Document:

Exhibit 10.20

 

OMTOOL, LTD.

1997 STOCK OPTION PLAN

NOTICE OF Non Qual STOCK OPTION AGREEMENT

 

 

	
  [DATE]

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  [NAME]

  	
  Omtool, Ltd.

  	
   

  
	
  [ADDRESS]

  	
  8 Industrial Way

  	
   

  
	
  [CITY,
  STATE ZIP CODE]

  	
  Salem, NH 03079

  	
   

  

 

[NAME] (the “Employee”), you have been granted
an option to purchase Common Stock, $0.01 par value (“Common Stock”), of
Omtool, Ltd., a Delaware corporation (the “Company”) subject to terms as and
conditions as set forth on the following page(s):

 

	
  Grant Number:

  	
   

  	
   

  	
   

  	
   

  
	
  Date of Grant:

  	
   

  	
   

  	
   

  	
   

  
	
  Shares Granted:

  	
   

  	
   

  	
   

  	
   

  
	
  Option Price:

  	
   

  	
   

  	
   

  	
   

  
	
  Grant Type:

  	
  Non Qual

  	
   

  	
   

  	
   

  
	
  Vesting Start
  Date:

  	
   

  	
   

  	
   

  	
   

  
	
  Last Date to
  Exercise:

  	
   

  	
   

  	
   

  	
   

  

 

Vesting:

Subject to the terms of the Plan as set forth on the
following pages, shares vest according to the following vesting schedule:

 

	
  Date of
  Vest

  	
   

  	
  Shares
  Vesting Over

  the
  Period

  	
   

  	
  Vesting
  in Period

  Occurs

  	
   

  	
  Last
  Date to

  Exercise

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1st Anniversary of Vesting Start Date

  	
   

  	
  25%

  	
   

  	
  End of
  period

  	
   

  	
  10th anniversary from
  Grant Date

  	
   

  
	
  2nd Anniversary of Vesting Start Date

  	
   

  	
  25%

  	
   

  	
  End of
  period

  	
   

  	
  10th anniversary from
  Grant Date

  	
   

  
	
  3rd Anniversary of Vesting Start Date

  	
   

  	
  25%

  	
   

  	
  End of
  period

  	
   

  	
  10th anniversary from
  Grant Date

  	
   

  
	
  4th Anniversary of Vesting Start Date

  	
   

  	
  25%

  	
   

  	
  End of
  period

  	
   

  	
  10th anniversary from
  Grant Date

  	
   

  

 

In the event of a Change of Control, as defined below,
any shares subject to the option granted that are still outstanding and not yet
vested and exercisable shall become 100% vested and exercisable immediately
prior to the Change in Control and shall be exercisable for the remaining
duration of the option. A “Change in Control” is defined as any event in which
(a) the Company is to be merged or consolidated with or acquired by another
entity in a merger or other reorganization in which the holders of the
outstanding voting stock of the Company immediately preceding the consummation
of such event shall, immediately following such event, hold, as a group, less
than a majority of the voting securities of the surviving or successor entity,
or (b) all or substantially all of the Company’s capital stock or assets are
sold or transferred to another entity.

 

IN WITNESS WHEREOF, the Company and the Employee have
caused this instrument to be executed as of the date first above written.

 

 

	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
  [NAME]

  	
   

  	
  Name:

  
	
   

  	
   

  	
  President and CEO

  
					

 

 

                                                1.                                      Grant Under 1997 Stock
Plan. This option is granted pursuant to and
is governed by the Company’s 1997 Stock Plan (the “Plan”) and, unless the
context otherwise requires, terms used herein shall have the same meaning as in
the Plan. Determinations made in connection with this option pursuant to the
Plan shall be governed by the Plan as it exists on this date.

 

                                                2.                                      Grant as Incentive Stock
Option; Other Options. This
option is not intended to qualify as an incentive stock option under
Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”).
This option is in addition to any other options heretofore or hereafter granted
to the Employee by the Company or any Related Corporation (as defined in the
Plan), but a duplicate original of this instrument shall not effect the grant
of another option.

 

                                                3.                                      Vesting of Option if
Employment Continues. If the
Employee has continued to be employed by the Company or any Related Corporation
on the following dates, the Employee may exercise this option for the number of
shares of Common Stock set opposite the applicable date.

 

Notwithstanding the foregoing, in accordance with and subject to the
provisions of the Plan, the Committee may, in its discretion, accelerate the
date that any installment of this Option becomes exercisable. The foregoing
rights are cumulative and (subject to Sections 4 or 5 hereof if the Employee
ceases to be employed by the Company and all Related Corporations) may be
exercised on or before the date which is 10 (ten) years from the date this
option is granted.

 

                                                4.                                      Termination of Employment.

 

                                                (a)                                  Termination Other Than for
Cause. If the Employee ceases to be employed by
the Company and all Related Corporations, other than by reason of death or
disability as defined in Section 5 or termination for Cause as defined in
Section 4(c), no further installments of this option shall become exercisable,
and this option shall terminate (and may no longer be exercised) after the
passage of three months from the Employee’s last day of employment, but in no
event later than the scheduled expiration date. In such a case, the Employee’s
only rights hereunder shall be those which are properly exercised before the
termination of this option.

