Document:

Exhibit 10.2

 

AMENDED AND RESTATED

CHANGE IN CONTROL SEVERANCE AGREEMENT

 

This Agreement is made and entered into effective as of October 1, 2018 (the "Effective Date") between Stock Yards Bank & Trust Company, a Kentucky banking corporation with its principal office located at 1040 East Main Street, Louisville, Kentucky 40206 (the "Bank") and Philip S. Poindexter ("Executive").

 

Recitals

 

	A.	
The Bank is a wholly owned subsidiary of Stock Yards Bancorp, Inc., a Kentucky corporation and bank holding company ("Bancorp").

 

	B.	
Bancorp, as the sole shareholder of the Bank, considers the establishment and maintenance of a sound and vital management team to be essential to protecting and enhancing the best interests of the Bank, Bancorp, and Bancorp's shareholders.

 

	C.	
Bancorp and the Bank recognize that, as is the case with many publicly held bank holding companies, the possibility exists that an unsolicited tender offer or takeover bid and a consequent change in control of Bancorp may occur, and thus, that as a practical matter, a change in control of the Bank may occur, and that such a possibility is unsettling and distracting to key executives of the Bank.

 

	D.	
Bancorp and the Bank have concluded that it is in the best interests of Bancorp, its shareholders and the Bank to take reasonable steps to help assure certain key executives of the Bank that, notwithstanding an unsolicited tender offer or takeover bid, or an actual change in control, they will be treated fairly and with concern for their welfare.

 

	E.	
Bancorp and the Bank have also concluded that it is important that, should Bancorp receive takeover or acquisition proposals from third parties, that it be able to call upon the key executives of the Bank for their candid assessment and advice concerning whether such proposals are in the best interests of Bancorp, its shareholders and the Bank, free of the influences caused by the uncertainties and risks of their own personal employment situations.

 

	F.	
For the foregoing reasons the Board of Directors of Bancorp and of the Bank have approved the Bank's entering into change in control severance agreements with key executives of the Bank.

 

	G.	
Executive has been selected by the Bank's Board of Directors as a key executive and Executive and the Bank entered into a similar agreement 2010 (the "Prior Agreement"), which this Agreement amends and restates in its entirety.

 

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Agreements

 

NOW THEREFORE, in consideration of these premises and for other good and valuable consideration, the Bank and Executive agree as follows:

 

1.            TERM OF AGREEMENT.  This Agreement (other than Section 6 hereof, which shall apply beginning at the Effective Date) shall apply only to termination of employment of the Executive during a period commencing 6 months before a Change in Control Announcement, and terminating on the 1st anniversary of that date if no Change in Control has then occurred, or, if a Change in Control has occurred, then on the 2nd anniversary of the Change in Control (the "Change in Control Window") unless it is earlier terminated in accordance with the next sentence (the "Term").   The Bank may amend or terminate this Agreement upon 12 months written notice to the Executive, but if a Change in Control or Change in Control Announcement occurs within the 12 month period after the Bank has given notice of termination or modification of this Agreement, the Agreement (without regard to such modifications, except to the extent that Executive consented thereto as evidenced by Executive's signature on an amended or restated Agreement) shall nonetheless remain in full force and effect for the entire Change in Control Window.

 

2.            SEVERANCE PAYMENT IN VARIOUS EVENTS

 

2.1            Termination by Bank Before Change in Control or for Cause.  The Bank may terminate Executive's employment and this Agreement (subject to survival of the covenants in Section 6) at any time prior to a Change in Control Window for any or no reason, and may terminate Executive' employment for Cause, even during a Change in Control Window.  If Executive's employment is terminated for Cause or prior to a Change in Control Window, Executive shall not be entitled to any payments or benefits except for (1) unpaid salary already earned by Executive and (2) benefits in which he has already become vested by such termination of employment, and which are payable upon such termination of employment under the terms and practices of the plans or arrangements under which such benefits are provided.

 

2.2            Resignation; Death; Disability Terminations.  Executive may terminate Executive's employment and this Agreement (subject to survival of the covenants in Section 6) at any time, including during a Change in Control Window.  If Executive's employment hereunder terminates because of Executive's resignation as an employee of Bank (other than as described in Section 2.3), his death, or his Permanent Disability, then Executive shall not be entitled to any payments or benefits hereunder except for (1) unpaid salary already earned by Executive and (2) benefits in which he has already become vested before such termination of employment, and which are payable upon such termination of employment under the terms and practices of the plans or arrangements under which such benefits are provided.  In the case of death, any such amounts shall be paid to Executive's estate (or, where applicable or the context requires, the surviving members of Executive's family or Executive's beneficiaries).

 

2.3            Constructive (Good Reason) Termination.  For all purposes of this Agreement, Executive's resignation from Executive's employment with Bank shall be deemed not to constitute a resignation, and instead to be treated as a termination of Executive's employment by Bank other than for Cause, if such resignation occurs upon written notice from Executive setting forth the (i) specific subsection of the Good Reason definition on which the resignation is based, and (ii) related facts in support of that reason, and (iii) the date of the Termination of Employment, which shall not be less than 14 days nor more than 60 days after the giving of such notice.

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2.4            Bank Termination After Change in Control Window Begins.  If a Change in Control is consummated during the Term and (i) if Termination of Employment of Executive by the Bank is other than for Cause (or deemed so terminated due to constructive termination in accordance with Section 2.3) during the Change in Control Window, and (ii) if, and only if, Executive signs a written release of the Bank and all of its then-current and former directors, trustees, officers, employees, agents, members, and affiliated companies from any and all claims, in such form as is determined by Bank, which release is not revoked if allowed by its terms, then Bank shall make a Severance Payment as provided in Sections 2.5-2.8 below.

 

2.5            Amount of Severance Payment.  The Severance Payment shall equal three times the sum of (i) Executive's highest monthly base salary as in effect at any time in the 6 month period immediately prior to Termination, plus (ii) Executive's Historical Bonus, subject to the maximum payment provisions of Section 2.7 below.  In addition to the cash payment, the Bank shall provide all pay and benefits to which Executive has already become vested before Termination of Employment, and which are payable upon such Termination of Employment under the terms and practices of the plans or arrangements under which such benefits are provided.  Such Severance Payment shall be in lieu of any other severance payment provided for by the Bank in accordance with its standard of practice and operations at the time of payment of this Severance Payment.

 

2.6            Payment Timing.  The Severance Payment shall be made in a lump sum cash payment 60 days after the later of (i) Executive's Termination of Employment or, (ii) in the case of a Termination which occurred prior to the consummation of the Change in Control, the date of the Change in Control of Bank.  Notwithstanding anything herein to the contrary, in the case of an Executive who is a "specified employee" at the time a payment or reimbursement hereunder on account of Termination of Employment, within the meaning of Treas. Reg. § 1.409A-1(i) (or any successor thereto) using the prior calendar year as the determination period,  which payment or reimbursement is not exempt from Section 409A of the Code, the portion of the payment that constitutes "deferred compensation" (within the meaning of Code Section 409A) shall be made at the later of the date provided in the preceding sentence and six months after the Executive's Termination of Employment.  If the Bank concludes that some or all of a Severance Payment to Executive must be delayed pursuant to the preceding sentence, the Bank shall nonetheless certify to Executive in writing, within the 60 day period for payment described in the first sentence of this Section, the amount (and calculations in support) of the Severance Payment so due and the date it will be paid hereunder.

 

2.7            Reduction of Amounts Payable.  If the amount payable hereunder,  either alone or together with any other payments or benefits received or to be received by Executive in connection with a Change in Control (collectively, the "Aggregate Payments"), would cause Bank to forfeit, pursuant to Section 280G(a) of the Code, its deduction for any or all of the amounts payable hereunder, and subject the Executive to the excise tax imposed by Section 4999 of the Internal Revenue Code (or any successor thereto), the following provisions shall apply:

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(i)            If the net amount that would be retained by Executive after all taxes on the Aggregate Payments are paid would be greater than the net amount that would be retained by Executive after all taxes are paid if the Aggregate Payments were limited to the largest amount that would result in no portion of the Aggregate Payments being subject to such excise tax, Executive shall be entitled to receive the Aggregate Payments.

 

(ii)            If, however, the net amount that would be retained by Executive after all taxes were paid would be greater if the Aggregate Payments were limited to the largest amount that would result in no portion of the Aggregate Payments being subject to such excise tax (generally, pursuant to Code Section 280G, 2.99 times the Executive's "base amount" as defined in that Code section and regulations hereunder), the Aggregate Payments to which Executive is entitled shall be reduced to such largest amount.

