SECOND SETTLEMENT AGREEMENT
Exhibit 10.1
SECOND SETTLEMENT AGREEMENT
SECOND SETTLEMENT AGREEMENT, dated the 22nd day of December, 2008 (this “Agreement”),
by and among O’Charley’s Inc., a Tennessee corporation (the “Company”), and ▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇, Crescendo Partners II, L.P., Series Z (“Crescendo Partners II”), Crescendo
Partners III, L.P., Crescendo Investments II, LLC, Crescendo Investments III, LLC (collectively,
“Crescendo” and each a “Crescendo Party”).
WHEREAS, Crescendo and the Company entered into a settlement agreement dated March 12, 2008
(the “First Settlement Agreement”), pursuant to which, among other things: (i) Arnaud
Ajdler, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ (each a “Crescendo Director,” and together with
the individual to be appointed to the Company’s Board of Directors (the “Board”) pursuant
to Section 1(a), the “Crescendo Directors”) were appointed to the Board and certain
of its committees; (ii) the Company agreed to declassify its Board of Directors, which such
declassification was subsequently approved by the Company’s shareholders; (iii) the parties agreed
to take certain actions with respect to the Company’s 2008 Annual Meeting of Shareholders; and (iv)
Crescendo agreed to refrain from certain other actions generally through the adjournment of the
2009 Annual Meeting of Shareholders (the “2009 Annual Meeting”), subject to certain
conditions, which were not met; and
WHEREAS, the parties desire to avoid a proxy contest with respect to the 2009 Annual Meeting,
and in light of the Chief Executive Officer’s planned retirement from the Company, have concluded
that it is in the Company’s and its shareholders’ best interests to come to an agreement with
respect to certain matters related to the 2009 Annual Meeting and certain other matters, as
provided herein.
NOW, THEREFORE, in consideration of the foregoing premises and the respective representations,
warranties, covenants and agreements hereinafter set forth, and, intending to be legally bound
hereby, the parties hereby agree as follows:
1. Crescendo Board Appointment; 2009 Annual Meeting and Related Matters.
(a) Board Expansion. The Company hereby agrees that, no later than 10 business days
from the date hereof, the size of the Board will be expanded from 11 to 12 directors. Promptly
following the execution of this Agreement, Crescendo shall recommend to the Board an individual
with relevant restaurant, hospitality or retail industry experience who qualifies as “independent”
under NASDAQ listing standards to fill the newly-created directorship resulting from the increase
in the size of the Board; provided, that the Board, upon the recommendation of its Nominating and
Corporate Governance Committee (the “Nominating Committee”), will have determined, after a
prompt, good faith, reasonable and customary review that such individual qualifies to serve on the
Board and is “independent” pursuant to the listing standards of the NASDAQ Stock Market (the
“NASDAQ”). If the Nominating Committee determines that such person does not meet the
qualifications of the Board or is not “independent” pursuant to the listing standards of the NASDAQ
Stock Market, Crescendo shall have the right to propose additional individuals so qualified to be
considered and appointed in accordance with the provisions of this Section 1(a). The Board
shall immediately appoint any such qualified candidate proposed by Crescendo to fill the newly
created directorship as soon as such candidate’s qualifications have been reviewed and approved by
the Nominating Committee. The Company will promptly thereafter expand the size of the Board and
appoint such individual to the Board, subject only to the Nominating Committee’s and the Board’s
prompt, good faith, reasonable and customary review of such individual’s qualifications.
(b) Board Composition Following 2009 Annual Meeting. The parties hereby agree to the
following with respect to the composition of the Board of Directors:
(i) Board Size Through 2009 Annual Meeting. The size of the Board will not be
increased to more than 12 directors before the Company’s Board of Directors’ meeting held in
connection with the Company’s 2009 Annual Meeting.
