SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
__________
FORM 10-K
(Mark One)
[x] Annual Report Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934 (No Fee Required)
[ ] Transition report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 (No Fee Required)
For the transition period from to
For fiscal year ended Commission file number
July 30, 1999 0-7536
____________
CBRL GROUP, INC.
(Exact name of registrant as specified in its charter)
Tennessee 62-1749513
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
Hartmann Drive, P.O. Box 787 37088-0787
Lebanon, Tennessee (Zip code)
(Address of principal executive offices)
_______________
Registrant's telephone number, including area code:
(615)444-5533
_____________
Securities registered pursuant to Section 12(b) of the Act:
None
_______________
Securities registered pursuant to Section 12(g) of the Act:
Common Stock
(Par Value $.01)
________________
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file
such reports) and (2) has been subject to such filing requirements
for the past 90 days.
Yes X No _
Indicate by check mark if disclosure of delinquent filers pursuant
to Item 405 of Regulation S-K is not contained herein, and will not
be contained, to the best of registrant's knowledge, in definitive
proxy or information statements incorporated by reference in Part
III of this Form 10-K or any amendment to this Form 10-K. X
The aggregate market value of voting stock held by nonaffiliates of
the registrant is $801,015,870 as of September 24, 1999.
58,628,162
(Number of shares of common stock outstanding as of September 24,
1999.)
Documents Incorporated by Reference
Document from which Portions Part of Form 10-K
are Incorporated by Reference to which incorporated
1. Annual Report to Shareholders Items 6, 7 and 8
for the fiscal year ended
July 30, 1999
2. Proxy Statement for Annual Part III
Meeting of Shareholders
to be held November 23, 1999
Except for specific historical information, the matters discussed in
this Form 10-K, as well as the Company's Annual Report to
Shareholders for the year ended July 30, 1999 incorporated herein by
reference, are forward-looking statements that involve risks,
uncertainties and other factors which may cause actual results and
performance of CBRL Group, Inc. to differ materially from those
expressed or implied by those statements. Factors which will affect
actual results include, but are not limited to: the availability
and costs of acceptable sites for development; the effect of
increased competition at Company locations on employee recruiting
and retention, labor costs and restaurant sales; the ability of the
Company to recruit, train and retain restaurant personnel; the
acceptance of the Company's concepts as the Company continues to
expand into new geographic regions; changes in or implementation of
additional governmental rules and regulations; the effects of local
or regional Year 2000-related computer failures on utilities and
vendors serving the Company; and other factors described from time
to time in the Company's filings with the Securities and Exchange
Commission, press releases and other communications.
PART I
ITEM 1. BUSINESS
OVERVIEW
CBRL Group, Inc. (the "Company") is principally engaged as a holding
company in the operation and development of the Cracker Barrel Old
Country Store(R), Logan's Roadhouse(R) and Carmine Giardini's
Gourmet Market and La Trattoria Ristorante(TM) concepts. The
Company was organized under the laws of the state of Tennessee in
August 1998 to succeed the business operated by Cracker Barrel Old
Country Store, Inc., a Tennessee corporation, organized in September
1969.
REORGANIZATION
On November 26, 1998, the shareholders of Cracker Barrel Old
Country Store, Inc. approved the tax-free reorganization of Cracker
Barrel Old Country Store, Inc. to a holding company structure by
approving the merger of CBRL Acquisition Corp., a wholly-owned
subsidiary of CBRL Group, Inc., with and into Cracker Barrel Old
Country Store, Inc. effective on December 31, 1998. Immediately
prior to the merger, CBRL Group, Inc. was a wholly-owned subsidiary
of Cracker Barrel Old Country Store, Inc. At the effective date of
the merger, each $.50 par value share of Cracker Barrel Old Country
Store, Inc. Common Stock was converted into a share of $.01 par
value Common Stock of CBRL Group, Inc. As a result of the
reorganization, CBRL Group, Inc. became the parent company and its
Common Stock is traded on the Nasdaq Stock Market (National Market)
under the symbol CBRL, formerly utilized by Cracker Barrel Old
Country Store, Inc. Also as a result, the Company has 400,000,000
shares of $.01 par value Common Stock authorized and 100,000,000
shares of $.01 par value Preferred Stock authorized. The conversion
of $.50 par value Common Stock of Cracker Barrel Old Country Store,
Inc. for $.01 par value Common Stock of CBRL Group, Inc. did not
affect any of the pre-existing rights of shareholders.
RECENT ACQUISITIONS
On February 16, 1999, the Company acquired all of the capital stock
of Logan's Roadhouse, Inc. The purchase consisted of cash of $24.00
per share of Logan's Roadhouse, Inc. Common Stock or approximately
$188 million and was accounted for as a purchase.
On April 1, 1998, the Company, through a new Cracker Barrel Old
Country Store, Inc. subsidiary CPM Merger Corporation ("CPM"),
acquired Carmine's Prime Meats, Inc. ("Carmine's") through a merger
of Carmine's into CPM. The purchase consisted of cash of $2.5
million and $10.5 million (262,090 shares) of the Company's Common
Stock and was accounted for as a purchase. CPM conducts business
under the name Carmine Giardini's Gourmet Market and La Trattoria
Ristorante.
See Note 7 to the Company's 1999 Annual Report to Shareholders,
incorporated herein by reference in Exhibit 13 for more information
regarding these two acquisitions.
CONCEPTS
Cracker Barrel Old Country Store
Cracker Barrel Old Country Store ("Cracker Barrel"), headquartered
in Lebanon, Tennessee, owns and operates as of October 29, 1999, 409
full service "country store" restaurants which are primarily located
in the southeast, midwest, mid-atlantic and southwest United States.
Stores principally are located along interstate highways, however,
ten stores are located at "tourist destinations" and five "off-
interstate" stores are located at a location that is neither a
tourist destination nor an interstate location. The restaurants
serve breakfast, lunch and dinner between the hours of 6:00 a.m. and
10:00 p.m. (11:00 p.m. on Fridays and Saturdays) and feature home
style country cooking prepared on the premises from the Company's
own recipes using quality ingredients and emphasizing authenticity.
Menu items are moderately priced and include country ham, chicken,
fish, roast beef, beans, turnip greens, vegetable plates, salads,
sandwiches, pancakes, eggs, bacon, sausage and grits. The
restaurants do not serve alcoholic beverages. The stores are
constructed in a rustic, country store design and feature a separate
retail area offering a wide variety of decorative and functional
items specializing in hand-blown glassware, cast iron cookware, toys
and wood crafts as well as various old fashioned candies, jellies
and other foods.
Logan's Roadhouse
Logan's Roadhouse ("Logan's"), headquartered in Nashville,
Tennessee, operates as of October 29, 1999, 58 company-owned Logan's
Roadhouse restaurants and franchises six Logan's Roadhouse
restaurants, all of which feature steaks, ribs, chicken and seafood
dishes served in a distinctive atmosphere reminiscent of an American
roadhouse of the 1940s and 1950s. The Logan's Roadhouse concept is
designed to appeal to a broad range of customers by offering
generous portions of moderately-priced, high quality food in a very
casual, relaxed dining environment that is lively and entertaining.
The restaurants are open seven days a week for lunch and dinner and
offer full bar service. Alcoholic beverages represented
approximately 11% of Logan's total revenue in fiscal 1999. The
Logan's Roadhouse menu is designed to appeal to a wide variety of
tastes, emphasizing extra-aged, hand-cut USDA choice steaks, and
signature dishes such as fried green tomatoes, baked sweet potatoes
and made-from-scratch yeast rolls.
Carmine Giardini's Gourmet Market and La Trattoria Ristorante
The Carmine Giardini's Gourmet Market business, headquartered in
Palm Beach Gardens, Florida, started 26 years ago as a prime meat
market and expanded 15 years ago to a full-service gourmet market.
A restaurant (also referred to as the "La Trattoria Ristorante") was
added to the Palm Beach Gardens, Florida store six years ago. The
Ft. Lauderdale, Florida store has the full-service gourmet market
only. Now owned by CPM Merger Corporation (a Cracker Barrel
subsidiary and referred to as "Carmine Giardini's"), the markets
consist of separate departments with a strong Italian flavor
featuring such items as seafood, meat, prepared foods, deli, bakery,
produce, cheese, pizza and wine. The prepared foods department
features various meat, seafood and pasta entrees, vegetables, salads
and appetizers. The markets also feature off-premises catering,
gift baskets and, in the case of the Palm Beach Gardens location, a
casual cafe. La Trattoria Ristorante is an upper scale Italian
restaurant including a full-service bar and fine dining table
service delivered in a casual dining atmosphere.
The Palm Beach Gardens, Florida gourmet market and restaurant
comprise approximately 15,000 square feet with 230 seats. The Ft.
Lauderdale gourmet market is approximately 6,000 square feet and has
no restaurant. The Palm Beach Gardens store will be the model for
the prototype that will be developed in one new location in fiscal
2000 in south Florida.
<PAGE>
OPERATIONS
Cracker Barrel Old Country Store
Store Format: The format of Cracker Barrel stores consists of a
rustic, country-store style building. All stores are freestanding
buildings. Store interiors are subdivided into a dining room
consisting of approximately 30% of the total interior store space,
and a retail shop consisting of approximately 22% of such space,
with the balance primarily consisting of kitchen and storage areas.
All stores have functioning stone fireplaces which burn wood
wherever permitted and are decorated with antique-style furnishings
and other authentic items of the past, similar to those used and
sold in original old country stores. The kitchens contain modern
food preparation and storage equipment allowing for extensive
flexibility in menu variation and development.
Products: Cracker Barrel's restaurants, which generated
approximately 76% of Cracker Barrel's total revenue in fiscal 1999,
offer rural American cooking featuring the Company's own recipes.
In keeping with Cracker Barrel's emphasis on authenticity and
quality, Cracker Barrel restaurants prepare menu selections on the
premises. The restaurants offer breakfast, lunch and dinner from a
moderately-priced menu. Breakfast items can be ordered at any time
throughout the day and include juices, eggs, pancakes, bacon,
country ham, sausage, grits, and a variety of biscuit specialties,
with prices for a breakfast meal ranging from $1.89 to $7.99. Lunch
and dinner items include country ham, chicken, fish, steak, roast
beef, beans, turnip greens, vegetable plates, salads, sandwiches,
soups and specialty items such as beef stew with cornbread. Lunches
and dinners range in price from $2.99 to $12.99. The average check
per customer for fiscal 1999 was $6.88. Cracker Barrel from time to
time adjusts its prices. Cracker Barrel decreased its menu prices
approximately 1% in September 1998 and 3% in March 1999. The price
decreases were intended to improve guests' price-to-value perception
of Cracker Barrel and to increase frequency of visits over time.
The retail area of the stores, which generated approximately 24% of
Cracker Barrel's total revenue in fiscal 1999, offer a wide variety
of decorative and functional items such as of hand-blown glassware,
cast iron cookware, old-fashioned crockery, handcrafted figurines,
classic children's toys and various other gift items, as well as
various candies, preserves, smoked sausage, syrups and other
foodstuffs. Many of the candy items, smoked bacon, jellies and jams
along with other high quality products are sold under the "Cracker
Barrel Old Country Store" brand name.
Product Development and Merchandising: Cracker Barrel maintains a
product development department, which develops new and improved menu
items in response to shifts in customer preferences. Cracker Barrel
merchandising specialists are involved on a continuing basis in
selecting and positioning of merchandise in the retail shop.
Management believes that Cracker Barrel has adequate flexibility to
meet future shifts in consumer preference on a timely basis.
Store Management: Store management typically consists of a general
manager, four associate managers and a retail manager who are
responsible for approximately 100 employees on two shifts. The
relative complexity of operating a Cracker Barrel Old Country Store
requires an effective management team at the individual store level.
As a motivation to store managers to improve sales and operational
efficiency, Cracker Barrel has a bonus plan designed to provide
store management with an opportunity to share in the pre-tax profits
of their store. Starting in fiscal 2000, Cracker Barrel implemented
a supplemental bonus plan, providing managers an opportunity to earn
an additional bonus based on achieving specific operational targets.
Cracker Barrel also offers managers and hourly employees stock
options based on their position. To assure that individual stores
are operated at a high level of quality, Cracker Barrel emphasizes
the selection and training of store managers and employs District
Managers to support individual store managers and Regional Vice
Presidents to support individual District Managers. The District
Managers individual span of control is eight to ten individual
restaurants, and Regional Vice Presidents support eight to ten
District Managers.
At all employment levels, Cracker Barrel hires and promotes men and
women solely on the basis of their qualifications, experience and
performance capabilities. Cracker Barrel complies with all
applicable local, state and federal employment laws and applies equal
opportunity hiring policies. In fact, Cracker Barrel seeks to hire
the broadest range of qualified and capable individuals for all
positions within Cracker Barrel, and to welcome all persons as guests
of its stores.
The store management recruiting and training program begins with an
evaluation and screening process. In addition to multiple interviews
and background and experience verification, Cracker Barrel conducts
testing which is intended to identify those applicants most likely to
be best suited to manage store operations. Those candidates who
successfully pass this screening process are then required to
complete an 11-week training program consisting of eight weeks of in-
store training and three weeks of training at Cracker Barrel's
corporate facilities. This program allows new managers the
opportunity to become familiar with Cracker Barrel's operations,
management objectives, controls and evaluation criteria before
assuming management responsibility.
Purchasing and Distribution: Cracker Barrel negotiates directly with
food vendors as to price and other material terms of most food
purchases. Cracker Barrel purchases the majority of its food
products and restaurant supplies on a cost-plus basis through an
unaffiliated distributor with custom distribution centers in Lebanon,
Tennessee; Dallas, Texas; Gainesville, Florida; and Belcamp,
Maryland. The distributor is responsible for placing food orders and
warehousing and delivering food products to the Company's stores.
Deliveries are generally made once per week to the individual stores.
Certain perishable food items are purchased locally by Cracker Barrel
stores.
On January 10, 1997, Cracker Barrel signed a new agreement with the
food distributor which became effective February 1, 1997. This
agreement, characterized as a "Prime Vendor Contract", outlined the
relationship between Cracker Barrel and the distributor and is
considered a mutual agreement between both parties that will permit
a profitable relationship. The contract will remain in effect until
both parties mutually modify it in writing or until terminated by
either Cracker Barrel or the distributor upon 180 days written notice
to the other party.
Three food categories (pork, beef and poultry) account for the
largest shares of Cracker Barrel's food purchasing expense at
approximately 12% each. The single food item within these categories
accounting for the largest share of Cracker Barrel's food purchasing
expense is chicken tenderloin. Cracker Barrel presently purchases
its pork through eight vendors, beef through seven vendors and
poultry through seven vendors. Cracker Barrel purchases its chicken
tenderloin through five vendors. Should any food items from these
vendors become unavailable for any reason, management is of the
opinion that these food items could be obtained in sufficient
quantities from other sources at competitive prices.