 

                                                (b)                                  Termination for Cause. If the employment of the Employee is terminated for
Cause (as defined in Section 4(c)), this option shall terminate upon the
Employee’s receipt of written notice of such termination and shall thereafter
not be exercisable to any extent whatsoever.

 

                                                (c)                                  Definition of Cause. “Cause” shall mean conduct involving one or more of
the following: (i) the substantial and continuing failure of the Employee,
after notice thereof, to render services to the Company or Related Corporation
in accordance with the terms or requirements of his or her employment; (ii) disloyalty,
gross negligence, willful misconduct, dishonesty or breach of fiduciary duty to
the Company or Related Corporation; (iii) the commission of an act of
embezzlement or fraud; (iv) deliberate disregard of the rules or policies
of the Company or Related Corporation which results in direct or indirect loss,
damage or injury to the Company or Related Corporation; (v) the
unauthorized disclosure of any trade secret or confidential information of the
Company or Related Corporation; or (vi) the commission of an act which
constitutes unfair competition with the Company or Related Corporation or which
induces any customer or supplier to breach a contract with the Company or
Related Corporation.

 

2

 

                                                5.                                      Death; Disability.

 

                                                (a)                                  Death. If the Employee dies while in the employ of the
Company or any Related Corporation, this option may be exercised, to the extent
otherwise exercisable on the date of his or her death, by the Employee’s
estate, personal representative or beneficiary to whom this option has been
assigned pursuant to Section 9, at any time within 180 days after the
date of death, but not later than the scheduled expiration date.

 

                                                (b)                                  Disability. If the Employee ceases to be employed by the Company
and all Related Corporations by reason of his or her disability (as defined in
the Plan), this option may be exercised, to the extent otherwise exercisable on
the date of the termination of his or her employment, at any time within
180 days after such termination, but not later than the scheduled
expiration date.

 

                                                (c)                                  Effect of Termination. At the expiration of the 180-day period provided in
paragraphs (a) or (b) of this Section 5 or the scheduled expiration date,
whichever is the earlier, this option shall terminate (and shall no longer be
exercisable) and the only rights hereunder shall be those as to which the
option was properly exercised before such termination.

 

                                                6.                                      Partial Exercise. This option may be exercised in part at any time and
from time to time within the above limits, except that this option may not be
exercised for a fraction of a share unless such exercise is with respect to the
final installment of stock subject to this option and cash in lieu of a
fractional share must be paid, in accordance with Paragraph 13(G) of the Plan,
to permit the Employee to exercise completely such final installment. Any
fractional share with respect to which an installment of this option cannot be
exercised because of the limitation contained in the preceding sentence shall
remain subject to this option and shall be available for later purchase by the
Employee in accordance with the terms hereof.

 

                                                7.                                      Payment of Price. (a) The option price shall be paid in the
following manner:

 

(i)                                     in cash or by check;

 

(ii)                                  subject to Section 7(b) below, by
delivery of shares of the Company’s Common Stock having a fair market value (as
determined by the Committee) equal as of the date of exercise to the option
price;

 

(iii)                               by delivery of an assignment satisfactory
in form and substance to the Company of a
sufficient amount of the proceeds from the sale of the Option Shares and an
instruction to the broker or selling agent to pay that amount to the Company;
or

 

(iv)                              by any combination of the foregoing.

 

                                                (b)                                  Limitations on Payment by
Delivery of Common Stock. If the
Employee delivers Common Stock held by the Employee (“Old Stock”) to the
Company in full or partial payment of the option price, and the Old Stock so
delivered is subject to restrictions or limitations imposed by agreement between
the Employee and the Company, an equivalent number of Option Shares shall be
subject to all restrictions and limitations applicable to the

 

3

 

Old Stock to the extent that the Employee paid for the
Option Shares by delivery of Old Stock, in addition to any restrictions or
limitations imposed by this Agreement. Notwithstanding the foregoing, the
Employee may not pay any part of the exercise price hereof by transferring
Common Stock to the Company unless such Common Stock has been owned by the
Employee free of any substantial risk of forfeiture for at least
six months.

 

                                                8.                                      Method of Exercising
Option. Subject
to the terms and conditions of this Agreement, this option may be exercised by
written notice to the Company at its principal executive office, or to such
transfer agent as the Company shall designate. Such notice shall state the
election to exercise this option and the number of Option Shares for which it
is being exercised and shall be signed by the person or persons so exercising
this option. Such notice shall be accompanied by payment of the full purchase
price of such shares, and the Company shall deliver a certificate or
certificates representing such shares as soon as practicable after the notice
shall be received. Such certificate or certificates shall be registered in the
name of the person or persons so exercising this option (or, if this option
shall be exercised by the Employee and if the Employee shall so request in the
notice exercising this option, shall be registered in the name of the Employee
and another person jointly, with right of survivorship). In the event this
option shall be exercised, pursuant to Section 5 hereof, by any person or
persons other than the Employee, such notice shall be accompanied by
appropriate proof of the right of such person or persons to exercise this
option.

