Exhibit 10.2
EMPLOYMENT
AGREEMENT
THIS EMPLOYMENT AGREEMENT
(“Agreement”), effective as of October 30, 2008
(“Effective Date”), is made and entered into by and
between CBRL GROUP, INC. (the “Company”) and
MICHAEL A. WOODHOUSE (“Executive”).
W I T N E S S E T
H:
WHEREAS , Executive currently is serving as the
Chairman, President and Chief Executive Officer of the Company
pursuant to an employment agreement dated as of August 1, 2005 (the
“Prior Employment Agreement”); and
WHEREAS , the Prior Employment Agreement currently
expires on August 31, 2009; and
WHEREAS , the Company's Board of Directors (the
“Board”) recognizes that the Executive's contribution
to the growth and success of the Company during prior years has
been substantial and the Board now desires, and deems it to be in
the best interests of the Company and its shareholders, to provide
for the continued employment of the Executive and to make certain
changes in the Executive's employment arrangements with the Company
which the Board has determined will reinforce and encourage the
Executive's continued attention and dedication to the future of the
Company; and
WHEREAS , the Executive is willing to commit himself to
continue to serve the Company on the specified terms and
conditions; and
WHEREAS , in order to effect the foregoing purposes and
to terminate the Prior Employment Agreement as of the Effective
Date, the Company and the Executive wish to enter into this
employment agreement on the terms and conditions set forth
below;
NOW,
THEREFORE , for and in
consideration of the premises, the mutual promises, covenants and
agreements contained herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:
1.
EMPLOYMENT .
Subject to the
terms and conditions of this Agreement, the Company hereby employs
Executive as its Chief Executive Officer. During
the term of this Agreement, subject to Section 3.1, Executive also
shall serve as either the Company's Chairman or
President.
2.
DURATION OF AGREEMENT .
2.1 Term
. This employment shall begin as of the Effective Date,
and shall continue until it terminates pursuant to this
Agreement. Unless extended pursuant to Section 2.2.1 or
Section 2.2.2, or earlier terminated pursuant to Sections 5, 6, 7,
8, 9 or 10, this Agreement will
automatically
terminate on October 31, 2011. The specified period
during which this Agreement is in effect is the
“Term.”
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2.2.1
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By
Agreement . The Term may be extended to a
specified future date at any time by the specific written agreement
of the parties signed prior to the original expiration date
specified in Section 2.1, or any subsequent expiration date
established pursuant to this Section 2.2.1 or Section
2.2.2.
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2.2.2
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Extension
Because of Change in Control . In the event of a Change in Control
(as hereinafter defined) of the Company prior to October 31, 2011,
the Term shall automatically be extended through October 31, 2012,
at which time this Agreement shall automatically terminate, and,
following such Change in Control, Executive shall be entitled to
exercise the rights and receive the benefits of this Agreement that
are described in Section 10 . For purposes of
this Agreement, a “Change in Control” of the
Company shall mean a change in control of a nature that would be
required to be reported in response to Item 5.01 of Current Report
on Form 8-K promulgated under the Securities Exchange Act of 1934,
as amended (the “Exchange Act”); provided, however,
that, without limitation, such a Change in Control shall be deemed
to have occurred if during the Term: (a) any “person”
(as such term is used in Sections 13(d) and 14(d) of the Exchange
Act) is or becomes the “beneficial owner” (as defined
in Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of the Company representing more than thirty-five
percent (35%) of the combined voting power of the Company's then
outstanding voting securities unless that acquisition was approved
or ratified by a vote of at least 2/3 of the members of the Board
in office immediately prior to the acquisition; or (b) all or
substantially all of the assets of the Company are sold, exchanged
or otherwise transferred (other than to secure debt owed by the
Company); or (c) the Company's shareholders approve a plan of
liquidation or dissolution; or (d) individuals who at the beginning
of the Term constitute members of the Board of Company cease for
any reason other than at the request or with the concurrence of the
Executive to constitute a majority thereof 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 a majority of the
directors then still in office who were directors at the beginning
of the Term.
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3.
POSITION AND DUTIES .
