provisions of this Section 4 constitutes an unreasonable or otherwise
unenforceable restriction against Employee, the provisions of this Section 4
shall be rendered void only to the extent that such judicial determination
finds such provisions to be unreasonable or otherwise unenforceable. In this
regard, the parties hereto hereby agree that any judicial authority
construing this Agreement shall be empowered to sever any portion of the
territory or prohibited business activity from the coverage of this Section
4 and to apply the provisions of this Section 4 to the remaining portion of
the territory or the remaining business activities not so severed by such
judicial authority. Moreover, notwithstanding the fact that any provisions of
this Section 4 are determined not to be specifically enforceable, the Company
shall nevertheless be entitled to recover monetary damages as a result of the
breach of such provision by Employee. The time period during which the
prohibitions set forth in this Section 4 shall apply shall be tolled and
suspended as to Employee for a period equal to the aggregate quantity of time
during which Employee violates such prohibitions in any respect.
5. Specific Enforcement. Employee specifically acknowledges and
agrees that the restrictions set forth in Sections 3 and 4 hereof are
reasonable and necessary to protect the legitimate interests of the Company
and that the Company would not have entered into this Agreement in the
absence of such restrictions. Employee further acknowledges and agrees that
any violation of the provisions of Sections 3 or 4 hereof will result in
irreparable injury to the Company, that the remedy at law for any violation
or threatened violation of such Sections will be inadequate and that in the
event of any such breach, the Company, in addition to any other remedies or
damages available to it at law or in equity, shall be entitled to temporary
injunctive relief before trial from any court of competent jurisdiction as a
matter of course and to permanent injunctive relief without the necessity of
proving actual damages.
4
6. Term. The initial period of this Agreement shall continue
until January 14, 2000, unless sooner terminated by either party in the
manner set forth herein. The date upon which this Agreement and Employee's
employment hereunder shall terminate, whether pursuant to the terms of this
Section or pursuant to any other provision of this Agreement shall hereafter
be referred to as the "Termination Date."
7. Termination Upon Cessation of Company's Operations or Death
of the Employee. In the event the Company ceases its operations (other than
pursuant to a Change in Control (as defined in Section 11.1)) or the Employee
dies during the term of this Agreement, this Agreement shall immediately
terminate and neither the Employee nor the Company shall have any further
obligations hereunder, except that the Company shall continue to be obligated
under Section 2 hereof for any compensation, unpaid salary, bonus,
unreimbursed expenses or payments pursuant to Section 10 hereof owed to
Employee or his estate that have accrued but not been paid as of the
Termination Date.
8. Termination by Employee. Employee may at any time terminate
his employment by giving the Company 90 days prior written notice of his
intent to terminate the Agreement. At the Termination Date, the Company
shall have no further obligation to Employee and Employee shall have no
further rights or obligations hereunder, except as set forth in Sections 3
and 4 above, and except for the Company's obligation under Section 2 hereof
for compensation, unpaid salary, bonus or unreimbursed expenses that have
accrued but have not been paid as of the Termination Date. The provisions of
this Section 8 are subject to and superseded by the provisions of Section 11
in the event of a Change in Control.
9. Termination for Cause. The Company shall have the right at
any time to terminate Employee's employment immediately for cause, which
shall include any of the following reasons:
(a) If Employee shall violate the provisions of Sections
3 or 4 of this Agreement.
(b) If Employee shall be convicted of, or enter a plea
of guilty or nolo contendere to (i) any felony, or (ii) any
misdemeanor involving the Company or reflecting upon Employee's
honesty or truthfulness;
(c) If Employee shall commit an act of dishonesty,
willful mismanagement, fraud or embezzlement involving or against the
Company.
5
Employee's obligations under Sections 3 and 4 hereof shall survive the
termination of the Agreement pursuant to this Section 9. In the event
Employee's employment hereunder is terminated in accordance with this
Section, the Company shall have no further obligation to make any payments to
Employee hereunder except for compensation, unpaid salary, bonus or
unreimbursed expenses that have accrued but have not been paid as of the
Termination Date.
10. Termination Without Cause. In the event that Company
breaches this Agreement or Employee is terminated without cause during the
term hereof (which shall not include a termination pursuant to Sections 7, 8,
9, 11 or 12), the Company shall (a) pay Employee all bonuses and unreimbursed
expenses owed to Employee that have accrued but have not been paid as of the
Termination Date; (b) continue to pay to Employee, as severance compensation,
his salary set forth in Section 2 hereof for 12 months if Employee is
terminated pursuant to this Section within the initial two (2) year term of
this Agreement; (c) continue to provide the insurance provided for in Section
2 hereof for 12 months; and (d) pay Employee an amount which equals the
average monthly bonus earned by Employee in the two years immediately
preceding the Termination Date (as if such bonus was earned and paid on a
monthly basis) for the number of months for which severance compensation will
be paid pursuant to clause (b) above; provided, that if Employee has not been
employed by the Company for two years, then the bonus amount payable
hereunder shall be computed on a pro rata basis for the number of months
Employee was actually employed by the Company (as if such bonus was earned
and paid on a monthly basis). In addition, any stock options granted to
Employee in accordance with Section 8.2(j) of that certain Agreement and Plan
of Merger, dated December 10, 1998, between the Company, CBRL Group, Inc.