 

Executive shall have a right to select an independent certified public accountant, benefits consultant or similar expert to audit the Bank's calculation of the Section 280G deductible amount, and the Severance Payment hereunder, at the Bank's expense.  If such audit reveals that the calculations performed by the Bank were in error or have resulted in the payment to Executive of an amount less than that to which he is entitled hereunder, the Bank shall immediately rectify such underpayment.

 

2.8            Tax Withholding.  Notwithstanding any other provision of this Agreement that may be read to the contrary, Bank shall have the right (without notice to Executive) to withhold from any amounts otherwise payable to or accrued by Executive under this Agreement, a sum which Bank determines is sufficient to satisfy all federal, state, and local withholding tax requirements that may apply with respect to such amounts.  In addition, any reference to a cash payment under this Agreement shall be deemed to include a payment by check or a credit to a bank account of Executive.

 

2.9            Health Plan Access.  So long as legally possible (even if to do so requires plan amendment), the Executive shall be entitled to continue his participation in the Bank's medical plans for active employees for a period of 36 months following any severance for which a Severance Payment is due hereunder, with the cost for such access and coverage paid by Executive on an after-tax basis at the rate payable by any former employee under the Consolidated Omnibus Reconciliation Act of 2005 (COBRA), and his rights to continue coverage under and for the period provided under COBRA to begin after the end of this contractual continuation period.

 

3.            BANK REGULATORY PROVISION.  Notwithstanding any other provision of this Agreement, the parties agree this Agreement shall be terminated or not observed, if and to the extent it violates bank regulatory rules involving the subject matter hereof, including but not limited to the following:

 

(a)            If Executive is suspended and/or temporarily prohibited from participating in the conduct of the Bank's affairs by a notice served under section 8(e)(3) or (g)(1) of the Federal Deposit Insurance Act (12 U.S.C. 1818(e)(3) and (g)(1)) of similar succeeding law or authority, the Bank's obligations under the Agreement shall be suspended as of the date of service unless stayed by appropriate proceedings.  If the charges in the notice are dismissed, the Bank may, in its discretion, (i) pay Executive all or part of the compensation withheld while its contract obligations were suspended or (ii) reinstate (in whole or in part) any of its obligations which were suspended.

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 (b)            If Executive is removed and/or permanently prohibited from participating in the conduct of the Bank's affairs by an order issued under 8(e)(4) or (g)(1) of the Federal Deposit Insurance Act (12 U.S.C. 1818(e)(4) and (g)(1)) or similar succeeding law or authority, all obligations of the Bank under the Agreement shall terminate as of the effective date of the order, but vested rights of the contracting parties shall not be affected.

 

(c)            If the Bank is in default (as defined in section 3(x)(1) of the Federal Deposit Insurance Act or succeeding law or authority), all obligations under the Agreement shall terminate as of the date of default, but this Section 3(c) shall not affect any vested rights of the contracting parties.

 

(d)            All obligations under the Agreement shall be terminated, except to the extent determined that continuation of the contract is necessary for the continued operation of the Bank, by the Chairman of the Federal Deposit Insurance Corporation, or his or her designee, or by the action or direction of the Board of Directors of the Federal Deposit Insurance Corporation (the "FDIC"):

 

 (i)            at the time the Federal Deposit Insurance Corporation enters into an agreement to provide assistance to or on behalf of the Bank under the authority contained in section 13(c) of the Federal Deposit Insurance Act; or

 

(ii)            at the time the FDIC approves a supervisory merger to resolve problems related to operation of the Bank or when the Bank is determined by the FDIC to be in an unsafe or unsound condition.

 

4.            FEES COSTS AND DISPUTES.  The Bank agrees to pay or reimburse all reasonable legal fees, costs, and expenses arising out of or in any way related to or incurred by Executive in connection with enforcing any right or benefit provided in this Agreement, or in interpreting this Agreement or calculating the amounts required to be paid to Executive under this Agreement, or in contesting or disputing any termination of Executive's employment hereunder purportedly for Cause or other action taken by the Bank hereunder.  Such amounts shall be paid promptly after demand is made by Executive and Executive's provision to the Bank of reasonably satisfactory evidence of such fees and expenses, but shall in no event be paid or payable on or after the last day of Executive's taxable year following the taxable year in which the expense was incurred. If the Executive is a specified employee and such payment is "deferred compensation" both as provided in Section 2.6 hereof, such payments shall not be made before the date that is six months after the date of the Executive's Termination of Employment. Executive shall also remain covered, to the full extent applicable to other former officers or directors of the Bank or Bancorp, under any indemnity for acts in such capacity under the Bank's or Bancorp's Articles of Incorporation and Bylaws, and such rights shall not be waived in the release required by Section 2.4. The Executive shall have the right and option to elect (in lieu of litigation) to have any dispute or controversy arising under or in connection with this Agreement settled by arbitration, conducted before a panel of three arbitrators sitting in a location selected by the Executive within 50 miles from the location of Executive's job with the Bank, in accordance with the rules of the American Arbitration Association then in effect. The Executive's election to arbitrate, as herein provided, and the decision of the arbitrators in that proceeding, shall be binding on the Bank and Executive.

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5.            MITIGATION.  Executive shall not be required to mitigate the amount of any payment provided for in its Agreement, whether by seeking other employment or otherwise, nor shall the amount of any payment provided for herein be reduced by any compensation earned or received by Executive as a result of his employment by another employer following his termination hereunder.

 

6.            COVENANTS.  Notwithstanding the terms and provisions of any other agreement by and between the Bank and Executive, even if it provides for negation of covenants from Executive to the Bank in the event of a Change in Control, in exchange for this Agreement, the Executive agrees to adhere to the following covenants during his employment and after its Termination for any reason.

 

6.1             Not To Compete.  For a period of 18 months following the receipt of the Severance Payment as contemplated herein, Executive will not, directly or indirectly, either for Executive or for any other person, entity or company, solicit business or individual patronage for the purpose of providing services which are identical or similar to services then provided by the Bank within a radius of 50 miles from any of the Bank's offices.

6.2            Non-Solicitation of Customers or Employees.  Executive agrees that, during the 18-month period following any Termination of Executive's employment (whether such termination is covered by this Agreement or otherwise), Executive shall not, without the express written consent of Bank, directly or indirectly, either for Executive or for any other person, entity or company, (i) solicit the business enjoyed by the Bank with any person or business that was a Customer; or  (ii) approach or solicit any person who was employed at the Bank as of the date of Executive's termination and with whom the Executive had material contact during the Executive's employment with the Bank, with a view to hiring such employee, persuading such employee to leave the employment of Bank, or actually hire an employee of the Bank for any other entity.

 

6.3            Cooperation With Litigation.  Executive agrees to cooperate with Bank, during the term of this Agreement and thereafter (including after Executive's Termination of Employment hereunder for any reason), by making Executive reasonably available to testify on behalf of Bank or any affiliated company in any action, suit, or proceeding, whether civil, criminal, administrative, or investigative, and to assist Bank or any affiliated company in any such action, suit, or proceeding by providing information to and meeting and consulting with Bank, any affiliated company, or any of their counsel or representatives upon reasonable request, provided that such cooperation and assistance shall not materially interfere with Executive's then current professional activities and that Bank shall agree to reimburse Executive for all reasonable out-of-pocket expenses incurred by Executive in connection with providing such cooperation and assistance.

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6.4            Bank's Confidential Information.  Executive agrees that, during the term of this Agreement and at any time thereafter, he shall not directly or indirectly, without the express written consent of Bank, disclose, divulge, discuss, copy, or otherwise use or suffer to be used in any manner, in competition with or contrary to the interests of Bank or any affiliated companies, the customer lists, proprietary organizational methods, products, business plans or strategies, or other trade secrets of Bank or any affiliated companies, it being acknowledged by Executive that all such information regarding the business of Bank and affiliated companies compiled or obtained by, or furnished to, Executive while Executive shall have been employed by or associated with Bank is confidential information and Bank's exclusive property. Confidential information shall not include any information (A) which becomes publicly known through no fault or act of the Executive; (B) is lawfully received by the Executive from a third party after a Termination of Employment without a similar restriction regarding confidentiality and use and without a breach of this Agreement or (C) which is independently developed by the Executive and entirely unrelated to the business of providing banking or banking related services.

 

6.5            Advice to Future Employers.  If Executive, in the future, seeks or is offered employment by any other company, firm, or person, he shall provide a copy of this Section 6 to the prospective employer prior to accepting employment with that prospective employer.