3.1
Position . Subject to the remaining conditions of
this Section 3.1, Executive shall serve as the Company's Chairman
of the Board and Chief Executive Officer. Executive
shall report to the Board and perform such duties and
responsibilities as may be prescribed from time-to-time by the
Board, which shall be consistent with the responsibilities of
similarly situated executives of comparable companies in similar
lines of business. So long as Executive is serving as
either Chairman of the Board or Chief Executive Officer, the
Company shall nominate Executive for election as a member of the
Board at each meeting of the Company's shareholders
at which
the election of Executive is subject to a vote by the Company's
shareholders and to recommend that the shareholders of the Company
vote to elect Executive as a member of the Board. From
time to time, Executive also may be designated as President of the
Company and to such other offices within the Company or its
subsidiaries as may be necessary or appropriate for the convenience
of the businesses of the Company and its subsidiaries; provided,
however, during the Term, he shall hold the title of either
Chairman of the Board or Chief Executive Officer.
3.2
Full-Time Efforts . Executive shall perform and
discharge faithfully, diligently and to the best of his ability
such duties and responsibilities and shall devote his full-time
efforts to the business and affairs of the Company. Executive
agrees to promote the best interests of the Company and to take no
action that in any way damages the public image or reputation of
the Company, its subsidiaries or its affiliates.
3.3 No
Interference With Duties . Executive shall not (i)
engage in any activities, or render services to or become
associated with any other business that in the reasonable judgment
of the Board violates Article 13 of this Agreement; or (ii) devote
time to other activities which would inhibit or otherwise interfere
with the proper performance of his duties, provided ,
however , that it shall not be a violation of this Agreement
for Executive to (i) devote reasonable periods of time to
charitable and community activities and industry or professional
activities, or (ii) manage personal business interests and
investments, so long as such activities do not interfere with the
performance of Executive’s responsibilities under this
Agreement. Executive may, with the prior approval of the
Board (or applicable committee), serve on the boards of directors
(or other governing body) of other for profit corporations or
entities, consistent with this Agreement and the Company's
policies.
3.4 Work
Standard . Executive hereby agrees that he shall at
all times comply with and abide by all terms and conditions set
forth in this Agreement, and all applicable work policies,
procedures and rules as may be issued by
Company. Executive also agrees that he shall comply with
all federal, state and local statutes, regulations and public
ordinances governing the performance of his duties
hereunder.
4.
COMPENSATION AND BENEFITS .
4.1 Base
Salary . Subject to the terms and conditions set
forth in this Agreement, the Company shall pay Executive, and
Executive shall accept, an annual salary (“Base
Salary”) in the amount of One Million and No/100 Dollars
($1,000,000). The Base Salary shall be paid in
accordance with the Company’s normal payroll practices and
may be increased from time to time at the sole discretion of the
Board.
4.2
Incentive, Savings and Retirement Plans . During
the Term, Executive shall be entitled to participate in all
incentive (including, without limitation, long term incentive
plans), savings and retirement plans, practices, policies and
programs applicable generally to senior executive officers of the
Company (“Peer Executives”), and on the same basis as
such Peer Executives, except as to benefits that are specifically
applicable to Executive pursuant to this
Agreement. Without limiting the
foregoing, the following provisions shall apply with respect to
Executive:
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4.2.1
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Incentive
Bonus . Executive shall be entitled to an
annual bonus, the amount of which shall be determined by the
Compensation and Stock Option Committee of the Board (the
"Committee"). The amount of and performance criteria
with respect to any such bonus in any year shall be determined not
later than the date or time prescribed by Treas. Reg. §
1.162-27(e) (“Section 162(m)”) in accordance with a
formula to be agreed upon by the Company and Executive and approved
by the Committee that reflects the financial and other performance
of the Company and the Executive's contributions
thereto. Throughout the Term, the Executive's annual
target (subject to such performance and other criteria as may be
established by the Committee) bonus shall be no less than one
hundred twenty-five percent (125%) of the Base Salary.
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4.2.2
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Long Term
Incentive Plan . The Company’s 2009 Long-Term
Incentive Plan (the “LTI”), a two-year plan covering
fiscal years 2009 and 2010 has been previously established; however
any options to purchase shares of the Company’s common stock
that are granted to the Executive during calendar year 2009 under
the LTI shall vest ratably in two annual
installments. With respect to any long term incentive
plan established by the Company that covers fiscal year 2011, the
Executive’s target percentage under such a plan shall be 250%
unless it is reduced as part of an across-the-board decrease in
target bonuses affecting other Peer Executives and any options
granted under such plan shall vest one year from the date of
grant.
