exhibit10-3.htm


    Exhibit
10.3

    


    June 3,
2009

    


    


    Mr. Paul
E. Avery

    16205
Sonsoles de Avila

    Tampa, FL
33613

    


    Dear
Paul,

    


    As we discussed, effective as of July
1, 2009 (the "Retirement Date"), you will retire from OSI Restaurant Partners,
LLC (the "Company") and your employment with the Company and its subsidiaries
and affiliates will terminate. The purpose of this letter agreement (the
"Agreement") is to confirm the agreement between you and the Company concerning
your retirement from the Company and the related severance arrangements, as
follows:

    


    1.           Retirement; Duties Until Retirement Date. Effective as of the
Retirement Date, your employment with the Company will terminate, and you will
resign from all other positions, offices and directorships that you hold
with the Company, Kangaroo Holdings, Inc. ("Holdings") or any of their
respective affiliates or subsidiaries. From the date first written above
until the Retirement Date, you shall continue to serve as the Chief Operating
Officer of the Company on the terms contained in the Employment Agreement
between you and the Company dated June 14, 2007 (as amended, the
"Employment Agreement"). Your right to receive the benefits under this
Agreement is conditioned upon your continued compliance with the covenants
contained in the Employment Agreement and the fulfillment of your
duties thereunder. As of the Retirement Date, the Employment Agreement
shall terminate, except as expressly provided in this Agreement.

    


    2.           Final Wages and Business
Expenses. In accordance with Section 9(a) of the Employment
Agreement, you will receive any base salary earned by you during
the current payroll period, through the Retirement Date, to the extent not
previously paid. You will also be reimbursed for any unreimbursed business
expenses incurred under Section 7 of the Employment Agreement, provided you
submit appropriate substantiation and documentation in accordance with Company
policy. These amounts will be paid to you within thirty (30) days of
the Retirement Date whether or not you accept this Agreement.

    


    3.           Severance Benefits. In
consideration of your acceptance of this Agreement, and subject to (i) your
executing a release agreement in the form attached hereto as Exhibit A (the
"Release") that satisfies the condition to severance benefits under the
Employment Agreement and (ii) your continued compliance with your obligations
under this Agreement and under Sections 10, 11, 13 and 27 of the Employment
Agreement, the Company will provide you with the following severance pay and
benefits:

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (a)           in
satisfaction of its obligations under Section 9(b) of the Employment Agreement,
the Company will provide you with a severance payment equal to One Million
Six Hundred Sixty Eight Thousand Five Hundred and Twenty Five Dollars
($1,668,525.00), which represents the sum of (i) twelve (12) months of
your base salary at the rate in effect on the Retirement Date and (ii) the
average of the annual bonuses paid to you in respect to the prior three years
(which shall include, for these purposes, 50% of the closing bonus paid to you
in 2007) (the "Severance Payment"); such Severance Payment to be paid to you in
twelve (12) equal monthly installments commencing on the date set forth in
Section 5 below;

    


    (b)           if
you elect, as of the Retirement Date, under the Consolidated Omnibus Budget
Reconciliation Act ("COBRA") to continue to participate in the Company's group
medical, dental and vision insurance plans, the Company shall reimburse you on a
monthly basis in arrears for the cost of your portion of the COBRA premiums
with respect to such coverage for eighteen (18) months following
the Retirement Date (such period, the "COBRA Period"); provided that you remain
eligible for such participation under applicable law and plan terms, and further provided that the
Company's obligations hereunder shall terminate on the date that you become
covered under another employer's health, dental and visions plans (in which
case you shall notify the Company of such fact within five (5) days of so
becoming covered);

    


    (c)           if,
as of the end of the COBRA Period, you are not covered under another
employer's medical plan and you obtain personal health insurance
coverage at your own expense, the Company shall reimburse you on a monthly
basis in arrears for the cost of your premiums under such coverage, up to a
maximum of $2,400 per month, subject to your providing the Company with
such appropriate documentation or substantiation as the Company may require; the
Company's obligations under this subsection (c) shall terminate on the
earlier of the date that (i) is the eighteen month anniversary of the last day
of the COBRA Period and (ii) you become covered under another employer's
health plan (in which case you shall notify the Company of such fact within
five (5) days of so becoming covered);