(ii) Board Restructuring at 2009 Annual Meeting. Effective as of the adjournment of
the 2009 Annual Meeting, the Board will be comprised of 10 directors. To effect this reduction in
the Board’s size from 12 to 10 members: (a) ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ will not stand for re-election at the
2009 Annual Meeting and his term as a director will expire at the adjournment thereof; (b) the
Company will either (x) nominate a total of seven directors for election at the 2009 Annual
Meeting, which slate will consist of Messrs. Ajdler and ▇▇▇▇▇▇▇, the individual appointed to the
Board upon the recommendation of Crescendo pursuant to Section 1(a) and four other nominees
of the Company, or (y) the Company will, effective as of the adjournment of the 2009 Annual
Meeting, obtain the resignation of an incumbent director (other than ▇▇▇▇▇▇▇ ▇▇▇▇▇▇) whose term
expires at the 2010 Annual Meeting of Shareholders (the “2010 Annual Meeting”), and will
nominate a total of eight directors for election, which will consist of Messrs. Ajdler and ▇▇▇▇▇▇▇,
the individual appointed to the Board upon the recommendation of Crescendo pursuant to Section
1(a) and five other nominees of the Company.
The Company will solicit proxies for the election of the Crescendo Directors at the 2009
Annual Meeting in the same manner as it does with respect to all other director nominees. The
Company will use its reasonable best efforts to cause all Voting Securities (as such term is
defined in Section 10) that members of the Board are entitled to vote at the 2009 Annual
Meeting to be voted in favor of the election of Crescendo Directors. Each Crescendo Party will
vote, and will cause its respective Affiliates and Associates (as such terms are defined in
Section 10) to vote, all Voting Securities (as such term is defined in Section 10)
that it is entitled to vote at the 2009 Annual Meeting (i) in favor of the election of each of the
Company’s nominees for election to the Board, and (iii) in its discretion with regard to any other
items of business that are brought before such meeting.
Notwithstanding anything to the contrary herein, the Board may expand its size at any time by
one director in connection with the hiring of a new permanent chief executive officer (the “New
CEO”), if the Board determines to appoint the New CEO to the Board.
(iii) 2009 Annual Meeting Date and Items of Business. The Company will hold its 2009
Annual Meeting at such time as is determined by the Board; provided, that the Company will
use all reasonable efforts to cause the 2009 Annual Meeting to be held on or before May 29, 2009,
and in no event will such meeting be held later than June 30, 2009. The only items to be put to a
shareholder vote at the 2009 Annual Meeting will be (i) the election of directors as contemplated
herein, (ii) ratification of the Company’s auditors and (iii) any shareholder proposal that the
Company is required to bring to a vote under applicable law.
(iv) Board Representation Upon Reduction in Crescendo Ownership. Notwithstanding
anything to the contrary herein, at any time during the term hereof, (A) if Crescendo owns less
than the lesser of 5% of the Company’s outstanding Voting Securities (as such term is defined in
Section 10) and 1,065,774 shares of the Company’s common stock (“Common Stock”),
but more than the lesser of 1% of the Company’s outstanding Voting Securities and 213,155 shares of
Common Stock, it will be entitled to representation on the Board of no more than two Crescendo
Directors and (B) if Crescendo owns less than the lesser of 1% of the Company’s outstanding Voting
Securities and 213,155 shares of common stock, it will not be entitled to any representation on the
Board. Immediately after Crescendo’s beneficial ownership of the Company’s Voting Securities falls
below the aforementioned requisite thresholds, Crescendo will so notify the Company and will cause
the appropriate number of Crescendo Directors to immediately resign. If a Crescendo Director is
required to resign from the Board
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pursuant to subpart (A) of the preceding sentence, Crescendo will cause a Crescendo Director
appointed to the class of directors whose current terms expire at the 2009 Annual Meeting to
resign.