The majority of retail items are purchased directly by Cracker
Barrel, warehoused at its Lebanon distribution center and shipped to
the stores. On December 20, 1996, Cracker Barrel signed a dedicated
carriage agreement with an unaffiliated transportation company for
the transportation of retail merchandise from the Cracker Barrel
distribution center throughout the contiguous 48 states. This
agreement, which is for a period of 48 months, sets forth the
relationship between the respective companies and is structured to
facilitate the growth of Cracker Barrel's retail business over the
term of the agreement. The transportation company or Cracker Barrel
may terminate the agreement on any annual anniversary date by giving
the other party 60 days prior written notice. Certain retail items
are drop-shipped directly from Cracker Barrel's vendors to its
stores.
Quality, Cost and Inventory Controls: Costs are closely monitored by
management to determine if any material variances in food costs or
operating expenses have occurred. Management monitors individual
store sales daily. Cracker Barrel's computer systems are used to
analyze store operating information by providing management reports
for continual monitoring of sales mix and detailed operational cost
data as well as information on sales trends and inventory levels to
facilitate retail purchasing decisions. These systems are also used
in the development of budget analyses and planning.
<PAGE>
Customer Satisfaction: Cracker Barrel is committed to providing its
customers a country-cooked meal, served with genuine hospitality in
a comfortable environment, in a way that evokes memories of the past.
Cracker Barrel is also committed to staffing each store with an
experienced management team to ensure attentive customer service and
consistent food quality. Through the regular use of customer surveys
and store visits by its District Managers and Regional Vice
Presidents, management receives valuable feedback, which it uses to
improve the stores and to demonstrate Cracker Barrel's continuing
commitment to pleasing its guests.
Marketing: New store locations generally are not advertised in the
media until several weeks after they have been opened in order to
give the staff time to adjust to local customer habits and traffic
volume. To effectively reach consumers in the primary trade area for
each Cracker Barrel store and also interstate travelers and tourists,
outdoor advertising is the primary advertising media utilized,
accounting for approximately 40% of advertising expenditures in
fiscal 1999. During the past few years Cracker Barrel has utilized
various types of media, such as television, radio and print, in its
core markets to maintain customer awareness, and outside of its core
markets to increase name awareness and to build brand loyalty.
Cracker Barrel defines its core market based on geographic location,
longevity in the market and name awareness in the market. However,
Cracker Barrel has changed its advertising strategy for fiscal 2000
to reduce overall advertising spending as a percentage of net sales
and to reallocate a portion of the advertising dollars previously
spent on television, radio and print media to other marketing
programs. Cracker Barrel will decrease its overall advertising budget
from 2.8% of Cracker Barrel's net sales in fiscal 1999 to 2.4% of
Cracker Barrel's net sales in fiscal 2000. Outdoor advertising
should represent approximately 50% of advertising expenditures in
fiscal 2000 as it has in fiscal years prior to 1999. Cracker Barrel
also plans to renew efforts with its frequency-based Cracker Barrel
Old Country Store Neighborhood(R) program. The program now has over
1.6 million neighbors enrolled with representation from all 50
states. The program is designed to enable Cracker Barrel to have
frequent, personal and direct two-way communication with both local
and traveling guests on a "one-on-one" basis. Cracker Barrel hopes
to develop personal relationships in order to tailor its services to
better meet guests' needs.
Logan's Roadhouse
Store Format: Logan's Roadhouse restaurants are constructed of rough-
hewn cedar siding in combination with bands of corrugated metal
outlined in double-striped, red neon. Interiors are decorated with
hand-painted murals depicting scenes reminiscent of American
roadhouses of the 1940s and 1950s, concrete and wooden planked
floors, neon signs, and feature Wurlitzer(TM) Jukeboxes playing
contemporary country hits. The lively, country "honky-tonk"
atmosphere seeks to appeal to families, couples, single adults and
business persons. The restaurants also feature display cooking and
an old-fashioned meat counter displaying steaks, ribs, seafood and
salads, and include a spacious, comfortable bar area. While dining
or waiting for a table, guests may eat complimentary roasted in-shell
peanuts and toss the shells on the floor, and watch as cooks prepare
steaks and other entrees on gas-fired mesquite grills.
Products: Logan's restaurants offer a wide variety of items designed
to appeal to a broad range of consumer tastes. Specialty appetizers
include Logan's fried green tomatoes, hot wings Roadhouse style, baby
back ribs basket and Roadhouse nachos. Logan's dinner menu features
an assortment of specially seasoned USDA choice steaks, extra-aged,
and cut by hand on premises. Guests may also choose from baby back
ribs, seafood, mesquite grilled shrimp, mesquite grilled pork chops,
grilled and barbecue chicken and an assortment of hamburgers, salads
and sandwiches. All dinner entrees include dinner salad, made-from-
scratch yeast rolls and a choice of brown sugar and cinnamon sweet
potato, baked potato, fries or rice pilaf at no additional cost.
Logan's express lunch menu provides specially priced items guaranteed
to be served in less than 15 minutes. All lunch salads are served
with made-from-scratch yeast rolls, and all lunch sandwiches are
served with home-style potato chips at no additional cost. Prices
range from $4.59 to $8.29 for lunch items and from $7.99 to $17.99
for dinner entrees. The average check per customer for fiscal 1999
was $11.05. Logan's adjusts its prices from time to time and
increased menu prices approximately 2% in October 1998.
Product Development and Merchandising: Logan's strives to obtain
consistent quality items at competitive prices from reliable sources.
Logan's tests various new products in an effort to obtain the highest
quality products possible and to be responsive to changing customer
tastes. In order to maximize operating efficiencies and to provide
the freshest ingredients for its food products, purchasing decisions
are made by Logan's corporate management. Management believes that
Logan's has adequate flexibility to meet future shifts in consumer
preference on a timely basis.
Store Management: Store management typically consists of a general
manager, one kitchen manager and four assistant managers who are
responsible for approximately 100 hourly employees. The general
manager of each restaurant is responsible for the day-to-day
operations of the restaurant, including maintaining the standards of
quality and performance established by Logan's corporate management.
Management believes that guests benefit from the attentive service
and high quality food, which results from having six managers in
every restaurant. Logan's generally seeks as managers for each
restaurant, two non-management employees promoted into management
positions who therefore fully understand the Logan's Roadhouse
concept, and four managers with high levels of previous management
experience. To assure that individual restaurants are operated at a
high level of quality, Logan's has Regional Managers to support
individual store managers and a Director of Operations and a Vice
President of Operations to support individual Regional Managers. Each
Regional Manager supports 4 to 5 individual restaurants. Through
regular visits to the restaurants, the Director of Operations and the
Regional Managers ensure that the Logan's concept, strategy and
standards of quality are being adhered to in all aspects of
restaurant operations.
Logan's is an equal opportunity employer and seeks to attract and
retain high quality managers and hourly employees by providing them
with attractive financial incentives and flexible working schedules.
Financial incentives provided to attract high quality managers
include competitive salaries and bonuses based on position, seniority
and performance criteria. Logan's cash bonus program is tied to
established performance goals on a restaurant-by-restaurant basis for
each restaurant's management team. Management believes that Logan's
attracts qualified managers by providing a better overall quality of
life characterized by a five-day work schedule involving fewer hours
than are typically required by managers in the restaurant industry.
Management believes that Logan's attracts high quality hourly
employees by providing a casual, high energy and fun atmosphere in
which to work.
Logan's requires that its restaurant managers have significant
experience in the full-service restaurant industry. All new managers
are required to complete a comprehensive ten-week training course
conducted at a Logan's Roadhouse restaurant, emphasizing the Logan's
operating strategy, procedures and standards and is conducted at a
Logan's Roadhouse restaurant.
Purchasing and Distribution: Logan's negotiates directly with food
vendors as to price and other material terms of most food purchases.
Logan's purchases the majority of its food products and restaurant
supplies on a cost-plus basis through the same unaffiliated
distributor as is used by cracker Barrel. The distributor is
responsible for placing food orders and warehousing and delivering
food products for Logan's restaurants. Certain perishable food items
are purchased locally by the restaurants.
The single food category accounting for the largest share
(approximately 38%) of Logan's food purchasing expense is beef. Each
Logan's restaurant employs a butcher who hand-cuts beef on premises.
Logan's presently purchases its beef through three vendors. Should
any beef items from these vendors become unavailable for any reason,
management believes that such items could be obtained in sufficient
quantities from other sources at competitive prices.
Quality, Cost and Inventory Controls: Management closely monitors
sales, product costs and labor at each of its restaurants. Weekly
restaurant operating results are analyzed by management to detect
trends at each location, and negative trends are promptly remedied
where possible. Financial controls are maintained through management
of an accounting and information management system that is
implemented at the restaurant level. Administrative and management
staff prepare daily reports of sales, labor and customer counts. On
a weekly basis, condensed operating statements are compiled by the
accounting department and provide management a detailed analysis of
sales, product and labor costs, with a comparison to budget and prior
period performance. These systems are also used in the development of
budget analyses and planning.
Customer Satisfaction: Logan's is committed to providing its
customers prompt, friendly, efficient service, keeping table-to-
server ratios low and staffing each restaurant with an experienced
management team to ensure attentive customer service and consistent
food quality. Through the regular use of customer surveys and an
independently run "mystery shoppers" program, management receives
valuable feedback, which it uses to improve restaurants and
demonstrate a continuing interest in customer satisfaction.
Marketing: Logan's employs an advertising and marketing strategy
designed to establish and maintain a high level of name recognition
and to attract new customers. Logan's primarily uses radio and
outdoor advertising in selected markets. Management's goal is to
develop a sufficient number of restaurants in certain markets to
permit the cost-efficient use of television, radio and outdoor
advertising. Logan's currently spends approximately 1.5% of its net
sales on advertising. Logan's also engages in a variety of
promotional activities, such as contributing time, money and
complimentary meals to charitable, civic and cultural programs, in
order to increase public awareness of Logan's Roadhouse restaurants.
Logan's also has numerous tie-ins with the Tennessee Titans,
Nashville NFL team, such as two concession facilities inside Adelphia
Coliseum named "Logan's Landings" and various promotions during and
around the games.
Franchising: Prior to the Company acquiring Logan's Roadhouse, Inc.,
Logan's entered into three Area Development Agreements ("Area
Developers") and accompanying Franchise Agreements ("Franchisees").
CMAC Incorporated ("CMAC") and L.G. Enterprises, Inc. ("LG") are the
only current Area Developers. CMAC's Area Development Agreement
provides for it to develop a specified number of Logan's Roadhouse
restaurants in the states of North Carolina and South Carolina, as
well as Augusta, Georgia. LG's Area Development Agreement provides
for it to develop a specified number of Logan's Roadhouse restaurants
in certain counties of northern California, southern Oregon and Reno,
Nevada.
The Area Development Agreements require the Area Developers to locate
sites and to develop a specified number of Logan's Roadhouse
restaurants within specified geographic areas. The Area Developer
enters into individual franchise agreements for each Logan's
Roadhouse restaurant that it develops. Franchisees and their
principals may not own, operate or assist other restaurants with
menus or methods of operation similar to those of Logan's Roadhouse
restaurants within their Development Area. Logan's has the right to
purchase all of the outstanding stock of CMAC and LG beginning in
April 2002, and January 2004, respectively, upon the occurrence of
specified events.
The Franchisees pay an initial $30,000 non-refundable franchise fee
and a monthly royalty fee of 3.0% of gross sales. Logan's currently
requires CMAC and LG to contribute 0.5% of gross sales to Logan's
general advertising account and may require the Franchisees to
contribute up to 1.0%. In fiscal 1999, total royalty and franchise
fees paid to Logan's were approximately $285,000.
As of October 29, 1999, CMAC operates Logan's Roadhouse restaurants
in Augusta, Georgia, Fayetteville and Jacksonville, North Carolina
and Greenville and North Myrtle Beach, South Carolina. LG opened its
first Logan's Roadhouse restaurant in Redding, California in May
1999.
Management is not considering any other future franchising
opportunities beyond the current Development Agreements with CMAC and
LG.
EXPANSION
The Company opened the following 40 new Cracker Barrel stores in
fiscal 1999:
Interstate 10 (1) Kerrville, Texas
Interstate 16 (1) Dublin, Georgia
Interstate 20 (1) Tyler, Texas
Interstate 24 (2) Cadiz, Kentucky; Smyrna, Tennessee
Interstate 30 (1) Arkadelphia, Arkansas
Interstate 40 (1) Kingman, Arizona
Interstate 49 (1) Alexandria, Louisiana
Interstate 55 (2) Lincoln, Illinois; Brookhaven, Mississippi
Interstate 57 (1) Mattoon, Illinois
Interstate 59 (1) Bessemer, Alabama
Interstate 64 (1) Shelbyville, Kentucky
Interstate 65 (3) Sellersburg, Indiana; Cave City and
Louisville, Kentucky
Interstate 69 (1) Marion, Indiana
Interstate 70 (2) Junction City, Kansas; Washington,
Pennsylvania
Interstate 74 (1) Shelbyville, Indiana
Interstate 75 (2) Pembroke Pines, Florida; Piqua, Ohio
Interstate 78 (1) Clinton, New Jersey
Interstate 80 (1) West Omaha, Nebraska
Interstate 81 (4) Binghampton, New York; Carlisle and
Frackville,
Pennsylvania; Morristown, Tennessee
Interstate 84 (1) Fishkill, New York
Interstate 87 (1) Clifton Park, New York
Interstate 90 (2) Missoula, Montana; Sheffield, Ohio
Interstate 91 (1) Holyoke, Massachusetts
Interstate 135 (1) Wichita, Kansas
Interstate 390 (1) Rochester, New York
Interstate 495 (1) Tewksbury, Massachusetts
Interstate 575 (1) Canton, Georgia
New Jersey Tpk (1) Westampton, New Jersey
Off Interstate (2) Springdale, Arkansas; Owensboro, Kentucky
The Company plans to open 30 new Cracker Barrel stores during fiscal
2000, of which the following 13 of those stores are already open:
Interstate 26 (1) Orangeburg, South Carolina
Interstate 29 (1) Sioux Falls, South Dakota
Interstate 64 (1) Corydon, Indiana
Interstate 75 (1) Calhoun, Georgia
Interstate 76 (1) Rootstown, Ohio
Interstate 80 (2) Ottowa, Illinois; Bloomburg, Pennsylvania
Interstate 91 (1) East Windsow, Connecticut
Interstate 94 (2) Lake Delton, Wisconsin; Bismark, North Dakota
Interstate 95 (1) Walterboro, South Carolina
Off Interstate (2) Kokomo, Indiana; Tupelo, Mississippi
The Company opened 12 new Logan's restaurants in fiscal 1999
subsequent to acquiring Logan's on February 16, 1999. The openings
were as follows:
Texas (6) Amarillo, El Paso, Houston, Lewisville, Lubbock and Odessa
Florida (3) Orlando, Sanford, and Tampa
Georgia (1) Snellville
Ohio (1) Columbus
Virginia (1) Manassas
The Company plans to open 12 new Logan's restaurants during fiscal
2000, of which the following four restaurants are already open:
Michigan (2) Roseville and Shelby Township
Texas (2) Grapevine and San Antonio
Prior to committing to a new location, the Company performs extensive
reviews of various available sites, gathering approximate cost,
demographic and traffic data. This information is analyzed by a model
to help with the decision on building a store. The Company utilizes
in-house engineers to consult on architectural plans, to develop
engineering plans and to oversee new construction. The Company is
currently engaged in the process of seeking and selecting new sites,
negotiating purchase or lease terms and developing chosen sites.