 

                                                9.                                      Option Not Transferable. This option is not transferable or assignable except
by will or by the laws of descent and distribution. During the Employee’s
lifetime only the Employee can exercise this option.

 

                                                10.                               No Obligation to Exercise
Option. The
grant and acceptance of this option imposes no obligation on the Employee to
exercise it.

 

                                                11.                               No Obligation to Continue
Employment. Neither
the Plan, this Agreement, nor the grant of this option imposes any obligation
on the Company or any Related Corporation to continue the Employee in
employment.

 

                                                12.                               No Rights as Stockholder
until Exercise. The
Employee shall have no rights as a stockholder with respect to the Option
Shares until such time as the Employee has exercised this option by delivering
a notice of exercise and has paid in full the purchase price for the shares so
exercised in accordance with Section 8. Except as is expressly provided in
the Plan with respect to certain changes in the capitalization of the Company,
no adjustment shall be made for dividends or similar rights for which the
record date is prior to such date of exercise.

 

                                                13.                               Capital Changes and
Business Successions. The
Plan contains provisions covering the treatment of options in a number of
contingencies such as stock splits and mergers. Provisions in the Plan for
adjustment with respect to stock subject to options and the related provisions
with respect to successors to the business of the Company are hereby made
applicable hereunder and are incorporated herein by reference.

 

                                                14.                               Early Disposition. The Employee agrees to notify the Company in writing
immediately after the Employee transfers any Option Shares, if such transfer
occurs on or before the later of (a) the date two years after the date of
this Agreement or (b) the date one year after the date the Employee
acquired such Option Shares. The Employee also agrees to provide the Company
with any information concerning any such transfer required by the Company for
tax purposes.

 

4

 

                                                15.                               Withholding Taxes. If the Company or any Related Corporation in its
discretion determines that it is obligated to withhold any tax in connection
with the exercise of this option, or in connection with the transfer of, or the
lapse of restrictions on, any Common Stock or other property acquired pursuant
to this option, the Employee hereby agrees that the Company or any Related
Corporation may withhold from the Employee’s wages or other remuneration the
appropriate amount of tax. At the discretion of the Company or Related
Corporation, the amount required to be withheld may be withheld in cash from
such wages or other remuneration or in kind from the Common Stock or other
property otherwise deliverable to the Employee on exercise of this option. The
Employee further agrees that, if the Company or any Related Corporation does
not withhold an amount from the Employee’s wages or other remuneration
sufficient to satisfy the withholding obligation of the Company or Related
Corporation, the Employee will make reimbursement on demand, in cash, for the
amount underwithheld.

 

                                                16.                               Provision of  Documentation  to  Employee. By
signing this Agreement the Employee acknowledges receipt of a copy of this
Agreement and a copy of the Plan.

 

                                                17.                               Miscellaneous.

 

                                                (a)                                  Notices. All notices hereunder shall be in writing and shall
be deemed given when sent by certified or registered mail, postage prepaid,
return receipt requested, to the address set forth below. The addresses for
such notices may be changed from time to time by written notice given in the
manner provided for herein.

 

                                                (b)                                  Entire Agreement;
Modification. This
Agreement constitutes the entire agreement between the parties relative to the
subject matter hereof, and supersedes all proposals, written or oral, and all
other communications between the parties relating to the subject matter of this
Agreement. This Agreement may be modified, amended or rescinded only by a written
agreement executed by both parties.

 

                                                (c)                                  Severability. The invalidity, illegality or unenforceability of any
provision of this Agreement shall in no way affect the validity, legality or
enforceability of any other provision.

 

                                                (d)                                  Successors and Assigns. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns,
subject to the limitations set forth in Section 9 hereof.

 

                                                (e)                                  Governing Law. This Agreement shall be governed by and interpreted
in accordance with the laws of the Delaware, without
giving effect to the principles of the conflicts of laws thereof.

 

5EXHIBIT
10.1

 

AGREEMENT

 

This Agreement is entered into this 7th day
of September, 2004, by and between Western Sizzlin Corporation, a Delaware
corporation, with its principal place of business at 1338 Plantation Road,
Roanoke, Virginia, 24012 (hereinafter the “Company”), subject to the further
definition set forth in Section 7.1, and Robyn B. Mabe, whose address is
6010 Windcrest Lane, Roanoke, Virginia, 24012 (hereinafter “Executive”).

 

WHEREAS, the Company considers the
establishment and maintenance of a sound and vital management to be essential
to protecting and enhancing the best interests of the Company and its
shareholders; and

 

WHEREAS, the Board of Directors of the
Company has determined that appropriate steps should be taken to reinforce and
encourage the continued attention and dedication of members of the Company’s
management, including Executive, to their assigned duties without distraction.

 

NOW, THEREFORE, in consideration of the
mutual covenants and agreements of the parties set forth herein, and for other
good and valuable consideration, the parties agree as follows:

 

Section 1.  Employment.

 

The Company and Executive agree that
Executive shall serve as Vice President and Chief Financial Officer of Western
Sizzlin Corporation.  Executive shall
perform such duties and exercise such powers pertaining to the management and
operations of the Company as may be determined from time to time by the
Company.  Such duties and powers shall be
consistent with those normally expected of persons holding similar
positions.  Executive’s duties, however,
are subject to reasonable modifications based on future developments in the
Company’s business.

