Executive employment agreement
PARTIES: Peter W. Kehayes
("Executive")
CBRL Group, Inc.
a Tennessee corporation
("Company")
Logan's Roadhouse, Inc.
a Tennessee corporation
("Logan's")
SUBJECT: Employment for a Specified Term
POSITION: President and Chief Operating
Officer of Logan's
LOCATION: Lebanon, Tennessee
DATE: January 15, 2002
- --------------------------------------------------------------------------------
This Agreement, dated for reference purposes January 15, 2002, is made by
CBRL Group, Inc., a Tennessee corporation (the "Company"), by Logan's Roadhouse,
Inc., a Tennessee corporation, and by Peter W. Kehayes, an individual (the
"Executive").
BACKGROUND FACTS
A. The Executive has previously been employed by the Company and
Logan's as the President and Chief Operating Officer of the Company's Logan's
Roadhouse, Inc. subsidiary.
B. The Board of Directors of the Company (the "Board") recognizes
that the Executive's contribution to the growth and success of Logan's during
prior years has been substantial. The Board now desires, and deems it to be in
the best interests of the Company and its shareholders, to provide for the
continued employment of the Executive and to make certain changes in the
Executive's employment arrangements with the Company and Logan's which the Board
has determined will reinforce and encourage the Executive's continued attention
and dedication to Logan's.
C. The Executive is willing to commit himself to continue to serve
the Company and Logan's on the specified terms and conditions.
D. In order to effect those purposes, the Company, Logan's and the
Executive wish to enter into an employment agreement on the terms and conditions
set forth below.
Therefore, in consideration of the mutual promises in this Agreement,
the Company, Logan's and the Executive agree as follows:
AGREEMENT
1. EMPLOYMENT.
The Company authorizes and approves the Executive's employment and
Logan's employs the Executive and the Executive accepts employment from Logan's
upon the terms and conditions of this Agreement.
2. DURATION OF AGREEMENT.
2.01 Initial Term. This employment shall begin as of the effective date
of this Agreement, January 15, 2002, and shall continue until it terminates
pursuant to this Agreement. Unless extended in writing by the parties or earlier
terminated pursuant to Article 6, this Agreement will automatically terminate at
July 30, 2004.
3. DUTIES.
3.01 In General. Subject to the ultimate direction and control of the
Company and Logan's Board of Directors, the Executive shall devote all of his
efforts on a full-time basis to the business and affairs of Logan's with such
duties and responsibilities as the Board shall designate, and he shall not
engage in any activities, or render services to or become associated with any
other business that in the reasonable judgment of the Board violates Article 8
of this Agreement or interferes with the full and proper performance of the
Executive's duties. The parties acknowledge and agree that community service,
charitable activities, and reasonable participation in unrelated business
activities, which do not adversely affect the Executive's employment duties, are
not prohibited or restricted by this Section.
3.02 Specific Duties. The Executive will serve as President and Chief
Operating Officer of Logan's. The Executive will provide leadership and
oversight and direction to the business operations of Logan's and its
subsidiaries.
4. COMPENSATION AND BENEFITS.
4.01 Compensation Package. In full consideration for all services
rendered by the Executive under this Agreement, including service on the Logan's
Board of Directors, and in accordance with its payroll practices and other
applicable Company policies for executives, the Company authorizes, and Logan's
shall pay the Executive an annual salary, and in appropriate specified
circumstances, a bonus, and they will provide employment benefits all as set
forth in Exhibit A attached to and a part of this Agreement. Exhibit A will
remain in effect until altered by mutual agreement or until this Agreement
expires or is terminated.
4.02 Benefits Distinct from Salary. Nothing paid to the Executive under
any benefit plan or arrangement presently in effect or made available in the
future shall be deemed to be in lieu of the salary payable to the Executive
pursuant to this Article 4 and Exhibit A.
4.03 Prorations. Any payments or benefits payable to the Executive in
respect of any 12-month period during which the Executive is employed by the
Company for less than the entire 12-month period shall, unless otherwise
provided in the applicable plan or arrangement, be prorated in accordance with
the actual number of days within the 12-month period during which he is
employed.
