Exhibit 10.3
EMPLOYMENT AGREEMENT
Between Denny's Corporation and Nelson J. Marchioli
This Employment Agreement ("Agreement") is being entered on the 1st
day of November, 2003, between Denny's Corporation, formerly doing
business as Advantica Restaurant Group, Inc., a Delaware corporation ("the
Company"), together with its wholly-owned subsidiary, Denny's, Inc., a
California corporation ("Denny's") and Nelson J. Marchioli (the "Executive"),
residing at 2110 Cleveland Street Ext., Greenville, SC 29607.
WITNESSETH:
WHEREAS, The Board of Directors (the "Board") of the Company wishes to continue
to employ the Executive as President and Chief Executive Officer of the Company
and of its wholly-owned subsidiary, Denny's, Inc., on the terms and subject to
the conditions set forth herein; and
WHEREAS, the Executive wishes to continue employment with the Company in the
position of President and Chief Executive Officer, on the terms and subject to
the conditions set forth herein.
NOW, THEREFORE, in consideration of the premises and the mutual covenants and
obligations hereinafter set forth, the parties agree as follows:
1. Employment
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The Executive shall be deemed an employee of Denny's. His
employment under the terms of this Agreement shall commence on the date
of execution as evidenced above (the "Effective Date"), and shall
continue until Midnight on December 31, 2005, unless terminated earlier
pursuant to Section 5. (Such period of employment under this Agreement
is hereinafter referred to as the "Employment Term.") The Executive
shall provide services to the Company hereunder as President and Chief
Executive Officer of the Company. The Executive will serve the Company
subject to the general supervision, advice and direction of the
Chairman of the Board and members of the Board and upon the terms and
conditions set forth in this Agreement.
2. Duties
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(a) During the Employment Term, and while serving as President and
Chief Executive Officer of the Company, the Executive shall have such
authority and duties as are customary in such positions, and shall
perform such other services and duties as the Board of Directors may
from time to time designate consistent with such positions.
(b) The Executive shall report solely to the Board. All senior officers
of the Company shall report, directly or indirectly through other
senior officers, to the Executive. The Executive shall be responsible
for hiring, terminating and reviewing the performance of the other
senior officers of the Company, and shall from time to time present to
the Board his recommendations for any adjustments to the salaries of
and bonus payments to such officers. The Executive shall be responsible
for, and, subject to discussion with and ratification by the Chairman
of the Compensation and Incentives Committee of the Board (with
subsequent ratification by the Board), shall have the authority to
enter into employment agreements on behalf of the Company with other
executives of the Company.
(c) The Executive shall devote his full business time and best efforts
to the business affairs of the Company; however, the Executive may
devote reasonable time and attention to:
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(i) serving as a director or member of a committee of any
not-for-profit organization or engaging in other charitable or
community activities; and
(ii) serving as a director of another business or service, but
only with the advance approval of the Board.
3. Compensation and Benefits
-------------------------
(a) Base Compensation. During the term of this Agreement, the Company
shall pay the Executive an annual base salary (the "Base Salary"), as
compensation for his employment under this Agreement, in the amount of
$650,000. During the Employment Term such Base Salary shall be paid in
equal installments on at least a bi-weekly basis, or on such other
basis as is applicable to employees of the Company's Support Center.
(b) Annual Bonus. For each calendar year ending during the Employment
Term, the Executive's bonus compensation ("Annual Bonus") shall be at
an annual rate equal to at least 100% of Base Salary (the "Targeted
Bonus") payable if the Company, Denny's and the Executive achieve
budgeted financial and other performance targets which shall be
established by the Compensation and Incentives Committee of the Board
(the "Compensation Committee") and communicated to the Executive. It is
expressly agreed that to the extent the Compensation Committee provides
additional over performance incentive targets in the Company's annual
incentive bonus plan for employees, the Executive shall be entitled to
fully participate in and receive the full benefits for achieving such
over-performance incentive targets. The Executive's Annual Bonus earned
with respect to each year shall be paid at the same time as annual
incentive bonuses with respect to that year are paid to other senior
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executives of the Company, and the Annual Bonus and any applicable over
performance incentive targets in the Company's annual incentive bonus
plan for employees shall be paid to Executive irrespective of whether
Executive is still employed under this Agreement at the time that
annual incentive bonuses with respect to that year are paid to other
senior executives of the Company.