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4.2.3
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Welfare
Benefit Plans . During the Term, Executive and
Executive’s eligible dependents shall be eligible for
participation in, and shall receive all benefits under, the welfare
benefit plans, practices, policies and programs provided by the
Company (including, without limitation, medical, prescription,
dental, disability, executive life, group life, accidental death
and travel accident insurance plans and programs) (“Welfare
Plans”) to the extent applicable generally to Peer
Executives. Also, throughout the Term, in addition to
participating in the other insurance programs provided to Peer
Executives, the Company, for the benefit of the Executive, shall
pay the premiums to maintain in force during the Term a policy of
term life insurance covering the Executive, with such carrier as is
reasonably acceptable to Company and Executive, in the face amount
of $2.5 million.
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4.2.4
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Vacation . Executive shall be entitled to an
annual paid vacation commensurate with the Company's established
vacation policy for Peer Executives. The timing of paid
vacations shall be scheduled in a reasonable manner by the
Executive.
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4.2.5
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Business
Expenses . Executive shall be reimbursed for
all reasonable business expenses incurred in carrying out the work
hereunder. Executive shall follow the Company’s expense
procedures that generally apply to other Peer Executives
in
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accordance with
the policies, practices and procedures of the Company to the extent
applicable generally to such Peer Executives.
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4.2.6
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Perquisites . Executive shall be entitled to
receive such executive perquisites, fringe and other benefits as
are provided to the senior most executives and their families under
any of the Company’s plans and/or programs in effect from
time to time and such other benefits as are customarily available
to Peer Executives.
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4.3.1
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Shares . Subject to all of the conditions
(including, without limitation, satisfaction of the performance
goals referred to in Section 4.3.2, the time of vesting and right
to receive) and restrictions set forth in this Section 4.3.1
, Company hereby grants to Executive an award of 150,000 shares
(the "Restricted Shares") of the Company's $0.01 par value common
stock (the "Shares"). Subject to satisfaction of the
performance goals referred to in Section 4.3.2, the Restricted
Shares shall become vested in, and shall be distributable to, the
Executive on such dates as are set forth in the award notice
evidencing the award of Restricted Shares (any such date being
hereinafter referred to as a “Vesting Date,” with all
such dates being collectively referred to as the “Vesting
Dates”). Subject to Section 4.3.2, as soon
as practicable following a Vesting Date, the Company shall promptly
cause its transfer agent to issue a certificate to the Executive
(or shall notify the Executive of a book-entry issuance per the
Direct Registration Program (“DRP”) to or for the
account of the Executive) evidencing the Restricted Shares that
become distributable to the Executive as of the Vesting
Date. The Company's obligation to cause the issuance of
any Restricted Shares to the Executive shall be subject to any
applicable federal, state, or local tax withholding
requirements. If, prior to a Vesting Date, the
Executive's employment is terminated for any reason other than
death or disability, all rights of the Executive in any Restricted
Shares awarded under this Section 4.3.1 that, as of the date
of such termination, have not vested and become distributable to
the Executive shall thereupon immediately terminate and become
forfeited and a stock certificate or DRP notice to or for the
account of the Executive for all the Restricted Shares that have
vested and become distributable to Executive as of the date of
termination shall (if not previously issued) thereupon be
issued. Executive shall not have any rights as a
shareholder with respect to any Restricted Shares until the
issuance of a stock certificate or DRP notice evidencing the
Restricted Shares. The number of Restricted Shares
awarded the Executive under this Section 4.3.1 shall be
proportionately adjusted to reflect any stock dividend, stock split
or share combination of the Shares or any recapitalization of the
Company occurring prior to a Vesting Date. Except as
provided in the preceding sentence, no adjustment shall be made on
the issuance of a stock certificate or DRP notice to the Executive
as to any dividends or other rights for which the record date
occurred prior to a Vesting Date. The right of the
Executive to receive the Restricted Shares shall not be assignable
or transferable otherwise than by will or the laws of descent and
distribution. If in the opinion of its counsel, the
issuance of any Restricted Shares shall not be lawful for any
reason, including the inability of the Company to obtain
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from any
regulatory body having jurisdiction or authority deemed by such
counsel to be necessary for such issuance, the Company shall not be
obligated to issue any such Restricted Shares, but, in such event,
shall be obligated to provide Executive with cash or non-cash
consideration having equivalent after tax value which is acceptable
to the Executive in the exercise of Executive's reasonable
discretion. Upon receipt of Restricted Shares at a time
when there is not in effect under the Securities Act of 1933, as
amended, a current registration statement relating to the
Restricted Shares, the Executive shall represent and warrant in
writing to the Company that the Restricted Shares are being
acquired for investment and not with a view to the distribution
thereof and shall agree to the placement of a legend on the
certificate or certificates representing the Restricted Shares
evidencing the restrictions on transfer under said Act and the
issuance of stop-transfer instructions by the Company to its
transfer agent with respect thereto. No Restricted
Shares shall be issued hereunder unless and until the then
applicable requirements of the Securities Act of 1933, the
Tennessee Business Corporation Act, the Tennessee Securities Act of
1980, as any of the same may be amended, the rules and regulations
of the Securities and Exchange Commission and any other regulatory
agencies and laws having jurisdiction over or applicability to the
Company, and the rules and regulations of any securities exchange
on which the Shares may be listed, shall have been fully complied
with and satisfied. The Company shall use its best
efforts to cause all such requirements to be promptly and
completely satisfied.