5. CHANGE IN CONTROL.
The Executive and the Company are parties to a separate agreement
concerning changes in control of the Company. That agreement is specified in a
letter dated October 8, 1999 from the Company to the Executive with a subject
styled: "Employee Retention Agreement" (the "Letter Agreement"). A copy of the
Letter Agreement comprises Exhibit B, which is attached to and is made part of
this Agreement. The Letter Agreement supersedes this Agreement and controls with
respect to all issues between the Company and the Executive that may be affected
by a change in control of the Company, as defined in the Letter Agreement (a
"Change in Control").
6. TERMINATION OF EMPLOYMENT OR SEVERANCE.
6.01 Termination Without Cause. The Company's Board of Directors may
direct Logan's to terminate the Executive's employment, with or without cause,
at any time by giving written notice of termination to the Executive, that
termination of employment to be effective on a date specified in the notice. In
the event of a termination without cause, the Executive shall be entitled to
receive:
a. the unpaid amount due the Executive for annual base salary
during the employment term prior to the date of termination;
b. an amount equal to 2 times the annual base salary in effect
at the date of termination; and
c. subject to other specific provisions of this Agreement and
the specific terms and conditions of each award or grant, appropriate stock
options and restricted stock.
Payments with respect to base salary shall be made in cash in a single payment
within 5 business days of the date of termination. The Executive's participation
in all benefit programs other than life, medical and disability insurance shall
cease as of the date of termination. The Executive's participation in the life,
medical and disability insurance programs shall continue until the earlier of
the time the Executive is employed by another employer and is covered or
permitted to be covered by that employer's benefit plans without regard to the
extent of such coverage, the Company no longer provides such benefit plans to
the Executive's management employees, or the expiration of the term of this
Agreement (as in effect at the time of termination). This provision supersedes
any other severance program or policy that may be offered by the Company (except
for those relating to termination following a Change in Control, which are set
forth in the Letter Agreement) and is in lieu of, rather than in addition to
other severance plans that may be in place, except with regard to any rights the
Executive may have pursuant to COBRA or the Letter Agreement.
6.02 Termination for Cause. If the Executive is terminated for cause,
the Company and Logan's shall have no further obligation to the Executive under
this Agreement, and the Executive's participation in all benefit programs
controlled by this Agreement shall cease as of the date of termination (except
employee health insurance benefits which shall continue to be provided in
accordance with applicable COBRA law). For purposes of this Agreement, "cause"
shall mean only any one or more of the following: (a) the Executive's personal
dishonesty in connection with his duties to the Company or Logan's; (b) the
Executive's willful misconduct in the performance of his duties with the Company
or Logan's; (c) breach of fiduciary duty to the Company or Logan's involving
personal profit by the Executive; (d) conviction of the Executive for any felony
or crime involving moral turpitude; (e) material intentional breach by the
Executive of any provision of this Agreement; or (f) unsatisfactory performance
by the Executive of the duties designated for the Executive by Logan's or the
Company's Board of Directors as a result of alcohol or drug use by the
Executive.
6.03 Termination by Executive After Change in Control. If a Change in
Control occurs, the Executive will have the rights, subject to the specified
terms and conditions, set forth in the Letter Agreement.
6.04 Termination by Executive Other Than After Change in Control. The
Executive may terminate his employment with Logan's at any time without further
obligation by either party under this Agreement (except for the obligations and
covenants of the Executive pursuant to Article 8, which shall survive
termination as specified in this Agreement) by giving not less than 60 nor more
than 180 days prior written notice of termination to the Company and Logan's.
6.05 Effect of Termination on Stock and Options.
a. General Effect. Subject to the terms, conditions and
provisions of the Company's separate Long-Term Incentive Plan and the cash and
stock awards made under that plan, upon any termination of the Executive's
employment and this Agreement, all stock options and restricted stock held by
the Executive that are vested prior to the effective date of the termination
shall be exercisable in accordance with their terms, and all stock options and
restricted stock held by the Executive that are not vested prior to the
effective date of the termination shall lapse and be void.
b. Effect Upon Change in Control. In the event of termination
following a Change in Control, the terms and conditions expressed in the Letter
Agreement will control with respect to stock options.