(v) Crescendo Director Vacancies. If any Crescendo Director leaves the Board (whether
by resignation or otherwise) before the 2010 Annual Meeting (other than pursuant to Section
1(b)(iv) hereof), Crescendo will be entitled to recommend to the Nominating Committee
replacement director(s) (each of whom will be deemed a Crescendo Director for purposes of this
Agreement) who will qualify as “independent” pursuant to NASDAQ listing standards;
provided, that any such successor nominee to ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ or the individual appointed to
the Board pursuant to Section 1(a) (the “New Director”) will have relevant
restaurant, hospitality or retail industry experience. The Nominating Committee will not
unreasonably withhold acceptance of any replacement director(s) recommended by Crescendo. In the
event the Nominating Committee does not accept a replacement director(s) recommended by Crescendo,
Crescendo will have the right to recommend additional replacement director(s) for consideration by
the Nominating Committee. The Board will appoint such replacement director(s) to the Board no later
than five (5) business days after the Nominating Committee’s recommendation of such replacement
director(s).
(c) Committee Membership of Crescendo Directors. Upon the execution of this Agreement,
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ shall continue to serve as a member of each of the Nominating Committee of the
Board and Executive Committee of the Board and Arnaud Ajdler shall continue to serve as a member of
the Compensation and Human Resources Committee of the Board. The Company will take all action
necessary in furtherance of the appointment of the New Director to the Audit Committee of the Board
assuming he satisfies the applicable NASDAQ listing requirements and Securities and Exchange
Commission (“SEC”) rules and subject to his approval to serve on such committee.
(d) Related Board Matters; Liaison Director. The parties hereby agree to the
following with respect to certain other matters relating to the Board of Directors:
(i) Resignation of ▇▇▇▇▇▇▇ ▇▇▇▇▇. Messr. ▇▇▇▇▇ will continue to serve as the
Company’s Chief Executive Officer, President, Chairman of the Board and Chairman of the Executive
Committee of the Board through the Board’s regularly scheduled meeting in February 2009 (the
“February Board Meeting”), at which time Messr. ▇▇▇▇▇ will tender his resignation from each
such position with the Company; provided however, Messr. ▇▇▇▇▇ shall continue to serve as a
director until the 2009 Annual Meeting.
(ii) Matters Relating to the February Board Meeting. At the February Board Meeting,
the Board will (i) name ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ as interim Chief Executive Officer and President to act
in that capacity until the hiring of the New CEO, (ii) appoint Messr. ▇▇▇▇▇▇ as Chairman of the
Executive Committee of the Board and (iii) appoint ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇. as Lead Independent Director.
(iii) Interim Liaison Director. Upon the execution of this Agreement, the Company
will take all action necessary in furtherance of (i) the appointment of Messr. ▇▇▇▇▇▇ to the
Executive Committee of the Board, (ii) the creation of the role of Interim Liaison Director of the
Executive Committee of the Board and (iii) the appointment of Messr. ▇▇▇▇▇▇ to serve as Interim
Liaison Director beginning as of the date hereof. Messr. ▇▇▇▇▇▇’▇ duties in his role as Interim
Liaison Director shall include (i) spending two days per week, on average, at the Company beginning
the week of January 5, 2009, (ii) serving as liaison between the management team and the Executive
Committee of the Board, (iii) monitoring the performance of the Company, (iv) attending meetings of
the Company’s Executive Leadership Council, (v) providing advice and guidance to the management
team on strategic direction and major decisions and (vi) performing such other duties as requested
by the Executive
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Committee and agreeable to Messr. ▇▇▇▇▇▇. Messr. ▇▇▇▇▇▇’▇ role as Interim Liaison Director
shall terminate upon Messr. ▇▇▇▇▇▇’▇ appointment as Chairman of the Executive Committee of the
Board at the February Board Meeting, at which time Messr. ▇▇▇▇▇▇ will continue the aforementioned
duties of Interim Liaison Director in such new role. In connection with serving as Interim Liaison
Director and Chairman of the Executive Committee of the Board, the Company has agreed to compensate
Messr. ▇▇▇▇▇▇ as follows: (i) on January 5, 2009, Messr. ▇▇▇▇▇▇ will be granted 7,500 shares of
the Company’s common stock under the Company’s 2008 Equity and Incentive Plan and be paid $15,000
in cash; (ii) on February 27, 2009 and at the conclusion of every subsequent four-week accounting
period (an “Accounting Period”) in which he serves in such capacity, Messr. ▇▇▇▇▇▇ will be
paid $30,000, which amounts shall be in addition to the compensation Messr. ▇▇▇▇▇▇ otherwise
receives in connection with his service as a director of the Company and which shall be prorated
accordingly in the event Messr. ▇▇▇▇▇▇’▇ service begins or ends during any Accounting Period; and
(iii) the Company will reimburse Messr. ▇▇▇▇▇▇ for his reasonable out-of-pocket expenses, including
travel expenses, incurred in connection with serving as Interim Liaison Director or Chairman of the
Executive Committee of the Board, as the case may be. After serving in such role for a period of
four Accounting Periods, the Executive Committee of the Board will review the duties performed by
Messr. ▇▇▇▇▇▇ and the related time requirements for such services and decide whether Messr.
