|
Exhibit
10.1
BUCA, INC. EXECUTIVE
SEVERANCE PLAN
Effective
December 20, 2007
TABLE OF
CONTENTS
|
|
|
|
|
| |
|
|
|
Page |
| Article 1. INTRODUCTION |
|
1 |
|
1.1
|
|
Establishment and Purpose. |
|
1 |
|
1.2
|
|
Effective
Date. |
|
1 |
|
|
| Article 2. DEFINITIONS AND CONSTRUCTION |
|
1 |
|
2.1
|
|
Definitions. |
|
1 |
|
2.2
|
|
Rules of
Construction. |
|
7 |
|
|
| Article 3. PARTICIPATION |
|
7 |
|
3.1
|
|
Commencing Participation. |
|
7 |
|
3.2
|
|
Ending
Participation. |
|
7 |
|
|
|
Article 4. SEVERANCE BENEFITS
|
|
8 |
|
4.1
|
|
Salary
Continuation Benefit and Excess Benefit. |
|
8 |
|
4.2
|
|
Welfare
Benefits. |
|
10 |
|
4.3
|
|
Time of
Payment Under Code § 409A. |
|
11 |
|
4.4
|
|
Non-duplication, Coordination, and Right to Change Benefit
Plans |
|
11 |
|
4.5
|
|
Forfeiture of Certain Parachute Payments. |
|
11 |
|
|
| Article 5. RELEASE AND RIGHT OF RECOVERY |
|
12 |
|
5.1
|
|
Benefits
Contingent on Executing Agreement. |
|
12 |
|
5.2
|
|
Time
Limit for Executing Agreement. |
|
13 |
|
|
| Article 6. NATURE OF PARTICIPANT’S INTEREST IN AND RIGHTS
UNDER THE PLAN |
|
14 |
|
6.1
|
|
No Right
to Assets. |
|
14 |
|
6.2
|
|
No Right
to Transfer Interest. |
|
14 |
|
6.3
|
|
No
Employment Rights. |
|
14 |
|
6.4
|
|
Withholding and Tax Liabilities. |
|
15 |
|
|
| Article 7. ADMINISTRATION, INTERPRETATION, AND MODIFICATION OF
PLAN |
|
15 |
|
7.1
|
|
Plan
Administrator. |
|
15 |
|
7.2
|
|
Powers of
the Administrator and Review of Determinations. |
|
15 |
|
7.3
|
|
American
Jobs Creation Act of 2004 (“AJCA”) |
|
16 |
|
7.4
|
|
Amendment, Suspension, and Termination. |
|
16 |
|
|
| Article 8. CLAIMS AND APPEALS |
|
17 |
|
8.1
|
|
Application of Claims and Appeals Procedures. |
|
17 |
|
8.2
|
|
Initial
Claims. |
|
17 |
|
8.3
|
|
Appeals. |
|
18 |
|
8.4
|
|
Other
Rules and Rights Regarding Claims and Appeals. |
|
19 |
|
8.5
|
|
Interpretation. |
|
19 |
|
|
| Article 9. MISCELLANEOUS PROVISIONS |
|
20 |
|
9.1
|
|
Payments
to be Made in Cash. |
|
20 |
|
|
|
|
|
| BUCA, Inc.
Executive Severance Plan |
|
i |
|
December 20, 2007 |
|
|
|
|
|
|
9.2
|
|
Obligation to Make Payments. |
|
20 |
|
9.3
|
|
Authority
to Determine Payment Date. |
|
20 |
|
9.4
|
|
Successors to the Company. |
|
20 |
|
9.5
|
|
Mitigation Not Required. |
|
20 |
|
9.6
|
|
Incapacity. |
|
20 |
|
9.7
|
|
Power to
Delegate Authority. |
|
21 |
|
9.8
|
|
Overpayments. |
|
21 |
|
9.9
|
|
Headings. |
|
21 |
|
9.10
|
|
Severability. |
|
21 |
|
9.11
|
|
Governing
Law. |
|
21 |
|
9.12
|
|
Complete
Statement of Plan. |
|
21 |
|
|
|
|
|
| BUCA, Inc.
Executive Severance Plan |
|
ii |
|
December 20, 2007 |
Article 1.
INTRODUCTION
| 1.1 |
Establishment and Purpose. |
This Executive Severance Plan
(the “Plan”) is established to provide severance and
other welfare benefits for eligible executives of BUCA, Inc. and
its Subsidiaries in the event that their employment is terminated
either (a) by the Company or a Subsidiary for a reason other
than Cause or (b) by the executive for Good Reason. The Plan
is an unfunded welfare plan maintained primarily for the purpose of
providing severance and other welfare benefits to a select group of
management and highly compensated employees.