It has traditionally been the Company's preference to own its store
properties. Of the 409 Cracker Barrel stores open as of October 29,
1999, the Company owns 384, while the other 25 properties are either
ground leases or ground and building leases. Currently, the average
cost for a new Cracker Barrel store is approximately $1,225,000 for
land and sitework, $900,000 for building, and $575,000 for equipment.
The current Cracker Barrel store size is approximately 10,000 square
feet with 184 seats in the restaurant.
Of the 64 Logan's stores open as of October 29, 1999, 6 are
franchised stores. Of the remaining 58 Logan's stores, the Company
owns 37, while the other 21 properties are ground leases. Currently,
the average cost for a new Logan's store is approximately $1,235,000
for land and sitework, $975,000 for building, and $440,000 for
equipment. The current Logan's store size is approximately 7,800
square feet with 290 seats in the restaurant, including 45 seats in
the bar area.
EMPLOYEES
As of July 30, 1999, CBRL Group, Inc. employed 16 people, of whom 8
were in advisory and supervisory capacities, and 4 were officers of
the Company. Cracker Barrel employed 43,817 people, of whom 385 were
in advisory and supervisory capacities, 2,377 were in store
management positions and 29 were officers. Logan's employed 5,350
people, of whom 25 were in advisory and supervisory capacities, 308
were in store management positions and 5 were officers. Carmine's
employed 131 people, of whom 4 were in advisory and supervisory
capacities, 8 were in store management and 1 was an officer. Many of
the restaurant personnel are employed on a part-time basis. Cracker
Barrel has an advancement, training and incentive plan for its hourly
employees which is intended to decrease turnover and to increase
productivity by providing a defined career path through testing and
ranking of employees. At all employment levels, the Company hires and
promotes men and women solely on the basis of their qualifications,
experience and performance capabilities. The Company complies with
all applicable local, state and federal employment laws and applies
equal opportunity hiring policies. In fact, the Company seeks to
hire the broadest range of qualified and capable individuals for all
positions within the Company, and to welcome all persons as guests of
its stores. The Company's employees are not represented by any
union, and management considers its employee relations to be good.
COMPETITION
The restaurant business is highly competitive and often is affected
by changes in the taste and eating habits of the public, local and
national economic conditions affecting spending habits, and
population and traffic patterns. Restaurant industry segments overlap
and often provide competition for widely diverse restaurant concepts.
In exceptionally good economic times, consumers can be expected to
patronize a broader range of restaurants and the breadth of
competition at different restaurant segments is likewise increased.
The principal basis of competition in the industry is the quality and
price of the food products offered. Site selection, quality and speed
of service, advertising and the attractiveness of facilities are also
important.
There are many restaurant companies catering to the public, including
several franchised operations, a number of which are substantially
larger and have greater financial and marketing resources than those
of the Company and which compete directly and indirectly in all areas
in which the Company operates.
TRADEMARKS
Cracker Barrel owns certain registered copyrights and trademarks
relating to the name "Cracker Barrel Old Country Store", as well as
its logo, menus, designs of buildings, general trade dress and other
aspects of operations. Logan's owns or has applied for certain
registered copyrights and trademarks relating to the name "Logan's
Roadhouse", as well as its logo, menus, designs of buildings, general
trade dress and other aspects of operations. Carmine's has pending
trademark registration relating to the name "Carmine Giardini" and
"Carmine Giardini's Gourmet Market and La Trattoria Ristorante". The
Company believes that the use of these names have some value in
maintaining the atmosphere and public acceptance of its mode of
operations. The Company's policy is to pursue registration of its
copyrights and trademarks whenever possible and to oppose vigorously
any infringement of its copyrights and trademarks.
RESEARCH AND DEVELOPMENT
While research and development are important to the Company, these
expenditures have not been material.
SEASONAL ASPECTS
Historically the profits of the Company have been lower in the second
fiscal quarter than in the first and third fiscal quarters and
highest in the fourth fiscal quarter. Management attributes these
variations primarily to the decrease in interstate tourist traffic
during the winter months and the increase in interstate tourist
traffic during the summer months.
SEGMENT REPORTING
The Company has one reportable segment. See Note 2 to the Company's
1999 Annual Report to Shareholders for more information on segment
reporting.
WORKING CAPITAL
In the restaurant industry, substantially all sales are either for
cash or credit card. Like most other restaurant companies, the
Company is able to, and may from time to time, operate with negative
working capital. Restaurant inventories purchased through the food
distributor are now on terms of net zero days, while restaurant
inventories purchased locally are generally financed from normal
trade credit. Retail inventories purchased domestically are
generally financed from normal trade credit, while imported retail
inventories are generally purchased through letters of credit. These
various trade terms are aided by rapid turnover of the restaurant
inventory.
COMPLIANCE WITH GOVERNMENT REGULATIONS
The Company is subject to a variety of federal, state and local laws.
Each of the Company's restaurants is subject to permitting, licensing
and regulation by a number of government authorities, including
health, safety, sanitation, building and fire agencies in the state
or municipality in which the restaurant is located. Each of the
Company's Logan's and Carmine's locations is also subject to
permitting, licensing and regulation by a number of government
authorities for alcoholic beverage control. Difficulties in
obtaining or failure to obtain required licenses or approvals could
delay or prevent the development of a new restaurant in a particular
area or close an existing restaurant for a period of time.
Approximately 11% of Logan's total revenue and 10% of Carmine's total
revenue were attributable to the sale of alcoholic beverages in
fiscal 1999. Alcoholic beverage control regulations require each of
the Company's Logan's Roadhouse restaurants and Carmine Giardini's
Gourmet Market and La Trattoria Ristorante locations to apply to a
state authority and, in certain locations, county or municipal
authorities for a license or permit to sell alcoholic beverages on
the premises. Typically, licenses must be renewed annually and may be
revoked or suspended for cause at any time. Alcoholic beverage
control regulations relate to numerous aspects of operations,
including minimum age of patrons and employees, hours of operation,
advertising, wholesale purchasing, inventory control and handling,
storage and dispensing of alcoholic beverages.
The failure of an individual location to obtain or retain liquor or
food service licenses would have a material adverse effect on the
location's operations. To reduce this risk, each Company restaurant
is operated in accordance with procedures intended to assure
compliance with applicable codes and regulations.
The Company is subject in certain states to "dram shop" statutes,
which generally provide a person injured by an intoxicated person the
right to recover damages from an establishment that wrongfully served
alcoholic beverages to the intoxicated person. Logan's and Carmine's
each carry liquor liability insurance coverage, and the Company
carries umbrella liability coverage. Management believes that the
Company is adequately insured.
The Company's operations are also subject to federal and state laws
governing such matters as the minimum hourly wage, unemployment tax
rates, sales tax and similar matters over which the Company has no
control. Significant numbers of the Company's service, food
preparation and other personnel are paid at rates indirectly related
to the federal minimum wage, and increases in the minimum wage could
increase the Company's labor costs.
The development and construction of additional locations also are
subject to compliance with applicable zoning, land use and
environmental laws and regulations.
Compliance with federal, state and local regulations should have no
material effect upon capital expenditures, earnings, or the
competitive position of the Company.
ITEM 2. PROPERTIES
The Company's corporate headquarters are presently located on
approximately 10 acres of land owned by the Company in Lebanon,
Tennessee. The Company utilizes 10,000 square feet of office space
for its corporate headquarters. Management believes that the current
amount of office space is sufficient to meet the Company's needs for
corporate office space through fiscal 2000.
The Cracker Barrel Old Country Store, Inc. corporate headquarters and
warehouse facilities are presently located on approximately 120 acres
of land owned by the Cracker Barrel Old Country Store, Inc. in
Lebanon, Tennessee. Cracker Barrel utilizes approximately 110,000
square feet of office space and 400,000 square feet of warehouse
facilities. Cracker Barrel management believes that the current
amount of office and warehouse space is sufficient to meet the
Company's needs through fiscal 2000.
The Logan's Roadhouse, Inc. corporate headquarters are presently
located in approximately 11,000 square feet of space in Nashville,
Tennessee, under a lease expiring on October 31, 1999 that will be
extended until March 1, 2000. Logan's intends to enter into a new
lease for 16,000 square feet of space in a different area of
Nashville, Tennessee, subject to a 10-year lease term. Logan's
management believes that the rent payable for either of these
premises does not exceed the fair market value of comparable
properties. Management believes this new lease is adequate for
Logan's current uses and anticipated growth through fiscal 2000.
The CPM Merger Corporation (Carmine Giardini's Gourmet Market and La
Trattoria Ristorante) corporate headquarters are presently located in
approximately 3,000 square feet of space in Palm Beach Gardens,
Florida, under a lease expiring on December 31, 2003 with two 5-year
renewal terms. Carmine Giardini's management believes that the rent
payable for either of these spaces does not exceed the fair market
value of comparable properties. Management believes this lease is
adequate for Carmine Giardini's current uses and anticipated growth
through fiscal 2000.
Cracker Barrel Old Country Store, Inc. opened a retail outlet store,
named the "Back Porch", in Lebanon, Tennessee in September 1998 to
sell out-of-season, slow-moving and discontinued merchandise. This
property is owned by Cracker Barrel Old Country Store, Inc.
Cracker Barrel Old Country Store, Inc. opened a retail-only mall
store, named "The Store," in a regional mall in Nashville, Tennessee
in July 1999 to test this growth opportunity to leverage the Cracker
Barrel's merchandising and logistical expertise. The retail-only
mall store is leased.
In addition to the various corporate facilities, Cracker
Barrel's outlet and retail-only mall stores and Carmine Giardini's
two gourmet markets and restaurant in Florida, the Company owns or
leases the following Cracker Barrel and Logan's store properties as
of October 29, 1999:
State Cracker Barrel Logan's Combined
Owned Leased Owned Leased Owned Leased
Tennessee 31 5 8 5 39 10
Florida 33 - 4 1 37 1
Texas 25 - 4 4 29 4
Georgia 24 2 5 1 29 3
Indiana 21 - 3 1 24 1
Ohio 20 3 1 - 21 3
Kentucky 17 2 1 3 18 5
Illinois 21 1 - - 21 1
Alabama 15 1 3 2 18 3
North Carolina 20 1 - - 20 1
Virginia 14 - 4 - 18 -
Michigan 14 - 1 1 15 1
Louisiana 9 - 3 2 12 2
South Carolina 12 2 - - 12 2
Missouri 13 - - - 13 -
Pennsylvania 11 1 - - 11 1
Mississippi 9 1 - - 9 1
New York 8 2 - - 8 2
Arizona 9 - - - 9 -
West Virginia 7 - - 1 7 1
Arkansas 6 1 - - 6 1
Kansas 6 - - - 6 -
Oklahoma 5 - - - 5 -
Wisconsin 5 - - - 5 -
Colorado 4 - - - 4 -
Iowa 3 - - - 3 -
Minnesota 3 - - - 3 -
New Jersey 2 1 - - 2 1
New Mexico 2 1 - - 2 1
Utah 3 - - - 3 -
Connecticut 2 1 - - 1 1
Maryland 2 - - - 2 -
Massachusetts 2 - - - 2 -
Montana 2 - - - 2 -
Nebraska 2 - - - 2 -
Idaho 1 - - - 1 -
North Dakota 1 - - - 1 -
South Dakota 1 - - - 1 -
Total 384 25 37 21 421 46
See "Business-Operations" and "Business-Expansion" for additional
information on the Company's stores.
ITEM 3. LEGAL PROCEEDINGS
The Company's Cracker Barrel Old Country Store, Inc. subsidiary is
involved in two lawsuits, which are not ordinary routine litigation
incidental to its business. Serena McDermott and Jennifer Gentry v.
Cracker Barrel Old Country Store, Inc., No. 4:99-CV-001-HLM was filed
as a collective action under the federal Fair Labor Standards Act and
was served on Cracker Barrel on May 3, 1999. Kelvis Rhodes, Maria
Stokes et al. v. Cracker Barrel Old Country Store, Inc., No. 4:99-CV-
217-HLM was filed under Title VII of the Civil Rights Act of 1964 and
Section 1 of the Civil Rights Act of 1866 and was served on Cracker
Barrel on September 15, 1999. Both cases were filed in the U.S.
District Court for the Northern District of Georgia, Rome Division.
The McDermott case is styled a collective action and alleges that
certain tipped hourly employees were required to perform non-serving
duties without being paid the minimum wage or overtime compensation
for that work. The McDermott case seeks recovery of unpaid wages and
overtime wages related to those claims. The Rhodes case seeks
certification as a class action, a declaratory judgment to redress an
alleged systemic pattern and practice of racial discrimination in
employment opportunities, an order to effect certain hiring and
promotion goals and back pay and other monetary damages. Cracker
Barrel Old Country Store, Inc. does not believe the claims in either
case have substantial merit, and it is defending each of these cases
vigorously. Because each of these cases was so recently served on
Cracker Barrel Old Country Store, Inc., and because it is so early in
the litigation process in each case, neither the Company, nor its
subsidiary, can reasonably estimate the likely results of either
lawsuit or the economic effects of the litigation on the Company.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable.
Pursuant to Instruction 3 to Item 401(b) of Regulation S-K and
General Instruction G(3) to Form 10-K, the following information is
included in Part I of this Form 10-K.
Executive Officers of the Registrant
The following table sets forth certain information concerning
the executive officers of the Company, and a subsidiary, as of
September 24, 1999:
Name Age Position with Registrant
Dan W. Evins 64 Chairman of the Board
& Chief Executive Officer
Michael A. Woodhouse 54 Executive Vice President
& Chief Operating Officer
Lawrence E. White 49 Senior Vice President, Finance
& Chief Financial Officer
Richard K. Arras 48 President and Chief Operating
Officer, Cracker Barrel Old
Country Store, Inc.
James F. Blackstock 52 Vice President, General Counsel
and Secretary
The following background material is provided for those executive
officers who have been employed by the Registrant for less than five
years:
Prior to his employment with the Company in January 1999, Mr. Evins
was Chairman of the Board and Chief Executive Officer of Cracker
Barrel Old Country Store, Inc. since its founding in 1969.
Prior to his employment with the Company in January 1999, Mr.
Woodhouse was Senior Vice President of Finance and Chief Financial
Officer of Cracker Barrel Old Country Store, Inc. since December
1995. Prior to December 1995, Mr. Woodhouse was Senior Vice
President and Chief Financial Officer of Daka International, Inc.
from 1993 to 1995. Mr. Woodhouse was Vice President and Chief
Financial Officer of Tia's Inc. from 1992 to 1993. Prior to 1992 he
was Executive Vice President and Chief Financial Officer of
Metromedia Steakhouses, Inc.