▇▇▇▇▇▇’▇ duties should be adjusted and the appropriate level of compensation for such duties. Any
decision to revise Messr. ▇▇▇▇▇▇’▇ duties as Chairman of the Executive Committee of the Board and
corresponding compensation at such time will require the approval of a majority of all of the
members of the Executive Committee.
(iv) Matters Relating to the New CEO. Promptly following the date hereof, the
Executive Committee of the Board will initiate a search for the New CEO. Upon the later of the
date of the 2009 Annual Meeting and the date of election of the New CEO, the Executive Committee of
the Board will recommend for approval by the Board a director to serve as the non-executive
Chairman of the Board, which recommendation will require the approval of a majority of all of the
members of the Executive Committee. At any such time as a non-executive Chairman of the Board is
appointed, the position of lead independent director shall cease to exist. Following the
appointment of the New CEO, Messr. ▇▇▇▇▇▇ shall remain Chairman of the Executive Committee of the
Board, unless a majority of all of the members of the Executive Committee shall determine
otherwise.
2. Termination. This Agreement will remain in full force and effect and will be fully binding
on the parties hereto in accordance with the provisions hereof until the date that is five business
days prior to the last date on which a shareholder of the Company may submit nominations for the
Board in connection with the Company’s 2010 Annual Meeting of Shareholders (the “Termination
Date”). Section 14 and Section 15 will survive any termination of this
Agreement.
3. Standstill.
(a) Each Crescendo Party agrees that during the period commencing on the date hereof and
ending on the Termination Date, without the prior written consent of the Board specifically
expressed in a written resolution adopted by a majority vote of the entire Board, it will not, and
will cause each of its Affiliates, Associates, officers, agents and other Persons acting on its
behalf not to:
(i) acquire, offer or propose to acquire, or agree to acquire (except by way of stock
dividends or other distributions or offerings made available to holders of Voting Securities (as
such term is defined in Section 10) generally on a pro rata basis, provided that any such
securities so received will be subject to the provisions hereof), directly or indirectly, whether
by purchase, tender or exchange offer, through the acquisition of control of another Person (as
such term is defined in Section 10), by joining a partnership, limited partnership,
syndicate or other “group” (within the meaning
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of Section 13(d)(3) of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”)) or otherwise, any Voting Securities, or otherwise become the economic owner (as such
term is defined in Section 10) of any such securities, if after giving effect to such
acquisition it (by itself or together with any other Crescendo Party, its respective Affiliates and
Associates and any other Person with whom it, such other Crescendo Party or any such Affiliate or
Associate has any agreement, understanding or arrangement with respect to Voting Securities) would
be the beneficial owner or economic owner of more than 15% of the Company’s outstanding Voting
Securities. For the purposes of this Section 3(a)(i), any Voting Securities, including
options to acquire Voting Securities, that have been or are hereafter issued or granted to ▇▇.
▇▇▇▇▇▇ in his capacity as a director, or any other Voting Securities otherwise acquired by ▇▇.