The Plan is effective as of
December 20, 2007.
Article 2.
DEFINITIONS AND
CONSTRUCTION
When their initial letter(s)
are capitalized, the following words and phrases have the following
meanings unless the context clearly indicates that a different
meaning is intended:
| |
(a) |
“ Base Salary ” for any Participant,
expressed as an annual amount, means the Participant’s annual
base salary in effect on the Participant’s Termination Date;
provided that if the Participant’s Notice Date or Termination
Date occurs within 12 months after a Change of Control, his or her
Base Salary for purposes of the Plan shall not be less than his or
her annual base salary in effect immediately prior to such Change
of Control. |
| |
(b) |
“ Board of Directors ” means the
Board of Directors of the Company. |
| |
(c) |
“ Cause ” means with respect to any
Participant: |
| |
(1) |
an act or acts of dishonesty undertaken by the Participant and
intended to result in material personal gain or enrichment of the
Participant or others at the expense of the Company; |
| |
(2) |
gross misconduct or gross neglect that is willful or deliberate
on the Participant’s part and that, in either event, is
injurious to the Company; or |
| |
(3) |
the conviction of the Participant of a felony; |
|
|
|
|
|
| BUCA, Inc.
Executive Severance Plan |
|
|
|
December 20, 2007 |
| |
(4) |
the material breach of any terms and conditions of any written
employment, non-disclosure, non-solicitation, non-competition,
assignment of inventions or similar agreement between the
Participant and the Company, or of any material written policy of
the Company relating to conflict of interest, business ethics,
insider trading, or discrimination and harassment, which breach has
not been cured by the Participant within 30 days after written
notice thereof to the Participant from the Company; or |
| |
(5) |
misconduct by the Participant that is deemed by a majority of
the Board of Directors to have a material adverse effect on the
business, operations, assets, properties, or financial condition of
the Company, taken as a whole. |
| |
(d) |
“ Change of Control ” means the
occurrence of any of the following: |
| |
(1) |
The acquisition, during any 12 consecutive month period, by any
“person” (as such term is used in Sections 13(d)(3) and
14(d)(2) of the Securities Exchange Act of 1934, as amended (a
“Person”), of ownership (determined taking into account
the ownership attribution rules of Code § 318(a)) of stock of
the Company possessing 30 percent or more of the total voting power
of the then outstanding stock of the Company; provided that for
purposes of this paragraph (d)(1): |
| |
(A) |
any stock of the Company owned by the Person prior to the start
of the applicable 12 consecutive month period shall not be counted
toward the 30 percent threshold specified above; and |
| |
(B) |
an acquisition shall not constitute a Change of Control
pursuant to this paragraph (1)(A) if: (i) prior to the
acquisition, the Person owns stock of the Company possessing more
than 50% of the total fair market value or total voting power of
the then outstanding stock of the Company; (ii) the
acquisition occurs after the Person has satisfied the 30 percent
threshold specified in this paragraph (d)(1); (iii) the
acquisition is by the Company or a Subsidiary; (iv) the
acquisition is by an employee benefit plan (or related trust)
sponsored or maintained by the Company or one or more of its
Subsidiaries; or (v) the acquisition is by a surviving or
acquiring entity in connection with a Business Combination
described in the proviso to paragraph (d)(4) below; |
| |
(2) |
The acquisition by a Person of stock of the Company that,
together with stock already held by such Person, constitutes more
than 50 percent of the total fair market value or total voting
power of the stock of the Company, other than an acquisition by a
Person who, prior to the acquisition, owned more than 50 percent of
the total fair market value or total voting power of the stock of
the Company; |
|
|
|
|
|
| BUCA, Inc.