Prior to his employment with the Company in September 1999, Mr. White
was Executive Vice President and Chief Financial Officer of Boston
Chicken, Inc. from 1998 to 1999. Mr. White was Executive Vice
President and Chief Financial Officer of El Chico Restaurants, Inc.
from 1992 to 1998. Prior to his employment with El Chico
Restaurants, Inc., Mr. White was Senior Vice President and Treasurer
of Metromedia Steakhouses, Inc. and Treasurer of TGI Friday's, Inc.
Prior to his employment with the Company in January 1999, Mr.
Blackstock was Vice President, General Counsel and Secretary of
Cracker Barrel Old Country Store, Inc. since June 1997. Prior to
June 1997, Mr. Blackstock was with Travel Centers of America, Inc.
from 1993 to 1997 serving as Vice President, General Counsel and
Secretary. Prior to 1993, Mr. Blackstock practiced law in Los
Angeles, California as a principal in the firm of James F.
Blackstock, Professional Law Corporation.
Prior to his employment with Cracker Barrel Old Country Store, Inc.
in September 1999, Mr. Arras had served as President and Chief
Operating Officer of Perkins Family Restaurants since 1988.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
SHAREHOLDER MATTERS
Since the initial public offering of the Company's Common Stock in
November 1981, the Company's Common Stock has been traded on The
Nasdaq Stock Market (National Market System) with the symbol CBRL.
There were 18,769 shareholders of record as of September 24, 1999.
The following table indicates the high and low sales prices of the
Company's Common Stock as reported on The Nasdaq Stock Market
(National Market System) during the periods indicated.
Fiscal Year 1999 Prices Fiscal Year 1998 Prices
Quarter High Low High Low
First $30.50 $22.13 $33.13 $27.50
Second 27.88 20.13 35.63 29.19
Third 23.50 16.00 43.00 34.19
Fourth 20.50 14.81 36.38 26.00
In September 1983, the Board of Directors of the Company initiated a
policy of declaring dividends on a quarterly basis. Prior to that
date, the Board followed a policy of declaring annual dividends
during the first fiscal quarter. Quarterly dividends of $.005 per
share were paid during all four quarters of fiscal 1998 and 1999.
The Company foresees paying comparable cash dividends per share in
the future.
Certain covenants relating to the 9.53% Senior Notes in the original
amount of $30,000,000 impose restrictions on the payment of cash
dividends and the purchase of treasury stock. Retained earnings not
restricted under the covenants were approximately $414,900,000 at
July 30, 1999.
ITEM 6. SELECTED FINANCIAL DATA
The table "Selected Financial Data" on page 17 of the Company's
Annual Report to Shareholders for the year ended July 30, 1999 (the
"1999 Annual Report") is incorporated herein by this reference.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
The following portions of the 1999 Annual Report are incorporated
herein by this reference:
Management's Discussion and Analysis of Financial Condition and
Results of Operations on pages 18 through 23.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
Interest Rate Risk. With certain instruments entered into for other
than trading purposes, the Company is subject to market risk exposure
related to changes in interest rates. As of October 29, 1999, the
Company has in place a $390 million bank credit facility, which
matures December 31, 2003. A portion of that facility, a $340
million revolver, bears interest at a percentage point spread from
LIBOR based on the Company's ratio of lease adjusted funded debt to
EBITDAR (earnings before interest expense, income taxes, depreciation
and amortization and rent expense), adjusted quarterly. As of July
30, 1999, the Company had $255 million outstanding under the revolver
at interest rates ranging from 6.07% to 6.33%. The remaining portion
of the bank credit facility is a $50 million 5-year term loan bearing
interest a base rate of 6.11% plus the Company's credit spread,
adjusted quarterly. As of July 30, 1999, the Company's interest rate
on the $50 million term loan was 7.11%. The Company's credit spread
on its bank credit facility increased by 25 basis points on August 2,
1999. The maturity payments for the Company's bank facility are as
follows: the $50 million term loan is due December 1, 2001 and any
amounts outstanding under the revolving credit facility (currently
$255 million) are due December 31, 2003. The weighted average
interest rates through the expected maturity dates for the Company's
term loan and revolving credit facility are 7.36% and 6.47%,
respectively, based on the Company's current credit spread of 1.25%.
The Company's senior notes payable, which had an outstanding balance
of $9.5 million at July 30, 1999, bear a fixed interest rate of
9.53%, and mature as follows: $2.5 million on January 15, 2000, $3
million on January 15, 2001, $2 million on January 15, 2002 and $2
million on January 15, 2003. While changes in LIBOR would affect the
cost of funds borrowed in the future, the Company believes that the
effect, if any, of reasonably possible near-term changes in interest
rates on the Company's consolidated financial position, results of
operations or cash flows would not be material. Based on discounted
cash flows of future payment streams, assuming rates equivalent to
the Company's incremental borrowing rate on similar liabilities, the
fair value of the $50 million term loan, the $255 million outstanding
under the revolving credit facility and the $9.5 million senior notes
approximates carrying value as of July 30, 1999.
Commodity Price Risk. Many of the food products purchased by the
Company are affected by commodity pricing and are, therefore, subject
to price volatility caused by weather, production problems, delivery
difficulties and other factors which are outside the control of the
Company and which are generally unpredictable. Three food categories
(beef, poultry and pork) account for the largest shares of the
Company's food purchases at approximately 12% each. Other items
affected by the commodities markets, such as dairy, produce and
coffee, may each account for as much as 10% of the Company's food
purchases. While the Company has some of its food items prepared to
its specifications, the Company's food items are based on generally
available products, and if any existing suppliers fail, or are unable
to deliver in quantities required by the Company, the Company
believes that there are sufficient other quality suppliers in the
marketplace that its sources of supply can be replaced as necessary.
The Company also recognizes, however, that commodity pricing is
extremely volatile and can change unpredictably and over short
periods of time. Changes in commodity prices would affect the
Company and its competitors generally and often simultaneously. In
many cases, the Company believes it will be able to pass through any
increased commodity costs by adjusting its menu pricing. From time to
time, competitive circumstances may limit menu price flexibility, and
in those circumstances increases in commodity prices can result in
lower margins for the Company. The Company does not use financial
instruments to hedge commodity prices. However, the Company believes
that any changes in commodity pricing which cannot be adjusted for by
changes in menu pricing or other product delivery strategies, would
not be material.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The following portions of the 1999 Annual Report are incorporated
herein by this reference:
Consolidated Financial Statements and Independent Auditors' Report on
pages 24 through 35.
Quarterly Financial Data (Unaudited) on page 35.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE
None.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The information required by this item with respect to directors of
the Company is incorporated herein by this reference to the section
entitled "Election of Directors" in the Company's definitive proxy
statement for its 1999 Annual Meeting of Shareholders (the "1999
Proxy Statement"). The information required by this item with
respect to executive officers of the Company is set forth in Part I
of this Form 10-K.
ITEM 11. EXECUTIVE COMPENSATION
The information required by this item is incorporated herein by this
reference to the section entitled "Executive Compensation" in the
Company's 1999 Proxy Statement.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
The information required by this item is incorporated herein by this
reference to the section entitled "Security Ownership of Management"
in the Company's 1999 Proxy Statement.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information required by this item is incorporated herein by this
reference to the section entitled "Certain Relationships and Related
Transactions" in the Company's 1999 Proxy Statement.
PART IV
ITEM 14. EXHIBITS AND REPORTS ON FORM 8-K
A. List of documents filed as part of this report:
1. The following Financial Statements and the Report of Deloitte &
Touche LLP on pages 24 through 35 of the 1999 Annual Report are
incorporated herein by this reference:
Independent Auditors' Report dated September 8, 1999
Consolidated Balance Sheet as of July 30, 1999 and July 31, 1998
Consolidated Statement of Income for each of the three fiscal years
ended July 30, 1999, July 31, 1998 and August 1, 1997
Consolidated Statement of Changes in Shareholders' Equity for each of
the three fiscal years ended July 30, 1999, July 31, 1998 and August
1, 1997
Consolidated Statement of Cash Flows for each of the three fiscal
years ended July 30, 1999, July 31, 1998 and August 1, 1997
Notes to Consolidated Financial Statements
2. The exhibits listed in the accompanying Index to Exhibits on pages
15 & 16 are filed as part of this annual report.
B. Reports on Form 8-K:
The Company filed a Current Report on Form 8-K/A on June 25, 1999
pursuant to Item 7 of such form at the Company's option to provide
the audited consolidated financial statements of Logan's Roadhouse,
Inc. for fiscal years ended December 27, 1998 and December 28, 1997.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, Cracker Barrel Old Country Store,
Inc. has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
CBRL GROUP, INC.
By: /s/Dan W. Evins By:/s/Patrick A. Scruggs
Dan W. Evins Patrick A. Scruggs
CEO and Chairman of the Board Assistant Treasurer
(Principal Executive Officer) (Principal Accounting Officer)
By: /s/Lawrence E. White
Lawrence E. White
Senior Vice President, Finance
(Principal Financial Officer)
Date: October 25, 1999
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons on
behalf of the Company and in the capacities and on the dates
indicated.
/s/James C. Bradshaw, M.D. ___________________________
James C. Bradshaw, M.D., Director Charles T. Lowe, Jr., Director
________________________________ /s/B.F. Lowery
Robert V. Dale, Director B. F. Lowery, Director
/s/Dan W. Evins /s/Gordon L. Miller
Dan W. Evins, Director Gordon L. Miller, Director
/s/Edgar W. Evins ____________________________
Edgar W. Evins, Director Martha M. Mitchell, Director
/s/William D. Heydel ____________________________
William D. Heydel, Director Jimmie D. White, Director
________________________ /s/Michael A. Woodhouse
Robert C. Hilton, Director Michael A. Woodhouse, Director
________________________________
Charles E. Jones, Jr., Director
INDEX TO EXHIBITS
Exhibit
3(a) Charter (1)
3(b) Bylaws (1)
4(a) Note Agreement dated as of January 1, 1991, relating to
$30,000,000 of 9.53% Senior Notes (2)
4(b) Shareholder Rights Agreement dated 9/7/1999 (3)
10(a) Credit Agreement dated 2/16/1999, relating to the $50,000,000
Term Loan and the $300,000,000 Revolving Credit Facility
10(b) First Amendment to Credit Agreement dated 7/29/1999
10(c) Second Amendment to Credit Agreement dated 9/29/1999
10(d) Lease dated 8/27/1981 for lease of Clarksville, Tennessee, and
Macon, Georgia, stores between Cracker Barrel Old Country
Store, Inc. and B. F. Lowery, a director of the Company (4)
10(e) The Company's Incentive Stock Option Plan of 1982, as amended
(5)
10(f) The Company's 1987 Stock Option Plan, as amended (6)
10(g) The Company's Amended and Restated Stock Option Plan, as
amended
10(h) The Company's Non-Employee Director's Stock Option Plan, as
amended (7)
10(i) The Company's Non-Qualified Savings Plan, effective 1/1/1996,
as amended (6)
10(j) The Company's Deferred Compensation Plan, effective 1/1/1994
(6)
10(k) The Company's Executive Employment Agreement for Dan W. Evins
(5)
10(l) Executive Employment Agreement for Michael A. Woodhouse dated
11/15/1995 (8)
10(m) Executive Employment Agreement for Lawrence E. White dated
9/3/1999
10(n) Executive Employment Agreement for Richard K. Arras dated
9/16/1999
10(o) Change-in-control Agreement for Dan W. Evins dated 10/8/1999
10(p) Change-in-control Agreement for Michael A. Woodhouse dated
10/8/1999
10(q) Change-in-control Agreement for Lawrence E. White dated
10/8/1999
10(r) Change-in-control Agreement for Richard K. Arras dated
10/8/1999
10(s) Change-in-control Agreement for James F. Blackstock dated
10/8/1999
13 Pertinent portions, incorporated by reference herein, of the
Company's 1999 Annual Report to Shareholders
21 Subsidiaries of the Registrant
22 Definitive Proxy Materials
23 Consent of Deloitte & Touche LLP
27 Financial Data Schedule
<PAGE>
(1) Incorporated by reference to the Company's Registration Statement
on Form S-4/A under the Securities Act of 1933 (File No. 333-62469).
(2) Incorporated by reference to the Company's Registration Statement
on Form S-3 under the Securities Act of 1933 (File No. 33-38989).
(3) Incorporated by reference to the Company's Forms 8-K and 8-A
under the Securities Exchange Act of 1934, filed September 21, 1999
(File No. 000-25225).
(4) Incorporated by reference to the Company's Registration Statement
on Form S-7 under the Securities Act of 1933 (File No. 2-74266).
(5) Incorporated by reference to the Company's Annual Report on Form
10-K under the Securities Exchange Act of 1934 for the fiscal year
ended July 28, 1989 (File No. 0-7536).
(6) Incorporated by reference to the Company's Registration Statement
on Form S-8 under the Securities Act of 1933 (File No. 33-45482).
(7) Incorporated by reference to the Company's Annual Report on Form
10-K under the Securities Exchange Act of 1934 for the fiscal year
ended August 2, 1991 (File No. 0-7536).
(8) Incorporated by reference to Exhibit 10.3 to the Executive
Employment Agreement section, page 39 of the Company's Registration
Statement on Form S-4, Amendment No. 1, filed with the Commission on
October 5, 1998 (File No. 333-62469) 1998 Definitive Proxy materials.
Exhibit 10(a)
CREDIT AGREEMENT
Dated as of February 16, 1999
By and Among
CBRL GROUP, INC.
THE BANKS LISTED HEREIN
AND
SUNTRUST BANK, NASHVILLE, N.A.,
as Administrative Agent and as a Lender
(Wachovia Bank, N.A. as Syndication Agent)
SUNTRUST EQUITABLE SECURITIES CORPORATION
AS ARRANGER
<PAGE>
EXHIBITS
Exhibit A - Form of Revolving Credit Note
Exhibit B - Form of Term Note
Exhibit C - Form of Swing Line Note
Exhibit D - Form of Assignment and Acceptance Agreement
Exhibit E - Form of Notice of Borrowing
Exhibit F - Form of Notice of Swing Line Loan
Exhibit G - Form of Closing Certificate
Exhibit H - Form of Opinion of Corporate Counsel
Exhibit I - Form of Compliance Certificate
Exhibit J - Form of Subsidiary Guaranty
Exhibit K - Form of Continuation/Conversion Notice
SCHEDULES
Schedule 5.1.
Schedule 5.5.
Schedule 5.8.(a)
Schedule 5.8.(b)
Schedule 5.8.(c)
Schedule 5.11.
Schedule 5.13.
Schedule 5.15.
Schedule 5.16.
Schedule 5.17.
Schedule 5.18.
Schedule 5.20.
Schedule 5.21.
<PAGE>
CREDIT AGREEMENT
THIS CREDIT AGREEMENT is made and entered into as of this 16th day
of February, 1999 by and between CBRL GROUP, INC., a Tennessee
corporation (the "Borrower"), SUNTRUST BANK, NASHVILLE, N.A.