 

6.6            Remedies. In the event of a breach or a threatened breach by Executive of any provision of Section 6 of this Agreement, the Bank shall be entitled to an injunction restraining Executive from the commission of such breach, and to recover its attorneys' fees, costs and expenses related to the breach or threatened breach.  Nothing herein contained shall be construed as prohibiting the Bank from pursuing any other remedies available to it for such breach or threatened breach, including the recovery of money damages.  These covenants and disclosures shall each be construed as independent of any other provisions in this Agreement, and the existence of any claim or cause of action by Executive against the Bank, whether predicated on this Agreement or otherwise, shall not constitute a defense to the enforcement by the Bank of such covenants and agreements.

 

6.7            Reasonableness of Restrictions.  Executive has carefully considered the nature and extent of the restrictions upon him and the rights and remedies conferred upon Bank under the provisions of this Section 6, and hereby acknowledges and agrees that the same are reasonable in time and territory, are designed to prevent disruption of relationships which are valuable to Bank, do not stifle the inherent skill and experience of Executive, would not operate as a bar to Executive's sole means of support, are fully required to protect the legitimate interests of Bank, and do not confer a benefit upon Bank disproportionate to the detriment to Executive which is caused by the provisions of this Section 6.

 

6.8            Severable Provisions.  The provisions of this Agreement are severable, and, if any one or more provisions are determined to be illegal or otherwise unenforceable, in whole or in part, the remaining provisions of this Agreement and any partially unenforceable provision of this Agreement, to the extent enforceable in any jurisdiction, shall nevertheless be binding and enforceable hereunder.  If any provision of this Agreement, including any provision of Section 6, is invalid in part or in whole, it will be deemed to have been amended, whether as to time, area covered or otherwise, as and to the extent required for its validity under applicable law and, as so amended, will be enforceable.

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7.            NOTICES.  Any notices, requests, demands and other communications provided for by this Agreement shall be sufficient if in writing and if sent by registered or certified mail to Executive at the last address he has filed in writing with the Bank or, in the case of the Bank, at its principal executive offices.

 

8.            GOVERNING LAW.  The provisions of this Agreement shall be construed in accordance with the laws of the Commonwealth of Kentucky.

 

9.            AMENDMENT; SUPERSEDES PRIOR AGREEMENT.  On the Effective Date, this Agreement supersedes and replaces in its entirety the Prior Agreement, which shall be void and of no force and effect on or after the Effective Date.  This Agreement may be amended or cancelled by the Bank as provided in Section 1 hereof, or by mutual agreement of the parties in writing without the consent of any other person.

 

10.            SUCCESSORS AND ASSIGNS.  This Agreement shall be binding upon and inure to the benefit of the Bank and its successors and assigns; including but not limited to any successor to the Bank, direct or indirect, resulting from purchase, merger, consolidation or otherwise.  This Agreement shall also be binding upon Executive and shall inure to the benefit of Executive, his personal or legal representatives, successors, heirs and assigns. No interest of the Executive, or any right to receive any payment or distribution hereunder, will be subject in an manner to sale, transfer, assignment, pledge, attachment, garnishment or other alienation or encumbrance of any kind, nor may such interest or right to receive a payment or distribution be taken, voluntarily or involuntarily, for the satisfaction of the obligation or debts of, or other claims against, the Executive, including claims for alimony, support, separate maintenance, and claims in bankruptcy proceedings.  All rights under this Agreement of the Executive will at all times be entirely unfunded, and no provision will at any time be made with respect to segregating any assets of the Bank or any affiliate for payment of any amounts due hereunder. The Executive will have only the rights of general unsecured creditor of the Bank.

 

11.            DEFINITIONS.  As used in this Agreement, in addition to phrases or words defined in the test of this Agreement, the following terms shall have the following meanings:

 

11.1            "Board" shall mean the Board of directors of the Bank, except where the context clearly refers to Bancorp, in which case it shall refer to the Board of Directors of Bancorp.

 

11.2            A "Change in Control" of Bank shall be deemed to have occurred if:

 

(i)            any Person (as defined below) is or becomes the Beneficial Owner (as defined in this definition) of securities of Bancorp representing 20% or more of the combined voting power of Bancorp's then outstanding securities (unless (A) such Person is the Beneficial Owner of 20% or more of such securities as of the Effective Date or (B) the event causing the 20% threshold to be crossed is an acquisition of securities directly from Bancorp);

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(ii)            during any period of two consecutive years beginning after April 26, 1995, individuals who at the beginning of such period constitute the Board of Bancorp and any new director (other than a director designated by a person who has entered into an agreement with Bancorp to effect a transaction described in clause (i), (iii) or (iv) of this Change in Control definition) whose election or nomination for election was approved by a vote of at least two-thirds of the directors then still in office who either were directors at the beginning of the period or whose election or nomination for  election was previously so approved cease for any reason to constitute a majority of the Board of Bancorp;

 

(iii)            the shareholders of Bancorp (or Bancorp as the sole shareholder of Bank) approve a merger or consolidation of Bancorp or Bank with any other corporation (other than a merger or consolidation which would result in the voting securities of Bancorp outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the entity surviving such merger or consolidation), in combination with voting securities of Bancorp or such surviving entity held by a trustee or other fiduciary pursuant to any employee benefit plan of Bancorp or such surviving entity or of any subsidiary of Bancorp or such surviving entity, at least 80% of the combined voting power of the securities of Bancorp or such surviving entity outstanding immediately after such merger or consolidation); or

 

(iv)            the shareholders of Bancorp approve a plan of complete liquidation or dissolution of Bancorp or an agreement for the sale or disposition by Bancorp of all or substantially all of Bancorp's assets.

 

For purposes of the definition of Change in Control, "Person" shall have the meaning ascribed to such term in Section 3(a)(9) of the Securities Exchange Act of 1934, as amended, as supplemented by Section 13(d)(3) of such Act; provided, however, that Person shall not include (i) Bancorp, any subsidiary or any other Person controlled by Bancorp, (ii) any trustee or other fiduciary holding securities under any employee benefit plan of Bancorp or of any subsidiary, or (iii) a corporation owned, directly or indirectly, by the shareholders of Bancorp in substantially the same proportions as their ownership of securities of Bancorp.

 

For purposes of the definition of Change in Control, a Person shall be deemed the "Beneficial Owner" of any securities which such Person, directly or indirectly, has the right to vote or dispose of or has "beneficial ownership" (within the meaning of Rule 13d-3 under the Securities Exchange Act of 1934, as amended) of, including pursuant to any agreement, arrangement or understanding (whether or not in writing); provided, however, that: (i) a Person shall not be deemed the Beneficial Owner of any security as a result of an agreement, arrangement or understanding to vote such security (x) arising solely from a revocable proxy or consent given in response to a public proxy or consent solicitation made pursuant to, and in accordance with the Securities Exchange Act of 1934, as amended, and the applicable rules and regulations thereunder or (y) made in connection with, or to otherwise participate in, a proxy or consent solicitation made, or to be made, pursuant to, and in accordance with, the applicable provisions of the Securities Exchange Act of 1934, as amended, and the applicable rules and regulations thereunder; in either case described in clause (x) or clause (y) above, whether or not such agreement, arrangement or understanding is also then reportable by such Person on Schedule 13D under the Securities Exchange Act of 1934, as amended (or any comparable or successor report); and (ii) a Person engaged in business as an underwriter of securities shall not be deemed to be the Beneficial Owner of any securities acquired through such Person's participation in good faith in a firm commitment underwriting until the expiration of forty days after the date of such acquisition.

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11.3            "Change in Control Announcement" shall be deemed to have occurred if (i) the Bank or Bancorp enters into an agreement, the consummation of which would (or, if simultaneously closed, does) result in the occurrence of a Change in Control, (ii) any person (including the Bank or Bancorp) publicly announces an intention to take or to con-sider taking actions which upon consummation would constitute a Change in Control, or (iii) the Board adopts a resolu-tion to the effect that a potential Change in Control for purposes of this Agreement has occurred.

 

11.4            "Cause" for termination shall exist if Executive (i) willfully and continually fails to substantially perform Executive's duties (other than as a result of incapacity or temporary or Permanent Disability) for the Bank as described in the most recent written description of such duties maintained by the Bank's personnel department or as communicated to Executive after a written demand for substantial performance is delivered to Executive by the Board specifically identifying the manner in which the Board believes that Executive has not substantially performed his duties; or (ii) in the good faith determination of the Board, engaged in gross misconduct constituting a violation of law or breach of fiduciary duty which misconduct is materially and demonstrably injurious to the Bank. Executive shall not be deemed to have breached Executive's responsibilities as an officer or director of the Bank or Bancorp and thereby to have forfeited entitlement to the Severance Payment if he expresses publicly his opposition to such transaction or proposed transaction, solicits votes or proxies from shareholders of Bancorp against the transaction or otherwise solicits or encourages others to oppose such transaction.

