EXHIBIT 10.1
SEVERANCE COMPENSATION
AGREEMENT dated as of July 9, 2007, between
O’Charley’s Inc., a Tennessee corporation (the
“Company”), and John R. Grady (the
“Executive”).
The Company’s Board of
Directors has determined that it is appropriate to reinforce and
encourage the continued attention and dedication of certain members
of the Company’s senior management, including the Executive,
to their assigned duties without distraction in potentially
disturbing circumstances arising from the possibility of a change
in control of the Company.
This Agreement sets forth the
severance compensation which the Company agrees it will pay to the
Executive if the Executive’s employment with the Company
terminates under one of the circumstances described herein
following a Change In Control of the Company (as defined
herein).
1. Term. This
Agreement shall become effective upon the commencement of
Executive’s employment with the Company. This Agreement shall
terminate, except to the extent that any obligation of the Company
hereunder remains unpaid as of such time, upon the earliest of
(i) one year from the date hereof if a Change in Control of
the Company has not occurred prior to such date; (ii) the
termination of the Executive’s employment with the Company
based on death, Disability (as defined in Section 3(b)),
Retirement (as defined in Section 3(c)) or Cause (as defined
in Section 3(d)) or by the Executive other than for Good
Reason (as defined in Section 3(e)); and (iii) eighteen months
from the date of a Change in Control of the Company.
2. Change in
Control. No compensation shall be payable under this
Agreement unless and until (a) there shall have been a Change
in Control of the Company while the Executive is still an employee
of the Company and (b) the Executive’s employment by the
Company thereafter shall have been terminated in accordance with
Section 3. For purposes of this Agreement, a Change in Control
means the happening of any of the following:
(i) 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 30% 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
(ii) 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; or
(iii) during any period of two
consecutive years, individuals who at the beginning of any such
period constitute the Board cease for any reason to constitute at
least a majority thereof, unless the election, or the nomination
for election by the Company’s shareholders, of each director
of the Company first elected during such period was approved by a
vote of at least two-thirds of the directors of the Company then
still in office who were directors of the Company at the beginning
of any such period.
3. Termination Following
Change in Control. (a) If a Change in Control of the
Company shall have occurred while the Executive is still an
employee of the Company, the Executive shall be entitled to the
compensation provided in Section 4 upon the subsequent
termination of the Executive’s employment with the Company by
the Executive or by the Company within eighteen months of the
Change in Control of the Company unless such termination is as a
result of (i) the Executive’s death; (ii) the
Executive’s Disability (as defined in Section (3)(b) below);
(iii) the Executive’s Retirement (as defined in Section
3(c) below); (iv) the Executive’s termination by the
Company for Cause (as defined in Section 3(d) below); or
(v) the Executive’s decision to terminate employment
other than for Good Reason (as defined in Section 3(e)
below).
(b)
Disability. If, as a result of the Executive’s
incapacity due to physical or mental illness, the Executive shall
have been absent from his duties with the Company on a full-time
basis for six months and within 30 days after written notice
of termination is thereafter given by the Company the Executive
shall not have returned to the full-time performance of the
Executive’s duties, the Company may terminate this Agreement
for “Disability.”
(c)
Retirement. The term “Retirement” as used
in this Agreement shall mean termination by the Company or the
Executive of the Executive’s employment based on the
Executive’s having reached age 65 or such other age as shall
have been fixed in any arrangement established with the
Executive’s consent with respect to the Executive.
(d)
Cause. The Company may terminate the
Executive’s employment for Cause. For purposes of this
Agreement only, the Company shall have “Cause” to
terminate the Executive’s employment hereunder only on the
basis of fraud, misappropriation or embezzlement on the part of the
Executive. Notwithstanding the foregoing, the Executive shall not
be deemed to have been terminated for Cause unless and until there
shall have been delivered to the Executive a copy of a resolution
duly adopted by the affirmative vote of not less than
three-quarters of the membership of the Company’s Board of
Directors (excluding the Executive if the Executive is then a
member of the Board of Directors) at a meeting of the Board called
and held for the purpose (after reasonable notice to the Executive
and an opportunity for the Executive, together with the
Executive’s counsel, to be heard before the Board), finding
that in the good faith opinion of the Board the Executive was
guilty of conduct set forth in the second sentence of this Section
3(d) and specifying the particulars thereof in detail.
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(e)
Good Reason. The Executive may terminate the
Executive’s employment for Good Reason at any time during the
term of this Agreement. For purposes of this Agreement “Good
Reason” shall mean any of the following (without the
Executive’s express written consent):
(i) the assignment to the Executive
by the Company of duties inconsistent with the Executive’s
position, duties, responsibilities and status with the Company
immediately prior to a Change in Control of the Company, or a
change in the Executive’s titles or offices as in effect
immediately prior to a Change in Control of the Company, or any
removal of the Executive from or any failure to reelect the
Executive to any of such positions, except in connection with
