SHONEY'S INC.
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
INDEX
Page
ARTICLE I - Definitions
Section 1.01. . . . . . . . . . . . . . . . . . . . . . .1
ARTICLE II - Participants
Section 2.01. . . . . . . . . . . . . . . . . . . . . . .3
Section 2.02. . . . . . . . . . . . . . . . . . . . . . .3
ARTICLE III - Accounts and Investments
Section 3.01. . . . . . . . . . . . . . . . . . . . . . .4
Section 3.02. . . . . . . . . . . . . . . . . . . . . . .4
Section 3.03. . . . . . . . . . . . . . . . . . . . . . .4
Section 3.04. . . . . . . . . . . . . . . . . . . . . . .7
Section 3.05. . . . . . . . . . . . . . . . . . . . . . .7
Section 3.06. . . . . . . . . . . . . . . . . . . . . . .8
Section 3.07. . . . . . . . . . . . . . . . . . . . . . .8
ARTICLE IV - Administration
Section 4.01. . . . . . . . . . . . . . . . . . . . . . .8
Section 4.02. . . . . . . . . . . . . . . . . . . . . . .9
Section 4.03. . . . . . . . . . . . . . . . . . . . . . .9
Section 4.04. . . . . . . . . . . . . . . . . . . . . . .9
Section 4.05. . . . . . . . . . . . . . . . . . . . . . .9
Section 4.06. . . . . . . . . . . . . . . . . . . . . . 10
Section 4.07. . . . . . . . . . . . . . . . . . . . . . 10
Section 4.08. . . . . . . . . . . . . . . . . . . . . . 10
Section 4.09. . . . . . . . . . . . . . . . . . . . . . 11
Section 4.10. . . . . . . . . . . . . . . . . . . . . . 11
Section 4.11. . . . . . . . . . . . . . . . . . . . . . 11
Section 4.12. . . . . . . . . . . . . . . . . . . . . . 11
Section 4.13. . . . . . . . . . . . . . . . . . . . . . 12
Section 4.14. . . . . . . . . . . . . . . . . . . . . . 12
Section 4.15. . . . . . . . . . . . . . . . . . . . . . 12
Section 4.16. . . . . . . . . . . . . . . . . . . . . . 12
Section 4.17. . . . . . . . . . . . . . . . . . . . . . 13
Section 4.18. . . . . . . . . . . . . . . . . . . . . . 13
Section 4.19. . . . . . . . . . . . . . . . . . . . . . 14
Section 4.20. . . . . . . . . . . . . . . . . . . . . . 14
Section 4.21. . . . . . . . . . . . . . . . . . . . . . 14
Section 4.22. . . . . . . . . . . . . . . . . . . . . . 15
Section 4.23. . . . . . . . . . . . . . . . . . . . . . 15
Section 4.24. . . . . . . . . . . . . . . . . . . . . . 15
ARTICLE V - Amendment of the Plan
Section 5.01. . . . . . . . . . . . . . . . . . . . . . 15
Section 5.02. . . . . . . . . . . . . . . . . . . . . . 15
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SHONEY'S, INC.
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
This Plan is an unfunded deferred compensation arrangement
for a select group of management or highly compensated
employees of Shoney's, Inc. or its Subsidiaries. All rights
under this Plan shall be governed by and construed in
accordance with the laws of the State of Tennessee.
ARTICLE I
DEFINITIONS
Section 1.01
"Board" means the Board of Directors of Shoney's, Inc.
"Committee" means the Human Resources and Compensation
Committee of the Board.
"Disability" means a mental or physical disability of at
least three (3) months duration, which, in the sole discretion
of the Committee based upon medical evidence that it deems
sufficient, prevents a Participant from engaging in the
principal duties of his or her employment and results in a
Termination of Employment from Shoney's, Inc.
"401(k) Plan" shall mean the Shoney's, Inc. 401(k) Plan
adopted by Shoney's, Inc. and its Subsidiaries effective
March 1, 1995 as the same may be amended from time to time.
"Investment Alternatives" means the investments selected
annually by the Committee in which a Participant may choose to
have his or her deferred compensation deemed to be invested.
Such Investment Alternatives may include, but are not limited to,
various stock or bond funds or indices, or combinations thereof
which are capable of being monitored for performance regardless
of whether actual investments are made in such funds or indices.