(c) Restricted Stock Units Award. The Company hereby grants to the
Executive performance-based Restricted Stock Units (Units) equal in
value to $300,000. The actual number of Units included in the award
shall be determined by dividing the amount of $300,000 by the closing
price of the Company's common stock on the day prior to the Effective
Date of this Agreement. The Units shall be granted subject to the
following terms: (i) the Units shall vest over a one-year period, and
(ii) the Units will be earned by the Executive on the following
performance basis: one-half shall be earned provided the Company
achieves its EBITDA target for the twelve-month calendar period
commencing on January 1, 2004 and one-half shall be earned if the
Company achieves its customer count growth target for said twelve-month
period. It is specifically agreed and understood that no pay out of the
Units shall be made until the vesting has actually occurred.
(d) Benefits. During the Employment Term, the Executive shall be
entitled to receive an annual car allowance and to participate in all
pension, profit sharing and other retirement plans, all incentive
compensation plans and all group health, hospitalization and disability
insurance plans and other employee welfare benefit plans in which other
senior executives of the Company may participate on terms and
conditions no less favorable than those which apply to such other
senior executives of the Company.
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4. Reimbursement of Expenses
-------------------------
(a) Expenses Incurred in Performance of Employment. In addition to the
compensation provided for under Section 3 hereof, upon submission of
proper vouchers, the Company will pay or reimburse the Executive for
all normal and reasonable expenses incurred by the Executive during the
Employment Term in connection with the Executive's responsibilities to
the Company, including the Executive's travel expenses.
(b) Section 4(d) of that certain Employment Agreement between the
Company and Nelson J. Marchioli which became effective on February 5,
2001, is incorporated herein and made a part hereof, and the obligation
of the Company set forth therein shall exist in this Agreement until
the four-year statute of limitations pursuant to California law
governing any claim of breach by the Executive of his employment
contract with El Pollo Loco expires. This Section 4(b) shall survive an
early termination of this Agreement which occurs prior to the
expiration of said four-year statute of limitations.
5. Termination
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(a) Events of Termination. The Employment Term shall terminate upon the
first to occur of the following events:
(i) Midnight on December 31, 2005, unless mutually extended in
writing by the parties;
(ii) the death of the Executive;
(iii) the close of business on the 180th day following the date
on which the Company gives the Executive written notice of the
termination of his employment as a result of his "Permanent
Disability" (as defined in subsection 5(c)(i));
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(iv) the close of business on the date on which the Company
gives the Executive written notice of the Company's termination
of his employment as a "Termination without Cause" (as defined
in subsection 5(c)(iv)) or the close of business on the
effective date of a termination of the Executive's employment
with the Company pursuant to subsection 5(c)(iii);
(v) the close of business on the date on which the Company gives
the Executive written notice of the Company's termination of his
employment for "Cause" (as defined in subsection 5(c)(ii)); and
(vi) the close of business on the effective date of a "Voluntary
Termination" (as defined in subsection 5(c)(v)(A)) by the
Executive of his employment with the Company.
(b) Termination Benefits. Upon the termination of the Executive's
employment with the Company for any reason set forth in subsection 5(a)
the Company shall provide the Executive (or, in the case of his death,
his estate or other legal representative) benefits due him under the
Company's benefits plans and policies for his services rendered to the
Company prior to the date of such termination (according to the terms
of such plans and policies), and the Company shall pay the Executive
not later than five (5) business days after such termination, in a lump
sum, all Base Salary earned through the date of such termination. The
Executive shall be entitled to the payments and benefits described
below only as each is applicable to such termination of employment.