 

Section 2. Term of Agreement.

 

This Agreement will be effective as of September 1,
2004, and, except as otherwise provided in this Agreement, will continue in
effect until September 1, 2005 (the Initial Term), and thereafter shall be
renewed automatically for additional one (1) year terms (each a Renewal Term)
unless a party hereto provides the other party with notice of the intent not to
renew at least ninety (90) days prior to the expiration of the Initial Term, or
any subsequent Renewal

 

1

 

Term.  If a Change in Control
occurs prior to the expiration of the Initial Term of this Agreement, this
Agreement will continue in effect for one (1) year from the Change in
Control.  If a Change in Control occurs
during a one (1) year Renewal Term, this Agreement will continue in effect for one
(1) year from the Change in Control. 
Executive’s base salary while employed will be determined from year to
year, by the Board’s Compensation Committee, but shall be no less than One
Hundred and Ten Thousand and 00/100 Dollars ($110,000.00) annually.

 

Section 3. Change in Control.

 

The Company recognizes that, as is the case
with many publicly held corporations, the possibility of a change in control
exists, and that possibility, along with the uncertainty and questions which
may arise among management, may result in the departure or distraction of
management personnel to the detriment of the Company and its shareholders.  In order to induce Executive to remain in its
employ, the Company agrees to provide Executive the payments and benefits
described in this Agreement if Executive’s employment with the Company is
terminated subsequent to a “Change in Control” of the Company as defined in Section 4,
under the circumstances described in Section 5.

 

Section 4. Definition of Change in
Control.

 

For purposes of this Agreement, a Change in
Control of the Company means the occurrence of any of the following events
during the period in which this Agreement remains in effect.  A Change in Control will be deemed to occur
on the date the event occurs:

 

4.1           Change
in Voting Power. Any person or persons acting together which would
constitute a “group” for purposes of Section 13(d) of the Exchange Act
(other than the Company, or any Subsidiary, or any entity beneficially owned by
any of the foregoing) beneficially own (as defined in Rule 13(d)-3 under the
Exchange Act) without Board approval or consent, directly or indirectly, at
least thirty  percent (30%) of the total voting
power of the Company entitled to vote generally for the election of the Board.

 

4.2           Change
in Board of Directors. Either:

 

(a)           the
Current Directors (as hereinafter defined) cease for any reason to constitute
at least a majority of the members of the

 

2

 

Board (for these
purposes, a “Current Director” means any member of the Board as of the date of
this Agreement, and any successor of a Current Director whose election or
nomination for election by the Company’s stockholders was approved by at least
a majority of the current Directors then on the Board); or

 

(b)           at
any meeting of the stockholders of the Company called for the purpose of
electing directors, a majority of the persons nominated by the Board for
election as directors fail to be elected; or

 

4.3                           Liquidation,
Merger or Consolidation. The stockholders of the Company approve:

 

(a)           a
plan of complete liquidation of the Company; or

 

(b)           an
agreement providing for the merger or consolidation of the Company (i) in which
the Company is not the continuing or surviving corporation (other than
consolidation or merger with a wholly owned subsidiary of the Company in which
all shares outstanding immediately prior to the effectiveness thereof are
changed into or exchanged for the same consideration) or (ii) pursuant to which
the shares are converted into cash, securities or other property, except a consolidation
or merger of the Company in which the holders of the shares immediately prior
to the consolidation or merger have, directly or indirectly, at least a
majority of the common stock of the continuing or surviving corporation
immediately after such consolidation or merger, or in which the Board
immediately prior to the merger or consolidation would, immediately after the
merger or consolidation, constitute a majority of the board of directors of the
continuing or surviving corporation; or

 

4.4           Sale
of Assets. The stockholders of the Company approve an agreement (or
agreements) providing for the sale or other disposition (in one transaction or
a series of transactions) of all or substantially all of the assets of the
Company.

 

3

 

Section 5.  Termination Following Change in Control.

 

If any of the events described in Section 4
constituting a Change in Control occur, Executive will be entitled to the
payments and benefits provided for in Section 6 if a subsequent
termination of Executive’s employment occurs within one (1) years from the date
of that Change in Control, unless that termination is:

 

i.              because
of Executive’s death;

 

ii.             by
the Company for Cause or Disability; or

 

iii.            by
Executive other than for Good Reason.

 

Those payments and benefits will be in lieu of any severance payments
Executive would otherwise receive in accordance with Section 19 of this
Agreement.