("SunTrust"), and such other banks and lending institutions are
referred to collectively as the "Lenders"), and SUNTRUST BANK,
NASHVILLE, N.A., in its capacity as agent for Lenders and each
successive agent for such Lenders as may be appointed from time to
time pursuant to Article 9. herein (the "Administrative Agent").
Wachovia Bank, N.A. shall serve as Syndication Agent.
RECITALS:
1. The Borrower desires that the Lenders extend the Borrower
credit pursuant to the terms of this Credit Agreement.
2. The Lenders are willing to extend the Borrower credit pursuant
to the terms and conditions contained herein.
NOW, THEREFORE, in consideration of the premises and for other
good and valuable consideration, the parties agree as follows:
ARTICLE 1. DEFINITIONS; CONSTRUCTION
Section 1.1 Definitions.
In addition to the other terms defined herein, the following terms
used herein shall have the meanings herein specified (to be
equally applicable to both the singular and plural forms of the
terms defined):
"Acquisition" means the acquisition by any Consolidated Company of
any of the following: (a) the controlling interest in any Person,
(b) a Consolidated Company, or (c) substantially all of the
Property of any Person.
"Adjusted LIBO Rate" shall mean with respect to each Interest
Period for a Eurodollar Advance, the rate obtained by dividing
(A) LIBO for such Interest Period by (B) a percentage equal to 1
minus the then stated maximum rate (stated as a decimal) of all
reserves requirements (including, without limitation, any
marginal, emergency, supplemental, special or other reserves)
applicable to any member bank of the Federal Reserve System in
respect of Eurocurrency liabilities as defined in Regulation D (or
against any successor category of liabilities as defined in
Regulation D).
"Administrative Agent" shall mean SunTrust, and any successor
Administrative Agent appointed pursuant to Section 9.9. hereof.
"Advance" shall mean any principal amount advanced and remaining
outstanding at any time under (i) the Revolving Loans, which
Advances shall be made or outstanding as Base Rate Advances or
Eurodollar Advances, as the case may be, (ii) the Swing Line Loan,
which Advances shall be made or outstanding as Base Rate Advances,
or (iii) the Term Loan, which Advance shall be made and
outstanding as Eurodollar Advances.
"Affiliate" of any Person means any other Person directly or
indirectly controlling, controlled by, or under common control
with, such Person, whether through the ownership of voting
securities, by contract or otherwise. For purposes of this
definition, "control" (including with correlative meanings, the
terms "controlling", "controlled by", and "under common control
with") as applied to any Person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the
management and policies of that Person.
"Agreement" shall mean this Credit Agreement, as hereafter
amended, restated, supplemented or otherwise modified from time to
time.
"Applicable Commitment Percentage" shall mean, for each Lender, a
fraction, the numerator of which shall be the amount of such
Lender's Commitment and the denominator of which shall be the
aggregate amount of the Commitments of all the Lenders, which
Applicable Commitment Percentage for each Lender as of the Closing
Date is as set forth on the signature pages hereof under the
caption "Applicable Commitment Percentage".
"Applicable Margin" shall mean the number of basis points per
annum determined in accordance with the table set forth below
based upon Borrower's Ratio of Total Funded Debt to Consolidated
EBITDA:
RATIO OF TOTAL FUNDED DEBT TO CONSOLIDATED EBITDA
TIER ONE TIER TWO TIER THREE TIER FOUR TIER FIVE
less than greater than greater than greater than greater
or equal to 0.625 but 1.00 but less 1.50 but less than
0.625 less than or than or equal than or equal 1.75
equal to 1.00 to 1.50 to 1.75
62.5 Basis 75.0 basis 100 basis 125 basis 150 basis
points per points per points per points per points per
annum annum annum annum annum
provided, however, that:
(a) The Applicable Margin in effect as of the date of execution and
delivery of this Agreement shall be the number of basis points
under the heading "Tier Three" as described in the table above and
shall remain in effect until such time as the Applicable Margin may
be adjusted as hereinafter provided; and
(b) So long as no Default or Event of Default has occurred and is
continuing under this Agreement, adjustments, if any, to the
Applicable Margin based on changes in the ratio set forth above
shall be made and become effective on the Effective Date set forth
in Section 3.6. herein.
"Assignment and Acceptance" shall mean an assignment and acceptance
entered into by a Lender and an Eligible Assignee in accordance
with the terms of this Agreement and substantially in the form of
Exhibit D.
"Available Revolving Credit Commitment" shall mean at any time that
amount equal to (A) Total Commitments less (B) the sum of (i) all
outstanding Revolving Loans, and (ii) all outstanding Swing Line
Loan.
"Bankruptcy Code" shall mean the Bankruptcy Code of 1978, as
amended and in effect from time to time (11 U.S.C. Section 101 et
seq.) and any successor statute.
"Base Rate Advance" shall mean an Advance made or outstanding as a
Revolving Loan or Swing Line Loan, bearing interest based on the
Base Rate.
"Base Rate" shall mean (with any change in the Base Rate to be
effective as of the date of change of either of the following
rates) the higher of (i) the rate which the Administrative Agent
publicly announces from time to time as its "base" or "prime"
lending rate, as the case may be, for Dollar loans in the United
States, as in effect from time to time, or (ii) the Federal Funds
Rate, as in effect from time to time, plus one-half of one percent
(0.50%) per annum. The Administrative Agent's "base" or "prime"
lending rate is a reference rate and does not necessarily represent
the lowest or best rate actually charged to customers; the
Administrative Agent may make commercial loans or other loans at
rates of interest at, above or below the Administrative Agent's
"base" or "prime" lending rate. The Base Rate is determined daily.
"Borrower" shall mean CBRL Group, Inc., a Tennessee corporation,
its successors and permitted assigns.
"Borrowing" shall mean the incurrence by Borrower under any
Facility of Advances of one Type concurrently having the same
Interest Period or the continuation or conversion of an existing
Borrowing or Borrowings in whole or in part.
"Business Day" shall mean any day excluding Saturday, Sunday and
any other day on which banks are required or authorized to close in
Nashville, Tennessee and, if the applicable Business Day relates to
Eurodollar Advances, excluding any day on which commercial banks
are closed or required to be closed for domestic and international
business, including dealings in Dollar deposits on the London
Interbank Market.
"Capital Lease" shall mean, as applied to any Person, any lease of
any Property by such Person as lessee which would, in accordance
with GAAP, be required to be classified and accounted for as a
capital lease on a balance sheet of such Person.
"Capital Lease Obligation" shall mean, with respect to any Capital
Lease, the amount of the obligation of the lessee thereunder which
would, in accordance with GAAP, appear on a balance sheet of such
lessee in respect of such Capital Lease.
"Closing Date" shall mean February 5, 1999, or such later date on
which the initial Loans are made and the conditions set forth in
Section 4.1. and 4.2. are satisfied or waived.
"Commitment" shall mean, for any Lender at any time the sum of its
Revolving Credit Commitment and its Term Loan Commitment, or in the
case of the Swing Line Lender, the Swing Line Commitment, as the
context may indicate. For each Lender (and any Lender as an
assignee), the Revolving Credit Commitment and the Term Loan
Commitment shall remain the same percentage.
"Commitment Fee" shall have the meaning ascribed to it in
Section 3.5(a).
"Commitment Fee Percentage" shall mean the number of basis points
per annum determined in accordance with the table set forth below
based upon Borrower's Ratio of Total Funded Debt to Consolidated
EBITDA:
RATIO OF TOTAL FUNDED DEBT TO CONSOLIDATED EBITDA
TIER ONE TIER TWO TIER THREE TIER FOUR TIER FIVE
less than greater than greater than greater than greater
or equal to 0.625 but 1.00 but less 1.50 but less than
0.625 less than or than or equal than or equal 1.75
equal to 1.00 to 1.50 to 1.75
12.5 Basis 15 basis 20 basis 25 basis 37.5 basis
points per points per points per points per points per
annum annum annum annum annum
provided, however, that:
(a) The Commitment Fee Percentage in effect as of the date of
execution and delivery of this Agreement shall be the number of
basis points under the heading "Tier Three" as described in the
table above and shall remain in effect until such time as the
Commitment Fee Percentage may be adjusted as hereinafter provided;
and
(b) So long as no Default or Event of Default has occurred and is
continuing under this Agreement, adjustments, if any, to the
Commitment Fee Percentage based on changes in the ratio set forth
above shall be made and become effective on the Effective Date set
forth in Section 3.6. herein.
"Consolidated Companies" shall mean, collectively, the Borrower,
its Subsidiaries, and any Person the financial statements of which
are consolidated with the Borrower or any Subsidiary. In the
determination of all ratios, financial covenants, and other matters
herein concerning accounting or financial terms, Logan's Roadhouse,
Inc. shall be treated as a Consolidated Company on a pro forma
basis, by including its prior four fiscal quarters, and the
Acquisition of any other Consolidated Company shall also be
determined on the same basis.
"Consolidated EBITDA" shall mean, as measured on a consolidated
basis over a rolling four fiscal quarter period, the sum of
(i) Consolidated Net Income (Loss), plus (ii) consolidated income
taxes, plus (iii) Consolidated Interest Expense plus
(iv) consolidated depreciation and amortization expense.
"Consolidated EBIT" shall mean, as measured on a consolidated basis
over a rolling four fiscal quarter period, the sum of
(i) Consolidated Net Income (Loss), plus (ii) consolidated income
taxes, plus (iii) Consolidated Interest Expense.
"Consolidated Interest Expense" shall mean, for any fiscal period
of Borrower, total interest expense (including without limitation,
interest expense attributable to Capital Leases in accordance with
GAAP and any program costs incurred by Borrower in connection with
sales of accounts receivable pursuant to a securitization program)
of the Consolidated Companies on a consolidated basis.
"Consolidated Net Income (Loss)" shall mean for any fiscal period
of Borrower, the net income (or loss) of the Consolidated Companies
on a consolidated basis for such period (taken as a single
accounting period) determined in conformity with GAAP; provided
that there shall be excluded therefrom (i) any items of gain or
loss which were included in determining such consolidated net
income and were not incurred in the ordinary course of business;
and (ii) the income (or loss) of any Person accrued prior to the
date such Person becomes a Consolidated Company or is merged into
or consolidated with a Consolidated Company, or such Person's
assets are acquired by a Consolidated Company.
"Contractual Obligation" of any Person shall mean any provision of
any security issued by such Person or of any agreement, instrument
or undertaking under which such Person is obligated or by which it
or any of the Property owned by it is bound.
"Credit Documents" shall mean, collectively, this Agreement, the
Notes, the Fee Letter, the Subsidiary Guaranties, and all other
instruments, documents, certificates, agreements and writings
executed in connection herewith.
"Default" shall mean any event or condition the occurrence of which
constitutes or would, with the lapse of time or the giving of
notice, or both, constitute an Event of Default.
"Dollar" and "U.S. Dollar" and the sign "$" shall mean lawful money
of the United States of America.
"Eligible Assignee" shall mean (i) a commercial bank or financial
institution organized under the laws of the United States, or any
state thereof, having total assets in excess of $1,000,000,000 or
any commercial finance or asset based lending Affiliate of any
commercial bank and (ii) any Lender or any Affiliate of any Lender.
"Environmental Laws" shall mean all federal, state, local and
foreign statutes and codes or regulations, rules or ordinances
issued, promulgated, or approved thereunder, now or hereafter in
effect (including, without limitation, those with respect to
asbestos or asbestos containing material or exposure to asbestos or
asbestos containing material), relating to pollution or protection
of the environment and relating to public health and safety,
relating to (i) emissions, discharges, releases or threatened
releases of pollutants, contaminants, chemicals or industrial toxic
or hazardous constituents, substances or wastes, including without
limitation, any Hazardous Substance, petroleum including crude oil
or any fraction thereof, any petroleum product or other waste,
chemicals or substances regulated by any Environmental Law into the
environment (including, without limitation, ambient surface water,
ground water, land surface or subsurface strata), or (ii) the
manufacture, processing, distribution, use, generation, treatment,
storage, disposal, transport or handling of any Hazardous
Substance, petroleum including crude oil or any fraction thereof,
any petroleum product or other waste, chemicals or substances
regulated by any Environmental Law, and (iii) underground storage
tanks and related piping, and emissions, discharges and releases or
threatened releases therefrom. Such Environmental Laws to include,
without limitation (i) the Clean Air Act (42 U.S.C. Section 7401
et seq.), (ii) the Clean Water Act (33 U.S.C. Section 1251 et
seq.), (iii) the Resource Conservation and Recovery Act (42 U.S.C.
Section 6901 et seq.), (iv) the Toxic Substances Control Act (15
U.S.C. Section 2601 et seq.), (v) the Comprehensive Environmental
Response Compensation and Liability Act, as amended by the
Superfund Amendments and Reauthorization Act (42 U.S.C. Section
9601 et seq.), and (vi) all applicable national and local laws or
regulations with respect to environmental control.
"ERISA Affiliate" shall mean, with respect to any Person, each
trade or business (whether or not incorporated) which is a member
of a group of which that Person is a member and which is under
common control within the meaning of the regulations promulgated
under Section 414 of the Tax Code.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended and in effect from time to time.
"Eurodollar Advance" shall mean an Advance made or outstanding as a
Revolving Loan, or as a Term Loan bearing interest based on the
Adjusted LIBO Rate.
"Event of Default" shall have the meaning provided in Article 8.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended from time to time, or any successor statute thereto.
"Excluded Subsidiary" or "Excluded Subsidiaries" shall mean
collectively Cracker Barrel Old Country Store TV, Inc., CBOCS
Aviation, Inc. and any future Subsidiary which is not required to
execute a Subsidiary Guarantee under Section 6.10.
"Executive Officer" shall mean with respect to any Person, the
Chief Executive Officer, President, Vice Presidents (if elected by
the Board of Directors of such Person), Chief Financial Officer,
Treasurer, Assistant Treasurer, Secretary and any Person holding
comparable offices or duties (if elected by the Board of Directors
of such Person).
"Facility" or "Facilities" shall mean the Revolving Credit
Commitments, the Swing Line Commitment, the Letter of Credit
Commitments, or the Term Loan Commitments, as the context may
indicate.
"Facing Fee" means a per annum fee equal to the product of .0125,
multiplied by the face amount of any Letter of Credit.
"Federal Funds Rate" shall mean with respect to any Base Rate
Advance, a fluctuating interest rate per annum equal for each day
during which such Advance is outstanding to the weighted average of
the rates on overnight Federal funds transactions with member banks
of the Federal Reserve System arranged by Federal funds brokers, as
set forth for each day on Page 4833 of the Telerate at 9:00 a.m.
(Nashville, Tennessee time) or if such reporting service is
unavailable, as published for such day (or, if such day is not a
Business Day, for the next preceding Business Day) by the Federal
Reserve Bank of Atlanta, or, if such rate is not so published for
any day which is a Business Day, the average of the quotations for
such day on such transactions received by the Administrative Agent
from three Federal funds brokers of recognized standing selected by
the Administrative Agent.
"Fee Letter" means that certain letter agreement dated December 11,
1998 between the Borrower and the Administrative Agent relating to
certain fees from time to time payable by the Borrower to the
Administrative Agent, together with all amendments and supplements
thereto.