▇▇▇▇▇▇ in his individual capacity, shall not be deemed to be Voting Securities held, beneficially
owned or controlled by Crescendo or any other Crescendo Party. For the purposes of computing the
beneficial ownership at the time of any purchase, the number of outstanding Voting Securities will
be determined by the latest available Company filing with the Securities and Exchange Commission
(the “SEC”);
(ii) engage, or in any way participate, directly or indirectly, in any “solicitation” (as such
term is defined in Rule 14a-1(l) promulgated by the SEC under the Exchange Act) of proxies or
consents (whether or not relating to the election or removal of directors), seek to advise,
encourage or influence any Person with respect to the voting of any Voting Securities; initiate,
propose or otherwise “solicit” (as such term is defined in Rule 14a-1(l) promulgated by the SEC
under the Exchange Act) shareholders of the Company for the approval of shareholder proposals
whether made pursuant to Rule 14a-8 or Rule 14a-4 under the Exchange Act or otherwise; induce or
attempt to induce any other Person to initiate any such shareholder proposal; or otherwise
communicate or seek to communicate with the Company’s shareholders or others pursuant to Rule
14a-1(l)(2)(iv) under the Exchange Act; provided, however, that nothing herein will
limit the ability of any Crescendo Party, or its respective Affiliates and Associates, except as
otherwise provided in Section 1(b)(ii), to vote its Voting Securities on any matter
submitted to a vote of the stockholders of the Company or announce its opposition to any
Board-approved proposals not supported by Messrs. Ajdler or ▇▇▇▇▇▇▇ or limit the ability of the
Crescendo Directors to exercise their rights as members of the Board while serving as members of
the Board;
(iii) form, join or in any way participate in any “group” (within the meaning of Rule 13d-5 of
Regulation 13D-G under the Exchange Act) with respect to any Voting Securities, other than a
“group” that includes all or some lesser number of the Crescendo Parties, but does not include any
other members who are not currently identified as a Crescendo Party;
(iv) deposit any Voting Securities in any voting trust or subject any Voting Securities to any
arrangement or agreement with respect to the voting of any Voting Securities, except as expressly
set forth in this Agreement;
(v) seek to have called, or cause to be called, any meeting of shareholders of the Company;
(vi) make any public demand to inspect the books and records of the Company, including
pursuant to any statutory right that Crescendo may have;
(vii) have any discussions or communications, or enter into any arrangements, understanding or
agreements (whether written or oral) with, or advise, finance, assist or encourage, any other
Person in connection with any of the foregoing, or make any investment in or enter into any
arrangement with, any other Person that engages, or offers or proposes to engage, in any of the
foregoing;
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(viii) make any proposal (including to publicly disclose or discuss any proposal) or enter
into any discussion regarding any of the foregoing, or make any proposal, statement or inquiry, or
disclose any intention, plan or arrangement (whether written or oral) inconsistent with the
foregoing, or make or publicly disclose any request to amend, waive or terminate any provision of
this Agreement; provided, however, that nothing herein will limit the ability of
any Crescendo Party, or its respective Affiliates and Associates, except as otherwise provided in
Section 1(b)(ii), to vote its Voting Securities on any matter submitted to a vote of the
stockholders of the Company or announce its opposition to any Board-approved proposals not
supported by Messrs. Ajdler or ▇▇▇▇▇▇▇ or limit the ability of the Crescendo Directors to exercise
their rights as members of the Board while serving as members of the Board; and provided,
further, that notwithstanding anything in this Section 3(a) to the contrary, if, at
any time a third party (A) commences a tender offer for at least 50% of the outstanding capital
stock of the Company or (B) enters into an agreement with the Company contemplating the acquisition
(by way of merger, tender offer or otherwise) of at least 50% of the outstanding capital stock of
the Company or all or substantially all of its assets, then the restrictions on Crescendo set forth
in Sections 3(a)(ii), 3(a)(iii) and 3(a)(vi) with respect to solicitations of proxies shall
terminate and cease to be of any further force or effect, such that Crescendo may (i) solicit
proxies with respect to any shareholder vote required in connection with any transactions of the
nature contemplated in subparts (A) and (B) of this proviso, and (ii) take any actions in
connection with any such solicitation of proxies, including requesting a stockholder list and
related information, filing an amendment or amendments to its Schedule 13D regarding the Common
Stock of the Company as required by law or taking any other action related to the solicitation of
proxies or making any public filings or announcements in furtherance thereof; or
(ix) take or cause or induce others to take any action inconsistent with any of the foregoing.