 

5.1           Cause.
Termination by the Company of Executive’s employment for “Cause” means Executive
has materially breached this Agreement or has engaged in action or misconduct
in connection with the performance of her duties that is injurious to the
business of the Company, or is convicted of a felony or commits an act of
gross, flagrant, and willful misconduct relating to her employment or the
Company’s business, including, but not limited to, theft or embezzlement of the
Company’s property or money, or an act of fraud against the Company.  If Company believes Cause exists, as defined
herein, a written notice will be delivered to Executive by the Chief Executive
Officer of the Company (or if Executive is the Chief Executive Officer, the
Chairman of the Compensation Committee) that specifically identifies the manner
in which the Chief Executive Officer (or the Chairman of the Committee)
believes that Executive has given the Company Cause for termination of
Executive’s employment, and giving Executive an opportunity for Executive,
together with Executive’s counsel, to be heard before the Board of Directors of
the Company.  The Board of Directors of
the Company may then make a finding that, in the good faith opinion of
two-thirds of the Board of Directors, Executive acted (or failed to act when
she should have acted) in a manner constituting Cause as defined herein, and
specifying the particulars of that finding in detail.  For purposes of this subsection 5.1, no
act, or failure to act, on Executive’s part will be considered “willful”

 

4

 

unless done, or omitted to be done, by
Executive not in good faith and without reasonable belief that Executive’s
action or omission was in the best interest of the Company.

 

5.2           Disability.
Termination by the Company of Executive’s employment for “Disability” means
termination of Executive’s employment following and because of Executive’s
failure to perform substantially all of the material duties of her position for
a period of at least one hundred eighty (180) consecutive calendar days due to
physical or mental illness or injury. 
Executive will continue to receive Executive’s full base salary at the
rate in effect and any bonus payments under the Plan payable during the one
hundred eighty (180) day qualification period until termination of Executive’s
employment for Disability. After that termination, Executive’s benefit will be
determined in accordance with the Company’s other benefit plans and practices
then in effect that apply to Executive. 
The Company will have no further obligation to Executive under this
Agreement and all supplemental benefits will be terminated.  If the Company and Executive disagree as to
Executive’s incapacity, each may appoint a medical doctor to certify her
opinion as to Executive’s incapacity, and if the doctors do not agree as to
Executive’s incapacity, then the two doctors will appoint a third medical
doctor to certify her opinion as to Executive’s incapacity, and the decision of
a majority of the three doctors will prevail. 
The Company will bear the costs of the doctors’ opinions.

 

5.3           Good
Reason. Termination by Executive of Executive’s employment for “Good Reason”
means termination by Executive of Executive’s employment based on:

 

(a)           The
assignment to Executive of duties inconsistent with her position and status
with the Company as they existed immediately prior to a Change in Control, or a
substantial change in Executive’s title, offices or authority, or in the nature
of her responsibilities, as they existed immediately prior to a Change in
Control, except in connection with the termination of her employment for Cause
or Disability or as a result of her death or by Executive other than for Good
Reason;

 

5

 

(b)           A
reduction in Executive’s base salary as in effect on the date of this Agreement
or as her salary may be increased from time to time;

 

(c)           Requiring
Executive to be based more than fifty (50) miles from the location where
Executive is based immediately prior to a Change in Control, except for
required travel on business to an extent substantially consistent with
Executive’s business travel obligations prior to the Change in Control, or if
Executive is agreeable to relocating, then the Company agrees to reimburse
Executive for all reasonable moving expenses incurred by Executive or to indemnify
Executive against any loss realized in the sale of her principal residence in
connection with that relocation;

 

(d)           The
failure to continue in effect any retirement plan, life insurance plan, medical
insurance plan, disability plan or any other benefit plan in which Executive is
participating immediately prior to a Change in Control (or provide plans
providing Executive with substantially similar benefits), the taking of any
action by the Company that would adversely affect Executive’s participation or
materially reduce her benefits under any of those plans or deprive Executive of
any material fringe benefit enjoyed by Executive immediately prior to a Change
in Control; or

 

(e)           The
failure by the Company to obtain the assumption of this Agreement by any
successor, as contemplated in Section 7.

 

5.4           Notice
of Termination. Any purported termination by the Company pursuant to
subsections 5.1 or 5.2 or by Executive pursuant to subsection 5.3 will be
communicated by written Notice of Termination to the other party. For purposes
of this Agreement, a “Notice of Termination” means a notice that indicates the
specific termination provision in this Agreement relied upon and setting forth
in reasonable detail the facts and circumstances claimed to provide a basis for
termination of Executive’s employment under the provision so indicated. Any
purported termination not effected pursuant to a Notice of Termination meeting
the requirements set forth in this Agreement will not be effective.

 

6

 

5.5           Date
of Termination.  For purposes of this
Agreement, the date of the termination of Executive’s employment (“Date of
Termination”) will be:

 

(a)           if
Executive’s employment is terminated by her death, the end of the month in which
her death occurs;

 

(b)           if
Executive’s employment is terminated for Disability, thirty (30) days after
Notice of Termination is given; or

 

(c)           if
Executive’s employment is terminated by Executive or by the Company for any
other reason, the date specified in the Notice of Termination.

 

Section 6.  Payments and Benefits Upon Certain
Terminations Following a Change in Control.

 

If within one (1) year following the Change
in Control, Executive’s employment is terminated other than for Death,
Disability or Cause, or if Executive terminates her employment for Good Reason,
then the following provisions will apply:

 

6.1           Compensation
Through Date of Termination. The Company will pay Executive within thirty
(30) days after termination:

 

i.              Any
unpaid amount of Executive’s base salary through the Date of Termination;

 

ii.             With
respect to any year then completed, any unpaid amount accrued to Executive
pursuant to the Plan; and

 

iii.            With
respect to any year then partially completed, a pro rata portion through the
Date of Termination of Executive’s annual bonus under the Plan, based upon the
amount of her bonus for the previous year.