6.06 Death of Executive. If the Executive dies during the employment
term, this Agreement and the Executive's employment shall terminate upon the
Executive's death. With respect to cash compensation, the Executive's estate
shall be entitled to any annual base salary earned but not paid plus any bonus
accrued by Logan's for the Executive through the date of death plus an
additional amount equal to the annual base salary in effect for the Executive at
the date of the death of the Executive. This payment shall be paid in a lump sum
to the Executive's estate within 90 days after Logan's is given notice of the
Executive's death. The rights of the Executive's estate with respect to stock
options and restricted stock, and all other benefit plans, shall be determined
in accordance with the specific terms, conditions and provisions of the
applicable awards, agreements and plans.
6.07 Disability of Executive. Through the Company, Logan's has
disability insurance insuring individuals holding officer positions, and the
Executive is included under that disability insurance. During any period that
the Executive fails to perform his duties as a result of a disability, the
Executive shall continue to receive his full salary at the rate then in effect
pursuant to Exhibit A until his employment is terminated by death or the
expiration of this Agreement. Payments made to the Executive during the
disability period shall be reduced by the amounts, if any, payable to the
Executive under disability benefit plans of the Company and Logan's. The
Executive's year-end bonus shall be paid in a pro rata amount to compensate the
Executive proportionately for days worked prior to the beginning of his
disability period. For purposes of this Agreement, unless and except as
otherwise specifically defined by the Company and Logan's in its insurance
plans, a "disability" of the Executive shall occur if the Executive suffers any
mental or physical condition that impairs the Executive's ability to perform the
essential functions of his duties for a period of 180 consecutive days or more,
and if within 30 days after the Executive receives written notice from Logan's
requesting that the Executive resume his duties under this Agreement, the
Executive is unable or refuses to do so.
7. INDEMNIFICATION.
7.01 Executive's Indemnification. The Company and Logan's shall
indemnify and hold the Executive harmless to the maximum extent permitted by law
against judgments, fines, amounts paid in settlement and reasonable expenses,
including reasonable attorneys' fees incurred by the Executive, in connection
with the defense of, or as a result of any action or proceeding (or any appeal
from any action or proceeding) in which the Executive is made or is threatened
to be made a party by reason of the fact that he is or was an officer of the
Company or Logan's.
7.02 Insurance. The Company and Logan's agree that the Executive is and
shall continue to be covered and insured up to the maximum limits provided by
all insurance which the Company and Logan's maintain to indemnify directors and
officers (and to indemnify the Company or Logan's for any obligations which it
incurs as a result of its undertaking to indemnify its officers and directors)
and that the Company and Logan's will each exert its best efforts to maintain
such insurance, in not less than its present limits, in effect throughout the
term of the Executive's employment.
8. LIMITS ON COMPETITION.
8.01 No Competing Activities. While this Agreement is in effect, and
for 1-year following termination of the Executive's employment for cause or by
the Executive's voluntary resignation, the Executive shall not directly or
indirectly, either as an employee, employer, officer, director, agent,
consultant, partner or other investor (except for investments no greater than 5%
of any entity) or in any other individual or representative capacity, engage or
participate in any business or profession that is in substantial direct
competition with the business of the Company. For the purposes of this
paragraph, a business enterprise with which the Executive becomes associated as
an employee, employer, officer, director, agent, consultant, partner or other
investor shall be considered in "substantial direct competition" with the
Company if it is engaged in the restaurant or gift shop business. Without
limiting the list of companies engaged in substantial direct competition, the
following companies are considered to certainly fall within that definition:
Advantica Restaurants, Applebee's International, Avado Brands, Inc., Bob Evans
Farms, Brinker International, Cheesecake Factory, Inc., Darden Restaurants,
Inc., Il Fornaio Corporation, O' Charley's, Outback Steakhouse, RARE Hospitality
and Roadhouse Grill. This Section does not prohibit the Executive from engaging
in any transaction which is approved in writing by the Board of Directors of the
Company and this Section does not apply following normal expiration of this
Agreement.