(b) Each Crescendo Party will be released from its standstill obligations set forth in
Section 3(a) on the Termination Date.
4. Representations and Warranties of Crescendo. Each Crescendo Party represents and warrants
as follows:
(a) Each Crescendo Party has the power and authority to execute, deliver and carry out the
terms and provisions of this Agreement and to consummate the transactions contemplated hereby.
(b) This Agreement has been duly and validly authorized, executed, and delivered by each
Crescendo Party, constitutes a valid and binding obligation and agreement of each Crescendo Party,
and is enforceable against each Crescendo Party in accordance with its terms.
(c) Crescendo, together with its Affiliates and Associates, are beneficial owners and/or
economic owners, directly or indirectly, of an aggregate of shares of Common Stock as set forth by
beneficial owner and amount on Schedule A hereto and such shares of Common Stock constitute
all of the Voting Securities of the Company owned by each Crescendo Party and its respective
Affiliates and Associates.
5. Representations and Warranties of the Company. The Company hereby represents and warrants
as follows:
(a) The Company has the corporate power and authority to execute, deliver and carry out the
terms and provisions of this Agreement and to consummate the transactions contemplated hereby.
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(b) This Agreement has been duly and validly authorized, executed and delivered by the
Company, constitutes a valid and binding obligation and agreement of the Company, and is
enforceable against the Company in accordance with its terms.
6. Specific Performance. Each of Crescendo, on the one hand, and the Company, on the other
hand, acknowledges and agrees that irreparable injury to the other party hereto would occur in the
event any of the provisions of this Agreement were not performed in accordance with their specific
terms or were otherwise breached and that such injury would not be adequately compensable in
damages. It is accordingly agreed that Crescendo, on the one hand, and the Company, on the other
hand (the “Moving Party”), will each be entitled to specific enforcement of, and injunctive
relief to prevent any violation of, the terms hereof and the other party hereto will not take
action, directly or indirectly, in opposition to the Moving Party seeking such relief on the
grounds that any other remedy or relief is available at law or in equity.
7. Press Release. Immediately following the execution and delivery of this Agreement, the
Company will issue the press release attached hereto as Exhibit A (the “Press
Release”). None of the parties hereto will before the Termination Date make any public
statements (including in any filing with the SEC or any other regulatory or governmental agency,
including any stock exchange) that are inconsistent with, or otherwise contrary to, the statements
in the Press Release issued pursuant to this Section 7. Following the date hereof, no
Crescendo Party, nor any of their respective Affiliates or Associates, will before the Termination
Date issue or cause the publication of any press release or other public announcement with respect
to this Agreement, the Company, its management or the Board or the Company’s business without prior
written consent of the Company, provided, however, that Crescendo may make such
filings as are required by law or as may be required by law per advice from its outside counsel;
provided further, that nothing herein will limit the ability of any Crescendo
Party, its respective Affiliates and Associates to publicly announce its opposition to any
Board-approved proposals not supported by Messrs. Ajdler or ▇▇▇▇▇▇▇.
8. Expenses. Within 10 business days following receipt of reasonably satisfactory
documentation thereof, the Company will reimburse Crescendo for its reasonable out-of-pocket fees
and expenses incurred on or before the date hereof in connection with its negotiation and execution
of this Agreement and all related activities and matters; provided, such reimbursement will
not exceed $35,000 in the aggregate.
9. No Waiver. Any waiver by either the Representative (as defined in Section 17) or
the Company of a breach of any provision of this Agreement will not operate as or be construed to
be a waiver of any other breach of such provision or of any breach of any other provision of this
Agreement. The failure of either the Representative or the Company to insist upon strict adherence
to any term of this Agreement on one or more occasions will not be considered a waiver or deprive
that party of the right thereafter to insist upon strict adherence to that term or any other term
of this Agreement.