("CBRL"), Cracker Barrel Old Country Store, Inc. and LRI Merger Corporation,
shall become fully vested and immediately exercisable for a period of 90 days
in the event the Company breaches this Agreement or Employee's employment is
terminated at any time during or after the term hereof without cause as
defined herein. If Employee is terminated without cause, the provisions of
Section 4 will be void and of no effect.
11. Termination Upon a Change in Control.
------------------------------------
11.1 For purposes of this Agreement, a "Change in
Control" shall mean (i) a tender offer or exchange offer has been made for
shares of the Company's equity securities, provided that the corporation,
person or entity making such offer purchases or otherwise acquires shares of
the Company's equity securities representing 50% or more of the outstanding
shares of the Company's equity securities pursuant to such offer, (ii) the
shareholders of the Company have approved a definitive agreement to merge or
consolidate with or into another corporation pursuant to which the Company
will not survive or
6
will survive only as a subsidiary of another corporation, or to sell or
otherwise dispose of all or substantially all of its assets, (iii) the time
that the Company first determines that any person and all other persons who
constitute a group (within the meaning of Section 13(d)(3) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act")), have acquired direct
or indirect beneficial ownership (within the meaning of Section 13(d)(3)
under the Exchange Act) of twenty percent (20%) or more of the Company's
outstanding securities, unless a majority of the Continuing Directors, as
hereinafter defined, approves the acquisition not later than ten (10)
business days after the Company makes that determination or (iv) the first
day on which a majority of the members of the Company's Board of Directors
are not Continuing Directors.
11.2 For purposes of this Agreement, "Continuing
Directors" shall mean, as of any date of determination, any member of the
Board of Directors of the Company who (i) was a member of the Board of
Directors on October 1, 1997, (ii) has been a member of the Board of
Directors for the two years immediately preceding such date of determination
or (iii) was nominated for election or elected to the Board of Directors with
the affirmative vote of a majority of Continuing Directors who were members
of the Board at the time of such nomination or election.
11.3 In the event of any termination of this Agreement
within six months of a Change in Control, including without limitation a
termination by Employee (except for a termination by Employee upon the Change
in Control resulting from the Company's merger with CBRL), Employee shall
immediately be paid all accrued salary, bonus compensation to the extent
earned, vested deferred compensation (other than plan benefits which will be
paid in accordance with the applicable plan), any benefits under any plans of
the Company in which Employee is a participant to the full extent of
Employee's rights under such plans (including accelerated vesting of any
awards granted to Employee under the Company's 1995 Incentive Stock Plan, as
amended), accrued vacation pay and any appropriate business expenses incurred
by Employee in connection with his duties hereunder, all to the Termination
Date, and all severance compensation provided in Section 11.4, but no other
compensation or reimbursement of any kind.
11.4 In addition, Employee shall be paid as severance
compensation his base salary in monthly installments (at the rate payable at
the time of any such termination) for 12 months upon any termination pursuant
to this Section within the initial two (2) year term of this Agreement.
Employee is under no obligation to mitigate the amount owed Employee pursuant
to this Section 11.4 by seeking other employment or otherwise.
Notwithstanding anything in this Section 11.4 to the contrary, Employee may
in Employee's sole discretion, by delivery of a notice to the Company within
thirty (30) days following any termination upon a Change in Control, elect to
7
receive from the Company a lump sum severance payment by bank cashier's check
equal to the present value of the flow of cash payments that would otherwise
be paid to Employee pursuant to this Section 11.4. Such present value shall
be determined as of the date of delivery of the notice of election by
Employee and shall be based on a discount rate equal to the interest rate on
90-day U.S. Treasury bills, as reported in the Wall Street Journal (or
similar publication), on the date of delivery of the election notice. If
Employee elects to receive a lump sum severance payment, the Company shall
make such payment to Employee within ten (10) days following the date on
which Employee notifies the Company of Employee's election. In addition to
the severance payment payable under this Section 11.4, Employee shall be paid
an amount which equals the average monthly bonus earned by Employee in the
two years immediately preceding the Termination Date (as if such bonus was
earned and paid on a monthly basis) for the number of months for which
severance compensation will be paid pursuant to the first sentence of this
Section 11.4; provided, that if Employee has not been employed by the Company
for two years, then the bonus amount payable hereunder shall be computed on
a pro rata basis for the number of months Employee was actually employed by
the Company (as if such bonus was earned and paid on a monthly basis).