8.02 Confidentiality. In consideration of his employment and the
compensation to be paid to him the Executive specifically covenants and agrees
that he will regard and preserve as confidential all trade secrets and all
non-public information pertaining to the Company's or its subsidiaries'
businesses that have been or may be obtained by him. The Executive will not
reveal, allow release of, nor disclose any Company or Logan's confidential
information. This prohibition on disclosure and release applies whether or not
the information which is confidential may be classified as a trade secret. The
confidential information of the Company or Logan's which the Executive will not
reveal, disclose or release to any person includes, but is not limited to, all
technology, recipes and business systems of the Company or Logan's at the date
of this Agreement as well as all recipes, customer lists, business systems and
styles developed during the course of this employment, and all other Company or
Logan's proprietary business information not generally known to the public. The
Executive shall not use any confidential information except in the course of
employment. The Executive will not use any of the confidential information after
his employment by Logan's is terminated, and the Executive will not take away or
retain after termination of employment any of the Company's or Logan's recipes,
business systems, business styles or specifications, Company or Logan's
proprietary information, customer lists, or other documents or things relating
to those matters. This provision does not apply to information voluntarily
disclosed by the Company or Logan's to the public, independently developed and
disclosed by others, or otherwise lawfully in the public domain.
8.03 No Contact with Employees. As a specific part of the consideration
to induce the Company and Logan's to enter into this Agreement with him, the
Executive unconditionally agrees that, for a period of 1-year from the effective
date of termination of the Executive's employment for any reason, the Executive
will not initiate any contact with any employees of CBRL Group, Inc., or its
subsidiaries or affiliates (jointly or severally, the "Group"), in order to
induce them to terminate their employment with the Group or to seek employment
with the Executive or any corporation or other business entity in which the
Executive has an ownership interest (except an ownership interest of 1% or less
in a public company) or by which he might be employed.
9. MISCELLANEOUS TERMS.
9.01 Annual Performance Review. The Executive will report regularly
to the Company's Board of Directors and the Board will conduct an annual review
of the Executive's performance in or near July of each year.
9.02 Location of Employment. The Executive shall be employed at Logan's
headquarters office in the city of Nashville, TN, but the Executive shall travel
to and carry out his duties wherever reasonably necessary for Logan's business,
to an extent substantially consistent with business travel obligations at the
date of this Agreement.
9.03 Compliance with Law. The Executive shall always, and when
appropriate, at Logan's expense, endeavor to comply with all applicable federal,
State and local laws, ordinances, rules, and regulations in the performance of
all work and other activities carried out in the name of or on behalf of
Logan's.
9.04 Notices. All notices, requests, demands and other communications,
under this Agreement shall be in writing and shall be duly given on the date of
delivery if served personally on the party, or delivered by overnight courier,
or 3 days after mailing if mailed to the party by first class mail, registered
or certified, postage fully prepaid, and properly addressed as specified on the
signature page of this Agreement. Any party may change its address by giving the
other parties written notice of the new address in the manner set forth in this
Section.
9.05 Entire Agreement. This Agreement, including the Letter Agreement
and its other Exhibits, supersedes all other agreements, either oral or in
writing, between the parties with respect to employment of the Executive by
Logan's. It contains all the promises between parties with respect to that
employment. No representations, inducements, promises or other agreements, oral
or otherwise, have been made by any party or any one acting on behalf of any
party, and no agreement, statement or promise not contained in this Agreement is
valid. Any modification of this Agreement must be in writing.
9.06 Partial Invalidity. If any provision in this agreement is held
by a court of competent jurisdiction to be void or unenforceable, the remaining
provisions shall continue in full force without being invalidated in any way.
9.07 Binding Effect. The provisions of this Agreement benefit and
bind the Executive's heirs, representatives, and successors, and the Company's
and Logan's successors, transferees and assigns.
9.08 No Assignment. The Executive, the Company and Logan's each
acknowledges and agrees that the services to be rendered by the Executive are
unique and personal. This Agreement is, therefore, personal to the parties and
it, and the rights and obligations created by it, may not be assigned by the
Executive, or except to a corporation which is part of a consolidated group for
tax purposes, by the Company or Logan's.
9.09 Attorneys' Fees. If any party brings suit to compel performance
of, to interpret, or to recover damages for the breach of this Agreement, the
finally prevailing party shall be entitled to reasonable attorneys' fees in
addition to costs and necessary disbursements otherwise recoverable.