"Participant" means an employee of Shoney's or of a
Subsidiary, either designated in Section 2.01 at the adoption
of this Plan or designated by the Committee for participation
in the Plan, or a person who was an employee at the time of his
or her Retirement, death, Disability or Termination of
Employment and who retains, or whose beneficiaries obtain,
benefits under the Plan in accordance with its terms.
"Plan" means this Supplemental Executive Retirement Plan
as it may be amended, modified or supplemented from time to time.
"Retirement" means retirement at or after obtaining age
fifty-five (55).
"Shoney's" means Shoney's, Inc., a Tennessee corporation,
and its corporate successors.
"Subsidiary" or "Subsidiaries" means a company or companies
each of which Shoney's owns, directly or indirectly, at least
80% of the shares with voting power.
"Termination of Employment" means an involuntary termination
of an individual's employment or a voluntary termination of an
individual's employment to seek another job.
"Unforeseeable Emergency" means severe financial hardship to
a Participant resulting from a sudden and unexpected illness or
accident of the Participant or of a dependant of a Participant
as defined in section 152(a) of the Internal Revenue Code of 1986,
as
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amended, loss of the Participant's property due to casualty,
or other similar extraordinary and unforeseeable circumstances
arising as a result of events beyond the control of the
Participant. In no event may payment be made from the Plan
to the extent that such hardship is or may be relieved
through reimbursement or compensation by insurance or
otherwise, by liquidation of the Participant's assets (to
the extent the liquidation of such assets would not itself
cause severe financial hardship), or by cessation of deferrals
under this Plan. Examples of what are not considered to be
Unforeseeable Emergencies include the need to send a
Participant's child to college or the desire to purchase a home.
"Year" (unless specifically defined otherwise) means the
calendar year.
ARTICLE II
PARTICIPANTS
Section 2.01 The employees eligible to participate in the
Plan are employees of Shoney's or its Subsidiaries which are
designated as employees who may participate by the Committee.
Such designation shall occur at least forty-five (45) days
before the commencement of the next Year for which a
Participant may defer his or her compensation. No employee
may participate in this Plan if he or she participates in the
401(k) Plan.
Section 2.02 For any Year, any Participant may elect in
writing to defer up to fifty percent (50%) of his or her base
salary and up to one hundred percent (100%) of any bonus, for the
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following Year. Such election must be made at least thirty
(30) days prior to the commencement of a Year.
ARTICLE III
ACCOUNTS AND INVESTMENTS
Section 3.01 The Committee shall cause an account to be
kept in the name of each Participant and each beneficiary of
a deceased Participant which shall reflect the value of the
benefits payable to such Participant or beneficiary under the
Plan.
Section 3.02 Until and except to the extent that deferred
benefits under this Plan are distributed to a Participant or
beneficiary from time to time in accordance with the
directions of the Committee, title and ownership of any
assets, whether cash or investments, which Shoney's may set
aside or earmark to meet its obligations hereunder shall at
all times remain in Shoney's and no Participant or
beneficiary shall acquire, under any circumstances, any
interest in any specific assets of Shoney's. This Plan
constitutes a mere promise by Shoney's to make benefit
payments in the future.
Section 3.03 (a) In order to meet its obligations
hereunder, Shoney's each Year shall set aside or earmark an
amount equal to the compensation deferred under Article II
plus matching contributions for such Year as set forth below.
(b) The Company shall "match" the compensation deferred
by the Participant each year in an amount equal to twenty-five
percent (25%) of the compensation actually deferred for the
Year or $10,000, whichever is less. The Participant may direct
the deemed
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investment of his or her matching contribution in the same
manner as he or she directs the deemed investment of his or
her deferred compensation. The Participant shall have such
amounts credited to his or her account under this Plan and
such amounts shall increase the benefits payable to a
Participant or his or her beneficiary under this Plan (i.e.
vest) if, and only if, the Participant has sixty (60)
consecutive months of employment with Shoney's, measured
from the Participants most recent date of hire. After a
Participant is vested, all matching contributions, either
prior to or after vesting, plus deemed investment income,
gains or losses, shall become part of his or her account
under this Plan and be subject to all other terms of this Plan.
(c) Funds set aside or earmarked to meet Shoney's
obligations under this Plan shall be deemed to be invested
in one or more Investment Alternatives in accordance with
Subsection 3.03(d).