(i) In the event of a termination as a result of the
Executive's death, and in addition to any other death benefits
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payable under the Company's benefit plans or policies, (A) for
so long as the Executive's surviving spouse is receiving any
Base Salary payment under clause (B) below, the Executive's
eligible family dependents (collectively, "Family") shall be
entitled to receive and participate in the disability, health,
medical and other welfare benefit plans which the Executive
and/or his Family would otherwise have been entitled to
hereunder if the Executive had not terminated employment (the
"Welfare Benefits") in addition to any continuation coverage
which the Executive's Family is entitled to elect under
Section 4980B of the Code; and (B) for a period of one year
following the date of the Executive's death, the Executive's
surviving spouse shall be paid (x) the Base Salary in effect
at the date of the Executive's death, payable in monthly
installments, and (y) the Annual Bonus that would have been
paid under Section 3(b) to the Executive during such period,
payable as and when annual incentive bonuses with respect to
such period are paid by the Company to other senior executives
of the Company.
(ii) In the event of a termination as a result of the
Executive's Permanent Disability, for a period of two years
after the date of such termination of the Executive's
employment, (A) the Executive and/or his Family shall be
entitled to receive and participate in the Welfare Benefits in
addition to any continuation coverage which the Executive
and/or his Family is entitled to elect under Section 4980B of
the Code; and (B) the Executive shall be paid (x) one-half of
the Base Salary in effect at such date of termination, payable
in monthly installments, and (y) one-half of the Annual Bonus
that would be payable under Section 3(b) for such period,
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payable as and when annual incentive bonuses with respect to
such period are paid by the Company to other senior executives
of the Company.
(iii) In the event of a "Termination without Cause" under
subsection 5(a)(iv), (A) the Executive and/or his
Family shall be entitled until the earlier of (x) the
first anniversary of the date of such termination of
employment or (y) the commencement of coverage of the
Executive and/or his Family by another group medical
benefits plan providing substantially comparable
benefits to the Welfare Benefits and which does not
contain any preexisting condition exclusions or
limitations, to receive and participate in the Welfare
Benefits in addition to any continuation coverage
which the Executive and/or his Family is entitled to
elect under Section 4980B of the Code; (B) not later
than five (5) business days after such termination,
the Company shall pay to the Executive a severance
payment in a lump sum amount equal to two years of his
then current Base Salary and Targeted Bonus. Provided,
however, in the event of a Termination without Cause
within one (1) year following the consummation of a
Change of Control as defined in subsection 5(c)(iii)
hereof, the Company shall pay the Executive within
five (5) business days of such termination a lump sum
payment equal to 299% of the sum of (1) the
Executive's then current Base Salary and (2) the
Executive's then current Targeted Bonus which shall be
no less than one hundred percent (100%) of the
Executive's then current Base Salary. A Change of
Control payment, as described above, may be reduced to
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avoid the Executive's payment of excise taxes under
Code Section 4999. This limited payment cap is to be
computed as follows: The acceleration of any
outstanding stock option (Option) shall be prevented
by the Company in the event that all of the following
conditions apply and the Executive (or, in the absence
of an election by the Executive, the Company) elects
to reduce the aggregate parachute payments by
eliminating the acceleration of Options under this
Agreement: (1) the Executive whose Options are
otherwise eligible for acceleration is also eligible
to receive payments under this Agreement and/or under
any other plan, agreement, program or policy that is
sponsored by the Company, which are triggered directly
or indirectly by a Change of Control ("parachute
payments"); (2) the aggregate amount of such parachute
payments is determined by the Company to be
potentially subject to excise tax under Code Section
4999 (imposed upon the "excess parachute payments");
and (3) it is determined that such excise tax would
cause the net after-tax parachute payments to be paid
to or on behalf of the Executive to be less than what
he would have netted, after federal, state and local
income taxes, had the present value of his total
parachute payments equaled $1.00 less than three times
his base amount, as defined under Code Section 280G(b)
(3)(A). In the event the above three conditions
apply, then such Executive's total payments described
in Code Section 280G(b)(2)(A) shall be reduced (but by
the minimum possible amount), so that their aggregate
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present value equals $100.00 less than three times the
Executive's Base Amount. If it is determined that any
payment to or on behalf of the Executive will be an
excess parachute payment, the Company shall promptly
give the Executive notice to that effect, a copy of
the detailed calculation thereof, and an explanation
of the calculation of the reduction (if any) required
hereunder. In the event the Executive disagrees with
such determination, he shall set forth the basis for
his disagreement in a written document which shall be
delivered to the Company. The Executive and his
representative and representatives of the Company
shall thereafter, within five (5) business days after
receipt of such written objection, meet in an attempt
to understand and resolve any competing understandings
and interpretations. Subsequent to such meeting, the
Executive may elect to (a) accept the parachute
payments recognizing any personal tax consequences,
(b) submit the dispute, if any, to arbitration
pursuant to Section 13 of this Agreement or (c)
determine which of the parachute payments under this
Agreement or any other agreements that make payments
on account of the Change of Control shall be
eliminated or reduced (as long as after such election
the aggregate present value of the parachute payments
is $100.00 less than three times Executive's Base
Amount). The Executive shall advise the Company in
writing of his election within twenty (20) days of his
receipt of this notice. If no such election is made
by Executive, the Company may elect which and how much
of such parachute payments under this Agreement or
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other agreements should be eliminated or reduced to
accomplish this required reduction, and shall promptly
thereafter provide for the acceleration of any options
under the Agreement, and pay or distribute for the
Executive's benefit such amounts as become due to the
Executive under any other agreements. It shall be
assumed for purposes of these calculations described
above that Executive's income tax rate will be
computed based upon the maximum effective marginal
federal, state and local income tax rates on earned
income, with such maximum effective federal rate to be
computed with regard to Code Section 68, and applying
any available deduction of state and local income
taxes for federal income tax purposes.