 

6.2           Additional
Severance. In lieu of any further salary and bonus payments to Executive
for periods subsequent to the Date of Termination, or other severance payments,
the Company will pay as severance pay to Executive the additional sum equal to:

 

7

 

Executive’s annual base salary as of the date
of Change in Control, or as of the Date of Termination, whichever is greater.

 

The severance pay provided for in this Section 6.2
shall be transferred to a “Rabbi Trust,” effective as of the Date of
Termination, and paid to Executive in twelve (12) equal monthly installments
commencing on the first day of the next month following the Date of
Termination, and on the first day of each subsequent month, until fully paid.

 

6.3           Benefit
Plans.  In the event of a Change in
Control, unless Executive’s employment is terminated for Cause, the Company
will, at the Company expense, maintain in full force and effect for Executive’s
continued benefit, for a period of one (1) year following the Date of
Termination, the health, dental, disability and other welfare benefits, plan,
programs and arrangements substantially equivalent to the most valuable
coverage provided under any plan maintained by the Company from time to time
during such period.  In addition,
Executive will continue to be provided during the one (1) year following the
Date of Termination, with the same life insurance coverage maintained on her
life immediately prior to the Date of Termination.  These benefits shall be reduced by the amount
of similar benefits provided to Executive during such period by a subsequent employer,
as determined solely by the Board.  For
the purposes of enforcing this offset provision, Executive shall notify the
Board as to the terms and conditions of any subsequent employment and the
corresponding benefits received pursuant thereto, and shall provide, or cause
to provide the Board, correct, complete, and timely information concerning the
same.

 

6.4           No
Mitigation Required.  Executive will
not be required to mitigate the amount of any payment provided for in this Section 6
by seeking other employment or otherwise, nor will the amount of any payment
provided for in this Section 6 be reduced by any compensation earned by
Executive as the result of employment with another employer after the Date of
Termination or otherwise, except for a reduction in benefits as set forth in
subsection 6.3.

 

6.5           Tax
Gross-up Payment.  If any payments or
benefits provided pursuant to this Section 6 are subject to an excise tax
on an “excess parachute payment” under Section 4999 of the Internal

 

8

 

Revenue Code of 1986 (the “Code”), or any
successor provision of the Code, or are subject to an excise or penalty tax
under any similar provision of any other revenue system to which Executive may
be subject, the Company will provide a gross-up payment to Executive in order
to place Executive in the same after-tax position Executive would have been in
had no excise or penalty tax become due and payable under Code Section 4999
(or any successor provision) or any similar provision of another revenue
system.  No gross-up payment will be made
for any excise or penalty tax attributable to any stock options granted to
Executive, or for any other payments or benefits provided to Executive under
other sections of this Agreement.

 

Section 7. Successors; Binding
Agreement.

 

7.1           Assumption
by Company’s Successor. The Company will request any successor (whether
direct or indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company, by agreement in
form and substance reasonably satisfactory to Executive, to expressly assume
and agree to perform this Agreement. 
Failure of the Company to obtain that agreement prior to the
effectiveness of any succession will be a breach of this Agreement and will
entitle Executive to payments and benefits from the Company in the same amount
and on the same terms to which Executive would be entitled under this Agreement
if Executive terminated Executive’s employment for Good Reason within one (1)
years following a Change in Control, except that for purposes of implementing
the foregoing, the date on which that succession becomes effective will be
deemed the Date of Termination.  As used
in this Agreement, “Company” means Western Sizzlin Corporation, its
subsidiaries and any successor to its business and/or assets regardless of
whether such successor specifically assumes and agrees to perform this
Agreement.

 

7.2           Enforcement
by Executive’s Successor. This Agreement will inure to the benefit of and
be enforceable by Executive’s personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees.  If Executive dies subsequent to the
termination of Executive’s employment while any amount would still be payable
to Executive pursuant to this Agreement if Executive had continued to live, all
those amounts, will be paid in

 

9

 

accordance with the terms of this Agreement
to Executive’s devisee, legatee or other designee or, if there be no designee,
to Executive’s estate. The foregoing payment will be made in a lump sum within
sixty (60) days following the date of Executive’s death.

 

Section 8.  Working Facility.

 

Executive will perform her services hereunder
at the principal office of the Company, located in Roanoke, Virginia, except as
travel to other locations is warranted by the business of the Company.  The Company shall provide Executive with such
office space, secretarial help, and other facilities and services as may be
suitable to her position and appropriate for the performance of her duties.

 

Section 9.  Expenses and Benefits.

 

The Company shall pay or reimburse Executive
for any expenses reasonably incurred by her in furtherance of her duties
hereunder, including, but not limited to, reasonable expenses for traveling,
meals and hotel accommodations, upon submission by Executive of vouchers or
itemized statements therefore, prepared in compliance with such rules and
policies as the Company may from time to time adopt and as may be required in order
to permit such payments as proper deductions by the Company under the Internal
Revenue Code and the rules and regulations adopted pursuant thereto, now or
hereafter in effect.