"Financial Officer" means with respect to the Borrower, any of the
Chief Financial Officer, Vice President of Finance, Treasurer and
Assistant Treasurer.
"Financial Report" means at a specified date, the most recent
financial statements of the Consolidated Companies delivered
pursuant to Section 6.7. of this Agreement.
"Fiscal Year" means the twelve (12) month accounting period ending
on or about July 31 of each year and presently used by Borrower as
its fiscal year for accounting purposes.
"GAAP" shall mean generally accepted accounting principles set
forth in the opinions and pronouncements of the Accounting
Principles Board of the American Institute of Certified Public
Accountants and statements and pronouncements of the Financial
Accounting Standards Board or in such other statements by such
other entity as may be approved by a significant segment of the
accounting profession, which are applicable to the circumstances as
of the date of determination.
"Guaranty" shall mean any contractual obligation, contingent or
otherwise, of a Person with respect to any Indebtedness or other
obligation or liability of another Person, including without
limitation, any such Indebtedness, obligation or liability directly
or indirectly guaranteed, endorsed, co-made or discounted or sold
with recourse by that Person, or in respect of which that Person is
otherwise directly or indirectly liable, including contractual
obligations (contingent or otherwise) arising through any agreement
to purchase, repurchase, or otherwise acquire such Indebtedness,
obligation or liability or any security therefor, or any agreement
to provide funds for the payment or discharge thereof (whether in
the form of loans, advances, stock purchases, capital contributions
or otherwise), or to maintain solvency, assets, level of income, or
other financial condition, or to make any payment other than for
value received. The amount of any Guaranty shall be deemed to be an
amount equal to the stated or determinable amount of the primary
obligation in respect of which guaranty is made or, if not so
stated or determinable, the maximum reasonably anticipated
liability in respect thereof (assuming such Person is required to
perform thereunder) as determined by such Person in good faith.
"Hazardous Substances" shall have the meaning assigned to that term
in the Comprehensive Environmental Response Compensation and
Liability Act of 1980, as amended by the Superfund Amendments and
Reauthorization Acts of 1986.
"Income Taxes" shall have the meaning given such term by GAAP.
"Indebtedness" of any Person shall mean, without duplication, (i)
all obligations of such Person which in accordance with GAAP would
be shown on the balance sheet of such Person as a liability
(including, without limitation, obligations for borrowed money and
for the deferred purchase price of Property or services, and
obligations evidenced by bonds, debentures, notes or other similar
instruments, (ii) all Capital Lease Obligations; (iii) all
Guaranties of such Person (including the stated amount of undrawn
letters of credit); (iv) Indebtedness of others secured by any Lien
upon Property owned by such Person, whether or not assumed; and (v)
obligations or other liabilities under currency contracts, Interest
Rate Contracts or similar agreements or combinations thereof.
Notwithstanding the foregoing, in determining the Indebtedness of
any Person, (x) there shall be included all obligations of such
Person of the character referred to in clauses (i) through (v)
above deemed to be extinguished under GAAP but for which such
Person remains legally liable and (y) any deferred obligations of
such Person to make payments on any agreement not to compete which
was entered into by such Person in connection with the acquisition
of any business shall be reduced by the effective federal and state
corporate tax rate applicable to such Person in order to recognize
the deductibility of such payments and the resulting reduction of
the cash actually expended by the Person to satisfy such
obligation.
"Indebtedness for Borrowed Money" shall mean, with respect to any
Person and without duplication:
(a) Indebtedness for money borrowed, including all revolving and
term Indebtedness and all other lines of credit; and
(b) Indebtedness which:
(i) is represented by a note payable or drafts accepted, that
represent extensions of credit;
(ii) constitutes obligations evidenced by bonds, debentures, notes
or similar instruments;
(iii) constitutes Purchase Money Indebtedness, conditional sales
contracts, asset securitization vehicles, title retention debt
instruments or other similar instruments upon which interest
charges are customarily paid or that are issued or assumed as full
or partial payment for property;
(c) Indebtedness that constitutes a Capital Lease Obligation;
(d) all indemnity agreements and reimbursement obligations under
any acceptances or any letters of credit issued in support of
Indebtedness of the character described in clauses (a) through (c)
above; and
(e) all Indebtedness of others of the character described in
clauses (a) through (d) above, but only to the extent that such
Indebtedness is subject to a Guaranty of such Person.
"Interest Coverage Ratio" shall mean, at any date of calculation,
the ratio of Consolidated EBIT to Consolidated Interest Expense.
"Interest Period" shall mean as to any Eurodollar Advances, the
interest period selected by the Borrower pursuant to Section
3.4.(a) hereof.
"Interest Rate Contract" shall mean all interest rate swap
agreements, interest rate cap agreements, interest rate collar
agreements, interest rate insurance and other agreements and
arrangements designed to provide protection against fluctuations in
interest rates, in each case as the same may be from time to time
amended, restated, renewed, supplemented or otherwise modified.
"Lender" or "Lenders" shall mean SunTrust, the other banks and
lending institutions listed on the signature pages hereof,
including, without limitation, the Swing Line Lender, each assignee
thereof, if any, pursuant to Section 10.6.(c), together with their
corporate successors.
"Lending Office" shall mean for each Lender, the office such Lender
may designate in writing from time to time to Borrower and the
Administrative Agent with respect to each Type of Loan.
"Letter of Credit Commitment" shall mean relative to any Lender,
such Lender's commitment under a Letter of Credit pursuant to
Section 2.13.
"Letter of Credit Fee" means an amount equal to the product of:
(a) the applicable Letter of Credit Fee Percentage per annum in
effect on the first day of each period of calculation multiplied by
(b) the face amount of the Letter of Credit, but in any event no
less than Five Hundred Dollars ($500).
"Letters of Credit" has the same meaning as set forth in
Section 2.13.
"Letter of Credit Application Agreement" means that certain
Application and Agreement for Issuance of a Letter of Credit in the
form of Schedule 2.13 hereto or any other similar form required by
the Administrative Agent appropriately completed by the Borrower
pursuant to Section 2.13.
"Letter of Credit Fee Percentage" shall mean the number of basis
points per annum determined in accordance with the table set forth
below based upon Borrower's Ratio of Total Funded Debt to
Consolidated EBITDA:
RATIO OF TOTAL FUNDED DEBT TO CONSOLIDATED EBITDA
TIER ONE TIER TWO TIER THREE TIER FOUR TIER FIVE
less than greater than greater than greater than greater
or equal to 0.625 but 1.00 but less 1.50 but less than
0.625 less than or than or equal than or equal 1.75
equal to 1.00 to 1.50 to 1.75
62.5 Basis 75.0 basis 100 basis 125 basis 150 basis
points per points per points per points per points per
annum annum annum annum annum
(a) The Letter of Credit Fee Percentage in effect as of the date of
execution and delivery of this Agreement shall be the number of
basis points under the heading "Tier Three" as described in the
table above and shall remain in effect until such time as the
Letter of Credit Fee Percentage may be adjusted as hereinafter
provided; and
(b) So long as no Default or Event of Default has occurred and is
continuing under this Agreement, adjustments, if any, to the Letter
of Credit Fee Percentage based on changes in the ratios set forth
above shall be made and become effective on the Effective Date set
forth in Section 3.6. herein.
"Leverage Ratio" shall mean the ratio of Total Funded Debt to Total
Capitalization.
"LIBO" shall mean, for any Interest Period, with respect to
Eurodollar Advances, the offered rate for deposits in U.S. Dollars,
for a period comparable to the Interest Period appearing on the
Telerate Screen Page 3750 as of 11:00 a.m. (London, England time)
on the day that is two (2) Business Days prior to the first day of
the Interest Period. If the foregoing is unavailable for any
reason, then such rate shall be determined by and based on any
other interest rate reporting service of recognized standing
designated in writing by the Administrative Agent to Borrower and
the other Lenders in any such case rounded, if necessary, to the
next higher 1/100 of 1.0%, if the rate is not such a multiple.
"Lien" means any security interest, mortgage, pledge, lien, claim,
charge, encumbrance, title retention agreement, lessor's interest
under a Capital Lease or analogous instrument, in, of or on any
Property.
"Loans" shall mean, collectively, the Revolving Loans, the Swing
Line Loan, the Letters of Credit, and the Term Loans.
"Margin Regulations" shall mean Regulation G, Regulation T,
Regulation U and Regulation X of the Board of Governors of the
Federal Reserve System, as the same may be in effect from time to
time.
"Materially Adverse Effect" shall mean any material adverse change
in (i) the business, operations, financial condition or assets of
the Consolidated Companies, taken as a whole, (ii) the ability of
Borrower to perform its obligations under this Agreement, or (iii)
the ability of the Consolidated Companies (taken as a whole) to
perform their respective obligations, if any, under the Credit
Documents.
"Maturity Date" shall mean the earlier of (i) December 31, 2003
with respect to the Revolving Loans and the Swing Line Loan and
December 1, 2001 with respect to the Term Loans, or (ii) the date
on which all amounts outstanding under this Agreement have been
declared or have automatically become due and payable pursuant to
the provisions of Article 8.; provided, however, that the date
listed in subsection (i) above for the Revolving Loans may be
extended as provided in Section 2.12.
"Moody's" shall mean Moody's Investors Services, Inc. and each of
its successors.
"Multiemployer Plan" shall have the meaning set forth in Section
4001(a)(3) of ERISA.
"Notes" shall mean, collectively, the Revolving Credit Notes, the
Swing Line Note, and the Term Loan Notes.
"Notice of Borrowing" shall have the meaning provided in Section
3.1.(a).
"Notice of Conversion/Continuation" shall have the meaning provided
in Section 3.1.(b).
"Obligations" shall mean all amounts owing to the Administrative
Agent or any Lender pursuant to the terms of this Agreement or any
other Credit Document, including, without limitation, all Loans
(including all principal and interest payments due thereunder),
fees, expenses, indemnification and reimbursement payments,
indebtedness, liabilities, and obligations of the Consolidated
Companies, direct or indirect, absolute or contingent, liquidated
or unliquidated, now existing or hereafter arising, together with
all renewals, extensions, modifications or refinancings thereof.
"Operating Lease" shall mean, as applied to any Person, any lease
of any Property by such Person as lessee which would, in accordance
with GAAP, be required to be classified and accounted for as a
operating lease on a balance sheet of such Person.
"Operating Lease Obligation" shall mean, with respect to any
Operating Lease, the amount of the obligation of the lessee
thereunder which would, in accordance with GAAP, appear on a
balance sheet of such lessee in respect of such Operating Lease.
"Payment Office" shall mean with respect to payments of principal,
interest, fees or other amounts relating to the Loans and all other
Obligations, the office specified as the "Payment Office" for the
Administrative Agent, and in the case of the Swing Line Loan, the
Swing Line Lender, on the signature page of the Administrative
Agent and the Swing Line Lender, or to such other place as the
Administrative Agent or Swing Line Lender directs by written notice
delivered to Borrower.
"PBGC" shall mean the Pension Benefit Guaranty Corporation, or any
successor thereto.
"Person" shall mean any individual, partnership, firm, corporation,
association, joint venture, trust, limited liability company,
limited liability partnership, or other entity, or any government
or political subdivision or agency, department or instrumentality
thereof.
"Plan" shall mean any "employee benefit plan" (as defined in
Section 3(3) of ERISA), including, but not limited to, any defined
benefit pension plan, profit sharing plan, money purchase pension
plan, savings or thrift plan, stock bonus plan, employee stock
ownership plan, Multiemployer Plan, or any plan, fund, program,
arrangement or practice providing for medical (including post-
retirement medical), hospitalization, accident, sickness,
disability, or life insurance benefits.
"Prior Revolving Credit Debt" means the revolving credit facility
provided to Cracker Barrel Old Country Store, Inc., dated February
18, 1997 by and among Cracker Barrel Old County Store, Inc.,
SunTrust as agent thereunder and the Lenders as so defined and
described therein.
"Prior Term Debt" means a term loan facility provided to Cracker
Barrel Old Country Store, Inc. pursuant to that certain Credit
Facility dated February 18, 1997 by and among Cracker Barrel Old
Country Store, Inc., SunTrust as agent thereunder and the Lenders
as so defined and described therein.
"Property" or "Properties" means any interest in any kind of
property or asset, whether real or personal, or mixed, or tangible
or intangible.
"Purchase Money Indebtedness" shall mean Indebtedness incurred or
assumed for the purpose of financing all or any part of the
acquisition cost of any Property (excluding trade payables
incurred in the ordinary course of business) and any refinancing
thereof, in each case entered into in compliance with this
Agreement.
"Rating Agency" shall mean either Moody's or Standard & Poor's.
"Regulation D" shall mean Regulation D of the Board of Governors
of the Federal Reserve System, as the same may be in effect from
time to time.
"Required Lenders" shall mean at any time, the Lenders holding at
least 66 2/3% of the amount of the Total Commitments, whether or
not advanced or, following the termination of all of the
Commitments, the Lenders holding at least 66 2/3% of the aggregate
outstanding Advances at such time.
"Requirement of Law" for any Person shall mean any law, treaty,
rule or regulation, or determination of an arbitrator or a court
or other governmental authority, in each case applicable to or
binding upon such Person or any of its Property or to which such
Person or any of its Property is subject.
"Revolving Credit Commitment" shall mean, at any time for any
Lender, the amount of such commitment set forth opposite such
Lender's name on the signature pages hereof, as the same may be
increased or decreased from time to time as a result of any
reduction thereof pursuant to Section 2.3., any assignment thereof
pursuant to Section 10.6., or any amendment thereof pursuant to
Section 10.2. The Revolving Credit Commitments shall be
automatically increased by the Term Loan Commitments on the
Maturity Date of the Term Loan in accordance with Section 2.3.
"Revolving Credit Notes" shall mean, collectively, the promissory
notes evidencing the Revolving Loans in the form attached hereto
as Exhibit A, either as originally executed or as hereafter
amended, modified or supplemented.
"Revolving Loans" shall mean, collectively, the revolving loans
made to the Borrower by the Lenders pursuant to Section 2.1.
"Shareholder's Equity" shall mean, with respect to any Person as
at any date of determination, shareholder's equity determined on a
consolidated basis in conformity with GAAP.
"Standard & Poor's" shall mean Standard & Poor's Ratings Group, a
division of McGraw-Hill, Inc. and its successors.
"Subsidiary" shall mean, with respect to any Person, any
corporation or other entity (including, without limitation,
limited liability companies, partnerships, joint ventures, limited
liability companies, and associations) regardless of its
jurisdiction of organization or formation, at least a majority of
the total combined voting power of all classes of Voting Stock or
other ownership interests of which shall, at the time as of which
any determination is being made, be owned by such Person, either
directly or indirectly through one or more other Subsidiaries.
"Subsidiary Guarantee" shall mean a Subsidiary Guarantee
substantially in the form of Exhibit J executed and delivered by
each Subsidiary in accordance with Section 6.10, in favor of the
Administrative Agent, for the ratable benefit of the Lenders,
together with all amendments and supplements thereto.
