May 20, 1994
Mr. Joseph Byrum
4272 Bit & Spur Road
Mobile, Alabama 36608
Via Hand Delivery
Dear Joe:
This confirms the terms of the agreement which you and I have reached
concerning your employment status following numerous discussions over the past
two months or more.
This letter, together with the Offer/Agreement and Waiver of Rights contained
herein, represents a proposed employment and benefits package covering your
status with Morrison Restaurants Inc. (the "Company"). Upon your acceptance,
both of us will acknowledge our agreement with the terms and conditions
specified in the Offer/ Agreement (the "Offer/Agreement") and Waiver of Rights
(the "Waiver") set forth in this letter (the Offer/Agreement and Waiver
collectively referred to herein as the "Agreement").
In consideration of the terms and conditions contained in this Agreement, you
and the Company agree as follows:
OFFER/AGREEMENT
This Offer/Agreement constitutes an offer to you by the Company, its
affiliates and subsidiaries. It is important that you read and understand the
terms of this Offer/Agreement in full and that if you decide to sign it, that
you do so knowingly and voluntarily. To enable you to do that, we suggest
that you consult with an attorney about this Offer/Agreement and your rights
before signing it. You will not, however, waive or give up any rights or
claims you may have against the Company that may arise after the date that you
sign this Offer/Agreement.
The Company's offer that is described in this Offer/Agreement will remain open
and effective for twenty-one (21) days from May 20, 1994, the "Effective Date"
of the Offer/Agreement. You have ample time to elect to accept or reject this
offer within that time period. If you decide to sign the Offer/Agreement and
waive your rights against the Company, you will have seven (7) days following
the signing and return of the signed Offer/ Agreement to change your mind and
revoke the Offer/Agreement. In other words, the Offer/Agreement will not be
in effect until seven (7) days have passed following your signing.
CONSIDERATION
In consideration of the terms and conditions contained in this
Offer/Agreement, you and the Company agree as follows:
A. General Severance Factors
1. You are aware that the Company is trying to locate a purchaser for
the Business and Industry (Education) assets of the Morrison Hospitality
Group ("B&I"). Accordingly, this Offer/Agreement is conditioned on your
positive participation, efforts and role in: (i) a smooth transition to
the purchaser, (ii) continuing to motivate employees of B&I, (iii)
acting as a positive influence and positive force on the B&I team, and
(iv) continuing to generate earnings in accordance with your B&I
strategic and financial plan (all such factors hereinafter collectively
referred to as the "Smooth Transition"). The Offer/Agreement is
voidable by the Company upon your failure to carry out your
responsibilities for the Smooth Transition.
2. You will remain on the Company's payroll and in the event your
status as a management employee of the Company is involuntarily
terminated by the Company at any time within twelve (12) months from the
date of this letter, then the Company will continue to employ you and
to pay your then current base salary from the date of termination of
that status for twelve (12) months, payable bi-weekly, plus a prorated
bonus to the date of the involuntary termination of your status as a
management employee, provided your strategic and financial plan earnings
for B&I have been met through the date of involuntary termination. The
1-year guarantee of base salary and prorated bonus are hereinafter
referred to as the "1-Year Compensation Guarantee". No 1-Year
Compensation Guarantee will be paid if you remain a management employee
of the Company for the twelve (12) months following the date of this
letter. You will not be eligible for any future bonuses other than the
bonus referenced in this Section 2.
3. Following the later of the end of either continuation of your
employment status as a management employee of the Company covering the
twelve (12) months from the date of this letter or the period of the 1-
Year Compensation Guarantee, you will remain employed by the Company to
age 55 (the "Bridge Period"), with an annual salary during the Bridge
Period, payable bi-weekly, being paid to you equal to the annual
retirement payment amount which you would receive based on the
retirement option you will be eligible for at age 55. In consideration
of said salary, you shall provide consulting or other mutually agreed
upon services during the Bridge Period. You will notify us 90 days
before commencement of the Bridge Period of the retirement option that
you will select at age 55, and the retirement option selected will not
be changed. Your retirement plan calculations will be based on the
Executive Supplemental Pension Plan (the "ESP") formula and will be
determined by your current base salary as of the commencement of the
Bridge Period.
4. Except as otherwise provided in this Paragraph 4, as an employee of
the Company during the Bridge Period, you will be entitled to group
medical, life and disability benefits which are made available from time
to time to similarly situated employees. Also, since you will continue
to be an employee to age 55, you will be entitled to any medical
insurance benefits at age 55 which similarly situated employees are then
entitled to who retire or terminate employment at that age.
