O’CHARLEY’S INC.
AMENDED AND RESTATED
EXECUTIVE EMPLOYMENT AGREEMENT
(the “Agreement”)
O’CHARLEY’S INC.
(the “Company”)
JEFFREY D. WARNE
(“Executive”)
|
A.
|
|
Executive has been employed as the
Company’s President — O’Charley’s Concept
and is party to an Employment Agreement dated November 6, 2007
(as amended to date, the “Employment
Agreement”).
|
|
|
|
|
|
B.
|
|
On
the date hereof, Executive has been appointed as the
Company’s President and Chief Executive Officer and in
connection therewith the Company and Executive desire to make
certain amendments to the Employment Agreement and to restate the
Employment Agreement as so amended.
|
ARTICLE I.
EMPLOYMENT, DUTIES AND TERM
1.1
Employment . Upon the terms and condition set forth in this
Agreement, the Company hereby employs Executive as the
Company’s President and Chief Executive Officer, and
Executive accepts such employment.
1.2 Duties
. Executive shall devote his full-time and best efforts to the
Company and to fulfilling the duties of his position, which shall
include such duties as may from time to time be assigned to him by
the Company. The Executive may devote reasonable time and attention
to civic, charitable, business and social organizations so long as
such activities do not interfere with the performance of
Executive’s responsibilities under this Agreement and
provided that Executive shall obtain the prior written approval of
the Company’s Chairman of the Board of Directors prior to
joining the board of directors or other governing body of any such
civic, charitable, business or social organization. Executive
confirms that he is not currently a member of the board of
directors or governing body of any for profit business organization
and has informed the Chairman of the Board of Directors of any
civic, charitable, non-profit business or social organization for
which he serves as a member of the board of directors or governing
body. Executive shall comply with the Company’s policies and
procedures to the extent they are not inconsistent with this
Agreement, in which case the provisions of this Agreement shall
prevail. The Executive agrees to serve without any additional
compensation as a member of the Board of Directors of the Company
and any committee thereof and as an officer and/or director of the
board of directors of any subsidiary of the Company as requested.
If the Executive’s employment terminates for any reason, the
Executive shall resign as an officer and director of the Company
and all of its subsidiaries, such resignation to be effective no
later than the date of termination of Executive’s employment
hereunder.
1.3 Term .
Subject to the provisions of Articles III , IV and
V herein, this Agreement and Executive’s employment
shall continue until March 2, 2012 (the “Initial
Term”) and shall automatically renew for successive one year
periods (each, a “Renewal Term”) upon all terms,
conditions and obligations set forth herein unless either party
shall provide written notice to the other not less than ninety
(90) days prior to the expiration of the Initial Term or any
Renewal Term, as applicable. For purposes hereof, the Initial Term,
together with any Renewal Term, are hereinafter referred to as the
“Term.”
ARTICLE II.
COMPENSATION AND EXPENSES
2.1 Base
Salary . For services rendered under this Agreement during the
Term, the Company shall pay Executive a base salary at the rate of
$600,000 per annum commencing June 6, 2009. Executive’s
base salary shall be reviewed annually by the Compensation and
Human Resources Committee of the Board (the
“Committee”) and may be increased in the sole
discretion of the Committee (such base salary, as it may be
increased from time to time during the Term, is hereinafter
referred to as the “Base Salary”).
2.2 Bonus and
Incentive . The Executive shall be eligible to participate in
such bonus and incentive plans during the Term as the Committee may
determine appropriate. For purposes of the Company’s 2009
fiscal year, Executive shall be eligible for a bonus equal to the
greater of (A) the amount determined in accordance with the
bonus plan previously adopted for Executive by the Committee for
the 2009 fiscal year assuming no changes in Executive’s Base
Salary resulting from this Agreement and (B) the amount equal
to the sum of (1) for the portion of fiscal 2009 prior to the
date of this Agreement, a bonus based on 70% of Executive’s
base salary in effect during such period at the
“Target” level (as previously established by the
Committee) and based 60% on the O’Charley’s
concept’s performance and 40% on the Company’s
performance and (2) for the portion of fiscal 2009 from and
after the date of this Agreement, a bonus based on 100% of Base
Salary at the “Target” level and based 100% on the
Company’s performance.