"Subsidiary Guaranties" shall mean more than one Subsidiary
Guarantee.
"Subsidiary Guarantor" shall mean a Subsidiary which will execute
a Subsidiary Guarantee pursuant to Section 6.10.
"SunTrust" means SunTrust Bank, Nashville, N.A., its successors
and assigns.
"Swing Line Commitment" shall mean, at any time for the Swing Line
Lender, an amount equal to the Swing Line Commitment set forth on
the signature page of the Swing Line Lender, as the same may be
increased or decreased from time to time as a result of any
assignment thereof pursuant to Section 10.6., or any amendment
thereof pursuant to Section 10.2. The Swing Line Commitment shall
be part of, subsumed within, and not in addition to the Revolving
Credit Commitment of the Swing Line Lender.
"Swing Line Facility" shall mean, at any time, the Swing Line
Commitment, which amount shall not exceed $10,000,000.
"Swing Line Lender" shall mean SunTrust and any successor or
assignee thereof
"Swing Line Loan" shall mean the loan made by the Swing Line
Lender to the Borrower pursuant to the Swing Line Facility.
"Swing Line Note" shall mean a promissory note of the Borrower
payable to the order of the Swing Line Lender, in substantially
the form of Exhibit C hereto, evidencing the maximum aggregate
principal indebtedness of the Borrower to such Swing Line Lender
with respect to the Swing Line Commitment, either as originally
executed or as it may be from time to time supplemented, modified,
amended, renewed or extended.
"Tax Code" shall mean the Internal Revenue Code of 1986, as
amended and in effect from time to time.
"Taxes" shall mean any present or future taxes, levies, imposts,
duties, fees, assessments, deductions, withholdings or other
charges of whatever nature, including without limitation, income,
receipts, excise, property, sales, transfer, license, payroll,
withholding, social security and franchise taxes now or hereafter
imposed or levied by the United States, or any state, local or
foreign government or by any department, agency or other political
subdivision or taxing authority thereof or therein and all
interest, penalties, additions to tax and similar liabilities with
respect thereto.
"Telerate Screen Page 3750" means the "British Bankers Association
Interest Rates" shown on page 3750 of the Telerate System
Incorporated Service.
"Term Loans" shall mean collectively, the term loans made to the
Borrower by the Lenders pursuant to Section 2.4.
"Term Loan Commitment" shall mean, at any time for any Lender, the
amount of such commitment set forth opposite such Lender's name on
the signature pages hereof, as the same may be decreased pursuant
to Section 2.3., any assignment thereof pursuant to Section 10.6,
or any amendments thereof pursuant to Section 10.2.
"Term Loan Notes" shall mean collectively, the promissory notes
evidencing the Term Loans in the form attached as Exhibit B,
either as originally executed or as hereafter amended, modified or
supplemented.
"Total Capitalization" shall mean for the Consolidated Companies
on a consolidated basis, the sum of their: (i) Shareholder's
Equity, plus (ii) Total Funded Debt.
"Total Commitments" shall mean the sum of the Revolving Credit
Commitments and Term Loan Commitments of all Lenders.
"Total Funded Debt" shall mean, with respect to the Consolidated
Companies without duplication on a consolidated basis, (i)
Indebtedness for Borrowed Money, (ii) Capital Lease Obligations,
(iii) the present value of all minimum lease commitments to make
payments with respect to Operating Leases determined in accordance
with standard S & P methodology, and (iv) all obligations under
any direct or indirect Guaranty of any Consolidated Company.
Additionally, the calculation of Funded Debt shall include the
redemption amount with respect to any redeemable preferred stock
of any Consolidated Company required to be redeemed within the
next twelve (12) months.
"Total Funded Debt to Consolidated EBITDA" shall mean that ratio
determined in accordance with Section 7.1.(ii) herein.
"Type" of Borrowing shall mean a Borrowing consisting of Base Rate
Advances or Eurodollar Advances.
"Voting Stock" shall mean stock of a corporation of a class or
classes having general voting power under ordinary circumstances
to elect a majority of the board of directors, managers or
trustees of such corporation (irrespective of whether or not at
the time stock of any other class or classes shall have or might
have voting power by the reason of the happening of any
contingency).
Section 1.2. Accounting Terms and Determination.
Unless otherwise defined or specified herein, all accounting terms
shall be construed herein, all accounting determinations hereunder
shall be made, all financial statements required to be delivered
hereunder shall be prepared, and all financial records shall be
maintained, in accordance with GAAP. In the event of a change in
GAAP that is applicable to the Consolidated Companies, compliance
with the financial covenants contained herein shall continue to be
determined in accordance with GAAP as in effect prior to such
change; provided, however, that the Borrower and the Required
Lenders will thereafter negotiate in good faith to revise such
covenants to the extent necessary to conform such covenants to
GAAP as then in effect.
Section 1.3. Other Definitional Terms.
The words "hereof", "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement
as a whole and not to any particular provision of this Agreement,
and Article, Section, Schedule, Exhibit and like references are to
this Agreement unless otherwise specified.
Section 1.4. Exhibits and Schedules.
Exhibits and Schedules attached hereto are by reference made a
part hereof.
ARTICLE 2. REVOLVING LOANS; LETTERS OF CREDIT; SWING LINE LOAN;
AND TERM LOANS
Section 2.1. Commitment; Use of Proceeds.
(a) Subject to and upon the terms and conditions herein set forth,
each Lender severally agrees to make to Borrower from time to time
on and after the Closing Date, but prior to the Maturity Date,
Revolving Loans; provided that, immediately after each such
Revolving Loan is made, (i) the aggregate principal amount of all
Advances comprising Revolving Loans made by such Lender shall not
exceed such Lender's Revolving Credit Commitment, and (ii) the
aggregate principal amount of all outstanding Revolving Loans,
plus the face amount of all Letters of Credit, plus the Term
Loans, plus the aggregate principal amount of the outstanding
Swing Line Loan shall not exceed the Total Commitments. Absent a
Default or Event of Default, Borrower shall be entitled to repay
and reborrow Revolving Loans and the Swing Line Loan in accordance
with the provisions hereof.
(b) Each Revolving Loan shall, at the option of Borrower, be made
or continued as, or converted into, part of one or more Borrowings
that shall consist entirely of Base Rate Advances or Eurodollar
Advances. The aggregate principal amount of each Borrowing of
Revolving Loans comprised of Eurodollar Advances shall be not less
than $5,000,000 or a greater integral multiple of $1,000,000, and
the aggregate principal amount of each Borrowing of Revolving
Loans comprised of Base Rate Advances shall be not less than
$1,000,000 or a greater integral multiple of $100,000.
(c) The proceeds of Revolving Loans shall be used solely for
acquisitions (including the acquisition of shares of Logan's
Roadhouse, Inc.), capital expenditures, working capital, stock
redemptions, to pay and retire the outstanding principal amount of
the Prior Revolving Credit Loan and for other general corporate
purposes.
Section 2.2. Revolving Credit Notes; Repayment of Principal.
(a) The Borrower's obligations to pay the principal of, and
interest on, the Revolving Loans to each Lender shall be evidenced
by the records of the Administrative Agent and such Lender and by
the Revolving Credit Note payable to such Lender (or the assignor
of such Lender) completed in conformity with this Agreement.
(b) All Borrowings outstanding under the Revolving Credit
Commitments shall be due and payable in full on the Maturity Date.
Section 2.3. Voluntary Reduction of Revolving Credit Commitments,
Term Loan Commitments and Swing Line Commitment; Mandatory
Prepayment; Increase in Revolving Credit Commitments.
(a) Upon at least three (3) Business Days prior telephonic notice
(promptly confirmed in writing) to the Administrative Agent,
Borrower shall have the right, without premium or penalty, to
terminate the Revolving Credit Commitments and/or Term Loan
Commitments, in part or in whole, provided that any partial
termination of the Revolving Credit Commitments and/or the Term
Loan Commitments pursuant to this Section 2.3. shall be in an
amount of at least $5,000,000 and in integral multiples of
$1,000,000.
(b) Any reduction of Revolving Credit Commitments and/or Term Loan
Commitments pursuant to subsection (a) or (c) of this Section 2.3.
shall apply to each Lender proportionately, and shall
automatically and permanently reduce the Revolving Credit
Commitments and/or Term Loan Commitments of each of the Lenders
based upon each Lender's Applicable Commitment Percentage. Any
amounts so reduced may not be reinstated.
(c) Fifty percent (50%) of net proceeds received by Borrower from
its public debt offerings (pursuant to the Federal Securities Act
of 1933 registration on Form S-3 and underwritten by Merrill Lynch
& Co., or other investment brokers, in the total amount of
$250,000,000) shall reduce the Revolving Credit Commitment.
(d) Upon the payment of the entire indebtedness of the Term Loans
on its Maturity Date, the Revolving Credit Commitments of each
Lender shall be increased by that Lender's Term Loan Commitment
immediately prior to such payment on the Maturity Date.
(e) If at any time the aggregate outstanding Swing Line Loan, the
Term Loans, and Revolving Loans (which include the face amount of
any Letters of Credit) exceed the Total Commitments, the Borrower
shall immediately cause an amount equal to such excess to be
applied as follows in the order of priority indicated:
First, to the prepayment of Swing Line Loan (excluding any Letters
of Credit);
Second, to the prepayment of outstanding Revolving Loans; and
Third, to the prepayment of the outstanding Term Loans;
with such prepayment to be applied to such Loans as designated by
the Borrower and, in the event the Borrower fails to designate a
Loan, to such Loans with the earliest maturity dates, based upon
the remaining terms of their respective Interest Periods, and with
respect to Loans with the same Interest Period, pro rata to the
Lenders extending such Loans.
Any prepayment of the Swing Line Loan, Revolving Loans and Term
Loans pursuant to this Section 2.3., shall be made, insofar as is
possible, in such a way as to avoid any funding losses pursuant to
Section 3.13.
Section 2.4. Term Loan.
(a) Subject to and upon the terms and conditions herein set forth,
each Lender severally agrees to make to Borrower on the Closing
Date, Term Loans, not to exceed such Lender's Term Loan
Commitment.
(b) The Term Loans shall be made as one initial Borrowing as a
Eurodollar Advance with an Interest Period ending prior to
March 1, 1999, however such initial Eurodollar Advance shall be
treated as having a three month Interest Period for purposes of
establishing the interest rate thereon. Thereafter the Term Loans
shall be continued as one Borrowing that shall consist entirely of
a Eurodollar Advance. Such Eurodollar Advance shall be
automatically continued for successive Interest Periods of three
(3) months until the Maturity Date.
(c) The proceeds of Term Loans shall be used solely to pay the
outstanding principal amount of the Prior Term Debt.
Section 2.5. Term Notes; Repayment of Principal.
(a) The Borrower's obligation to pay the principal of, and
interest on, the Term Loans to each Lender shall be evidenced by
the records of the Administrative Agent and such Lender and by the
Term Note payable to such Lender (or the assignor of such Lender)
completed in conformity with this Agreement.
(b) The outstanding principal amount and all accrued interest on
the Term Loans shall be due and payable on the Maturity Date.
Section 2.6. Limitation on the Amount of Loans.
The aggregate outstanding principal amount of all Revolving Loans,
the Swing Line Loan, the face amount of all outstanding Letters of
Credit and the Term Loans at any time shall not exceed the Total
Commitments at such time.
Section 2.7. Pro Rata Payments.
Except as otherwise provided herein, (a) each payment on account
of the principal of and interest on the Revolving Loans and the
Term Loans and fees (other than the fees payable under the Fee
Letter, which shall be retained by the Administrative Agent)
described in this Agreement shall be made to the Administrative
Agent for the account of the Lenders pro rata based on their
Applicable Commitment Percentages, (b) all payments to be made by
the Borrower for the account of each of the Lenders on account of
principal, interest and fees, shall be made in immediately
available funds, free and clear of any defenses, setoffs, counter-
claims, or withholdings or deductions for taxes, and (c) the
Administrative Agent will promptly distribute payments received by
it to the Lenders. If, for any reason, the Administrative Agent
makes any distribution to any Lender prior to receiving the
corresponding payment from the Borrower, and the Borrower's
payment is not received by the Administrative Agent within three
(3) Business Days after payment by the Administrative Agent to the
Lender, the Lender shall, upon written request from the
Administrative Agent, return the payment to the Administrative
Agent with interest at the interest rate per annum for overnight
borrowing by the Administrative Agent from the Federal Reserve
Bank for the period commencing on the date the Lender received
such payment and ending on, but excluding, the date of its
repayment to the Administrative Agent. If the Administrative Agent
advises any Lender of any miscalculation of the amount of such
Lender's share that has resulted in an excess payment to such
Lender, promptly upon request by the Administrative Agent such
Lender shall return the excess amount to the Administrative Agent
with interest calculated as set forth above. Similarly, if a
Lender advises the Administrative Agent of any miscalculation that
has resulted in an insufficient payment to such Lender, promptly
upon written request by such Lender the Administrative Agent shall
pay the additional amount to such Lender with interest calculated
as set forth above. In the event the Administrative Agent is
required to return any amount of principal, interest or fees or
other sums received by the Administrative Agent after the
Administrative Agent has paid over to any Lender its share of such
amount, such Lender shall, promptly upon demand by the
Administrative Agent, return to the Administrative Agent such
share, together with applicable interest on such share.
Section 2.8. Swing Line Facility; Use of Proceeds.
(a) Availability. Subject to and upon the terms and conditions
herein set forth, the Swing Line Lender, from on and after the
Closing Date, but prior to the Maturity Date, hereby agrees to
make available to the Borrower from time to time, a Swing Line
Loan which shall not exceed in aggregate principal amount at any
time outstanding the Swing Line Commitment.
(b) Amount and Terms of Swing Line Loan. The Swing Line Loan shall
be made as Base Rate Advances. The aggregate principal amount of
each Swing Line Advance shall be not less than $100,000 or greater
integral multiples of $100,000.
(c) Use of Proceeds. The proceeds of the Swing Line Loan shall be
used by the Borrower for acquisitions, capital expenditures and as
working capital and for other general corporate purposes.
Section 2.9. Swing Line Note; Repayment of Principal.
(a) The Borrower's obligations to pay the principal of, and
interest on, the Swing Line Loan to the Swing Line Lender shall be
evidenced by the records of the Swing Line Lender and by the Swing
Line Note payable to the Swing Line Lender in the amount of the
Swing Line Facility.
(b) All Borrowings outstanding under the Swing Line Note shall be
due and payable in full on the Maturity Date.
Section 2.10. Voluntary Reduction of Swing Line Commitment
Upon at least three (3) Business Days' prior telephonic notice
(promptly confirmed in writing) to SunTrust and the Administrative
Agent, Borrower shall have the right, without premium or penalty,
to terminate the unutilized portion of the Swing Line Commitment,
in part or in whole, provided that any partial termination
pursuant to this Section 2.10. shall be in an amount of at least
$1,000,000 and integral multiples of $100,000.
Section 2.11. Refunding Swing Line Loan with Proceeds of
Mandatory Revolving Loans.