Effective as of the day immediately prior to the commencement of the
Bridge Period (the "Conversion Date"), your participation in the
Morrison Restaurants Inc. Executive Life Insurance Plan (the "ELIP")
will cease; provided, however, that the terms of the Split Dollar
Agreement, dated as of January 1, 1994, between you and the Company (the
"Split Dollar Agreement"), are hereby modified effective as of the day
immediately following the Conversion Date, as follows: (1)
notwithstanding existing Sections III and and Section IV of the Split
Dollar Agreement, premium payments and bonus payments by the Company
shall continue during the Bridge Period notwithstanding the cessation
of your participation in the ELIP; (2) notwithstanding existing Section
VI of the Split Dollar Agreement, the death benefit payable to your
designated beneficiary shall be four times your annual salary earned
during the Bridge Period, rounded to the next highest $1,000 and reduced
by any death benefit payable under any Company-provided group term life
insurance coverage; and (3) notwithstanding existing Section VII of the
Split Dollar Agreement, the Split Dollar Agreement, as so modified,
shall terminate on the last day of the Bridge Period. As of the day
immediately following the Conversion Date, the provisions of the Split
Dollar Agreement not specifically modified hereby shall be construed by
the parties in a manner consistent with the intent reflected by the
foregoing modifications.
5. Your employee's share of medical insurance premium payments due the
Company will be deducted from your bi-weekly salary.
6. Your Fiscal 1994 bonus will be based on actual.
7. You have the option of either returning to the Company or purchasing
any Company automobile driven by you. If you elect to purchase, you may
do so at the Hospitality Group's net book value as of the date that you
cease management employee status.
8. All of your Stock Options which by the terms of their plan documents
would otherwise expire upon a termination or change of your employment
status with the Company will remain exercisable as you will remain an
employee of the Company through the expiration of the Bridge Period and
may be exercised when such Stock Options become exercisable under the
terms of their plans. See Exhibit A for a listing of your stock
options. Stock Options not exercised by their expiration date under the
terms of their respective plans will automatically terminate. You will
be subject to exercising the Stock Options as an employee of the Company
and will be still fully subject to all the terms and conditions of such
plans which are not in conflict with the exercise privilege extended to
you under this Agreement. You will not be eligible for any stock
options other than those listed on Exhibit A.
9. In return for the consideration paid you pursuant to the terms of
this Offer/Agreement, you will sign a non-competition agreement in which
you will recognize and agree: (i) that you have established significant
contacts and personal relationships dealing with the goodwill of the
Company in the geographical area served by the B&I business being sold
and the Company's health care business, and (ii) that you would develop
numerous new contacts with potential B&I and health care customers and
potential contracts in the future. Therefore, you will agree that for
a period of three (3) years from the Effective Date of this
Offer/Agreement you will not, in the continental United States, compete
with the Company, its successors and assigns, in the health care field.
Additionally, you will also agree as a covenant and condition running
in favor of the Company and any third party purchaser of B&I that for
a period of three (3) years from the Effective Date of this
Offer/Agreement you will not compete with such third party purchaser in
the B&I field.
10. Following termination of your employment status with the Company,
we agree to provide you with information covering your health insurance
entitlements under COBRA and other employee benefits at termination.
You will hear directly from the appropriate Company Benefits/Insurance
Plan Administrator, explaining these matters at that time.
11. All compensation payments to you will be subject to applicable
payroll deductions.
12. The Company acknowledges that you shall be indemnified by the
Company against expenses, judgments, fines and amounts paid in
settlement incurred in connection with threatened, pending or completed
actions, suits or proceedings regarding the services you have rendered
or may render as an employee of the Company, but only to the extent
indemnification would be permitted by the indemnification provisions of
Article XII of the By-Laws of the Company, as the same may be amended
from time to time hereafter.
B. Divestiture Incentive Program
1. In further consideration of your remaining with the Company and
assisting the Company in effecting a closing of a transaction with a
third party to purchase the assets of B&I and your participation, role
and efforts in a Smooth Transition through the closing of the sale, the
Company will pay you a commission as described in the chart set forth
below on a sale by the Company of the B&I assets occurring on or before
September 30, 1994. If the Company's net pre-tax sales price, including
the full effect or charge due to cancellation and cessation of the
grocery retail food service business, is:
At least $75 million Commission of $100,000
but less than $80 million
At least $80 million Commission of $200,000
but less than $85 million
At least $85 million Commission of $300,000
but less than $90 million
At least $90 million Commission of $400,000
but less than $95 million
At least $95 million Commission of $500,000
The "net pre-tax sales price", is defined as the gross amount of the
purchase price of the B&I assets in the purchase contract, less the full
effect or charge due to cancellation and cessation of the grocery retail
food service business, and costs of the sale (including, but not limited
to, legal, accounting, investment brokers, and Company employee
severance packages).
2. Any commissions earned by you on this transaction will be paid by
a setoff by the Company of the last installments of your purchase of the
Morrison-Crothall stock described below.
