CHANGE IN CONTROL OFFICERSChange of Control Agreement |
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EXHIBIT 10 .
3 1
CHANGE IN CONTROL BENEFITS AGREEMENT
This
Change in Control Benefits Agreement (“Agreement”)
is made and entered into as of November 7, 2007, by and
between The Steak N Shake Company, an Indiana corporation
(hereinafter referred to as the “Company”), and
Jeffrey A. Blade (hereinafter referred to as
“Executive”).
W I T N E S S
E T H
WHEREAS,
Executive is an executive officer of the Company and/or its
subsidiaries; and
WHEREAS,
the Company believes that Executive has made and will continue
to make valuable contributions to the productivity and
profitability of the Company; and
WHEREAS,
the Company desires to encourage Executive to continue to make
such contributions and not to seek or accept employment
elsewhere; and
WHEREAS,
the Company, therefore, desires to assure Executive of certain
benefits in the event there is a Change in Control of the
Company or in the case of any termination or significant
redefinition of the terms of his employment with the Company
subsequent to any Change in Control of the
Company;
NOW,
THEREFORE, in consideration of the foregoing and of the mutual
covenants herein contained and the mutual benefits herein
provided, the Company and Executive hereby agree as
follows:
1. The
term of this Agreement shall be from the date hereof through
December 31, 2010; provided, however, that such term
shall be automatically extended for an additional year each
year thereafter unless either party hereto gives written
notice to the other party not to so extend prior to
June 30 of the final year of the Agreement prior to such
extension, in which case no further automatic extension shall
occur.
2. As
used in this Agreement, “Change in Control” of the
Company means:
(A) The
acquisition, within a 12-month period ending on the date of
the most recent acquisition, by any individual, entity or
group (within the meaning of Section 13(d)(3)
or 14(d)(2) of the Securities Exchange Act of 1934, as
amended (the “Exchange Act”) (a
“Person”) of beneficial ownership (within the
meaning of Rule 13d-3 promulgated under the Exchange Act
as in effect from time to time) of fifty percent (50%) 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; provided, however, that the
following acquisitions shall not constitute an acquisition of
control: (i) any acquisition by a Person who,
immediately before the commencement of the 12-month period,
already held beneficial ownership of fifty percent (50%) or
more of that combined voting power; (ii) any acquisition
directly from the Company (excluding an
acquisition by virtue of the exercise of a conversion
privilege), (iii) any acquisition by the Company,
(iv) any acquisition by any employee benefit plan (or
related trust) sponsored or maintained by the Company or any
corporation controlled by the Company, or (v) any
acquisition by any corporation pursuant to a reorganization,
merger or consolidation, if, following such reorganization,
merger or consolidation, the conditions described in
clauses (i), (ii) and (iii) of subsection (C)
of this definition are satisfied;
(B) The
replacement of a majority of members of the Board of
Directors during any 12-month period, by members whose
appointment or election is not endorsed by a majority of the
members of the Board of Directors prior to the date of the
appointment or election;
(C) A
reorganization, merger or consolidation, in each case,
unless, following such reorganization, merger or
consolidation, (i) more than sixty percent (60%) of,
respectively, the then outstanding shares of common stock of
the corporation resulting from such reorganization, merger or
consolidation and the combined voting power of the then
outstanding voting securities of such corporation entitled to
vote generally in the election of directors is then
beneficially owned, directly or indirectly, by all or
substantially all of the individuals and entities who were
the beneficial owners, respectively, of the outstanding
Company common stock and outstanding Company voting
securities immediately prior to such reorganization, merger
or consolidation in substantially the same proportions as
their ownership, immediately prior to such reorganization,
merger or consolidation, of the outstanding Company stock and
outstanding Company voting securities, as the case may be,
(ii) no Person (excluding the Company, any employee
benefit plan or related trust of the Company or such
corporation resulting from such reorganization, merger or
consolidation and any Person beneficially owning, immediately
prior to such reorganization, merger or consolidation,
directly or indirectly, twenty-five percent (25%) or more of
the outstanding Company common stock or outstanding voting
securities, as the case may be) beneficially owns, directly
or indirectly, twenty-five percent (25%) or more of,
respectively, the then outstanding shares of common stock of