 

11.5            "Code" means Internal Revenue Code of 1986, as amended.

 

11.6            "Customer" shall mean any firm, individual, corporation or entity which used the facilities, products or services of the Bank during the 12 month period immediately preceding the voluntary or involuntary termination of Executive's employment with the Bank; but Customer shall not include any firm, individual, corporation or entity with which Executive had a business relationship, either for Executive or for Executive's previous employer, prior to the date of Executive's employment with the Bank and which Executive specifically identifies in writing to the Bank within 30 days following the date of Executive's employment with the Bank (or the Effective Date, if later), except that following 18 months employment with the Bank, any such firm, individual, corporation or entity so identified by Executive shall be deemed to have become a Customer of the Bank if they otherwise meet the definition of "Customer" as set forth above.

 

11.7            "Good Reason" means a resignation at Executive's initiative (but not a Termination for Cause, or due to death or Disability) following a Change in Control and the occurrence of any of the following triggering events, provided (A) such resignation occurs within 90 days after a triggering event and within the Change in Control Window, and (B) Executive first notifies the Board (via its chairman) in writing that he considers Good Reason to have occurred and gives the Bank at least 30 days to reverse or rectify the change:

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(i)            without his express written consent, Executive's responsibilities or authority are materially diminished from those in effect immediately prior to the Change in Control Window, including but not limited to a requirement that Executive report to a lower level officer than previously required (or, if not previously reporting to any officer, to an officer or to a non-public company board, rather than directly to the board of a publicly-traded company);

 

(ii)  without his express written consent, Executive is removed or not reelected to any office or board position at either the Bancorp or the Bank which he held immediately prior to the Change in Control Window, without simultaneous election to a board position at a similar level in a post-Change in Control affiliated group;

 

(ii)            a reduction by the Bank in Executive's base salary as in effect prior to the beginning of a Change in Control Window, other than via a salary reduction for Bank personnel generally of not more than 10%;

 

(iii)            the Bank's requiring Executive to work from an office anywhere other than within 25 miles of the Bank's office from which Executive works as of the beginning of a Change in Control Window, except for required travel on the Bank's business to an extent substantially consistent with prior business travel obligations or such obligations as are incident to a promotion; or

 

(iv)            the failure by the Bank to continue in effect (or ceasing Executive's participation in or reducing Executive's benefits from) any material fringe benefit, deferred benefit or compensation plan, pension plan, profit sharing plan, life insurance plan, major medical or hospitalization plan or disability plan or paid time off or vacation program in which Executive is participating when the Change in Control Window begins, without substituting plans providing the Executive with substantially similar or greater benefits in the aggregate.

 

11.8            "Historical Bonus" means the highest annual cash bonus paid to the Executive in the year in which the Termination of Employment occurs or the two immediately preceding calendar years, including cash bonuses that are deferred pursuant to any deferral election by Executive under a tax-qualified or non-qualified retirement or deferral plan maintained by the Bank.

 

11.9            "Permanent Disability" means any mental or physical condition or impairment which prevents Executive from substantially performing his duties for a period of more than 90 consecutive days.

 

11.10            "Termination of Employment" or "Termination" means the date the Bank reasonably anticipates that (i) Executive will not perform any further services for the Bank, Bancorp, or any other entity considered a single employer with the Bank under Section 414(b) or (c) of the Code (inserting 50% threshold for ownership in each place where 80% now appears therein) (the "Employer Group"), or (ii) the level of bona fide services Executive will perform for the Employer Group after that date will permanently decrease to less than 20% of the average level of bona fide services performed over the previous 36 months (or if shorter, over the duration of service).   For this purpose, service performed as an employee or as an independent contractor is counted, except that service as a member of the Board of an Employer Group entity is not counted unless benefits under this Agreement are aggregated with benefits under any other Employer Group plan or agreement in which Executive also participates as a director.  An Executive will not be treated as having a Termination of Employment while on military leave, sick leave or other bona fide leave of absence if the leave does not exceed six months or, if longer, the period during which Executive has a reemployment right under statute or contract.  If a bona fide leave of absence extends beyond six months, Executive will be considered to have a Termination of Employment on the first day after the end of such six month period, or on the day after Executive's statutory or contractual reemployment right lapses, if later.  The Company will determine when Executive's Termination of Employment occurs based on all relevant facts and circumstances, in accordance with the definition of separation from service in Treasury Regulation Section 1.409A-1(h).

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IN WITNESS WHEREOF, the Bank and Executive have entered into this Agreement as of the Effective Date, but actually on the dates set forth below.

 

	
 

	
STOCK YARDS BANK & TRUST COMPANY

	
 

	
 

	
 

	
 

	
 

	
 

	
By:

	
/s/ David P. Heintzman

	
 

	
 

	
 

	
David P. Heintzman

	
 

	
 

	
 

	
 

	
 

	
 

	
Title:

	
Chairman and Chief Executive Officer

	
 

	
 

	
 

	
 

	
 

	
 

	
Date:

	
May 29, 2018

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
EXECUTIVE

	
 

	
 

	
 

	
 

	
 

	
 

	
/s/ Philip S. Poindexter

	
 

	
 

	
Philip S. Poindexter

	
 

	
 

	
 

	
 

	
 

	
 

	
Date:

	
May 29, 2018

	
 

 

 

 

12Exhibit 10.1

SEVERANCE AGREEMENT

This SEVERANCE AGREEMENT by and between CRACKER BARREL OLD COUNTRY STORE, Inc., a Tennessee corporation (the “Company”), and ___________ (“Executive”) is dated as of _________________ (the “Effective Date”).

W I T N E S S E T H :

WHEREAS, the Company wishes to attract and retain well-qualified executives and key personnel and to ensure their continuing commitment to the Company and energetic focus on continually improving its business operations by providing certain benefits if their employment with the Company is terminated in certain circumstances, as set forth herein;

WHEREAS, to achieve these purposes, the Compensation Committee of the Board of Directors of the Company (the “Committee” and “Board”, respectively) has approved this Agreement as being in the best interests of the Company and its shareholders.

NOW, THEREFORE, it is mutually agreed as follows:

1.             Operation and Term of Agreement.  This Agreement shall have an initial term of three (3) years following the Effective Date, after which this Agreement shall automatically renew for successive one (1)-year subsequent terms unless the Company notifies Executive of its intention not to renew this Agreement at least ninety (90) days prior to the end of the initial term or any subsequent term (the “Term”).  Following a termination of this Agreement in accordance with this Section 1, this Agreement shall thereafter be null and void and of no further effect.

2.             Termination of Employment.

(a)           General.  Executive and the Company acknowledge that, except as may otherwise be provided under any other written agreement between Executive and the Company, the employment of Executive by the Company is “at will.”   The Company may, at any time and in its sole discretion, terminate Executive’s employment, and thereby this Agreement, with Cause or without Cause, and Executive may, at any time and in Executive’s sole discretion, resign from Executive’s employment with the Company, and thereby this Agreement (any such date of termination, the “Termination Date”).

(b)          Termination by the Company for Cause or by Executive Without Good Reason.

 

(i)            During the Term, if Executive’s employment with the Company shall be terminated either by the Company with Cause or by Executive without Good Reason (as hereinafter defined), the Company shall pay to Executive (A) any unpaid Base Salary earned through the Termination Date in a cash lump sum within ten (10) days of the Termination Date, (B) any compensation previously deferred by Executive (together with any accrued interest or earnings thereon) at the times provided in the applicable plans under which the deferral was made, to the extent not paid as of the Termination Date, (C) accrued and unpaid vacation in a cash lump sum within ten (10) days of the Termination Date, and any expense reimbursement due to Executive as provided in the applicable reimbursement policies of the Company to the extent not previously paid, (D) at such time as it would have been paid if Executive had not been terminated, any cash incentive compensation earned as of the Termination Date in respect of the prior fiscal year which has not been paid as of the Termination Date, and (E) to the extent not theretofore paid or provided, any other accrued amounts or accrued benefits required to be paid or provided or which Executive is eligible to receive under any plan, program, policy, practice, contract or agreement of the Company at the times provided under the applicable plan, program, policy, practice, contract or agreement of the Company (collectively items (A) to (E), the “Accrued Amounts”), and the Company shall not have any further obligations to Executive under this Agreement except those required to be provided by law.

(ii)           For purposes of this Agreement, “Cause” shall mean any one of the following:

(A)          Executive’s personal dishonesty or willful misconduct in connection with any material aspect of Executive’s duties to the Company;

(B)          breach of fiduciary duty by Executive;

(C)          Executive’s conviction for, or pleading guilty or no contest to, any felony or crime involving moral turpitude; or

(D)          Executive’s willful or intentional misconduct that causes (or is reasonably believed by the Company to have caused) material and demonstrable injury, monetarily or otherwise, to the Company.