C. Morrison-Crothall Sale
1. In accordance with, and subject to, the more detailed terms and
conditions of a definitive acquisition agreement between you, the
Company and appropriate representatives of Crothall, the Company, upon
the written approval of the appropriate representatives of Crothall,
will sell you its interest in Morrison-Crothall stock for $400,000 (the
"Crothall Purchase Price"). The Morrison-Crothall stock sale would be
scheduled to close as soon as possible, but in no event no later than
the end of the Company's Fiscal 1994. The Crothall Purchase Price shall
accrue interest at the annual rate of 8%, beginning at the date of
closing of such sale. Payment of the Crothall Purchase Price, and
interest thereon, shall be delayed until a date one year following the
closing date of such sale at which time you shall, 1) pay all interest
accrued during the prior year on the outstanding principal ($32,000),
and 2) beginning at the end of each quarter thereafter until paid in
full, make equal quarterly payments of $50,000 ($200,000 annually), plus
interest thereon as stated above. The Crothall Purchase Price and all
notes and accounts receivables due the Company from Crothall will be
evidenced by a promissory note executed by you. Such promissory note
will be credited with any payments made by Crothall of notes and
accounts receivables outstanding which are applicable to your promissory
note. A definitive agreement will be entered into reflecting this
arrangement, together with such other terms reasonably necessary to
cause the Company to be relieved of any liability including, but not
limited to, liability created by performance or other bonds and letters
of credit given by Morrison for the benefit of Morrison-Crothall, with
respect to its relationship with Morrison-Crothall. If you fail to
timely make any payment due under your promissory note, you will
undertake a cashless exercise of all options for Company stock granted
during your term of employment as they first become exercisable in such
amounts necessary to make such past due payments and, you further agree
that any pre-tax cash resulting from a cashless exercise of those
options will be applied to the past due sums under your promissory note.
In addition, the Crothall Purchase Price and promissory note executed
by you will be secured and guaranteed with 11,147 shares of Company
stock which you and/or your spouse own, evidenced with an appropriate
Stock Pledge/Guaranty & Collateral Assignment. You represent to the
Company that the number of shares set forth above is all Company stock
which you and/or your spouse own and which is not otherwise incumbered
as of the date of this Offer/Agreement.
D. General
1. Aside from the amounts to which you are entitled under the terms of
this Offer/Agreement, you acknowledge that you have received any and all
compensation and remuneration of any kind and character, including, but
not limited to, salary, bonuses, vacation, stock options and severance
pay, which you may be entitled to receive from the Company at any time
now or in the future. Specifically, this Offer/Agreement is in lieu of
any severance pay.
2. There are no other promises, agreements or understandings between
you and the Company, and it is the intent of this Offer/Agreement that
it embody any and all promises, agreements and understandings between
yourself and the Company. No changes or modifications may be made in
the terms stated in this Offer/Agreement unless made in writing and
signed by yourself and an authorized representative of the Company.
This Offer/Agreement will inure to the benefit of, and will be binding
on both parties, and their personal representatives, heirs, successors
and assigns.
3. If you decide to accept the Company's offer under this
Offer/Agreement, please sign within twenty-one (21) days and return the
Agreement and the Waiver to me, the undersigned Company Representative.
By signing this Agreement on behalf of the Company, I am indicating the
Company's intent to make you this offer and to be bound by its offer.
If there are any questions which need clarification, please let me know
immediately in order that we can discuss and resolve them.
4. The Company's offer under this Offer/Agreement will be left open
until June 10, 1994. If you have not executed this Offer/Agreement on
or before the close of business on June 10, 1994, then the Company's
offer is withdrawn.
5. It is understood and agreed that if any provision or part of this
Offer/Agreement is found to be unenforceable, illegal, or inoperable,
such provision or part shall be severed, and all remaining provisions
and parts of this Offer/Agreement shall remain fully valid and
enforceable.
Please let me know if you have any further questions.
Sincerely,
/s/ Samuel E. Beall, III
S. E. Beall, III
President and Chief Executive
Officer
Offer/Settlement acknowledged and accepted:
/s/ Joseph Byrum
Joseph Byrum
Date Signed: May 23, 1994
WAIVER OF RIGHTS
I, Joseph Byrum, knowingly and voluntarily, agree to waive, settle,
release and discharge Morrison Restaurants Inc. (the "Company") from any and
all claims, demands, damages, actions or causes of action, including any
claims for attorneys' fees which I have against the Company, its subsidiaries,
and affiliates, and the officers, directors, employees and agents of each of
them arising out of or relating to my employment with the Company or the
change in status relating to my employment with the Company under the terms
of the Offer/Agreement executed by myself and containing an Effective Date of
May 20, 1994. I understand this Waiver of Rights includes any claims I may
have arising under any Federal, state or local laws, ordinances or regulations
pertaining to discrimination on the basis of sex, race, color, religion,
creed, national origin, age or handicap status and particularly any rights I
may have pursuant to the Age Discrimination in Employment Act, the Older
Workers Benefit Protection Act, Title VII of the Civil Rights Act of 1964 and
1991, or relating to my employment with the Company or termination of my
employment with the Company under terms of the Offer/Agreement executed by
myself and containing an Effective Date of May 20, 1994.
I acknowledge and understand that I waive my right to file suit for any
claim I may have under the laws and the statutes named in the paragraph above.
I further waive my right to claim or receive damages as a result of any charge
of discrimination which may be filed by me or anyone acting on my behalf.
I UNDERSTAND, ACKNOWLEDGE AND AGREE TO THE TERMS OF THIS AGREEMENT, THIS
23rd DAY OF May, 1994.
/s/ Joseph Byrum
Joseph Byrum