(d) Each Participant may direct the deemed investment
of his or her deferred compensation and matching contributions
to meet Shoney's obligations under this Plan into one or more
of the Investment Alternatives selected by Committee. Each
Participant must designate, in writing, at the time of the
deferral election the percentage of his or her deferrals and
matching contributions deemed to be allocated to one or more
of the Investment Alternatives selected by the Committee.
Each Participant may direct that funds previously set aside
with respect to his or her deferrals matching contributions
and previously deemed invested in accordance with the
Participant's
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designation pursuant to Subsection 3.03(d) be deemed to be
reinvested in investments different than his or her previous
designation. Each Participant may later alter his or her
deemed investment designation under this Subsection 3.03(d)
no more frequently than once each Year and such deemed
reinvestment shall be effective as of the beginning of the
Year following the Year of the deemed reinvestment designation.
(e) An amount equal to the income, gains and losses
from investments deemed to be made pursuant to Subsection
3.03(d) shall be determined annually at the close of the Year
by the Committee. An amount equal to the net income or loss
as determined shall be allocated to the accounts of the
Participants. Amounts so allocated shall increase or decrease,
as the case may be, the benefits payable to a Participant or
his or her beneficiary.
(f) Upon the Retirement, Termination of Employment,
death or Disability of a Participant, an amount equal to the
value, specially determined over an interim basis as of the
date of such event and in the same manner provided in
Subsection 3.03(e) above, of the benefits payable to such
Participant or his or her beneficiary shall be determined and
shall continue to be deemed to be invested as provided in
Subsection 3.03(d). The total amount payable to the Participant
or his or her beneficiary shall be appropriately adjusted by
an amount equal to the deemed net income or loss on such funds,
in accordance with the terms of Subsection 3.03(e) above.
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(g) Notwithstanding the provisions of Subsections
3.03(c) and (d), Shoney's shall not be required to invest the
funds deferred in the investment options selected by a Participant.
Section 3.04 A Participant shall be entitled to payments
of the amounts calculated under Subsection 3.03 above in the
case of his or her Retirement, Termination of Employment,
Disability or death, or in the event of an Unforeseeable
Emergency. In the event of Termination of Employment, the
Participant shall receive an immediate lump sum distribution
within thirty (30) days of termination. In the event of death,
Disability or Retirement, the Participant or his personal
representative, shall be paid in accordance with Section
3.03(f) and in sixty (60) monthly installments commencing
within thirty (30) days after the occurrence of the event
giving rise to the payment. If the Committee shall make
payment on account of an Unforeseeable Emergency, such payment
shall be in a lump sum and shall not exceed an amount
reasonably needed, in the sole discretion of the Committee,
to satisfy the emergency.
Section 3.05 Each Participant shall have the right to
designate beneficiaries who are to succeed to his or her
right to receive benefits under the Plan in the event of his
or her death. In case a Participant fails to designate a
beneficiary or if the designated beneficiary dies without
a successor being designated, distribution shall be made to
a Participant's estate. No designation of beneficiary shall
be valid unless in writing signed by the Participant, dated,
and filed with the Committee.
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Beneficiaries may be changed without the consent of any prior
beneficiaries.
Section 3.06 Nothing contained herein shall be deemed
to create a trust of any kind (except as specifically provided
herein) or create any fiduciary relationships. Funds invested
hereunder shall continue for all purposes to be part of the
general funds of Shoney's and no person other than Shoney's
shall by virtue of the provisions of this Plan have any
interest in any such funds. To the extent that any person
acquires a right to receive payments from Shoney's under this
Plan, such rights shall be no greater than the right of any
general unsecured creditor of Shoney's.
Section 3.07 The Participant and his or her
beneficiaries shall assume sole risk for any losses that are
incurred by virtue of the investment of any funds which are
deferred or invested according to the terms of the Plan and
in no event shall Shoney's, its successors or Subsidiaries
have any liability to any Participant or any beneficiary.
ARTICLE IV
ADMINISTRATION
Section 4.01 The books and records to be maintained
for the purposes of the Plan shall be maintained by the
officers and employees of Shoney's at its expense and subject
to the supervision and control of the Committee. Shoney's
shall pay all expenses of any trust. The Participants, on a
pro rata basis, shall bear all other expenses of the Plan
including but not limited to any investment advisor's fees.