 

Executive shall have made available to her,
on substantially the same terms as other management level employees of the
Company, group insurance, retirement plans, and other benefit programs in
effect from time to time during the term of Executive’s employment.  Executive’s participation under any group
insurance programs, retirement plans or other benefit programs shall be subject
to the applicable terms and conditions of the same.  This paragraph shall not be construed as a
commitment on the part of the Company to establish, maintain, or continue any
such plans or programs.

 

Section 10. Notice.

 

For purposes of this Agreement, notices and
all other communications provided for in this Agreement will be in writing and
will be deemed to have been duly given when delivered or mailed by United
States registered mail, return receipt requested, postage prepaid, addressed to
the respective addresses set forth on the first page of this Agreement,
provided that all notices

 

10

 

to the Company will be directed to the attention of the Chief Executive
Officer of the Company (or if the notice is from the Chief Executive Officer,
to the Secretary of the Company), or to such other address as either party may
have furnished to the other in writing in accordance with this Section 10,
except that notice of change of address will be effective only upon receipt.

 

Section 11. Modification and Waiver.

 

No provision of this Agreement may be
modified, waived or discharged unless that waiver, modification or discharge is
agreed to in writing by Executive and such officer as may be specifically
designated by the Board of Directors of the Company. No waiver by either party
at any time of any breach by the other party of, or compliance with, any
condition or provision of this Agreement to be performed by that other party
will be deemed a waiver of similar or dissimilar provisions or conditions at
the time or at any prior or subsequent time.

 

Section 12. Construction.

 

This Agreement supersedes any oral agreement
between Executive and the Company and any oral representation by the Company to
Executive with respect to the subject matter of this Agreement.  The validity, interpretation, construction
and performance of this Agreement will be governed by the laws of the State of
Virginia.

 

Section 13. Severability.

 

If any one or more of the provisions of this
Agreement, including but not limited to Section 18 hereof, or any word,
phrase, clause, sentence or other portion of a provision is deemed illegal or
unenforceable for any reason, that provision or portion will be modified or
deleted in such a manner as to make this Agreement as modified legal and
enforceable to the fullest extent permitted under applicable laws. The validity
and enforceability of the remaining provisions or portions will remain in full
force and effect.

 

Section 14. Counterparts.

 

This Agreement may be executed in two or more
identical counterparts, each of which will take effect as an original and all
of which will evidence one and the same agreement.

 

11

 

Section 15. Legal Fees.

 

If the Company breaches this Agreement or if,
within one (1) year following a Change in Control, (a) Executive’s employment
is terminated by the Company other than for Cause or Disability; or (b)
Executive terminates Executive’s employment for Good Reason, the Company will
reimburse Executive for all legal fees and expenses reasonably incurred by
Executive as a result of that termination (including all those fees and
expenses, if any, incurred in seeking to obtain or enforce any right or benefit
provided by this Agreement, unless the Company is the prevailing party in such
contest or dispute).

 

Section 16. Employment by a
Subsidiary.

 

Either the Company or a Subsidiary may be
Executive’s legal employer. For purposes of this Agreement, any reference to
Executive’s termination of employment with the Company means termination of
employment with the Company and all Subsidiaries, and does not include a
transfer of employment between any of them. The actions referred to under the
definition of “Good Reason” in subsection 5.3 include the actions of the
Company or Executive’s employing Subsidiary, as applicable. The obligations
created under this Agreement are obligations of the Company. A change in
control of a Subsidiary will not constitute a Change in Control for purposes of
this Agreement unless there is also a contemporaneous Change in Control of the
Company. For purposes of this Agreement, a “Subsidiary” means an entity more
than fifty percent (50%) of whose equity interests are owned directly or
indirectly by the Company.

 

Section 17.  Arbitration.

 

Except for the rights and duties of the
parties set forth in Section 18 of this Agreement, any dispute or
controversy arising under or in connection with this Agreement shall be settled
exclusively by arbitration in Roanoke, Virginia, according to the rules of the
American Arbitration Association then in effect. Judgment may be entered on the
arbitrator’s award in any court having jurisdiction; provided, however, that
Executive shall be entitled to seek specific performance of her right to be
paid for all periods up to the Date of Termination during the pendency of any
dispute or controversy arising under or in connection with this Agreement.

 

12

 

Section 18.  Restrictive Covenant.

 

18.1         Need
for Protection.  Executive
acknowledges that, because of her senior executive position with the Company,
her knowledge of the affairs of the Company and her relations with its
suppliers and customers, she could do serious damage to the financial welfare
of the Company, should she compete or assist others in competing with the
business of the Company.  Accordingly,
the parties agree as follows:

 

18.2         Confidential
Information.

 

(a)           Non-Disclosure.  Except as the Company may permit or direct in
writing, during the term of this Agreement and thereafter, Executive agrees
that she will never disclose to any person or entity any confidential or
proprietary information, knowledge, or data of the Company, which she may have
obtained while in the employ of the Company, relating to any customers,
customer lists, methods of distribution, sales, prices, profits, costs,
contracts, inventories, suppliers, dealers, distributors, business prospects,
business methods, formulas, plans or techniques, research, trade secrets, or
know how of the Company.