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4.3.2
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Vesting and
receipt of the Restricted Shares is subject to Executive achieving
performance criteria (each a “Performance Goal” and
collectively the “Performance Goals”) established by
the Board’s Compensation Committee (the
“Committee”)) as of each of the respective Vesting
Dates. The Performance Goals are being established by
the Committee contemporaneously with entering into this Agreement
and within the time period specified in Section
162(m). The Committee also shall certify in writing
whether any Performance Goal is achieved prior to the distribution
of that portion of the Restricted Shares distributable upon
achievement of the Performance Goal in question.
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This Agreement
may be terminated immediately at any time by the Company without
any liability owing to Executive or Executive’s beneficiaries
under this Agreement, except Base Salary through the date of
termination and benefits under any plan or agreement covering
Executive which shall be governed by the terms of such plan or
agreement, under the following conditions, each of which shall
constitute “Cause” or “Termination for
Cause”:
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Any act by
Executive involving fraud and any breach by Executive of applicable
regulations of competent authorities in relation to trading or
dealing with stocks, securities, investments and the like or any
willful or grossly negligent act by Executive resulting in an
investigation by the Securities and Exchange Commission which, in
each case, a majority of the Board determines in its
sole
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and absolute
discretion materially adversely affects the Company or
Executive’s ability to perform his duties under this
Agreement;
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Attendance at
work in a state of intoxication or otherwise being found in
possession at his place of work of any prohibited drug or
substance, possession of which would amount to a criminal
offense;
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Executive's
personal dishonesty or willful misconduct in connection with his
duties to the Company;
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Breach of
fiduciary duty to the Company involving personal profit by the
Executive;
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Conviction of
the Executive for any felony or crime involving moral
turpitude;
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Material
intentional breach by the Executive of any provision of this
Agreement or of any Company policy adopted by the Board;
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The continued
failure of Executive to perform substantially Executive’s
duties with the Company (other than any such failure resulting from
incapacity due to Disability, and specifically excluding any
failure by Executive, after good faith, reasonable and demonstrable
efforts, to meet performance expectations for any reason), after a
written demand for substantial performance is delivered to
Executive by a majority of the Board that specifically identifies
the manner in which such Board believes that Executive has not
substantially performed Executive’s duties.
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The cessation
of employment of Executive shall not be deemed to be for Cause
unless and until there shall have been delivered to Executive a
copy of a resolution duly adopted by the affirmative vote of not
less than two-thirds of the entire membership of the Board at a
meeting of the Board called and held for such purpose (after
reasonable notice is provided to Executive and Executive is given
an opportunity, together with counsel, to be heard before the
Board), finding that, in the good faith opinion of such Board,
Executive is guilty of the conduct described in any one or more of
subparagraphs (a) through (g) above, and specifying the particulars
thereof in detail.
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6.
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TERMINATION UPON DEATH
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Notwithstanding anything herein to the contrary,
this Agreement shall terminate immediately upon Executive’s
death, and the Company shall have no further liability to Executive
or his beneficiaries under this Agreement, other than for payment
of Accrued Obligations (as defined in Paragraph 9(a)(1)), the
timely payment or provision of Other Benefits (as defined in
Paragraph 9(d)), including without limitation benefits under such
plans, programs, practices and policies relating to death benefits,
if any, as are applicable to Executive on the date of his
death. The rights of the Executive’s estate with
respect to stock options and restricted stock, and all other
benefit plans, shall be determined in accordance with the specific
terms,
conditions and
provisions of the applicable agreements and plans; provided,
however, that the Restricted Shares granted under Section
4.3.1 of this Agreement shall immediately vest and become
distributable upon the death of the Executive.