(c)           Qualifying Terminations.

(i)            The term “Qualifying Termination” shall mean termination by the Company of the employment of Executive with the Company for any reason other than death, Disability or Cause, or resignation by Executive upon the occurrence of any of the following events (each an event of “Good Reason”):

(A)          other than Executive’s removal for Cause pursuant to Section 2(b), without the prior written consent of Executive, the assignment to Executive of any duties inconsistent in any material respect with Executive’s position (including status, offices, titles and reporting requirements), authority, duties or responsibilities, or any other action by the Company which results in a demonstrable diminution in such position, authority, duties or responsibilities; provided, however, that an isolated, insubstantial and inadvertent action not taken in bad faith, which is remedied by the Company promptly after receipt of written notice thereof given by Executive, shall not constitute “Good Reason”;

 

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(B)          a reduction by the Company by an amount of five percent (5%) or more of Executive’s Base Salary as in effect on the Effective Date or as the same may be increased from time to time, unless such reduction is a part of an across-the-board proportional decrease in base salaries affecting all senior executive officers of the Company (the “Peer Executives”), which reduction is approved by the Compensation Committee of the Company’s Board of Directors (the “Committee”);

(C)          a reduction by the Company by an amount of five percent (5%) or more of Executive’s (1) annual target bonus percentage to which Executive is entitled or (2) target percentage under any long-term incentive plan established by the Company to which Executive is entitled, unless, in either case (1) or (2), such reduction is a part of an across-the-board proportional decrease in annual target bonus percentages or target percentages under any equity plan of the Company affecting all other Peer Executives, which reduction is approved by the Committee;

(D)          a reduction by the Company of benefits under (1) a “pension plan or arrangement” or (2) a “compensation plan or arrangement”, in each case in which Executive participates as of the Effective Date, or the elimination of Executive’s participation in any such plan or arrangement which reduction or elimination results in a reduction, in the aggregate, of the benefits provided thereunder, taking into account any replacement plan or arrangement or other additional compensation provided to Executive in connection with or following such reduction or elimination (except for immaterial reductions or across-the-board plan changes or terminations similarly affecting other Peer Executives); provided, that, subject to Section 5, in the event of any such changes or terminations, the Company shall timely pay or provide to Executive any accrued amounts or accrued benefits required to be paid or provided or which Executive is eligible to receive under any such plan or arrangement in accordance with the terms of such plan or arrangement; or

(E)           the Company requiring Executive, without Executive’s consent, to be based at any office or location more than 50 miles from the Company’s current headquarters in Lebanon, Tennessee; or

(F)           the failure of any successor to the Company to assume this Agreement or a material breach of this Agreement by the Company or its successors;

provided that, in each case, (x) within forty-five (45) days of the initial occurrence of the specified event Executive has given the Company written notice giving the Company at least thirty (30) days to cure the Good Reason event, (y) the Company has not cured the Good Reason event within the thirty-(30) day cure period and (z) Executive resigns within ten (10) days from the expiration of the thirty-(30) day cure period.

(ii)           During the Term, if Executive’s employment with the Company shall be terminated as a result of a Qualifying Termination:

(A)          the Company shall pay to Executive the Accrued Amounts;

 

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(B)          so long as Executive complies with Sections 2(c)(iv) and 3 of this Agreement, the Company shall pay to Executive severance pay in an amount determined in accordance with Exhibit A attached hereto, payable in equal installments, in accordance with the Company’s regular payroll policies then in effect, for the duration of the period set forth in Exhibit A (the “Severance Payment Period”), which payments shall commence on the first payroll period (the “Initial Payment”) occurring on or after the 60th day (but no later than the earlier of March 15th of the calendar year, or the 90th day) following the Termination Date (the “Severance Delay Period”); provided, the Initial Payment shall include payment for any payroll periods which occur during the Severance Delay Period, and the remaining payments shall continue for the remainder of the Severance Payment Period and on the same terms and with the same frequency as Executive’s annual salary was paid prior to such termination; and

(C)          all employee benefits and benefit accruals will cease as of the Termination Date. However, medical insurance benefits may be continued (at Executive’s sole expense) to the extent required by federal law. To the extent Executive may have other benefit conversion or withdrawal rights arising under other Company sponsored retirement or welfare benefit plan as a result of the termination of Executive’s employment, such benefits and rights shall be governed by the terms of such plans.

(iii)          Payments pursuant to this Section 2(c) shall be in lieu of any other severance benefits that Executive may be eligible to receive under the Company’s or any of the Company’s Affiliates’ benefit plans or programs.  Nothing in this Agreement shall affect or limit Executive’s right to receive (i) payment of any compensation or the issuance of any securities which Executive deferred under any deferred compensation plan of the Company, or (ii) any amounts due or belonging to Executive under any retirement program, employee stock purchase plan, or 401(k) plan, each of which shall be subject to the terms of such arrangements, including any deferral elections made thereunder.

(iv)          As a condition to receiving the payments provided for in this Section 2(c), Executive agrees to sign and deliver to the Company a release in the form attached hereto as Exhibit B and delivered to Executive within five (5) business days of the Termination Date, which must become effective prior to the end of the Severance Delay Period, or else Executive shall forfeit all rights to any severance benefits under this Agreement hereunder and the Company shall be under no obligation to make any payments to Executive pursuant hereto. THE EXECUTIVE UNDERSTANDS, ACKNOWLEDGES AND AGREES THAT THE RIGHT TO OBTAIN THE SEVERANCE BENEFITS AND THE BENEFITS PROVIDED BY THIS SECTION 2(C) IS ADEQUATE CONSIDERATION FOR THE RELEASE OF CLAIMS REQUIRED BY THIS SECTION 2(c)(iv) AND THAT THE EXECUTED AND UNREVOKED RELEASE WILL CONTINUE IN FULL FORCE AND EFFECT EVEN IF THE EXECUTIVE DOES NOT RECEIVE SOME OR ALL OF THE SEVERANCE BENEFITS AS A RESULT OF ANY FAILURE BY THE EXECUTIVE TO COMPLY WITH THE EXECUTIVE’S OTHER OBLIGATIONS UNDER THIS AGREEMENT, INCLUDING BUT NOT LIMITED TO SECTION 3 HEREOF. THE PROVISIONS OF THIS SECTION 2(c)(iv) SHALL SURVIVE ANY TERMINATION OF THIS AGREEMENT OR THE EXECUTIVE’S EMPLOYMENT WITH THE COMPANY.

(v)           If Executive dies during the Severance Payment Period, any benefits remaining to be paid to Executive shall be paid to the beneficiary designated by Executive’s estate to receive those benefits (or in the absence of designation, to Executive’s surviving spouse or next of kin).

 

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(d)          Termination Upon Death or Disability.

(i)            This Agreement shall terminate immediately upon Executive’s death, and Executive or her beneficiaries shall be entitled to no further payments or benefits hereunder, other than the payment of the Accrued Amounts, including, without limitation, benefits under such plans, programs, practices and policies relating to death benefits, if any, as are applicable to Executive on the date of her death.  The rights of Executive’s estate with respect to any outstanding equity grants and any benefit plans shall be determined in accordance with the specific terms, conditions and provisions of the applicable award agreements and benefit plans.

(ii)           If the Company determines in good faith that the Disability (as defined below) of Executive has occurred during the Term, it may give to Executive written notice of its intention to terminate Executive’s employment.  In such event, Executive’s employment with the Company shall terminate effective on the 30th day after receipt of such written notice by Executive (the “Disability Effective Date”), provided, that, within the 30-day period after such receipt, Executive shall not have returned to full-time performance of Executive’s duties.  If Executive’s employment is terminated by reason of Disability, this Agreement shall terminate, and Executive shall be entitled to no further payments or benefits hereunder, other than payment of Accrued Amounts, including, without limitation, benefits under such plans, programs, practices and policies relating to disability benefits, if any, as are applicable to Executive on the Disability Effective Date.  For purposes of this Agreement, “Disability” shall mean: (a) a long-term disability entitling Executive to receive benefits under the Company’s long-term disability plan as then in effect; or (b) if no such plan is then in effect or the plan does not apply to Executive, the inability of Executive, as determined by the Company’s Board of Directors, to perform the essential functions of Executive’s regular duties and responsibilities hereunder, with or without reasonable accommodation, due to a medically determinable physical or mental illness which has lasted (or can reasonably be expected to last) for a period of at least six (6) consecutive months.  