2.3 Long-Term
Incentive . On the date of this Agreement, Executive shall be
granted an option (the “Stock Option”) pursuant to the
Company’s 2008 Equity and Incentive Plan (the
“Plan”) to purchase 150,000 shares of the
Company’s Common Stock at an exercise price equal to the
closing price for the Company’s common stock on the date of
grant. Subject to the terms of the Plan and this Agreement, the
Stock Option shall “cliff” vest on March 10, 2012
and expire on March 10, 2015.
2.4 Business
Expenses . The Company shall, consistent with its policies in
effect from time to time, bear all ordinary and necessary business
expenses incurred by Executive in performing Executive’s
duties as an employee of the Company, provided , that
Executive incurs and accounts promptly for such expenses to the
Company in the manner prescribed by the Company.
2.5
Benefits . During the Term, the Company shall provide Executive
with those benefits provided generally to members of senior
management, including a car allowance in an amount at least equal
to the amount as in effect on the date hereof.
ARTICLE III.
SEVERANCE FOR CIRCUMSTANCES OTHER THAN CHANGE IN
CONTROL
3.1
Severance . This Article III shall not apply to a
termination of Executive’s employment following a Change in
Control (as hereinafter defined), which is governed solely by
Article IV .
(a) It
is understood and agreed that if Executive’s employment with
the Company should be terminated at any time prior to the
expiration of the Term as a result of a Termination
Without
2
Cause (defined
below) or a Termination With Good Reason (defined below), and if
Executive is not then or thereafter in material breach of this
Agreement, and upon the execution and delivery to the Company by
Executive of an agreement, in a form presented by the Company and
accepted by Executive, which acceptance shall not be unreasonably
withheld or delayed, releasing all claims which Executive may have
against the Company (other than claims for indemnification pursuant
to Section 6.7 hereunder and claims under this
Agreement), Executive shall receive, in full and complete
settlement of any claims for compensation which Executive may have,
and in lieu of any severance pay under any policy of the Company or
otherwise, the following:
(i)
continued monthly payments, in accordance with the Company’s
regular payroll practices, for a period of eighteen
(18) months after the date of termination equal to the sum of
(1) one-eighteenth (1/18) of Executive’s Base Salary,
and (2) one-eighteenth (1/18) of the Executive’s target
annual bonus for the fiscal year in which the date of termination
occurs;
(ii)
any payments and benefits which Executive or Executive’s
spouse, dependents, beneficiaries or estate would have been
entitled to receive pursuant to any employee benefit plan or
program of the Company during the twelve (12)-month period
following Executive’s termination had Executive remained an
employee during that period, with such benefits provided to
Executive at no less than the same coverage level and at no more of
a cost to Executive as in effect as of the date of
Executive’s termination subject to such reduction in coverage
or increases in cost as shall become in effect for senior executive
employees of the Company generally, provided ,
however , that such continued payments and benefits shall
terminate on the date or dates Executive receives substantially
similar coverage and benefits, without waiting period or
pre-existing condition limitations, under the plans and programs of
a subsequent employer (such coverage and benefits to be determined
on a coverage-by-coverage or benefit-by-benefit basis);
and
(iii)
notwithstanding any provisions to the contrary contained in the
agreement evidencing the Stock Option granted pursuant to
Section 2.3 , in the event Executive is entitled to
receipt of payments under this Section 3.2 , the Stock
Option shall vest immediately prior to the date of termination in
an amount equal to the product of (x) the number of shares subject
to the Stock Option and (y) a fraction, the numerator of which
is the number of days that have elapsed between the date of this
Agreement and the date of termination and the denominator of which
is 1,011.
(b) As
used in this Article III , “Termination Without
Cause” means any termination of Executive’s employment
by the Company other than a Termination With Cause (defined
below).