If the Company
determines in good faith that the Disability of Executive has
occurred during the Term (pursuant to the definition of Disability
set forth below), it may give to Executive written notice of its
intention to terminate Executive’s employment. In such
event, Executive’s employment with the Company shall
terminate effective on the 30th day after receipt of such written
notice by Executive (the “Disability Effective Date”),
provided that, within the 30 days after such receipt, Executive
shall not have returned to full-time performance of
Executive’s duties. If Executive’s
employment is terminated by reason of his Disability, this
Agreement shall terminate without further obligations to Executive,
other than for payment of Accrued Obligations (as defined in
Paragraph 9(a)(1)), the timely payment or provision of Other
Benefits (as defined in Paragraph 9(d)), including without
limitation benefits under such plans, programs, practices and
policies relating to disability benefits, if any, as are applicable
to Executive on the Disability Effective Date. The
rights of the Executive with respect to stock options and
restricted stock, and all other benefit plans, shall be determined
in accordance with the specific terms, conditions and provisions of
the applicable agreements and plans; provided, however, that the
Restricted Shares granted under Section 4.3.1 of this
Agreement shall immediately vest and become distributable upon the
Disability Effective Date.
For purposes of
this Agreement, “Disability” shall mean: (i) a
long-term disability entitling Executive to receive benefits under
the Company’s long-term disability plan as then in effect; or
(ii) if no such plan is then in effect or the plan does not apply
to Executive, the inability of Executive, as determined by the
Board of the Company, to perform the essential functions of his
regular duties and responsibilities, with or without reasonable
accommodation, due to a medically determinable physical or mental
illness which has lasted (or can reasonably be expected to last)
for a period of six consecutive months. At the request of
Executive or his personal representative, the Board's determination
that the Disability of Executive has occurred shall be certified by
two physicians mutually agreed upon by Executive, or his personal
representative, and the Company. Without such independent
certification (if so requested by Executive), Executive’s
termination shall be deemed a termination by the Company without
Cause and not a termination by reason of his Disability.
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8.
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EXECUTIVE'S TERMINATION OF
EMPLOYMENT .
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Executive’s employment may be terminated
at any time by Executive for Good Reason or no reason. For
purposes of this Agreement, “Good Reason” shall
mean:
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Other than his
removal for Cause pursuant to Section 5 and subject to the proviso
below, without the written consent of Executive, the assignment to
Executive of any duties inconsistent in any material respect with
Executive’s position (including status, offices, titles and
reporting requirements), authority, duties or responsibilities as
in effect on the Effective Date, or any other action by
the
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Company which
results in a demonstrable diminution in such position, authority,
duties or responsibilities (including without limitation a shift of
material responsibility from the Chief Executive Officer position
to the Chairman position if Executive does not serve in both
capacities), provided, however , it is expressly understood
and agreed that so long as Executive is serving as either the
Chairman of the Board or the Chief Executive Officer, the
designation of another person as either Chairman of the Board or
Chief Executive Officer (but not both) shall not be "Good Reason"
and also excluding for this purpose an isolated, insubstantial and
inadvertent action not taken in bad faith and which is remedied by
the Company promptly after receipt of notice thereof given by
Executive;
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A reduction by
the Company in Executive’s Base Salary as in effect on the
Effective Date or as the same may be increased from time to
time;
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A reduction by
the Company in Executive's annual target bonus (expressed as a
percentage of Base Salary) unless such reduction is a part of an
across-the-board decrease in target bonuses affecting all other
Peer Executives; provided, however that in any event, the Company
may not reduce Executive's annual target bonus (expressed as a
percentage of Base Salary) below one hundred twenty-five percent
(125%) of the Base Salary;
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The failure by
the Company to continue in effect any “pension plan or
arrangement” or any “compensation plan or
arrangement” in which Executive participates or the
elimination of Executive’s participation in any such plan
(except for across-the-board plan changes or terminations similarly
affecting other Peer Executives);
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The
Company’s requiring Executive, without his consent, to be
based at any office
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