 

(b)           Return
of Records.  All records, documents,
software, computer disks, and any other form of information relating to the
business of the Company, which are or were prepared or created by Executive, or
which may or did come into her possession during the term of her employment
with the Company, including any and all copies thereof, shall be returned to
the Company, or as the case may be, shall remain in the possession of the Company,
upon termination of employment for any reason.

 

(c)           Future
Employment.  Nothing in this section shall
limit the Executive’s right to carry Executive’s accumulated career knowledge
and professional skills to any future employment, subject to the specific
limitations of the foregoing provisions of this section and the covenants
set forth below.

 

13

 

18.3         Non-Competition.

 

(a)           Scope
of Operations.  The parties hereto
acknowledge that the Company’s operations are within the continental United
States, and that it conducts business throughout the continental United States,
thus, the Company’s need for protection against unfair competition is
throughout the continental United States.

 

(b)           Covenant
Not To Compete.  Executive agrees
that she will not, during the term of this Agreement and for a period of six
(6) months after her employment with the Company has terminated:

 

(1)           engage
directly or indirectly, for her own personal benefit or the benefit of any
person or entity other than the Company, which would result in direct
competition with the Company, anywhere in the continental United States; or

 

(2)           develop,
promote, invest in, provide financing for, be employed by, or operate any
business on her own behalf, or for any other person or entity, which would
result in direct competition with the Company, or, assist any other person in
doing so.

 

1.             For
the purposes of this Section 18.3(b) the phrase “direct competition.”
shall mean employment with a restaurant or chain providing family steaks and/or
buffet.

 

18.4         Termination
Without Cause.  It is understood and
agreed that in the event the Company terminates Executive’s employment without
Cause, subsection 18.3 hereof shall be null and void.  Notwithstanding the foregoing provision,
however, if Executive’s employment is terminated under circumstances which
entitle her to receive the payments and benefits provided in Section 6 of
this Agreement, then in such event, the provisions of Section 18.3 hereof
shall remain in full force and effect.

 

14

 

18.5         Judicial
Modification.  In the event that any
court of law or equity shall consider or hold any aspect of this Section 18
to be unreasonable or otherwise unenforceable, the parties hereto agree that
the aspects of this section so found may be reduced, reformed or modified
by appropriate order of the court, and shall thereafter continue, as so
modified, in full force and effect.

 

18.6         Injunctive
Relief.  The parties hereto acknowledge
that the remedies at law for breach of this section will be inadequate,
and the Company shall be entitled to injunctive relief for violation thereof;
provided, however, that nothing herein shall be construed as prohibiting the
Company from pursing any other remedies available for such breach or threatened
breach, including the recovery of damages from Executive.

 

Section 19.  Termination and Severance; No Change in
Control.

 

Executive’s employment under this Agreement
may be terminated, separate and apart from the occurrence of a Change in
Control, in one of the following ways:

 

19.1         Mutual
Agreement.  At any time by mutual
written agreement of both parties to this Agreement, subject to any terms and
conditions specified in such mutual written agreement; or

 

19.2         For
Cause.  At any time by the Company,
by written notice to Executive, terminating this Agreement and discharging
Executive for Cause, as defined in Section 5.1 of this Agreement; or

 

19.3         Automatically.  Automatically and immediately should one of
the following events occur:

 

(a)           Executive
dies; or

 

(b)           Executive’s
Disability, as defined in Section 5.2 of this Agreement.

 

19.4         Severance.  In addition to the foregoing, Company may at
any time, upon thirty (30) days’ written notice, terminate this Agreement
without Cause.  If termination occurs
during the initial or renewal term of this Agreement, Executive shall be
entitled to severance

 

15

 

pay in an amount equal to (including amounts
paid during the 30-day notice period) three (3) months base salary at the rate
then in effect, upon the execution by executive of any appropriate release
agreement.  The base salary portion of
the severance shall be payable, at the Company’s option, in a lump sum or in
equal monthly installments consistent with the Company’s ordinary payroll
practices.  Executive shall also be
entitled to continuation of benefits through the end of the employment term
then in effect under this Agreement, or if sooner, until such time as she
secures alternative employment which provides her with comparable
benefits.  If the Company terminates this
Agreement without Cause, the Company shall have the right at its option, to
require Executive to immediately leave the Company’s premises; provided, that
the Company shall be obligated to pay (as part of the severance) Executive’s
base salary during the 30-day notice period.

 

Section 20.  Exclusivity of Services.

 

Executive agrees that her employment with the
Company will be full time, and that she will devote her best efforts and
attention to the business of the Company.

 

IN WITNESS WHEREOF, the parties have executed
this Agreement as of the date first above written.

 

	
   

  	
  Western Sizzlin Corporation,

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Pat Vezertzis

  	
   

  
	
   

  	
   

  	
  Chairman

  
	
   

  	
   

  	
  Compensation Committee

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/ Robyn B. Mabe

  	
   

  
	
   

  	
   

  	
  Robyn B. Mabe

  
					

 

16

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