10. Certain Definitions. As used in this Agreement, (a) the term “Person” will mean
any individual, partnership, corporation, group, syndicate, trust, government or agency, or any
other organization, entity or enterprise; (b) the terms “Affiliates” and
“Associates” will have the meanings set forth in Rule 12b-2 under the Exchange Act and will
include Persons who become Affiliates or Associates of any Person subsequent to the date hereof;
(c) the term “Voting Securities” will mean any securities of the Company entitled, or which
may be entitled, to vote in the election of directors, or securities convertible into or
exercisable or exchangeable for such securities, whether or not subject to passage of time or other
contingencies; (d) the terms “beneficial owner” and “beneficially own” have the
same meanings as set forth in Rule 13d-3 promulgated by the SEC under the Exchange Act; and (e) the
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terms “economic owner” and “economically own” will have the same meanings as
“beneficial owner” and “beneficially own,” except that a Person will also be deemed
to economically own and to be the economic owner of (i) all shares of the Common Stock that such
Person has the right to acquire pursuant to the exercise of any rights in connection with any
securities or any agreement, regardless of when such rights may be exercised and whether they are
conditional and (ii) all shares of Common Stock in which the Person has any economic interest,
including, without limitation, pursuant to a cash-settled call option or other derivative security,
contract or instruction in any way related to the price of shares of Common Stock.
11. Successors and Assigns. Neither this Agreement nor any right, interest or obligation
hereunder may be assigned by any party hereto without the prior written consent of the other
parties hereto and any attempt to do so will be void. Subject to the preceding sentence, this
Agreement is binding upon, inures to the benefit of and is enforceable by the parties hereto and
their respective successors and assigns.
12. Entire Agreement; Amendments. This Agreement contains the entire understanding of the
parties hereto with respect to the subject matter hereof. There are no restrictions, agreements,
promises, representations, warranties, covenants or undertakings other than those expressly set
forth herein. This Agreement may be amended only by a written instrument duly executed by the
parties hereto or their respective successors or assigns.
13. Headings. The section headings contained in this Agreement are for reference purposes
only and will not affect in any way the meaning or interpretation of this Agreement.
14. Notices. All notices, demands and other communications to be given or delivered under or
by reason of the provisions of this Agreement will be in writing and will be deemed to have been
given (a) when delivered by hand (with written confirmation of receipt), (b) upon sending if sent
facsimile, with electronic confirmation of sending; provided, however, that a copy
is sent on the same day by registered mail, return receipt requested, in each case to the
appropriate mailing address set forth below (or to such other mailing address as a party may
designate by notice to the other parties in accordance with this Section 14), (c) one (1)
day after being sent by nationally recognized overnight carrier to the addresses set forth below
(or to such other mailing addresses as a party may designate by notice to the other parties in
accordance with this Section 14) or (d) when actually delivered if sent by any other method
that results in delivery (with written confirmation of receipt):
| If to the Company: | O’Charley’s Inc. | |||
| ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ | ||||
| ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ | ||||
| Attn: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Chief Financial Officer | ||||
| Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇ | ||||
| with a copy to: | Bass, ▇▇▇▇▇ & ▇▇▇▇ PLC | |||
| ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇ | ||||
| ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇ | ||||
| Attn: J. Page Davidson | ||||
| Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇ | ||||
| If to Crescendo | ||||
| or the Representative: | ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ | |||
| c/o Crescendo Partners II, L.P., Series Z | ||||
| ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ | ||||
| ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ | ||||
| Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇ | ||||
| with a copy to: | ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Frome ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP | |||
| ▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ | ||||
| ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ | ||||
| Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ | ||||
| Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇ |
or to such other address as the Person to whom notice is given may have previously furnished to the
others in writing in the manner set forth above.