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Section 4.02 To the fullest extent permitted by law,
the rights of any Participant or any beneficiary in any
benefit or any payment under this Plan shall not be subject
in any manner to attachment or other legal process for the
debts of such Participant or beneficiary and any such benefit
or payment shall not be subject to anticipation, alienation,
sale, transfer, assignment, pledge, encumbrance, attachment
or garnishment.
Section 4.03 If any Participant or beneficiary under
the Plan should become bankrupt or attempt to anticipate,
alienate, sell, assign, pledge, encumber or change any right
to a benefit hereunder, then such right or benefit, in the
sole discretion of the Committee, shall cease and, in such
event, the Committee may hold or apply the same or any part
thereof for the benefit of such Participant or beneficiary,
his or her spouse, children, or other dependents, or any of
them, in any such manner and in such portion as the Committee
may deem proper.
Section 4.04 No member of the Board or of the Committee
and no officer or employee of Shoney's or its Subsidiaries
shall be liable to any person for any action taken or omitted
in connection with the administration of the Plan unless
attributable to fraud or willful misconduct. In like manner,
Shoney's and its Subsidiaries shall not be liable to any
person for any action unless attributable to the fraud or
willful misconduct on the part of any director, officer or
employee of Shoney's or a Subsidiary.
Section 4.05 If the Committee shall find that any person
to whom any payment is payable under the Plan is unable to care
for
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his or her affairs because of illness or accident, or is a
minor, any payment due (unless a prior claim therefor shall
have been made by a duly appointed guardian, committee or other
legal representative) may be paid to the spouse, a child,
parent or brother or sister, or to any person deemed by the
Committee to have incurred expenses for such person otherwise
entitled to payment. Any such payment shall be a complete
discharge of Shoney's liability under the Plan.
Section 4.06 The Committee shall have full power and
authority to interpret and administer the Plan. The
Committee's interpretations and construction of any
provision or action taken under the Plan, including any
valuation of the assets earmarked for the Plan, or the amount
or recipient of any payment due under the Plan, shall be
binding and conclusive on all persons for all purposes.
Section 4.07 Shoney's intends that the Plan shall be
an unfunded deferred compensation plan for purposes of the
Internal Revenue Code of 1986, as amended, and for purposes
of Title 1 of the Employee Retirement Income Security Act of
1974, as amended.
Section 4.08 The amounts deferred by a Participant
are considered to be wages for purposes of the Federal
Insurance Contribution Act. Shoney's may withhold such
amounts from a Participant's salary or bonus as are necessary
to pay any amounts assessed against the Participant because of
the Federal Insurance Contribution Act.
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Section 4.09 If the Committee has any question as to
the proper beneficiary to receive payments hereunder, the
Committee shall have the right to withhold such payments
until the matter is finally adjudicated. Any payment made
by Shoney's, in good faith and in accordance with this Plan,
shall fully discharge Shoney's from all further obligations
with respect to such payment.
Section 4.10 Shoney's shall have no obligation of
any nature whatsoever to a Participant under the Plan except
as otherwise expressly provided in the Plan.
Section 4.11 The Plan does not in any way obligate
Shoney's or any Subsidiary of Shoney's to continue the
employment of a Participant with Shoney's, nor does it limit
the right of Shoney's or any Subsidiary at any time and for
any reason to terminate a Participant's employment.
Termination of a Participant's employment with Shoney's or
any Subsidiary for any reason, whether by action of Shoney's,
a Subsidiary or a Participant, shall immediately terminate
his or her participation in the Plan and all further
obligations hereunder except for the payment of such
compensation as has been previously deferred. In no event
shall the Plan by its terms or by implication constitute
an employment contract of any nature whatsoever between
Shoney's or any Subsidiary and a Participant.
Section 4.12 The benefits provided for a Participant
and a Participant's beneficiary under the Plan are in addition
to any other benefits available to such Participant under any
other plan or program of Shoney's or its Subsidiaries for its
employees, and,
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except as may otherwise be expressly provided for, the Plan
shall supplement and shall not supersede, modify or amend
any other plan or program of Shoney's or its Subsidiaries.
Section 4.13 The general administration of this Plan,
as well as construction and interpretation thereof, shall be
vested in the Committee. The Committee may delegate the
routine administration duties to the Finance Department of
Shoney's.