Employee shall also be entitled to an accelerated vesting of any awards
granted to Employee under the Company's 1995 Incentive Stock Plan, as
amended. Employee shall continue to accrue retirement benefits and shall
continue to enjoy any benefits under any plans of the Company in which
Employee is a participant to the full extent of Employee's rights under such
plans, including any perquisites provided under this Agreement, through the
remaining term of this Agreement; provided, however, that the benefits under
any such plans of the Company in which Employee is a participant, including
any such perquisites, shall cease upon re-employment by a new employer.
11.5 Notwithstanding anything else in this Agreement and
solely in the event of any termination upon a Change in Control, the amount
of severance compensation paid to Employee under this Section 11, but
exclusive of any payments to Employee in respect of any stock options then
held by Employee (or any compensation deemed to be received by Employee in
connection with the exercise of any stock options at any time), shall not
include any amount the Company is prohibited from deducting for federal
income tax purposes by virtue of Section 280G of the Internal Revenue Code or
any successor provision.
12. Disability of Employee. If, on account of physical or mental
disability, Employee shall fail or be unable to perform his assigned duties
in any material respect for a period of 60 consecutive days, the Company
shall pay Employee his full salary as set forth in Section 2 hereof and shall
provide the insurance, bonus and other benefits of Section 2 for a period of
six months from the date such disability began or for such shorter period as
Employee is unable
8
to perform his duties hereunder; provided, however, that Employee's salary
shall be reduced by any disability income paid to him pursuant to any
disability insurance policy maintained under this Agreement. In the event
Employee is unable to perform his duties hereunder after the expiration of
the six-month period, this Agreement shall automatically terminate. Employee
shall not be required to perform his obligations under Section 1 hereof
during any period of disability.
13. Assignment.
----------
(a) The rights and benefits of Employee under this
Agreement, other than accrued and unpaid amounts due under Section
2 hereof, are personal to him and shall not be assignable. Discharge
of Employee's undertakings in Sections 3 and 4 hereof shall be an
obligation of Employee's executors, administrators, or other legal
representatives or heirs.
(b) This Agreement may not be assigned by the Company
except to an affiliate of the Company, provided, however, that if the
Company shall merge or effect a share exchange with or into, or sell
or otherwise transfer substantially all its assets to, another
corporation, the Company shall assign its rights hereunder to that
corporation and cause such corporation to assume all of the Company's
obligations under this Agreement to the extent such obligations are
not assumed by operation of law as a result of such transaction. In
such event, all references in this Agreement to the Company shall
apply to such corporation (as well as to the Company with respect to
Sections 10, 11 and 13 hereof if the Company survives such
transaction) to the same extent as if such corporation were the
Company.
14. Notices. Any notice or other communications under this
Agreement shall be in writing, signed by the party making the same, and shall
be delivered personally or sent by certified or registered mail, postage
prepaid, addressed as follows:
If to Employee: Xxxxx Xxxxxxx
20633 N.E. 00xx Xxxxx
Xxxxxxx, Xxxxxxxxxx 00000
If to the Company: Xxxxx'x Roadhouse, Inc.
000 Xxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxxxx 00000
Attention: Chairman of the
Compensation Committee of the
Board of Directors
9
With a copy to: X. Xxxxx Xxxx, Esq.
Xxxxxx Xxxxxxx Xxxxxx & Xxxxx,
A Professional Limited Liability
Company
2100 Nashville City Center
000 Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
or to such other address as may hereafter be designated by either party
hereto. All such notices shall be deemed given on the date personally
delivered or mailed.
15. Governing Law. This Agreement shall be interpreted and
enforced in accordance with the laws of the State of Tennessee.
16. Severability. Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid,
but if any one or more of the provisions contained in this Agreement shall be
invalid, illegal or unenforceable in any respect for any reason, the
validity, legality and enforceability for any such provisions in every other
respect and of the remaining provisions of this Agreement shall not be in any
way impaired.
17. Modification. No waiver of modification of this Agreement
or of any covenant, condition, or limitation herein contained shall be valid
unless in writing and duly executed by the party to be charged therewith and
no evidence of any waiver or modification shall be offered or received in
evidence of any proceeding, arbitration or litigation between the parties
hereunder, unless such waiver or modification is in writing, duly executed as
aforesaid and the parties further agree that the provisions of this section
may not be waived except as herein set forth.
18. Entire Agreement. This Agreement contains the entire
agreement of the parties hereto with respect to the subject matter contained
herein. There are no restrictions, promises, covenants or undertakings,
other than those expressly set forth herein. This Agreement supersedes all
prior agreements and understandings between the parties with respect to such
subject matter. This Agreement may not be changed except by a writing
executed by the parties.
10
IN WITNESS WHEREOF, the undersigned have executed this Employment
Agreement on the day and year first above written.
XXXXX'X ROADHOUSE, INC.
By: /s/
--------------------------------
Title: Chairman of the Compensation
Committee of the Board of
Directors
EMPLOYEE
/s/ Xxxxx Xxxxxxx
------------------------------------
Xxxxx Xxxxxxx
11
[appendix omitted]