(e)          Change in Control Agreement.  The Company and Executive are parties to that certain Change in Control Agreement of even date herewith (the “CIC Agreement”), which establishes certain obligations of the parties regarding the employment of Executive, as well as termination payments and other benefits to which Executive would be entitled in connection with the termination of Executive’s employment in connection with a Change in Control (as defined in the CIC Agreement), all according to the terms and conditions set forth in the CIC Agreement.  The Company and Executive acknowledge and agree that it is the intent of the parties that the CIC Agreement shall take precedence over this Agreement in connection with the matters set forth in the CIC Agreement.  Without limiting the foregoing, if Executive is entitled to receive termination payments and other benefits pursuant to the CIC Agreement in connection with the termination of Executive’s employment with the Company in connection with a Change in Control, then Executive shall be entitled to receive such termination payments and other benefits as set forth in the CIC Agreement and not pursuant to this Agreement, and neither party shall argue that the rights of the Company or Executive, nor any severance payments or other benefits to which the Executive may be entitled, pursuant to the CIC Agreement shall be limited or superseded by anything set forth in this Agreement.

 

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3.             Obligations of Executive.  In consideration for the benefits offered to Executive under this Agreement and in consideration of Executive’s continued employment with the Company as of the date of this Agreement’s execution, Executive hereby agrees to the following terms and conditions:

(a)           Confidentiality.  During Executive’s employment and following any termination of Executive’s employment for whatever reason thereafter, Executive shall strictly maintain the confidentiality of Company marketing, financial, strategic planning, proprietary or other information which is not generally known to the public.  Executive acknowledges that, as a result of his/her employment by the Company, Executive has or will become familiar with and acquire knowledge of confidential information and certain trade secrets that are special, unique and extraordinarily valuable assets of the Company.  Executive agrees that all such confidential information and trade secrets are the property of the Company and that following the termination of Executive’s employment for any reason, all confidential information and trade secrets shall be considered to be proprietary to the Company and kept as the private records of the Company and will not be divulged to any firm, individual, or institution, or used to the detriment of the Company.  None of the foregoing confidentiality obligations are intended to, nor shall they, prohibit Executive from communicating with any governmental agency.

(b)           Return of Company Property.  Upon termination of Executive’s employment for whatever reason during the Term, Executive shall return to the Company all Company property then in Executive’s possession or control, in good condition and repair (normal wear and tear excepted) including but not limited to keys, security cards and fobs, credit cards, furniture, equipment, automobiles, computer hardware and software, telephone equipment, and all documents, manuals, plans, equipment, training materials, business papers, personnel files, computer files or copies of the same relating to Company business which are in Executive’s possession or control.

(c)           Non-Compete.  During Executive’s employment and for the shorter of (i) six months or (ii) the length of the Severance Payment Period following any termination of Executive’s employment for whatever reason during the Term, Executive shall not directly or indirectly own any interest in, manage, control, participate in, consult with, render services for, be employed in an executive, managerial or administrative capacity by, or in any manner engage in, any business within the United States that is engaging in the multi-unit restaurant business that offers full service family dining (“Restricted Business”).  Executive acknowledges that during the course of Executive’s employment with the Company, as a result of Executive’s position within the Company, Executive has and will become familiar with the Company’s trade secrets, personnel and other confidential information concerning the Company at a very high level and that Executive’s services have been and shall continue to be of special, unique, and extraordinary value to the Company. Nothing herein shall prohibit Executive from (i) being a passive owner of not more than 2% of the outstanding stock of any class of a corporation that is publicly traded, so long as Executive has no active participation in the business of such corporation; or (ii) becoming employed, engaged, associated or otherwise participating with a separately managed division or subsidiary of a competitive business that does not engage in the Restricted Business (provided that Executive’s services are provided only to such division or subsidiary); or (iii) accepting employment with any federal or state government or governmental subdivision or agency.

 

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(d)           Non-Solicit.  During Executive’s employment and, following any termination of Executive’s employment for whatever reason during the Term, for the shorter of (A) twelve months or (B) the length of the Severance Payment Period, Executive shall not directly or indirectly through another Person (i) induce or attempt to induce any employee of the Company to leave the employ of the Company, or in any way interfere with the relationship between the Company and any employee thereof; (ii) hire any Person who was an employee of the Company at any time during the twelve-month period immediately following the termination of Executive’s employment with the Company; or (iii) induce or attempt to induce any customer, supplier, licensee or other business relation of the Company to cease or materially reduce doing business with the Company, or in any way interfere with the relationship between any such customer, supplier, licensee or business relation and the Company (including, without limitation, making any negative or disparaging statements or communications regarding the Company, its products or its personnel). Notwithstanding the foregoing, nothing in this Agreement shall prohibit Executive from employing an individual (i) with the consent of the Company or (ii) who responds to general solicitations in publications or on websites, or through the use of search firms, so long as such general solicitations or search firm activities are not targeted specifically at an employee (or former employee, as described above) of the Company.

(e)           Reasonable Scope.  Executive agrees and acknowledges that the covenants set forth in this Section 3 are reasonable in scope and duration and necessary to protect the legitimate business interests of the Company and that the compensation payable hereunder is sufficient consideration therefor.  If any of the provisions of the covenants in this Section 3 is construed to be invalid or unenforceable in any respect, the same shall be modified as the court may direct in order to make such provision reasonable and enforceable, and such modification of the provision shall not affect the remainder of the provisions of the covenants, and such provision will be given the maximum possible effect and the modified Agreement will be fully enforceable.

 

4.             No Obligation to Mitigate Damages. Executive shall not be obligated to seek other employment or otherwise take steps to mitigate or reduce the amounts payable or arrangements provided for under this Agreement, and the obtaining of any such other employment shall not reduce any of the Company’s obligations under this Agreement.

 

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5.             Section 409A.

(a)           It is intended that (i) each payment or installment of payments provided under this Agreement is a separate “payment” for purposes of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), and (ii) that the payments satisfy, to the greatest extent possible, the exemptions from the application of Section 409A of the Code, including those provided under Treasury Regulations 1.409A-1(b)(4) (regarding short-term deferrals), 1.409A-1(b)(9)(iii) (regarding the two-times, two (2) year exception) and 1.409A-1(b)(9)(v) (regarding reimbursements and other separation pay).  Notwithstanding anything to the contrary herein, if (i) on the date of Executive’s “separation from service” (as such term is defined under Treasury Regulation 1.409A-1(h)), Executive is deemed to be a “specified employee” (as such term is defined under Treasury Regulation 1.409A-1(i)(1)) of the Company, as determined in accordance with the Company’s “specified employee” determination procedures, and (ii) any payments to be provided to Executive pursuant to this Agreement which constitute “deferred compensation” for purposes of Section 409A are or may become subject to the additional tax under Section 409A(a)(1)(B) of the Code or any other taxes or penalties imposed under Section 409A if provided at the time otherwise required under this Agreement, then such payments shall be delayed until the date that is six (6) months after the date of Executive’s “separation from service” (as such term is defined under Treasury Regulation 1.409A-1(h)) or, if sooner, the date of Executive’s death.  Any payments delayed pursuant to this Section 9(e) shall be made in a lump sum on the first day of the seventh month following Executive’s “separation from service” (as such term is defined under Treasury Regulation 1.409A-1(h)) or, if sooner, the date of Executive’s death.

(b)           Notwithstanding any other provision to the contrary, a termination of employment with the Company shall not be deemed to have occurred for purposes of any provision of this Agreement providing for the payment of “deferred compensation” (as such term is defined in Section 409A of the Code and the Treasury Regulations promulgated thereunder) upon or following a termination of employment unless such termination is also a “separation from service” from the Company within the meaning of Section 409A of the Code and Section 1.409A-1(h) of the Treasury Regulations and, for purposes of any such provision of this Agreement, references to a “separation,” “termination,” “termination of employment” or like terms shall mean “separation from service.”

(c)           To the extent that any expenses, reimbursement, fringe benefit or other, similar plan or arrangement in which Executive participates during the term of Executive’s employment under this Agreement or thereafter provides for a “deferral of compensation” within the meaning of Section 409A, then such amount shall be reimbursed in accordance with Section 1.409A-3(i)(1)(iv) of the Treasury Regulations, including (i) the amount eligible for reimbursement or payment under such plan or arrangement in one calendar year may not affect the amount eligible for reimbursement or payment in any other calendar year (except that a plan providing medical or health benefits may impose a generally applicable limit on the amount that may be reimbursed or paid), (ii) subject to any shorter time periods provided herein or the applicable plans or arrangements, any reimbursement or payment of an expense under such plan or arrangement must be made on or before the last day of the calendar year following the calendar year in which the expense was incurred, and (iii) the right to any reimbursement or in-kind benefit is not subject to liquidation or exchange for another benefit.