    


    (d)           you
shall be entitled to an Outback Steakhouse "comp" card for the remainder of
your life, subject to the spending limits that are in effect with respect
to your existing "comp" card as of May 31, 2009; it being understood that
in no event shall any amounts under such "comp" card that are not used in a
calendar year be carried over to any subsequent calendar year;
and

    


    (e)           in
lieu of any payment pursuant to the Company's bonus program for fiscal year
2009, you will be entitled to receive a pro-rata annual bonus in respect of the
2009 fiscal year, based on the 2009 bonus plan approved by the Compensation
Committee of the Board of Directors of the Company, as amended on or about
May 5, 2009 and without giving effect to any further amendments that may
be made after the Retirement Date, such pro-rata bonus to be determined
by

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    multiplying the annual bonus that is earned for such year, based on
actual performance, by a fraction the numerator of which is the number of
months (including partial months) you were employed during such year (which
shall be six (6)) and the denominator of which is twelve (12). Any bonus payment
under this subsection (e) shall be paid in a single lump sum payment within
90 days after December 31, 2009.

    


    4.           Stock Options; Restricted
Stock.

    


    (a)           The
option to purchase Four Hundred Fifty Nine Thousand Two Hundred Fourteen
(459,214) shares of the common stock of Holdings at Ten Dollars ($10.00) per
share (the "Option"), that was granted to you pursuant to that certain Option
Agreement dated as of June 14, 2007 between you and Holdings (the "Option
Agreement"), shall continue to be governed by such Option Agreement, as amended
effective as of the date hereof, the terms of the Holdings 2007 Equity Incentive
Plan (the "Equity Plan") and the other agreements referenced
therein.

    


    (b)           The
One Million Two Hundred Thirty Four Thousand Five Hundred (1,234,500) shares of
restricted Holdings common stock (the "Restricted Shares") that
were granted to you pursuant to that certain Restricted Stock Agreement
dated as of June 14, 2007 by and among Holdings and you (as amended, the
"Restricted Stock Agreement") shall continue to be governed by the terms of the
Restricted Stock Agreement, as further amended effective June 14, 2009, and
the other agreements referenced therein.

    


    5.           Conditions to the Company's
Obligations. Any obligation of the Company, Holdings or any of their
respective affiliates under Sections 3 and 4 hereof is conditioned upon (i)
your executing this Agreement (which includes the release of claims included in
Section 13 below) and (ii) your executing the Release and
delivering it to the Company within twenty-one (21) calendar days of
the Retirement Date; provided, however, that the
Severance Payment shall not commence earlier than five (5) business days
following the later of the effective date of the Release (that is,
the eighth calendar day following the date of your signing the Release,
provided you have not revoked such Release) or the date that the Release,
signed by you, is received by the Company.

    


    6.           Tax Withholding. All payments
by the Company under this Agreement will be reduced by all taxes and
other amounts that the Company is required to withhold under
applicable law and all other deductions authorized by you.

    


    7.           Acknowledgement of Full Payment and
Status of Benefits. You agree that the payments and benefits
provided under Sections 2 and 3 of this Agreement and described in Section
4 of this Agreement are in complete satisfaction of any and all
compensation due to you from the Company or any of its affiliates, whether
arising under the Employment Agreement or otherwise, in connection with
your employment or the termination thereof, and that, except as expressly
provided in this Agreement, nothing further is owed to you by the Company or
Holdings or any of 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    their
respective affiliates. You will not continue to earn vacation or other paid time
off after the Retirement Date and, except as expressly provided in Sections
3(b) and 3(d) above, your participation in all employee benefit plans and
programs of the Company and its affiliates will end as of the Retirement Date,
in accordance with the terms of those plans and programs.