(iv) In the event of a termination for Cause
under subsection 5(a)(v) and in the event of a
Voluntary Termination under subsection 5(a)(vi), the
Executive shall not be entitled to any benefits or
payments from the Company except as provided in the
first sentence of subsection (b) above.
(c) For purposes of this Agreement:
(i) "Permanent Disability" shall mean the Executive's
inability to perform the material duties contemplated by this
Agreement by reason of a physical or mental disability or
infirmity which has continued for more than 180 consecutive
days. The Executive agrees to submit such medical evidence
regarding such disability or infirmity as is reasonably
requested by the Company, including, but not limited to, an
examination by a physician selected by the Company in its sole
discretion.
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(ii) "Cause" shall mean (A) the Executive's habitual neglect
of his material duties, (B) an act or acts by the Executive,
or any omission by him, constituting a felony, and the
Executive has entered a guilty plea or confession to, or has
been convicted of, such felony, (C) the Executive's failure to
follow any lawful directive of the Board consistent with the
Executive's position and duties, (D) an act or acts of fraud
or dishonesty by the Executive which results or is intended to
result in financial or economic harm to the Company, or (E)
breach of a material provision of this Agreement by the
Executive; provided, that the Company shall provide the
Executive (x) written notice specifying the nature of the
alleged Cause, and, with respect to clauses (A), (C) and (E),
(y) a reasonable opportunity to appear before the Board to
discuss the matter, and (z) a reasonable opportunity for a
period of thirty (30) days to cure any such alleged Cause.
(iii) "Change of Control" shall mean the occurrence of any of
the following: (A) An acquisition of any voting securities of
the Company (the " Voting Securities") by any "Person" (as the
term is used for purposes of Section 13(d) or 14(d) of the
Exchange Act) immediately after which such Person has
"Beneficial Ownership" (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of fifty-one percent (51%)
or more of the combined voting of the Company's then
outstanding Voting Securities; provided, however, in
determining whether a Change of Control has occurred, the
acquisition of Voting Securities in a "Non-Control
Acquisition" (as hereinafter defined) shall not constitute an
acquisition which would cause a Change of Control. A
"Non-Control Acquisition" shall mean an acquisition by (a) an
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employee benefits plan (or a trust forming a part thereof)
maintained by the Company, or (2) any corporation or other
Person of which a majority of its voting power or its voting
equity securities or equity interest is owned, directly or
indirectly, by (a) the Company; (b) any subsidiary of the
Company, (c) any Person in connection with a "non-Control
Transaction" (as hereinafter defined, or (d) any Person who,
immediately prior to such acquisition, owned fifty-one percent
(51%) or more of the combined voting power of the Company`s
then outstanding Voting Securities.