Executive Severance Plan |
|
2 |
|
December 20, 2007 |
| |
(3) |
The replacement, during any 12 consecutive month period, of a
majority of the members of the Board of Directors with members
whose appointment or election is not endorsed by a majority of the
members of the Board of Directors before the date of the
appointment or election; |
| |
(4) |
The consummation of a reorganization, merger, or consolidation
of the Company or a statutory exchange of outstanding voting
securities of the Company (each, a “Business
Combination”), provided that a Change of Control will not
include a Business Combination where the stockholders of the
Company immediately before the Business Combination own, directly
or indirectly, 50 percent or more of the total fair market value
and total voting power of all the outstanding stock of the
surviving or acquiring entity resulting from such Business
Combination; or |
| |
(5) |
The acquisition, during any 12 consecutive month period, by a
Person of assets of the Company with a total gross fair market
value (determined without regard to any liabilities associated with
such assets) equal to more than 40 percent of the total gross fair
market value of all assets of the Company immediately prior to the
acquisition, other than an acquisition by: (A) a stockholder
of the Company immediately prior to such acquisition in exchange
for or with respect to its Company stock; (B) an entity 50
percent or more of the total value or voting power of which is
owned, directly or indirectly, by the Company; (C) a Person
that owns, directly or indirectly, 50 percent or more of the total
value or voting power of all outstanding stock of the Company; or
(D) an entity 50 percent or more of the total value or voting
power of which is owned, directly or indirectly, by a Person
described in clause (d)(5)(C); |
provided, however, that in
each case the transaction or transactions constitutes a change in
the ownership of the Company, a change in the effective control of
the Company, or a change in the ownership of a substantial portion
of the assets of the Company, as determined under Code §
409A.
| |
(e) |
“ COBRA ” means the Consolidated
Omnibus Budget Reconciliation Act of 1985, as amended. |
| |
(f) |
“ Code ” means the Internal Revenue
Code of 1986, as amended, and any regulations and guidance
promulgated thereunder. |
| |
(g) |
“ Commencement Date ” means, for any
Participant, the Company’s first semi-monthly pay date that
occurs after the Participant’s Termination Date. |
| |
(h) |
“ Company ” means BUCA, Inc., a
Minnesota corporation, and any successor thereto. |
| |
(i) |
“ Compensation Committee ” means the
Compensation Committee of the Board of Directors. |
|
|
|
|
|
| BUCA, Inc.
Executive Severance Plan |
|
3 |
|
December 20, 2007 |
| |
(j) |
“ Designated Number ” means, for any
Participant, the number of months that the Compensation Committee
assigns to the Participant at the time the Participant commences
participation in the Plan and communicates to the Participant in
writing. The Compensation Committee may, in its sole discretion,
assign to a Participant more than one Designated Number for the
purpose of determining such Participant’s benefits hereunder,
with each Designated Number having application to specific
conditions or events. By way of example and not limitation, the
Compensation Committee may assign one Designated Number for the
purpose of determining a Participant’s benefits hereunder in
the event the Participant is Dismissed prior to a Change of Control
and a different Designated Number for the purpose of determining
such Participant’s benefits hereunder in the event the
Participant is Dismissed on or after a Change of Control, and/or
the Compensation Committee may assign different Designated Numbers
to a Participant based on whether the Participant’s
Termination Date occurs before or after a specified date or during
specified time periods. For any situation or time period for which
the Compensation Committee has not assigned and communicated a
Designated Number in writing to a Participant, such
Participant’s Designated Number shall be zero. |
| |
(k) |
“ Disability ” means a continuing
condition of the Participant that has been determined to meet the
criteria set forth in the Company’s *[Long Term Disability
Plan], or similar successor plan, to render the Participant
eligible for long-term disability benefits under said plan, whether
or not the Participant is in fact covered by such plan. The
determination shall be made by the insurer of the plan or, if the
Participant is not covered by the plan, by the Company in its sole
discretion. |
| |
(l) |
“ Dismissed ” means, with respect to
any Participant, that: |
| |
(1) |
The Participant terminates his or her employment with the
Company and its Subsidiaries for Good Reason; or |
| |
(2) |
The Participant’s employment with the Company and its
Subsidiaries is terminated involuntarily by the Company (within the
meaning of Treas. Reg. § 1.409A-1(n)(1)) for any reason other
than for Cause or Disability. |
| |
(m) |
“ Effective Date ” means
December 20, 2007. |
| |
(n) |
“ Eligible Executive ” means an
Executive who is employed not less than 25 hours per week; who is a
“highly compensated employee,” as that term is defined
in Code § 414(q); who is not a party to, participant in,
or beneficiary of any Other Arrangement with the Company or a
Subsidiary designed to provide to such Executive any severance,
salary continuation, advance notice, or similar benefits as a
result of any termination of employment; and to whom the
Compensation Committee has assigned in writing a Designated Number.
The Board of Directors or the Compensation Committee, in its sole
discretion, may determine that an Executive will not be an Eligible
Executive, or may determine that an Executive not described above
will be an Eligible Executive. |
|
|
|
|
|
| BUCA, Inc.