Section 4.14 In connection with the administration
of the plan, the Board may designate one of the members of
the Committee as Chairman and may appoint a Secretary who
need not be a member of the Committee. The Secretary shall
keep minutes of the Committee's proceedings and all data,
records and documents relating to the Committee's
administration of the Plan. In connection with the
administration of the Plan, the Committee may appoint from
its number such sub-committees with such powers as the
Committee shall determine and may authorize one or more
members of the Committee or any agent to execute or
deliver any instrument or make any payment on behalf of
the Committee.
Section 4.15 All resolutions or other actions taken
by the Committee shall be by the vote of a majority of those
present at a meeting at which a majority of the members are
present, or in writing by a majority of the members if they
act without a meeting.
Section 4.16 Subject to the Plan, the Committee shall
from time to time establish rules, forms and procedures for
the administration of the Plan. Except as herein otherwise
expressly provided, the Committee shall have the exclusive
right to interpret
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the Plan and to decide any and all matters arising thereunder
or in connection with the administration of the Plan, and it
shall endeavor to act, whether by general rules or by
particular decisions, so as not to discriminate in favor of
or against any person. The Committee shall have the exclusive
right to determine (i) Disability in respect of a Participant
and (ii) the degree thereof, either or both determinations to
be made on the basis of such medical and/or other evidence as
the Committee in its sole judgment, may require. Such
decisions, actions and records of the Committee shall be
conclusive and binding upon Shoney's and all persons having
or claiming to have any right to or interest in or under the
Plan.
Section 4.17 The Committee and the officers and
directors of Shoney's shall be entitled to rely on all
certificates and reports made by any duly appointed
accountants, and on all opinions given by any duly appointed
legal counsel. Such legal counsel may be counsel for Shoney's.
Section 4.18 No member of the Committee shall be liable
for any act or omission of any other member of the Committee,
or for any act or omission on his or her own part, excepting
only his or her own willful misconduct. Shoney's shall
indemnify and save harmless each member of the Committee
against any and all expenses and liabilities arising out of
his or her membership on the Committee arising out of the
Plan, excepting only expenses and liabilities arising out of
his or her own willful misconduct. Expenses against which a
member of the Committee shall be
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indemnified hereunder shall include, without limitation,
the amount of any settlement or judgment, costs, counsel fees
and related charges reasonably incurred in connection with a
claim asserted, or a proceeding brought or settlement
thereof. The foregoing right of indemnification shall be in
addition to any other rights to which any such member may be
entitled as a matter of law.
Section 4.19 In addition to the powers hereinabove
specified, the Committee shall have the power to compute and
certify under the Plan the amount and kind of benefits from
time to time payable to Participants and their beneficiaries
and to authorize all disbursements for such purposes.
Section 4.20 To enable the Committee to perform its
functions, Shoney's shall supply full and timely information
to the Committee on all matters relating to the compensation
of all Participants, their Retirement, death, Disability or
other cause for Termination of Employment, and such other
pertinent facts as the Committee may require.
Section 4.21 Any notice which shall be or may be given
under the Plan shall be in writing and shall be mailed by
United States mail, postage prepaid. If notice is to be
given to Shoney's, such notice shall be addressed to
Shoney's, marked for the attention of the Corporate
Secretary, Finance Department; or, if notice is to a
Participant, addressed to the address shown on such
Participant's personnel records.
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Section 4.22 Any party may, from time to time, change
the address to which notices shall be mailed by giving
written notice of such new address.
Section 4.23 The Plan shall be binding upon Shoney's
and its successors and assigns, and upon a Participant, his
beneficiary, assigns, heirs, executors and administrators.
Section 4.24 Shoney's and its Subsidiaries, each on
their own behalf, may enter into a trust agreement (the
"Trust") into which each may make contributions to provide
itself with a source of funds to meet its respective
liabilities under the Plan. Such Trusts shall be on the
terms and conditions set forth in the document attached
hereto as Exhibit A.
ARTICLE V
AMENDMENT OF THE PLAN
Section 5.01 The Plan may be amended, terminated,
modified or supplemented in whole or part from time to time
by the Board.
Section 5.02 Notice of every such amendment shall be
given in writing to each Participant and beneficiary of a
deceased Participant.
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Trust Exhibit Omitted As Immaterial