8
15. Jurisdiction; Applicable Law. Each of the parties hereto (a) consents to submit itself to
the personal jurisdiction of the Court of Chancery or other federal or state courts in Davidson
County in the State of Tennessee in the event any dispute arises out of this Agreement, (b) agrees
that it will not bring any action relating to this Agreement in any court other than the Court of
Chancery or other federal or state courts of the State of Tennessee, (b) agrees that it will not
attempt to deny or defeat such personal jurisdiction by motion or other request for leave form any
such court, and (c) agrees that service of process in any proceeding in any such court may be made
by registered mail, return receipt requested, in the case of the Company, to the address set forth
in Section 14 and in the case of any Crescendo Party, to the address of Crescendo and the
Representative set forth in Section 14. This Agreement will be governed in all respects,
including validity, interpretation and effect, by the laws of the State of Tennessee applicable to
contracts executed and to be performed wholly within such state without giving effect to the choice
of law principles of such state.
16. Counterparts. This Agreement may be executed in counterparts, each of which will be an
original, but all of which together will constitute one and the same Agreement.
17. Crescendo Representative. Crescendo hereby irrevocably appoints ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ as its
attorney-in-fact and representative (the “Representative”), in its place and stead, to do
any and all things and to execute any and all documents and give and receive any and all notices or
instructions in connection with this Agreement. The Company will be entitled to rely, as being
binding on Crescendo, upon any action taken by the Representative or upon any document, notice,
instruction or other writing given or executed by the Representative.
18. First Settlement Agreement. This Agreement supersedes and replaces the First Settlement
Agreement, which is of no further force and effect and under which the parties have no remaining
liabilities or obligations.
[The remainder of this page intentionally left blank]
9
IN WITNESS WHEREOF, each of the undersigned parties has executed or caused this Agreement to
be executed or caused to be executed on its behalf on the date first above written.
| O’CHARLEY’S INC. | ||||||||
| By: | /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ | |||||||
| Name: | ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ | |||||||
| Title: | Chief Financial Officer | |||||||
| CRESCENDO PARTNERS II, L.P., SERIES Z | ||||||||
| By: | ||||||||
| Crescendo Investments II, LLC, General Partner | ||||||||
| By: | /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ | |||||||
| Name: | ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ | |||||||
| Title: | Managing Member | |||||||
| CRESCENDO PARTNERS III, L.P. | ||||||||
| By: | ||||||||
| Crescendo Investments III, LLC, General Partner | ||||||||
| By: | /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ | |||||||
| Name: | ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ | |||||||
| Title: | Managing Member | |||||||
| CRESCENDO INVESTMENTS II, LLC | ||||||||
| By: | /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ | |||||||
| Name: | ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ | |||||||
| Title: | Managing Member | |||||||
| CRESCENDO INVESTMENTS III, LLC | ||||||||
| By: | /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ | |||||||
| Name: | ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ | |||||||
| Title: | Managing Member | |||||||
| /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ | ||||||||
| ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ | ||||||||
Signature Page to Second Settlement Agreement
Schedule A
Summary of Beneficial and Economic Ownership of Shares of Common Stock of O’Charley’s Inc.
| Beneficially | Economically | Percent of | ||||||||||
| Owner | Owned | Owned | Class | |||||||||
Crescendo Investments II, LLC |
2,534,891 | 0 shares | 11.4% | |||||||||
Crescendo Investments III, LLC |
136,474 | 0 shares | Less than 1% | |||||||||
Crescendo Partners II, L.P., Series Z |
2,534,891 | 2,534,891 | 11.4% | |||||||||
Crescendo Partners III, L.P. |
136,474 | 136,474 | Less than 1% | |||||||||
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ |
2,671,365 | 0 shares | 12.0% | |||||||||
Arnaud Ajdler |
11,265 | 11,265 | Less than 1% | |||||||||
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ |
18,865 | 18,865 | Less than 1% | |||||||||
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ |
10,015 | 1 | 10,015 | Less than 1% | ||||||||
| 1 | Includes 400 shares of Common Stock held in Mr. ▇▇▇▇▇▇▇’▇ ▇▇▇ account. |