EXHIBIT 10.1
SEVERANCE AGREEMENT AND GENERAL RELEASE
THIS SEVERANCE AGREEMENT AND GENERAL RELEASE ("Agreement") is made and
entered into this 1st day of January, 2006, by and between ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
(hereinafter referred to as "▇▇. ▇▇▇▇▇▇") and O'CHARLEY'S INC. and its
subsidiaries and related entities (hereinafter collectively referred to as
"O'Charley's").
W I T N E S S E T H:
WHEREAS, ▇▇. ▇▇▇▇▇▇ currently serves as Concept President-O'Charley's
and as a member of the Board of Directors of O'Charley's and has expressed his
desire to resign his position as a director and his employment, effective
January 1, 2006 (the "Effective Date");
WHEREAS, O'Charley's has expressed its willingness to accept
▇▇. ▇▇▇▇▇▇'▇ resignation as a director and from employment upon the following
terms and conditions; and
WHEREAS, after a period of negotiations between them, the parties have
reached an agreement by which ▇▇. ▇▇▇▇▇▇ will resign as a director and his
employment on the Effective Date.
NOW, THEREFORE, in consideration of the premises and mutual promises
herein contained, it is agreed as follows:
1. The recitals set forth above are true and accurate, and by signing this
Agreement, ▇▇. ▇▇▇▇▇▇ hereby resigns as a member of the Board of
Directors and his employment effective January 1, 2006 (the "Effective
Date"). Between the date of this Agreement and the Effective Date, ▇▇.
▇▇▇▇▇▇ will continue to serve at the direction of the Company's Chief
Executive Officer. During such time, ▇▇. ▇▇▇▇▇▇ will continue to
receive his base salary as currently in effect.
2. This Agreement is not and shall not be construed as an admission by
O'Charley's of any fact or conclusion of law. Without limiting the
general nature of the previous sentence, this Agreement shall not be
construed as an admission that O'Charley's, its subsidiaries, related
entities, or any of its or their officers, directors, managers, agents,
or employees have violated any law or regulation or have violated any
contract, express or implied.
3. ▇▇. ▇▇▇▇▇▇ represents and warrants that he has not filed any
complaint(s) or charge(s) against O'Charley's with the Equal Employment
Opportunity Commission or the state commission empowered to investigate
claims of employment discrimination, the United States Department of
Labor, the Office of Federal Contract Compliance Programs, or with any
other local, state or federal agency or court, and that if any such
agency or court assumes jurisdiction of any complaint(s) or charge(s)
against O'Charley's on behalf of ▇▇. ▇▇▇▇▇▇, ▇▇. ▇▇▇▇▇▇ will request
such agency or court to withdraw from the matter, and ▇▇. ▇▇▇▇▇▇ will
refuse any benefits derived therefrom. This Agreement will not affect
▇▇. ▇▇▇▇▇▇'▇ right to hereafter file a charge with or otherwise
participate in an investigation or proceeding conducted by the Equal
Employment Opportunity
Commission regarding matters which arose after the Effective Date and
which are not the subject of this Agreement.
4. ▇▇. ▇▇▇▇▇▇ represents and agrees that he is fully aware of his rights
and is advised to discuss any and all aspects of this Agreement with
his attorney, that ▇▇. ▇▇▇▇▇▇ has consulted with his attorney regarding
this Agreement, or has chosen voluntarily not to do so, that he has
carefully read and fully understands all of the provisions of this
Agreement, and that, in consideration of the provisions hereof, ▇▇.
▇▇▇▇▇▇ agrees to enter into this Agreement. ▇▇. ▇▇▇▇▇▇ represents and
acknowledges that prior to the execution of this Agreement, he has been
provided a period of twenty-one (21) days within which to consider the
Agreement.