B. The individuals who, as of the date hereof, are members of
the Board (the "Incumbent Board"), cease for any reason to
constitute at least a majority of the members of the Board;
provided, however, that if the election, or nomination for
election by the Company's common stockholders of any new
director was approved by a majority of the Incumbent Board,
such new director shall, for purposes of this Agreement, be
considered as a member of the Incumbent Board; provided
further, however, that no individual shall be considered a
member of the Incumbent Board if such individual initially
assumed office as a result of either an actual or threatened
"Election Contest" (as described in Rule 14a-11 promulgated
under the Exchange Act) or other actual or threatened
solicitation of proxies or consents by or on behalf of a
Person other than the Incumbent Board (a "Proxy Contest"),
including by reason of any agreement intended to avoid or
settle any Election Contest; or
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(C) The consummation of: (1) a merger, consolidation or
reorganization with or into the Company or in which securities
of the Company are issued (a "Merger"), unless such Merger is
a "Non-Control Transaction." A "Non-Control Transaction" shall
mean a Merger if: (a) the shareholders of the Company,
immediately before such Merger, own directly or indirectly
immediately following such Merger at least fifty-one percent
(51%) of the combined voting power of the outstanding voting
securities of the corporation resulting from such Merger (the
"Surviving Corporation") in substantially the same proportion
as their ownership of the Voting Securities immediately before
such Merger, (b) the individuals who were members of the
Incumbent Board immediately prior to the execution of the
agreement providing for such Merger constitute at least a
majority of the members of the board of directors of the
Surviving Corporation, and (c) no Person other than (i) the
Company, (ii) any Subsidiary of the Company, (iii) an employee
benefit plan (or any trust forming apart thereof) that,
immediately prior to such Merger was maintained by the Company
or any Subsidiary, or (iv) any Person who, immediately prior
to such Merger had Beneficial Ownership of fifty-one percent
(51%) or more of the combined voting power of the Surviving
Corporation's then outstanding voting securities or its common
stock;
(D) A complete liquidation or dissolution of the Company (not
including a "Non-Control Transaction"); or
(E) The sale or other disposition of all or substantially all
of the assets of the Company to any Person (other than a
transfer to a Subsidiary or the distribution to the Company's
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shareholders of the stock of a Subsidiary or any other
assets). Notwithstanding the foregoing, a Change of Control
shall not be deemed to occur solely because any Person (the
"Subject Person") acquired Beneficial Ownership of more than
the permitted amount of the then outstanding Voting Securities
as a result of the acquisition of Voting Securities by the
Company which, by reducing the number of shares Beneficially
Owned by the Subject Person; provided that if a Change of
Control would occur (but for the operation of this sentence)
as a result of the acquisition of Voting Securities by the
Company, and after such share acquisition by the Company, the
Subject Person becomes the Beneficial Owner of any additional
Voting Securities which increases the percentage of the then
outstanding Voting Securities Beneficially Owned by the
Subject Person, then a Change of Control shall occur.
(iv) "Termination without Cause" shall mean a termination by
the Company of the Executive's employment without Cause (as
defined above), and shall be deemed to include any termination
under the circumstances described in subsection 5(c)(v)(B). In
the event of any termination of the Executive's employment by
the Company or by the Executive under circumstances described
in subsection 5(c)(v)(B), the Executive shall not be required
to seek other employment to mitigate damages, and any income
earned by the Executive from other employment or self-
employment shall not be offset against any obligations of the
Company to the Executive under this Agreement.
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(v)(A) "Voluntary Termination" shall mean any voluntary
termination by the Executive of his employment with the
Company provided that the Executive shall give the Company
at least thirty (30) days prior written notice of the
effective date of such termination. (B) For purposes of this
Agreement, the Executive shall not be deemed to have incurred
a "Voluntary Termination" if upon 10 days' prior written
notice from the Executive, the Executive notifies the Company
that his termination of employment with the Company is a
result of (x) a breach by the Company of a material provision
of this Agreement or (y) a change by the Company of the
Executive's title, duties or responsibilities as Chief
Executive Officer and President of the Company without his
consent, and such breach or change is not corrected by the
Company within 30 days or such longer reasonable amount of
time required to correct such breach or change, not to exceed
90 days, after the Executive notifies the Board in writing of
the action or omission which the Executive believes
constitutes such a breach or change. In such event, the
Executive shall be deemed to have been terminated without
Cause, the benefits described under subsection 5(b)(iv) shall
apply and the obligations of the Executive set forth in
Section 7(c) shall be deemed null and void.