(c) As
used in this Article III , “Termination With
Cause" means termination by
the Company of Executive’s employment at any time after the
Company believes in good faith it has actual knowledge of the
occurrence of any of the following events: gross neglect of duty,
material breach of this Agreement, a material act of dishonesty or
disloyalty, the inability by Executive to discharge
Executive’s material duties due to alcohol or drug addiction,
or gross misconduct inimical to the best interests of the Company;
provided , however , that termination of employment
solely due to unsatisfactory job performance shall not be
considered a Termination With Cause; and, provided
further , that a “Termination With Cause” shall
not be deemed existing unless and until the Company has delivered
to Executive a copy of a resolution duly adopted by the
Company’s Board of Directors at a meeting of the Board duly
called (after reasonable (but in no event less than seven
(7) days) notice to Executive and an opportunity for
Executive, together with Executive’s counsel, to be heard
before the Board), finding that in the good faith opinion of the
Board, Executive had engaged in the conduct set forth above and
specifying the particulars thereof in reasonable detail.
3
(d) As
used in this Article III , “Termination With Good
Reason” means Executive’s termination of employment at
any time within the earlier of two (2) years after Executive
has actual knowledge of the occurrence or the expiration of the
Term, without Executive’s written consent, of one of the
following events: (i) a material reduction in
Executive’s Base Salary or a material reduction in the health
and welfare insurance, retirement and other benefits available to
Executive as of the date of this Agreement, except for reductions
in such benefits as shall become in effect for senior executive
employees of the Company generally; or (ii) the relocation of
Executive’s principal office to a location more than fifty
(50) miles from Nashville, Tennessee; provided that Executive
shall have notified the Company of the existence of a condition
described in items (i) or (ii), within ninety (90) days
of Executive’s actual knowledge of the initial existence of
the condition, and the Company shall have failed to remedy the
condition within thirty (30) days of receiving such notice.
For the avoidance of doubt, subsequent occurrences of these events
shall start new time periods described in this
paragraph.
(e) In
the event Executive’s employment pursuant to this Agreement
terminates for any reason other than a Termination Without Cause or
a Termination With Good Reason, Executive shall be entitled to
receive, in full and complete settlement of any claims for
compensation which Executive may have, and in lieu of any severance
pay under any policy of the Company or otherwise, Base Salary and
benefits (including any Bonus which has been determined by the
Committee to have been earned in respect of a completed fiscal year
but not yet paid) to be paid or provided by the Company through the
date of termination.
(f) The
amounts payable to Executive under this Article III are
not eligible earnings under any pension, savings, deferred
compensation, bonus, incentive, supplemental retirement benefit or
other benefit plan of the Company.
ARTICLE IV.
CHANGE IN CONTROL
4.1 Change In
Control . No compensation shall be payable under this
Article IV unless and until (a) there shall have
been a Change in Control of the Company during the Term and (b)
Executive’s employment by the Company thereafter shall have
been terminated in accordance with Section 4.2 . For
purposes of this Agreement, a Change in Control means the happening
of any of the following:
(a) any
person or entity, including a “group” as defined in
Section 13(d)(3) of the Securities Exchange Act of 1934, other
than the Company, a wholly-owned subsidiary thereof, any employee
benefit plan of the Company or any of its Subsidiaries becomes the
beneficial owner of the Company’s securities having 50% or
more of the combined voting power of the then outstanding
securities of the Company that may be cast for the election of
directors of the Company (other than as a result of an issuance of
securities initiated by the Company in the ordinary course of
business); or
(b) as
the result of, or in connection with, any cash tender or exchange
offer, merger or other business combination, sale of assets or
contested election, or any combination of the foregoing
transactions, less than a majority of the combined voting power of
the then outstanding securities of the Company or any successor
corporation or entity entitled to vote generally in the election of
the directors of the Company or such other corporation or entity
after such transaction are held in the aggregate by the holders of
the Company’s securities entitled to vote generally in the
election of directors of the Company immediately prior to such
transaction.
4.2
Termination . If a Change in Control of the Company shall have
occurred during the Term, Executive shall be entitled to the
compensation provided in Section 4.3 upon the
subsequent termination of Executive’s employment with the
Company
|