Executive Severance Plan |
|
4 |
|
December 20, 2007 |
| |
(o) |
“ Employer ” means, with respect to a
Participant, the Company or the Subsidiary that employs the
Participant immediately before the Participant’s Termination
Date. |
| |
(p) |
“ ERISA ” means the Employee
Retirement Income Security Act of 1974, as amended. |
| |
(q) |
“ Excess Benefit ” means the benefit
described in Section 4.1(a)(2). |
| |
(r) |
“ Executive ” means any person
employed by the Company or a Subsidiary who is employed in a
position classified by the Company at the level of Senior Vice
President or above. An individual shall remain an Executive for
purposes of this Plan for up to one year of continuing employment
with the Company or a Subsidiary if such Executive is transferred
from an Executive position to a non-Executive position. |
| |
(1) |
A Participant shall be deemed to resign for Good Reason if and
only if (A) his or her Termination Date occurs within ninety
(90) days immediately following the date on which a Covered
Action (as defined by paragraph (2), below) occurs and (B) the
conditions specified by paragraphs (2) and (3) of this
Section 2.1(s) are satisfied. |
| |
(2) |
A Participant shall have Good Reason to resign from employment
with the Company and its Subsidiaries only if at least one of the
following events (each a “Covered Action”) occurs
within one year following a Change of Control, without the
Participant’s consent: |
| |
(A) |
A material reduction in the Participant’s Base
Salary; |
| |
(B) |
An action by the Company or a Subsidiary results in a material
diminution in the Participant’s authority, duties, or
responsibilities; |
| |
(C) |
The relocation of the Participant’s principal place of
work to a location more than 50 miles outside the city in which he
or she is principally based, unless the relocation decision is made
by the Participant; or |
| |
(D) |
The material breach by the Company or a Subsidiary of any
written employment or similar agreement between the Company or such
Subsidiary pursuant to which the Participant provides services to
the Company or a Subsidiary. |
| |
(3) |
A Participant shall not have Good Reason to resign as a result
of a Covered Action unless: |
| |
(A) |
Within the 30-day period immediately following the date on
which such Covered Action first occurs, the Participant notifies
his or her Employer in writing that such Covered Action has
occurred and of his or her intention to resign for Good Reason;
and |
|
|
|
|
|
| BUCA, Inc.
Executive Severance Plan |
|
5 |
|
December 20, 2007 |
| |
(B) |
Such Covered Action is not remedied within the 30-day period
immediately following the date on which the Executive’s
Employer receives a notice provided in accordance with subparagraph
(A) above. |
| |
(t) |
“ IRS ” means the Internal Revenue
Service. |
| |
(u) |
“ Notice Date ” means, for any
Participant, the date the Company or a Subsidiary provides written
notice to the Participant that his or her employment with the
Company and its Subsidiaries will be terminated involuntarily as of
a specified Termination Date in the future. |
| |
(v) |
“ Other Arrangement ” means
(1) any employment agreement with the Company or a Subsidiary
or (2) any plan, program, policy, or other arrangement
maintained by the Company or a Subsidiary. |
| |
(w) |
“ Participant ” means an Eligible
Executive who has become a participant in the Plan under Article
3. |
| |
(x) |
“ Plan ” means the BUCA, Inc.
Executive Severance Plan, as set forth herein and subsequently
amended from time to time. |
| |
(y) |
“ Salary Continuation Benefit ” means
the benefit described in Section 4.1(a)(1). |
| |
(z) |
“ Severance Benefits Committee ”
means the committee established from time to time by the
Compensation Committee to decide claims for benefits as described
in Article 8 of this Plan. |
| |
(aa) |
“ Severance Period ” means, for any
Participant, the period starting on the Participant’s
Termination Date and ending on the last day of the calendar month
that is the Designated Number of months after such Termination
Date. |
| |
(bb) |
“ Subsidiary ” means, with respect to
the Company, any corporation or other entity that is required to be
combined with the Company as a single employer under Code §
414(b) or (c). |
| |
(cc) |
“
Termination Date ” means, for any Participant,
the date of the Participant’s “separation from
service” (within the meaning of Code § 409A(a)(2)(A)(i))
with the Company and its Subsidiaries, as determined by the
Company. For purposes of the Plan, a Participant who is on a leave
of absence and does not have a statutory or contractual right to
reemployment shall be deemed to have had a “separation from
service” on the first date that is more than six months after
the commencement of such leave of absence. However, if the leave of
absence is due
|
|
|
|
|
|
| BUCA, Inc.