6. Denny's Indemnification
-----------------------
Denny's hereby undertakes to guarantee, pay and perform each and every
obligation, duty and responsibility of Company under this Agreement,
and, in the event of any failure of Company to pay or perform any
obligation, duty or responsibility under this Agreement, Denny's agrees
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that it will pay, perform or otherwise fully complete such obligation,
duty or responsibility.
7. Protected Information; Prohibited Solicitation and Competition
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(a) The Executive hereby recognizes and acknowledges that during the
course of his employment by the Company, the Company will furnish,
disclose or make available to the Executive confidential or proprietary
information related to the Company's business, including, without
limitation, customer lists, ideas, processes, inventions and devices,
that such confidential or proprietary information has been developed
and will be developed through the Company's expenditure of substantial
time and money, and that all such confidential information could be
used by the Executive and others to compete with the Company. The
Executive hereby agrees that all such confidential or proprietary
information shall constitute trade secrets, and further agrees to use
such confidential or proprietary information only for the purpose of
carrying out his duties with the Company and not otherwise to disclose
such information unless otherwise required to do so by subpoena or
other legal process. No information otherwise in the public domain
(i.e., information that has been disclosed to the general public, the
marketplace or to governmental regulatory agencies) shall be considered
confidential.
(b) The Executive hereby agrees, in consideration of his employment
hereunder and in view of the confidential position to be held by the
Executive hereunder, that during the Employment Term and for the period
ending on the date which is one year after the termination of the
Employment Term, the Executive shall not, without the written consent
of the Company, knowingly solicit, entice or persuade any other
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employees of the Company or any affiliate of the Company to leave the
services of the Company or such affiliate for any reason.
(c) The Executive further agrees that, he shall not (except as to the
activities described in Section 2(c)) during the Employment Term and
for the period ending on the date which is one year after the
termination of the Employment Term, enter into any relationship
whatsoever, either directly or indirectly, alone or in partnership, or
as an officer, director, employee or stockholder (beneficially owning
stock or options to acquire stock totaling more than five percent of
the outstanding shares) of any corporation (other than the Company), or
otherwise acquire or agree to acquire a significant present or future
equity or other proprietorship interest, whether as a stockholder,
partner, proprietor or otherwise, with any enterprise, business or
division thereof (other than the Company), which is engaged in the
Family Dining restaurant business in those states within the United
States in which the Company or any of its subsidiaries is at the time
of such termination of employment conducting its business. For purposes
of this Agreement, Family Dining shall be defined as regional or
national restaurant chains identified in the CREST data as being part
of the family dining segment of the restaurant industry, specifically
including, but not be limited to the following: IHOP, Friendly's,
Perkins, Bob Evans, Cracker Barrel, Shoney's, Marie Callendars, Baker's
Square, Big Boy, Country Kitchen, Shari's, Mimi's and Eat and Park.
(d) The restrictions in this Section 7 shall survive the termination of
this Agreement and shall be in addition to any restrictions imposed
upon the Executive by statute or at common law.
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(e) The parties hereby acknowledge that the restrictions in this
Section 7 have been specifically negotiated and agreed to by the
parties hereto and are limited to only those restrictions necessary to
protect the Company from unfair competition. The parties hereby agree
that if the scope or enforceability of any provision, paragraph or
subparagraph of this Section 7 is in any way disputed at any time, and
should a court find that such restrictions are overly broad, the court
may modify and enforce the covenant to the extent that it believes to
be reasonable under the circumstances. Each provision, paragraph and
subparagraph of this Section 7 is separable from every other provision,
paragraph, and subparagraph and constitutes a separate and distinct
covenant.
8. Injunctive Relief
-----------------
The Executive hereby expressly acknowledges that any breach or
threatened breach by the Executive of any of the terms set forth in
Section 7 of this Agreement may result in significant and continuing
injury to the Company, the monetary value of which would be impossible
to establish. Therefore, the Executive agrees that the Company shall be
entitled to apply for injunctive relief in a court of appropriate
jurisdiction. The provisions of this Section shall survive the
Employment Term.