5. ▇▇. ▇▇▇▇▇▇ hereby irrevocably and unconditionally releases, acquits and
forever discharges O'Charley's, its subsidiaries, and related entities,
and each of their respective shareholders, successors, assigns, agents,
directors, officers, employees, representatives, and attorneys, and all
persons acting by, through, under or in concert with any of them
(collectively, the "Released Parties"), or any of them, from any and
all charges, complaints, claims, liabilities, obligations, promises,
agreements, controversies, damages, actions, causes of action, suits,
rights, demands, costs, losses, debts and expenses (including
attorney's fees and costs actually incurred), of any nature whatsoever,
known or unknown ("Claims"), which ▇▇. ▇▇▇▇▇▇ now has, owns, holds, or
claims to have, own, or hold, or which ▇▇. ▇▇▇▇▇▇ at any time
heretofore had, owned, or held, or claimed to have, own, or hold. Such
Claims include those under local, state or federal law, Executive
Order, or at common law including, but not limited to, the Age
Discrimination in Employment Act (ADEA). This provision does not
include the release of future charges before the Equal Employment
Opportunity Commission regarding matters which arose after the
Effective Date and which are not the subject of this Agreement. This
provision further does not include the release of Claims with respect
to any vested benefits under a plan governed by the Employee Retirement
Income Security Act ("ERISA") or any Claim related to the rights and
benefits granted by the express terms of this Agreement.
6. ▇▇. ▇▇▇▇▇▇ agrees that he will not, without O'Charley's prior written
consent, for a period ending on December 31, 2006, directly or
indirectly, (i) solicit to hire or hire (or cause to leave the employ
of O'Charley's) any salaried employee of O'Charley's or its
subsidiaries or (ii) for himself or through, on behalf of or in
conjunction with any person, persons or entity, own, consult with,
maintain, operate, engage in, or have any financial or beneficial
interest in (other than as a holder of not more than one percent of the
outstanding stock of any corporation, which stock is publicly traded),
advise, assist or make loans to, any business that is of a character
and concept similar to the O'Charley's, Ninety-Nine Restaurant & Pub or
Stoney River Legendary Steaks concepts operated by O'Charley's,
including, without limitation, a full service varied menu casual dining
restaurant which serves alcoholic beverages through a full-service bar,
and which business is located within the United States. In the event
▇▇. ▇▇▇▇▇▇ desires to engage in any of the activities set forth in (i)
or (ii) of this paragraph 6, he shall deliver to O'Charley's Inc.,
Attn: President, his request in writing for O'Charley's consent,
setting forth in detail the activity in which ▇▇. ▇▇▇▇▇▇ proposes to
engage and will supply such
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other information as O'Charley's shall request in connection therewith.
O'Charley's will consider such request and in determining whether to
consent to any such request, O'Charley's will take into consideration
the potential impact of such proposed activity on the business
interests of O'Charley's. The agreements set forth in this paragraph 6,
together with those contained in paragraph 7 are sometimes hereinafter
collectively referred to as the "Restrictive Agreements."
7. ▇▇. ▇▇▇▇▇▇ also recognizes that, as Concept President-O'Charley's he
has had access to, was provided in detail with, and used throughout his
employment with O'Charley's, certain confidential and proprietary
business information. Such information includes but is not limited to
business strategy, pricing information, branding strategy, budgets,
site location, vendor information, market analysis and evaluation, and
other such proprietary and confidential business information as defined
under Tennessee law as a trade secret (hereinafter "Confidential and
Proprietary Business Information"). ▇▇. ▇▇▇▇▇▇ agrees that, without
O'Charley's prior written consent, he will not divulge, disclose,
publish or disseminate in any manner, directly or indirectly, any such
Confidential and Proprietary Business Information to any other person
or entity.
8. ▇▇. ▇▇▇▇▇▇ agrees that the Restrictive Agreements are reasonable and
supported by adequate consideration, which but for his agreement
herein, ▇▇. ▇▇▇▇▇▇ would not be entitled to receive. ▇▇. ▇▇▇▇▇▇ further
agrees that the Restrictive Agreements are necessary for the protection
of O'Charley's, its business and its employees, and properly balance
his personal interest in future employment and the various interests
related to O'Charley's, its business and its employees. ▇▇. ▇▇▇▇▇▇
further agrees that if he breaches any of the Restrictive Agreements,
such breach likely will not have an adequate remedy at law and that
O'Charley's shall be entitled, in addition to all other legal remedies
available to it, to cease making the payments provided under paragraph
9 and apply to and obtain from a court of competent jurisdiction an
injunction against any violation thereof with the prevailing party
entitled to recover all costs of such action, including reasonable
attorneys' fees. These rights and remedies shall be cumulative and not
alternative.