    


    8.           Confidentiality, Non-Disparagement,
Non-Competition and Non-Solicitation. You agree that you will not
disclose this Agreement or any of its terms or provisions, directly or by
implication, except to members of your immediate family and to your legal and
tax advisors, and then only on condition that they agree not to further disclose
this Agreement or any of its terms or provisions to others. You hereby
acknowledge, reaffirm, and agree to comply with all of your post-employment
confidentiality, non-solicitation, non-competition and other obligations under
Sections 10, 11, and 13 of the Employment Agreement (the "Restrictive
Covenants"), in accordance with the terms thereof. The Company's obligations to
provide any of the payments and benefits set forth in this Agreement are
expressly conditioned on your continued full compliance with the Restrictive
Covenants and your compliance with the covenants contained in this
Agreement, including, but not limited to, those contained in Section 10
below.

    


    10.           Non-Disparagement. You agree
that from and after the date hereof you will not make any false, misleading
or disparaging statements about, or otherwise criticize, the Company, Holdings,
or any of their respective affiliates, directors, employees, officers, agents,
products or services.

    


    11.           Return of Documents and Other
Property. In signing this Agreement, you agree that, prior to
the Retirement Date, you will return to the Company any and all documents,
materials and information related to the business, whether present or otherwise,
of the Company and its affiliates as required by Section 12 of the
Employment Agreement, and all keys and other property of the Company
and its subsidiaries and affiliates in your possession or control. As of
the Retirement Date, you agree that you will not, for any purpose, attempt to
access or use any computer or computer network or system of the Company or
any of its affiliates, including without limitation their electronic mail
systems. Further, you agree that prior to the Retirement Date you will
disclose to the Company all passwords necessary or desirable to enable the
Company to access all information which you have password-protected on its
computer network or system.

    


    12.           Cooperation. You agree to
cooperate fully with all reasonable requests for information and
participation by the Company, its agents or attorneys in prosecuting or
defending claims, suits and disputes brought on behalf of or against the Company
or its affiliates and in which you are involved or about which you have
knowledge.

    


    13.           Release of
Claims.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

                          (a)           In
exchange for the severance pay and benefits provided to you under this
Agreement, which are contingent on your signing this Agreement, which includes
this release of claims, and to which you would not otherwise be entitled, on
your own behalf and that of your heirs, executors, administrators,
beneficiaries, representatives and assigns, and all others connected with or
claiming through you, you hereby release and forever discharge the Company,
Holdings, and their respective subsidiaries and other affiliates and all of
their respective past, present and future officers, directors, trustees,
shareholders, employees, agents, general and limited partners, members,
managers, joint venturers, representatives, successors and assigns, and all
others connected with any of them, both individually and in their official
capacities, from any and all causes of action, rights or claims of any type or
description, known or unknown., which you have had in the past, now have or
might have, through the date of your signing of this Agreement, including,
without limitation, any and all causes of action, rights or claims in any
way resulting from, arising out of or connected with your employment by the
Company or any of its subsidiaries or other affiliates, or the termination of
that employment or pursuant to any federal, state or local law, regulation
or other requirement.

    


    (b)           Excluded
from the scope of the release of claims set forth in Section 13(a) is (i) any
claim arising under terms of this Agreement after the effective date of this
Agreement, (ii) payment of any severance amounts pursuant to Section 3
of this Agreement, any vested rights, payments, or benefits due under any
employee benefit plan sponsored or maintained by the Company or any of its
affiliates and the Company's obligations to provide you with the gross-up
payments referenced in the second paragraph of Section 6 of the Employment
Agreement, (iii) any claim arising out of the Option or the Restricted
Shares, to the extent vested and as modified as described in Section 4
above, (iv) any right of indemnification or contribution

    pursuant
to the Articles of Incorporation or By-Laws of the Company or any of its
subsidiaries or other affiliates and (v) any right of indemnification or
contribution that you have pursuant to any written stockholder agreement between
you and the Company or any of its subsidiaries or other
affiliates.