[continued on following page]
9.10 Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Tennessee.
IN WITNESS WHEREOF, the parties have executed this Agreement on
February 27, 2002, to be effective as of the date specified on page 1 of this
Agreement.
ADDRESSES: COMPANY:
106 Castle Heights Avenue North CBRL Group, Inc.
Lebanon, Tennessee 37087 a Tennessee corporation
By: /s/Michael A. Woodhouse
-------------------------------
Michael A. Woodhouse, President
By: /s/James F. Blackstock
-------------------------------
James F. Blackstock, Secretary
LOGAN'S:
Logan's Roadhouse, Inc.
a Tennessee corporation
By: /s/Dan W. Evins
-----------------------------
Dan W. Evins, Chairman
By: /s/James F. Blackstock
-----------------------------
James F. Blackstock, Assistant
Secretary
EXECUTIVE:
Peter W. Kehayes
/s/Peter W. Kehayes
----------------------------------
Peter W. Kehayes
February 27, 2002
Approved.
/s/Robert V. Dale
- ---------------------------
Robert V. Dale,
Chairman Compensation & Stock Option Committee
Peter W. Kehayes Executive Employment Agreement
Agreed Salary and Benefits
Effective Date Executive Annual Base Salary Bonus Base
- -------------- ----------------- ------------------ -------------------
January 15, 2002 Peter W. Kehayes $323,000 80% of base salary
1. Salary. The annual base salary for the Executive will be paid in arrears in
equal installments at Logan's normal paydays during each calendar month. This
salary may be increased from time to time in accordance with normal business
practices of the Company by direction to Logan's, and if so increased, shall not
thereafter during the term of this Agreement be decreased. Compensation of the
Executive by salary payments shall not be deemed exclusive and shall not prevent
the Executive from participating in any other compensation or benefit plan of
the Company and Logan's.
2. Benefits. The Company and Logan's shall maintain in full force, and the
Executive shall be entitled to continue to participate in, all of its employee
benefit plans and arrangements in force on the effective date of this Exhibit A
in which the Executive now participates (or it will implement plans or
arrangements providing the Executive with at least equivalent benefits). The
Company and Logan's shall not make any changes in those plans and arrangements
which would adversely affect the Executive's rights or benefits, unless the
change occurs pursuant to a program applicable to all executive officers of the
Company and does not result in a proportionately greater reduction in the rights
of or benefits to the Executive as compared with any other executive officers of
the Company. The Executive shall be entitled to participate in or receive
benefits under any employee benefit plan or arrangement made available by the
Company and Logan's in the future to its executive officers and key management
employees, subject to and on a basis consistent with the terms, conditions and
overall administration of those plans and arrangements.
3. Options. The Executive is currently a participant in the Company's existing
long term incentive arrangement and the Executive will have an opportunity each
year to receive an annual grant of options for shares of Company common stock in
the same manner stock options are granted to senior management employees of the
Company. All option grants are subject to annual review and approval by the
Company's Board of Directors.
4. Bonus. As part of this employment Agreement, the Executive will participate
in a company bonus plan substantially similar in terms and conditions to the
Company and Cracker Barrel Old Country Store, Inc. Management Incentive Program
("MIP"), with a base bonus amount established at 80% of annual base salary. This
bonus, or a portion of it, is earned if, and as, annually specified Logan's and
personal target goals are achieved in each fiscal year. Any bonus earned will be
paid after the close of each fiscal year.
EXHIBIT A
5. Expenses. The Executive shall be entitled to receive prompt reimbursement for
all reasonable expenses incurred by him in performing his services, including
all expenses of travel and living expenses while away from home on business or
at the request of and in the service of Logan's, provided that those expenses
are incurred and accounted for in accordance with the policies and procedures
established by the Company and Logan's from time to time.
6. Health Insurance. The Executive will be provided with health, life, and
disability insurance benefits of the same kinds and at the same levels as are
available to senior management employees of Logan's throughout the term of his
employment.
7. Retirement Savings. The Executive will be eligible to participate in
Company-sponsored retirement savings plans of the same kind and at the same
level as are available to senior management employees of the Company and its
subsidiaries throughout the term of his employment.
A-2