9. Following the Effective Date, O'Charley's will provide to ▇▇. ▇▇▇▇▇▇
the following:
(a) The aggregate sum of $526,518.88, payable as follows: (i)
$426,907.20, payable weekly at the rate of $7,115.12
commencing on the Effective Date and (ii) $99,611.68, payable
in a lump sum on March 1, 2007, and from which payments
O'Charley's will make applicable legal withholdings.
(b) If ▇▇. ▇▇▇▇▇▇ elects to continue health insurance coverage
pursuant to his "COBRA" right after the Effective Date,
O'Charley's will pay the premiums for such coverage during the
twelve month period following the Effective Date ending
December 31, 2006.
10. Attached as Schedule A is a listing of all stock options and restricted
stock awards held by ▇▇. ▇▇▇▇▇▇ as of the Effective Date which are
exercisable in whole or in part on the Effective Date. ▇▇. ▇▇▇▇▇▇
agrees that Schedule A accurately reflects all equity awards
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and their respective terms held by him as of the date hereof and which
are exercisable in whole or in part on the Effective Date. All such
awards were granted pursuant to the terms of the O'Charley's 2000 Stock
Incentive or the O'Charley's 1990 Employee Stock Plan. Pursuant to such
plans, upon the Effective Date, each of the stock options and
restricted stock awards would automatically terminate; however,
notwithstanding the provisions of such plans, O'Charley's agrees to
extend until March 31, 2006 the time within which ▇▇. ▇▇▇▇▇▇ shall have
the right to exercise any and all stock options listed on Schedule A to
the extent they are exercisable as of the Effective Date (it being
understood that all or any portion of any stock options, restricted
stock awards or other equity based awards which are not exercisable or
vested as of the Effective Date shall terminate as of such date in
accordance with their terms).
11. ▇▇. ▇▇▇▇▇▇ represents that he has not heretofore assigned or
transferred, or purported to assign or transfer to any person or
entity, any claim or any portion thereof or interest therein.
12. ▇▇. ▇▇▇▇▇▇ represents and acknowledges that in executing this Agreement
he does not rely and has not relied upon any other representation or
statement made by any of the Released Parties or by any of the Released
Parties' agents, representatives or attorneys, except as set forth
herein, with regard to the subject matter, basis or effect of this
Agreement.
13. This Agreement shall be binding upon O'Charley's, ▇▇. ▇▇▇▇▇▇ and upon
▇▇. ▇▇▇▇▇▇'▇ heirs, administrators, representatives, executors,
successors, and assigns, and shall inure to the benefit of the Released
Parties and each of them, and to their heirs, administrators,
representatives, executor, successors and assigns.
14. This Agreement shall in all respects be interpreted, enforced and
governed under the laws of the State of Tennessee. If either party
files suit to enforce the terms of this Agreement, the prevailing party
shall be entitled to its reasonable attorneys' fees and costs.
15. ▇▇. ▇▇▇▇▇▇ shall have seven (7) days following the execution of this
Agreement during which to revoke the Agreement. This Agreement shall
become effective and irrevocable only after the seven (7) day period
has expired and only absent a timely and effective revocation.
16. Should any provision of this Agreement be declared or be determined by
any court to be illegal or invalid, the validity of the remaining
parts, terms, or provisions shall not be affected thereby and said
illegal or invalid part, term or provision shall be deemed not to be a
part of this Agreement.
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17. This Agreement sets forth the entire agreement between the parties
hereto.
O'CHARLEY'S INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Title: CEO
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Date: December 23, 2005
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Schedule A
LIST OF EQUITY AWARDS
NUMBER OF
SHARES SUBJECT SHARES
GRANT EXERCISE TO AWARD ON EXERCISABLE ON
TYPE OF AWARD DATE PRICE EFFECTIVE DATE EFFECTIVE DATE
--------------------------- ------------------------ ------------ ---------------- -----------------
Stock Option February 18, 1998 $12.08 37,500 36,469
Stock Option February 17, 1999 $15.25 35,000 35,000
Stock Option February 15, 2000 $11.88 20,000 10,200
Stock Option February 19, 2003 $21.19 42,240 42,240
Restricted Stock Award February 19, 2003 N/A 21,120 0
Restricted Stock Award May 12, 2004 N/A 23,624 0
Restricted Stock Award January 21, 2005 N/A 25,484 0