the corporation resulting from such reorganization, merger or
consolidation or the combined voting power of the then
outstanding voting securities of such corporation entitled to
vote generally in the election of directors and (iii) at
least a majority of the members of the board of directors of
the corporation resulting from such reorganization, merger or
consolidation were members of the Incumbent Board at the time
of the execution of the initial agreement providing for such
reorganization, merger or consolidation;
1
(D) A
complete liquidation or dissolution of the Company;
or
(E) The
sale or other disposition of all or substantially all of the
assets of the Company, other than any of the following
dispositions: (i) to a corporation with respect to which
following such sale or other disposition (1) more than
sixty percent (60%) of, respectively, the then outstanding
shares of common stock of such corporation and the combined
voting power of the then outstanding voting securities of
such corporation entitled to vote generally in the election
of directors is then beneficially owned, directly or
indirectly, by all or substantially all of the individuals
and entities who were the beneficial owners, respectively, of
the outstanding Company common stock and outstanding Company
voting securities immediately prior to such sale or other
disposition in substantially the same proportion as their
ownership, immediately prior to such sale or other
disposition, of the outstanding Company common stock and
outstanding Company voting securities, as the case may be,
(2) no Person (excluding the Company and any employee
benefit plan or related trust of the Company or such
corporation and any Person beneficially owning, immediately
prior to such sale or other disposition, directly or
indirectly, twenty-five percent (25%) or more of the
outstanding Company common stock or outstanding Company
voting securities, as the case may be) beneficially owns,
directly or indirectly, twenty-five percent (25%) or more of,
respectively, the then outstanding shares of common stock of
such corporation and the combined voting power of the then
outstanding voting securities of such corporation entitled to
vote generally in the election of directors and (3) at
least a majority of the members of the board of directors of
such corporation were members of the Incumbent Board at the
time of the execution of the initial agreement or action of
the Board providing for such sale or other disposition of
assets of the Company; (ii) to a shareholder of the
Company in exchange for or with respect to its stock;
(iii) to a Person that owns, directly or indirectly,
fifty percent (50%) or more of the total value or voting
power of all outstanding stock of the Company; or
(iv) to an entity, at least fifty percent (50%) or more
of the total value or voting power of which is owned,
directly or directly, by the Company or by a Person described
in (iii).
Despite
any other provision of this definition to the contrary, an
occurrence shall not constitute a Change in Control if it does
not constitute a change in the ownership or effective control,
or in the ownership of a substantial portion of the assets of,
the Company within the meaning of Section 409A(a)(2)(A)(v) of
the Internal Revenue Code of 1986, as amended (the
“Code”) and its interpretive
regulations.
3. The
Company shall provide Executive with the benefits set forth in
Section 6 of this Agreement upon any termination of
Executive’s employment by the Company within twelve (12)
months following a Change in Control for any reason except the
following:
(A) Termination
by reason of Executive’s death.
(B) Termination
by reason of Executive’s
“disability.” For purposes hereof,
“disability” shall be defined as Executive’s
inability by reason of illness or other physical or mental
disability to perform the duties required by his employment
for any consecutive ninety (90) day period.
(C) Termination
for “Cause.” As used in this Agreement,
the term “Cause” shall mean the occurrence of one
or more of the following
events: (i) Executive’s conviction for a
felony or of any crime involving moral turpitude;
(ii) Executive’s engaging in any fraudulent or
dishonest conduct in his dealings with, or on behalf of, the
Company (or its affiliates); (iii) Executive’s
gross or habitual negligence in the performance of his
employment duties for the Company (or its affiliates);
(iv) Executive’s material violation of the
Company’s business ethics or conflict-of-interest
policies, as such policies currently exist or as they may be
amended or implemented during Executive’s employment
with the Company; or (v) Executive’s misuse of
alcohol or illegal drugs which interferes with the performance
of Executive’s employment duties for the Company or
which compromises the reputation or goodwill of the
Company.
4. Subject
to the procedural conditions prescribed below, the Company
shall al
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