9. Parties Benefited; Assignments
------------------------------
This Agreement shall be binding upon the Executive, his heirs
and his personal representative or representatives, and upon the
Company, Denny's and their respective successors and assigns. Neither
this Agreement nor any rights or obligations hereunder may be assigned
by the Executive, other than by will or by the laws of descent and
distribution.
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10. Notices
-------
Any notice required or permitted by this Agreement shall be in writing,
sent by registered or certified mail, return receipt requested,
addressed to the Board and the Company and Denny's at the then
respective principal office of each, or to the Executive at the address
set forth in the preamble, as the case may be, or to such other address
or addresses as any party hereto may from time to time specify in
writing for the purpose in a notice given to the other parties in
compliance with this Section. Notices shall be deemed given when
received.
11. Governing Law
-------------
This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of South Carolina, without regard
to conflict of law principles.
12. Indemnification and Insurance; Legal Expenses
---------------------------------------------
The Company and Denny's shall indemnify the Executive to the fullest
extent permitted by the laws of the State of Delaware and the State of
California, respectively, as in effect at the time of the subject act
or omission, and shall advance to the Executive reasonable attorney's
fees and expenses as such fees and expenses are incurred (subject to an
undertaking from the Executive to repay such advances if it shall be
finally determined that by a judicial decision which is not subject to
appeal that the Executive was not entitled to the reimbursement of such
fees and expenses) and he will be entitled to the protection of any
insurance policies the Company may elect to maintain generally for the
benefit of its directors and officers against all costs, charges and
expenses incurred or sustained by him in connection with any action,
suit or proceeding to which he may be made a party by reason of his
being or having been a director, officer or employee of the Company,
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Denny's or any of the Company's other subsidiaries or his serving or
having served any other enterprise as a director, officer or employee
at the request of the Company (other than any dispute, claim or
controversy arising under or relating to this Agreement).
13. Disputes
--------
Any dispute or controversy arising under, out of, in connection with
or in relation to this Agreement shall, at the election and upon
written demand of either the Executive or the Company, be finally
determined and settled by arbitration in Charlotte, North Carolina in
accordance with the rules and procedures of the American Arbitration
Association, and judgment upon the award may be entered in any court
having jurisdiction thereof. The arbitration shall be conducted by a
single arbitrator, shall be completed within sixty (60) days after the
filing of the demand, and the arbitrator shall be instructed to
allocate all costs and expenses of such arbitration (including legal
and accounting fees and expenses of the respective parties) to the
parties in the proportions that reflect their success on the merits
(including the successful assertion of any defenses).
14. Miscellaneous
-------------
This Agreement contains the entire agreement of the parties relating to
the subject matter hereof. This Agreement supersedes any prior written
or oral agreements or understandings between the parties relating to
the subject matter hereof. No modification or amendment of this
Agreement shall be valid unless in writing and signed by or on behalf
of the parties hereto. A waiver of the breach of any term or condition
of this Agreement shall not be deemed to constitute a waiver of any
subsequent breach of the same or any other term or condition. This
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Agreement is intended to be performed in accordance with, and only to
the extent permitted by, all applicable laws, ordinances, rules and
regulations. If any provision of this Agreement, or the application
thereof to any person or circumstance, shall, for any reason and to any
extent, be held invalid or unenforceable, such invalidity and
unenforceability shall not affect the remaining provisions hereof and
the application of such provisions to other persons or circumstances,
all of which shall be enforced to the greatest extent permitted by law.
The compensation provided to the Executive pursuant to this Agreement
shall be subject to any withholdings and deductions required by any
applicable tax laws. The headings in this Agreement are inserted for
convenience of reference only and shall not be a part of or control or
affect the meaning of any provision hereof.
[signature page follows]
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IN WITNESS WHEREOF, the parties have duly executed and delivered this
Agreement as of the date first written above.
Denny's Corporation
By: /s/ Charles F. Moran
---------------------
Name: Charles F. Moran
Title: Chairman of the Board of Directors
Denny's, Inc.
By: /s/ Rhonda J. Parish
--------------------
Name: Rhonda J. Parish
Title: Executive Vice President,
General Counsel & Secretary
By: /s/ Nelson J. Marchioli
-----------------------
Nelson J. Marchioli
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