 (d)          Notwithstanding any other provision to the contrary, in no event shall any payment under this Agreement that constitutes “deferred compensation” for purposes of Section 409A of the Code and the Treasury Regulations promulgated thereunder be subject to offset by any other amount unless otherwise permitted by Section 409A of the Code.

 

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(e)           For the avoidance of doubt, any payment due under this Agreement within a period following Executive’s termination of employment or other event, shall be made on a date during such period as determined by the Company in its sole discretion, and in accordance with Section 409A.

 

(f)            This Agreement shall be interpreted in accordance with, and the Company and Executive will use their best efforts to achieve timely compliance with, Section 409A of the Code and the Treasury Regulations and other interpretive guidance promulgated thereunder, including without limitation any such regulations or other guidance that may be issued after the Effective Date of this Agreement.

6.             Notices. Any notices, requests, demands and other communications provided for by this Agreement shall be sufficient if in writing and if sent by registered or certified mail to Executive at the last address he/she has filed in writing with the Company or, in the case of the Company, at its principal executive offices.

7.             Non-Alienation. Executive shall not have any right to pledge, hypothecate, anticipate or in any way create a lien upon any amounts provided under this Agreement; and no benefits payable hereunder shall be assignable in anticipation of payment either by voluntary or involuntary acts, or by operation of law, except by will or the laws of descent and distribution.

8.             Governing Law. The provisions of this Agreement shall be construed in accordance with the laws of the State of Tennessee without regard to any conflict of laws provision thereof.

9.             Entire Agreement; Amendment.  Subject to Section 2(e), this Agreement contains the entire agreement of the parties relating to the subject matter herein and supersedes in full and in all respects any prior oral or written agreement, arrangement or understanding in connection with the matters set forth herein.  This Agreement may only be amended or canceled by mutual agreement of the parties in writing without the consent of any other person, and, so long as Executive lives, no person, other than the parties hereto, shall have any rights under or interest in this Agreement or the subject matter hereof.

10.           Arbitration. Any dispute or controversy between the Company and Executive, whether arising out of or relating to this Agreement, the breach of this Agreement, or otherwise, shall be settled by arbitration administered in accordance with the Commercial Arbitration Rules of the American Arbitration Association (“AAA”) then in effect, and judgment on the award rendered by the arbitrator may be entered in any court having jurisdiction. Any arbitration shall be held before a single arbitrator who shall be selected by the mutual agreement of the Company and Executive, unless the parties are unable to agree to an arbitrator, in which case, the arbitrator will be selected by the then President of the Tennessee Bar Association. The arbitrator shall have the authority to award any remedy or relief that a court of competent jurisdiction could order or grant, including, without limitation, the issuance of an injunction. However, either party may, without inconsistency with this arbitration provision, apply to any court having jurisdiction over such dispute or controversy and seek interim provisional, injunctive or other equitable relief until the arbitration award is rendered or the controversy is otherwise resolved. Except as necessary in court proceedings to enforce this arbitration provision or an award rendered hereunder, or to obtain interim relief or as required by law, neither a party nor an arbitrator may disclose the existence, content or results of any arbitration hereunder without the prior written consent of the Company and Executive. The Company and Executive acknowledge that this Agreement evidences a transaction involving interstate commerce. Notwithstanding any choice of law provision included in this Agreement the United States Federal Arbitration Act shall govern the interpretation and enforcement of this arbitration provision. The arbitration proceeding shall be conducted in Nashville, Tennessee or such other location to which the parties may agree. The Company shall pay the costs of the arbitration, including all fees and expenses of any arbitrator appointed hereunder.

 

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11.           Successors.

 

(a)           This Agreement is personal to Executive and without the prior written consent of the Company shall not be assignable by Executive otherwise than by will or the laws of descent and distribution. This Agreement shall inure to the benefit of and be enforceable by Executive’s legal representatives.

(b)           This Agreement shall inure to the benefit of and be binding upon the Company and its successors and assigns.

(c)           The Company will require 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 to assume expressly and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place. As used in this Agreement, “Company” shall mean the Company as hereinbefore defined and any successor to its business and/or assets as aforesaid which assumes and agrees to perform this Agreement by operation of law, or otherwise.

12.           Survival.  The obligations of the parties pursuant to Sections 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12 and 13, as applicable, shall survive the termination of Executive’s employment and any termination of this Agreement.

13.           Severability. In the event that any provision or portion of this Agreement shall he determined to be invalid or unenforceable for any reason, the remaining provisions of this Agreement shall he unaffected thereby and shall remain in full force and effect.

[Signature page follows.]

 

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IN WITNESS WHEREOF, as evidence of their mutual agreement Executive and Company have caused this Agreement to be executed as of the day and year first above written.

 

	
Cracker Barrel Old Country Store, Inc.

	 	
Executive

	 
	 	 	 	 
		 	
 

	 

	
Name:

	 	 	
Name:

	 	 
	
Title:

	 	 	 	 	 

 

Exhibit A – Severance Payments

Exhibit B – Form of Release

 

[Signature Page to Severance Agreement]

 

Exhibit A

 

Section 2(c) Severance Benefits

 

	
Position

	 	
Severance Benefit

	 	 	 
	
Senior Vice President

	 	
12 months’ base salary plus one additional week of severance for each year of service in excess of 15 years (not to exceed 18 months’ total severance)

 

For purposes of this Agreement, “year of service” means twelve (12) consecutive months of continuous full time employment (32 hours or more per week) with the Company. Breaks in service of more than 90 days are not recognized as continuous employment under this Agreement.

 

A-1

Exhibit B

 

Form of Release

 

THIS RELEASE (this “Release”) is made and entered into by and between ___________ (“Executive”) and CRACKER BARREL OLD COUNTRY STORE, INC. and its successors or assigns (the “Company”). The Company and Executive are collectively referred to herein as the “Parties.”

 

WHEREAS, Executive and the Company have agreed that Executive’s employment with Company shall terminate on ___________________;

 

WHEREAS, Executive and the Company have previously entered into that certain Severance Agreement, dated May __, 2018 (the “Agreement”), and this Release is incorporated therein by reference;

 

WHEREAS, Executive and the Company desire to delineate their respective rights, duties and obligations attendant to such termination and desire to reach an accord and satisfaction of all claims arising from Executive’s employment, and the termination thereof, with appropriate releases, in accordance with the Agreement;

 

WHEREAS, the Company desires to compensate Executive in accordance with the Agreement for service she has or will provide for the Company;

 

NOW, THEREFORE, in consideration of the premises and the agreements of the Parties set forth in this Release, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereto, intending to be legally bound, hereby covenant and agree as follows:

 

1.             Claims Released Under This Agreement.  In exchange for the opportunity to receive the severance benefits described in Section 2(b) of the Agreement and except as provided in Paragraph 2 below, subject to Executive’s fulfillment of Executive’s ongoing obligations under the Agreement, Executive hereby voluntarily and irrevocably waives, releases, dismisses with prejudice, and withdraws all claims, complaints, suits or demands of any kind whatsoever (whether known or unknown) which Executive ever had, may have, or now has against the Company and other current or former subsidiaries or affiliates of the Company and their past, present and future officers, directors, employees, agents, insurers and attorneys (collectively, the “Released Parties”), arising out of or relating to (directly or indirectly) Executive’s employment or the termination of Executive’s employment with the Company, or any other event occurring prior to the execution of this Release, including, but not limited to:

 

(a)           claims for violations of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act of 1967, , the Civil Rights Act of 1866, the Civil Rights Act of 1991, the Older Workers’ Benefit Protection Act of 1990, the Americans With Disabilities Act, the Equal Pay Act of 1963, the Family and Medical Leave Act, 42 U.S.C. § 1981, the Worker Adjustment and Retraining Notification Act, the National Labor Relations Act, the Labor Management Relations Act, Executive Order 11246, Executive Order 11141, the Rehabilitation Act of 1973, or the Employee Retirement Income Security Act, the Tennessee Human Rights Act, the Tennessee Disability Act, the Genetic Information Nondiscrimination Act, or any other law relating to discrimination or retaliation in employment (in each case, as amended);

 

B-1

(b)           claims for violations of any other federal or state statute or regulation or local ordinance;

 

(c)           claims for lost or unpaid wages, compensation or benefits, defamation, intentional or negligent infliction of emotional distress, assault, battery, wrongful or constructive discharge, negligent hiring, retention or supervision, misrepresentation, conversion, tortious interference, breach of contract or breach of fiduciary duty;

 

(d)           claims to benefits under any bonus, severance, workforce reduction, early retirement, outplacement or any other similar type plan sponsored by the Company; or

 

(e)           any other claims under state law arising in tort or contract.