    


    (c)           You
also acknowledge that you have been advised by the Company and its subsidiaries
and other affiliates to seek the advice of an attorney
prior to executing this Agreement, and that you have had sufficient
time to consider this Agreement and to consult with an attorney, if you
wished to do so, or to consult with any other person of your choosing
before signing, and you are signing this Agreement voluntarily and with a full
understanding of its terms. You further acknowledge that, in signing this
Agreement, you have not relied on any promises or representations, express or
implied, that are not set forth expressly in this Agreement.

    


    14.           Entire Agreement. This
Agreement constitutes the entire agreement between you and the Company and
supersedes all prior and contemporaneous communications, agreements and
understandings, whether written or oral, with respect to your employment,
its termination and all related matters, excluding only your rights and
obligations under or with respect to the Option Agreement, the Restricted
Stock

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Agreement, the Stockholders Agreement (as such term is defined in the
Option Agreement),
the Registration Rights Agreement (as such term is defined in the Option
Agreement), the Equity Plan and your post-employment obligations under Sections
10, 11, 13 and 27 of the Employment Agreement and the Company's rights and
remedies under the Employment Agreement, including those other provisions
of the Employment Agreement that are necessary or desirable for the enforcement
of the aforementioned surviving provisions, all of which shall remain in full
force and effect in accordance with their terms. Nothing in this Agreement
shall discharge or otherwise affect your obligations under that certain
Amended and Restated Promissory Note dated September 24, 2008 between you and
Holdings, as amended, that certain Amended and Restated Stock Pledge Agreement
dated as of September 24, 2008 between you and Holdings, that certain
Promissory Note dated as of June 15, 2009 between you and Holdings and that
certain Stock Pledge Agreement dated as of June 15, 2009 between you and
Holdings, nor the Company's obligations under that certain Split Dollar
Agreement dated August 14, 2008 and effective August 2005, by and between the
Company and Nelson R. Avery, Trustee of the Paul E. Avery Irrevocable Trust
dated February 19, 1999.

    


    15.           Section 409A. Any taxable
welfare benefits provided to you pursuant to this Agreement (the
"Applicable Benefits") shall be subject to the following requirements in order
to comply with Section 409A of the Internal Revenue Code of 1986, as amended
(the "Code"). The amount of any Applicable Benefits provided during one
taxable year shall not affect the amount of the Applicable Benefits
provided in any other taxable year, except that with respect to any
Applicable Benefits that consist of the reimbursement of expenses referred to in
Code Section 105(b), a limitation may be imposed on the amount of such
reimbursements as described in Treasury Regulations Section 1.409A-3(i)(iv)(B).
To the extent that any Applicable Benefits consist of the reimbursement of
eligible expenses, such reimbursement must be made on or before the last
day of the calendar year following the calendar year in which the expense was
incurred. Further, no Applicable Benefits may be liquidated or exchanged for
another benefit.

    


    16.           Miscellaneous. This Agreement
may not be modified or amended, and no breach shall be deemed to be waived,
unless agreed to in writing by you and the Company. The captions and headings in
this Agreement are for convenience only and in no way define or describe
the scope or content of any provision of this Agreement. This Agreement may be
executed in one or more counterparts, each of which shall be an original
and all of which together shall constitute one and the same instrument.
This Agreement shall be governed by the laws of the State of Florida,
without giving effect to the principles of comity or conflicts of laws
thereof.

    


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               If
the terms of this Agreement are acceptable to you, please sign, date and return
it to the Company. The enclosed copy of this Agreement, which you should also
sign and date, is for your records.

    


    


    Sincerely,

    


    OSI
RESTAURANT PARTNERS, LLC

    


    


    By: /s/ A. William Allen,
III

    


    Name: A.
William Allen, III

    Title:
Chief Executive Officer

    


    


    


    Accepted
and agreed:

    


    


    Signature:
/s/
Paul E. Avery

    


    Date:
6-3-09