Executive Severance Plan |
|
6 |
|
December 20, 2007 |
| |
to any medically
determinable physical or mental impairment that can be expected to
last for a continuous period of six months or more, and such
impairment causes the Participant to be unable to perform the
duties of his or her position of employment or any substantially
similar position of employment, the preceding sentence shall be
deemed to refer to a 29-month period rather than to a six-month
period.
|
| |
(dd) |
“ Welfare Benefits ”
means the medical and dental care benefits being provided by the
Company or a Subsidiary to its active employees from time to
time. |
| 2.2 |
Rules of Construction. |
For purposes of the Plan,
unless the contrary is clearly indicated by the context:
| |
(a) |
The use of the singular shall also include within its meaning
the plural and vice versa; |
| |
(b) |
The word “include” shall mean to include, but not
to be limited to; |
| |
(c) |
Any reference to a statute or section of a statute shall
further be a reference to any successor or amended statute or
section, and any regulations or other guidance of general
applicability issued thereunder; and |
| |
(d) |
“As soon as practicable,” with respect to any date
or event, shall mean on the earliest administratively practicable
date after the relevant date or event, but no later than
(1) the last day of the calendar year in which the relevant
date or event occurs or (2) the 90th day following the
occurrence of the relevant date or event, whichever occurs later.
Such earliest administratively practicable date shall be determined
by the Company in its sole discretion. |
Article 3.
PARTICIPATION
| 3.1 |
Commencing Participation. |
An Eligible Executive shall
become a Participant in the Plan as of the later of (a) the
date he or she becomes an Eligible Executive or (b) the
Effective Date.
| 3.2 |
Ending Participation. |
An individual who becomes a
Participant shall remain a Participant until the earlier of
(a) the Participant’s Termination Date if such
termination is for any reason other than because such Participant
is Dismissed, or (b) the date on which the Participant’s
Designated Number is zero; provided, however, that if a Participant
is Dismissed before any date specified in clause (b), then such
Participant shall remain a Participant until the last day of any
period for which the Company is required to provide any payments or
benefits prescribed by Sections 4.1 or 4.2.
|
|
|
|
|
| BUCA, Inc.
Executive Severance Plan |
|
7 |
|
December 20, 2007 |
Article 4.
SEVERANCE
BENEFITS
| 4.1 |
Salary Continuation Benefit and Excess
Benefit. |
| |
(a) |
Eligibility for and Amount of Benefit . |
| |
(1) |
Salary Continuation Benefit . If a Participant is
Dismissed and, upon his or her Termination of Employment, timely
executes and submits to the Company the agreement required by
Article 5, the Participant shall be eligible for a Salary
Continuation Benefit equal to the lesser of (i) the product of
one-twelfth of the Participant’s Base Salary times the
Participant’s Designated Number (“Base Benefit”)
and (ii) four hundred fifty thousand and no/100 dollars
($450,000.00). |
| |
(2) |
Excess Benefit . If the Participant is eligible for a
Salary Continuation Benefit and the Base Benefit (as defined in
Section 4.1(a)(1)) for such Participant is equal to or greater
than four hundred fifty thousand and no/100 dollars ($450,000.00),
then the Participant shall also be eligible for an Excess Benefit
equal to the difference between the Participant’s Base
Benefit and the Salary Continuation Benefit (but not below
zero). |
| |
(b) |
Form and Time of Payment of Benefit Prior to Change of
Control . If a Participant is Dismissed and (i) in the
case of an involuntary termination by the Company or a Subsidiary
without Cause, the Participant’s Termination Date occurs
prior to a Change of Control or more than one year following a
Change of Control, or (ii) in the case of a
Participant’s resignation for Good Reason, the Covered Action
(as defined in Section 2.1(s)) occurs prior to a Change of
Control or more than one year following a Change of Control, then
any Salary Continuation Benefit and any Excess Benefit to which
such Participant is entitled shall be paid in the form and at the
times set forth in this Section 4.1(b). |
| |
(1) |
Salary Continuation Benefit . The Company shall pay the
Salary Continuation Benefit prescribed by Section 4.1(a)(1) in
semi-monthly installments (without interest). Before withholding,
each installment shall be equal to one-half of the
Participant’s Base Salary for one month, except that any
residual amount in respect of a period of less than one-half of a
month shall be paid together with the last installment. |
| |
(2) |
Excess Benefit . Except as required by Section 4.3,
the Company shall pay the Excess Benefit (if any) prescribed by
Section 4.1(a)(2) in semi-monthly installments (without
interest). Before withholding, each installment shall be equal
t |
|