 

2.             Claims Not Released Under This Agreement.  In signing this Release, Executive is not releasing any claims that (a) enforce Executive’s rights under the Agreement, (b) arise out of events occurring after the date Executive executes this Release, (c) arise under any written non-employment related contractual obligations between the Company or its affiliates and Executive which have not terminated as of the execution date of this Release by their express terms, (d) arise under a policy or policies of insurance (including director and officer liability insurance) maintained by the Company or its affiliates on behalf of Executive, (e) relate to any indemnification obligations to Executive under the Company’s bylaws, certificate of incorporation, Tennessee law or otherwise, or (f) if Executive’s date of termination of employment occurs prior to a Change in Control, claims for additional severance entitlements under Section 4.5 of the Agreement if a Change in Control occurs within 180 days following such date.  However, Executive understands and acknowledges that nothing herein is intended to or shall be construed to require the Company to institute or continue in effect any particular plan or benefit sponsored by the Company, and the Company hereby reserves the right to amend or terminate any of its benefit programs at any time in accordance with the procedures set forth in such plans.  Nothing in this Release shall prohibit Executive from engaging in protected activities under applicable law or from communicating, either voluntarily or otherwise, with any governmental agency concerning any potential violation of law.

 

3.             No Assignment of Claim.  Executive hereby represents that Executive has not assigned or transferred, or purported to assign or transfer, any claims or any portion thereof or interest therein to any Party prior to the date of this Release.

 

4.             No Admission Of Liability.  This Release shall not in any way be construed as an admission by the Company or Executive of any improper actions or liability whatsoever as to one another, and each specifically disclaims any liability to or improper actions against the other or any other person, on the part of the Company or Executive, or the Company’s or Executive’s representatives, employees or agents.

 

B-2

5.             No Current Claims. Executive represents and warrants that Executive has not filed any complaint(s) or charge(s) against the Company or the other Released Parties with the EEOC or the state commission empowered to investigate claims of employment discrimination, the United States Department of Labor, or with any other local, state, or federal agency or court or that Executive has disclosed in writing to the Company any such complaint(s) or charge(s).

 

6.             Disclosure.  Executive acknowledges and warrants that, that except as previously discussed (whether orally or in writing) with the Board or internal or external Company counsel, Executive is not aware of any matters for which Executive was responsible or which came to Executive’s attention as an employee of the Company that might give rise to, evidence or support any claim of illegal conduct, regulatory violation, unlawful discrimination, retaliation or other cause of action against the Company.

 

7.             Company Property.  All records, files, lists, including computer generated lists, data, drawings, documents, equipment and similar items relating to the Company’s business that Executive generated or received from the Company remains the Company’s sole and exclusive property.  Executive agrees to promptly return to the Company all property of the Company in Executive’s possession.  Executive further represents that Executive has not copied or caused to be copied, printed out, or caused to be printed out any documents or other material originating with or belonging to the Company.  Executive additionally agrees not to retain in Executive’s possession any such documents or other materials.

 

8.             Cooperation.  Executive will provide reasonable cooperation to the Company, all Released Parties and their respective counsel at all times in any internal or external claims, charges, audits, investigations, and/or lawsuits involving the Company and/or any other Released Party of which Executive may have knowledge or in which Executive may be a witness, it being understood that requests for reasonable cooperation shall not unreasonably interfere with Executive’s personal or other professional responsibilities.  Such reasonable cooperation includes meeting with the Company’s representatives and counsel to disclose such facts as Executive may know; preparing with the Company’s counsel for any deposition, trial, hearing, or other proceeding; attending any deposition, trial, hearing or other proceeding to provide truthful testimony.  The Company agrees to reimburse the Executive for reasonable out-of-pocket expenses incurred by the Executive in the course of complying with this obligation.  Nothing in this Section 8 should be construed in any way as prohibiting or discouraging the Executive from testifying truthfully under oath as part of, or in connection with, any such proceeding.

 

9.             Acknowledgement of Waiver of Claims under ADEA. Executive acknowledges that this Release waives any and all claims that Executive may have under the ADEA for claims arising prior to the execution of this Release and that Executive’s agreement to waive such claims and all other claims released under the terms of this Release is made knowingly and voluntarily. Executive acknowledges that Executive would not be entitled to the severance benefits but for Executive’s non-revoked execution of this Release. Executive further acknowledges that (a) Executive has been advised that Executive should consult with an attorney prior to executing this Release, (b) Executive has been given twenty-one (21) days within which to consider this Release before executing it, (c) Executive has been given at least seven (7) days following the execution of this Release to revoke this Release (the “Revocation Period”) by providing written notice of revocation in accordance with Section 6 of the Agreement, and (d) Executive was not coerced, threatened or otherwise forced to sign this Release, and that Executive’s signature appearing hereinafter is knowing and voluntary.  Executive further acknowledges that upon expiration of the Revocation Period, this Release will be binding upon Executive and Executive’s heirs, administrators, representatives, executors, successors and assigns, and this Release will become irrevocable.

 

B-3

10.           Severability. All provisions of this Release are intended to be severable. In the event any provision or restriction contained herein is held to be invalid or unenforceable in any respect, in whole or in part, such finding shall in no way affect the validity or enforceability of any other provision of this Release. The Parties further agree that any such invalid or unenforceable provision shall be deemed modified so that it shall be enforced to the greatest extent permissible under law, and to the extent that any court or arbitrator of competent jurisdiction determines any restriction herein to be unreasonable in any respect, such court or arbitrator may limit this Release to render it reasonable in the light of the circumstances in which it was entered into and specifically enforce this Release as limited.

 

11.           Specific Performance. If a court of competent jurisdiction determines that Executive has breached or failed to perform any part of this Release, the Executive agrees that Company shall be entitled to seek injunctive relief to enforce this Release, to the extent permitted by applicable law.

 

12.           Restrictive Covenants. Executive acknowledges that Executive entered into restrictive covenants in Section 3 of the Agreement, and that in accordance with the terms of the Agreement, Executive is subject to those obligations as they remain in full force and effect following Executive’s separation of employment with the Company.

 

13.           No Waiver. Should the Company fail to require strict compliance with any term or condition of the Agreement or this Release, such failure shall not be deemed a waiver of such terms or conditions, nor shall the Company’s failure to enforce any right it may have preclude it from thereafter enforcing its rights under the Agreement or this Release.  Waiver of any one breach shall not be deemed a waiver of any other breach of the same or any other provision of the Agreement or this Release.

 

14.           Entire Agreement.  This Release constitutes the entire understanding of the Parties regarding the subject matter of this Release, supersedes all prior oral or written agreements on the subject matter of this Release and cannot be modified except by a writing signed by all Parties in accordance with Section 18 below.

 

15.           Binding Effect.  This Release inures to the benefit of, and is binding upon, the Parties and their respective successors and assigns.

 

16.           Captions.  The captions to the various sections of this Release are for convenience only and are not part of this Release.

 

17.           Counterparts.  This Release may be executed in one or more counterparts, each of which will be deemed an original, but all of which together will constitute the same agreement.

 

B-4

18.           Amendments. Any amendment to this Release must be in writing and signed by duly authorized representatives of each of the Parties hereto and must expressly state that it is the intention of each of the Parties hereto to amend the Release.

 

19.           Governing Law. This Release shall be governed by and construed in accordance with the laws of the State of Tennessee without reference to principles of conflict of laws.

 

20.           Exclusive Jurisdiction and Venue.  The appropriate state or federal court in Wilson County, Tennessee will be the exclusive jurisdiction and venue for any dispute arising out of this Release.  The parties voluntarily submit to the jurisdiction of these courts for any litigation arising out of or concerning the application, interpretation or any alleged breach of this Release.

 

IN WITNESS WHEREOF, the parties hereto have executed this Release as of the day and year first written above.

 

Acknowledged and Agreed To:

“COMPANY”

CRACKER BARREL OLD COUNTRY STORE, INC.

	
By:

	 	 	 
	 	
Name:

	 	 
	 	 	 	 
	 	 	 	 
	 	
Title:

	 	 
	 	 	 	 
	 	
Date:

	 	 

I UNDERSTAND THAT BY SIGNING THIS RELEASE, I AM GIVING UP RIGHTS I MAY HAVE.  I UNDERSTAND THAT I DO NOT HAVE TO SIGN THIS RELEASE.

“EXECUTIVE”

	 	 
	
[Name]

	 

 

 

B-5

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