If (i) the Swing Line Loan shall be outstanding upon the
occurrence of an Event of Default, or (ii) after giving effect to
any request for a Swing Line Loan or a Revolving Loan, the
aggregate principal amount of the Revolving Loans and the Swing
Line Loan outstanding to the Swing Line Lender would exceed the
Swing Line Lender's Revolving Credit Commitment, then each Lender
hereby agrees, upon request from the Swing Line Lender, to make a
Revolving Loan (which shall be initially funded as a Base Rate
Advance) in an amount equal to such Lender's Applicable Commitment
Percentage of the outstanding principal amount of the Swing Line
Loan (the "Refunded Swing Line Loan") outstanding on the date such
notice is given. On or before 11:00 a.m. (Nashville, Tennessee
time) on the first Business Day following receipt by each Lender
of a request to make Revolving Loans as provided in the preceding
sentence, each such Lender (other than the Swing Line Lender)
shall deposit in an account specified by the Administrative Agent
to the Lenders from time to time the amount so requested in same
day funds, whereupon such funds shall be immediately delivered to
the Swing Line Lender (and not the Borrower) and applied to repay
the Refunded Swing Line Loan. On the day such Revolving Loans are
made, the Swing Line Lender's pro rata share of the Refunded Swing
Line Loan shall be deemed to be paid with the proceeds of the
Revolving Loans made by the Swing Line Lender. Upon the making of
any Revolving Loan pursuant to this clause, the amount so funded
shall become due under such Lender's Revolving Credit Note and
shall no longer be owed under the Swing Line Note. Each Lender's
obligation to make the Revolving Loans referred to in this clause
shall be absolute and unconditional and shall not be affected by
any circumstance, including, without limitation, (i) any setoff,
counterclaim, recoupment, defense or other right which such Lender
may have against the Swing Line Lender, the Borrower or any other
Person for any reason whatsoever; (ii) the occurrence or
continuance of any Default or Event of Default; (iii) any adverse
change in the condition (financial or otherwise) of the Borrower
or any other Consolidated Company; (iv) the acceleration or
maturity of any Loans or the termination of the Revolving Credit
Commitments after the making of any Swing Line Loan; (v) any
breach of this Agreement by the Borrower or any other Lender; or
(vi) any other circumstance, happening or event whatsoever,
whether or not similar to any of the foregoing.
Section 2.12. Extension of Commitments.
(a) The Borrower may, by written notice to the Administrative
Agent (which shall promptly deliver a copy to each of the
Lenders), given not more than ninety (90) days nor less than sixty
(60) days prior to the annual anniversary of the Closing Date
while the Revolving Credit Commitments are in effect, request that
the Lenders extend the then scheduled Maturity Date of the
Revolving Credit Facility (the "Existing Date") for an additional
one-year period, provided, however, that the Borrower is not
entitled to more than three renewals. Each Lender shall, by
notice to the Borrower and the Administrative Agent within thirty
(30) days after the Borrower gives such notice, advise the
Borrower and the Administrative Agent whether or not such Lender
consents to the extension request (and any Lender that fails to
respond during such thirty (30) day period shall be deemed to have
advised the Borrower and the Administrative Agent that it will not
agree to such extension).
(b) In the event that, on the 30th day after Borrower gives the
notice described in subsection (a) above, not all of the Lenders
have agreed to extend the Revolving Credit Commitments, the
Borrower shall notify each of the consenting Lenders ("Consenting
Lenders") of the amount of the Revolving Credit Commitments of the
non-consenting Lenders ("Non-Consenting Lender") and each of such
Consenting Lenders shall, by notice to the Borrower and the
Administrative Agent given within ten (10) Business Days after
receipt of such notice, advise the Administrative Agent and the
Borrower whether or not such Lender wishes to purchase all or a
portion of the Revolving Credit Commitments of the Non-Consenting
Lenders (and any Lender which does not respond during such 10-
Business Day period shall be deemed to have rejected such offer).
In the event that more than one Consenting Lender agrees to
purchase all or a portion of such Revolving Credit Commitments,
the Borrower and the Administrative Agent shall allocate such
Revolving Credit Commitments among such Consenting Lenders so as
to preserve, to the extent possible, the relative pro-rata shares
of the Consenting Lenders of the Revolving Credit Commitments
prior to such extension request. If the Consenting Lenders do not
elect to assume all of the Revolving Credit Commitments of the
Non-Consenting Lenders, the Borrower shall have the right to
arrange for one or more banks or other lending institutions (any
such bank or lending institution being called a "New Lender"), to
purchase the Revolving Credit Commitment of any Non-Consenting
Lender. Such New Lender must meet the requirements of an Eligible
Assignee. Each Non-Consenting Lender shall assign its Revolving
Credit Commitment and the Loans outstanding hereunder to the
Consenting Lender or New Lender purchasing such Revolving Credit
Commitment in accordance with Section 10.6., in return for payment
in full of all principal, interest, and other amounts owed to such
Non-Consenting Lender hereunder on or before the Existing Date
and, as of the effective date of such assignment, shall no longer
be a party hereto, provided that each New Lender shall be subject
to the approval of the Administrative Agent (which approval shall
not be unreasonably withheld). If (and only if) Lenders (including
New Lenders) holding Revolving Credit Commitments representing at
least 100% of the aggregate Revolving Credit Commitments on the
date of such extension request shall have agreed in accordance
with the terms hereof to such extension (the "Continuing
Lenders"), then (i) the Maturity Date shall be extended for one
additional year from the Existing Date and (ii) the Commitment of
any Non-Consenting Lender which has not been assigned to a
Consenting Lender or to a New Lender shall terminate (with the
result that the amount of the Total Commitments shall be decreased
by the amount of such Revolving Credit Commitment), and all Loans
of such Non-Consenting Lenders shall become due and payable,
together with all accrued interest thereon and all other amounts
owed to such Non-Consenting Lender hereunder, on the Existing Date
applicable to such Lender without giving effect to the extension
of the Maturity Date.
(c) The effective date of any extension of the Maturity Date shall
be the date on which 100% of the Continuing Lenders have agreed to
such extension in accordance with the terms hereof.
(d) The extension by the Swing Line Lender of its Revolving Credit
Commitment pursuant to this Section 2.12. shall automatically
extend the Swing Line Commitment.
Section 2.13. Letters of Credit Commitment.
(a) Subject to the terms and conditions herein set forth, each of
the Lenders agree that the Administrative Agent on behalf of the
Lenders will issue to third party beneficiaries for the account of
Borrower, or jointly for the account of Borrower and a Subsidiary
of Borrower, irrevocable standby Letters of Credit in the face
amount of up to $10,000,000 in the aggregate. In connection with
the issuance of each Letter of Credit, the Borrower shall complete
a Letter of Credit Application Agreement, and such other
documentation in form and substance as required by Administrative
Agent.
(b) In connection with the issuance of any Letter of Credit, the
Borrower shall pay in advance to Administrative Agent a Letter of
Credit Fee (calculated as of the date of the issuance of the
Letter of Credit and accruing to the end of the current Fiscal
Quarter, and thereafter payable quarterly in advance for the
actual number of days in such Fiscal Quarter, calculated on a 360-
day year, provided however that if the term of the Letter of
Credit expires before the end of the Fiscal Quarter, then it will
be payable for the actual number of days until expirations) to be
apportioned and paid by Administrative Agent to each of the
Lenders pursuant to the Applicable Commitment Percentage of each
Lender. If the term of any Letter of Credit is less than one (1)
month, the Letter of Credit Fee shall be calculated as if the term
of the Letter of Credit were equal to one (1) month.
(c) In connection with the issuance of any Letter of Credit, the
Borrower shall also pay to Administrative Agent a Facing Fee
(payable on the dates set forth in subsection (b) of this Section)
calculated on a 360-day year. None of the Lenders, except for the
Administrative Agent, shall share in the Facing Fee.
(d) The Administrative Agent agrees to use its best efforts to
issue and deliver to the Borrower each requested Letter of Credit
within three (3) Business Days following submission by Borrower of
a properly completed Letter of Credit Application Agreement.
(e) No Letter of Credit shall be issued for a term that extends
beyond the Maturity Date for the Revolving Credit Facility. The
language of each Letter of Credit, including the requirements for
a draw thereunder, shall be subject to the reasonable approval of
the Administrative Agent.
(f) The face amount of all outstanding Letters of Credit shall
reduce the Borrower's ability to receive Advances under the
Revolving Credit Loans by such amount. Additionally, any payment
by Administrative Agent under a Letter of Credit shall be treated
as a Base Rate Advance under the Revolving Credit Loans, and the
terms and provisions of repayment shall be treated as a Base Rate
Advance under the Revolving Credit Loans.
(g) The Lenders shall participate in all Letters of Credit
requested by the Borrower under this Agreement except for the
Facing Fee. Each Lender holding a Revolving Credit Note, upon
issuance of a Letter of Credit by the Administrative Agent, shall
be promptly notified by the Administrative Agent and shall be
deemed to have purchased without recourse, a risk participation
from the Administrative Agent in such Letter of Credit and the
obligations arising thereunder, in each case in an amount equal to
its Applicable Commitment Percentage of all obligations under such
Letter of Credit and shall absolutely, unconditionally, and
irrevocably assume, as primary obligor and not as surety, and be
obligated to pay to the Administrative Agent therefor and
discharge when due, its Applicable Commitment Percentage of all
obligations arising under such Letter of Credit. Without limiting
the scope and nature of a Lender's participation in any Letter of
Credit, to the extent that the Administrative Agent has not been
reimbursed as required hereunder or under any such Letter of
Credit, each such Lender shall pay to the Administrative Agent its
Applicable Commitment Percentage of such unreimbursed drawing in
same day funds on the day of notification by the Administrative
Agent of an unreimbursed drawing. The obligation of each Lender to
so reimburse the Administrative Agent shall be absolute and
unconditional and shall not be affected by the occurrence of an
Event of Default or any other occurrence or event.
ARTICLE 3. GENERAL LOAN TERMS
Section 3.1. Funding Notices.
(a)(i) Whenever the Borrower desires to make a Borrowing of
Revolving Loans with respect to the Revolving Credit Commitments
(other than one resulting from a conversion or continuation
pursuant to Section 3.1.(b)), it shall give the Administrative
Agent prior written notice (or telephonic notice promptly
confirmed in writing) of such Borrowing (a "Notice of Borrowing"),
such Notice of Borrowing to be given at Administrative Agent's
Payment Office (x) prior to 11:00 a.m. (Nashville, Tennessee time)
on the Business Day which is the requested date of such Borrowing
in the case of Base Rate Advances, and (y) prior to 11:00 a.m.
(Nashville, Tennessee time) three (3) Business Days prior to the
requested date of such Borrowing in the case of Eurodollar
Advances. Notices received after 11:00 a.m. (Nashville, Tennessee
time) shall be deemed received on the next Business Day. Each
Notice of Borrowing shall be irrevocable and shall specify the
aggregate principal amount of the Borrowing, the date of Borrowing
(which shall be a Business Day), and whether the Borrowing is to
consist of Base Rate Advances or Eurodollar Advances and (in the
case of Eurodollar Advances) the Interest Period to be applicable
thereto.
(ii) Whenever Borrower desires to obtain a Swing Line Loan under
the Swing Line Facility (other than one resulting from a
conversion or continuation pursuant to Section 3.1.(b)), it shall
give the Swing Line Lender prior written notice (or telephonic
notice promptly confirmed in writing) of such Swing Line Loan (a
"Notice of Swing Line Loan"), such Notice of Swing Line Loan to be
given at its Payment Office prior to 11:00 a.m. (Nashville,
Tennessee time) on the Business Day which is the requested date of
such Swing Line Loan. Notices received after 11:00 a.m.
(Nashville, Tennessee time) shall be deemed received on the next
Business Day. Each Notice of Swing Line Loan shall be irrevocable
and shall specify the aggregate principal amount of the Swing Line
Loan and the date of Swing Line Loan (which shall be a Business
Day).
(b) Whenever Borrower desires to convert all or a portion of an
outstanding Borrowing under the Revolving Credit Facility
consisting of Base Rate Advances into a Borrowing consisting of
Eurodollar Advances, or to continue outstanding a Borrowing
consisting of Eurodollar Advances for a new Interest Period, it
shall give the Administrative Agent at least three (3) Business
Days' prior written notice (or telephonic notice promptly
confirmed in writing) of each such Borrowing to be converted into
or continued as Eurodollar Advances. Such notice (a "Notice of
Conversion/Continuation") shall be given prior to 11:00 a.m.
(Nashville, Tennessee time) on the date specified at the Payment
Office of the Administrative Agent. Each such Notice of
Conversion/Continuation shall be irrevocable and shall specify the
aggregate principal amount of the Advances to be converted or
continued, the date of such conversion or continuation and the
Interest Period to be applicable thereto. If, upon the expiration
of any Interest Period in respect of any Borrowing under the
Revolving Credit Facility consisting of Eurodollar Advances,
Borrower shall have failed to deliver the Notice of
Conversion/Continuation, Borrower shall be deemed to have elected
to convert or continue such Borrowing to a Borrowing consisting of
Base Rate Advances. So long as any Executive Officer of Borrower
has knowledge that any Default or Event of Default shall have
occurred and be continuing, no Borrowing may be converted into or
continued as (upon expiration of the current Interest Period)
Eurodollar Advances unless the Administrative Agent and each of
the Lenders shall have otherwise consented in writing. No
conversion of any Borrowing of Eurodollar Advances shall be
permitted except on the last day of the Interest Period in respect
thereof. Notwithstanding any provision of this Agreement to the
contrary, Borrower shall not have the option to convert Term
Loans, which shall be automatically converted in accordance with
Section 2.4.
(c) The Administrative Agent shall promptly (and in any event by
noon on a same-day basis for Base Rate Advances and by the same
time on the next succeeding Business Day for Eurodollar Advances,
as such notice is received) give each Lender notice by telephone
(confirmed in writing) or by telex, telecopy or facsimile
transmission of the matters covered by the notices given to the
Administrative Agent pursuant to this Section 3.1. with respect to
the Revolving Credit Commitments.
Section 3.2. Disbursement of Funds.
(a) For Revolving Credit Loans, no later than 1:00 p.m.
(Nashville, Tennessee time), each Lender will make available its
Applicable Commitment Percentage of the amount of such Borrowing
in immediately available funds at the Payment Office of the
Administrative Agent. The Administrative Agent will make available
to Borrower the aggregate of the amounts (if any) so made
available by the Lenders to the Administrative Agent in a timely
manner by crediting such amounts to Borrower's demand deposit
account maintained with the Administrative Agent or at Borrower's
option, by effecting a wire transfer of such amounts to Borrower's
account specified by the Borrower, by the close of business on
such Business Day. In the event that the Lenders do not make such
amounts available to the Administrative Agent by the time
prescribed above, but such amount is received later that day, such
amount may be credited to Borrower in the manner described in the
preceding sentence on the next Business Day (with interest on such
amount to begin accruing hereunder on such next Business Day).
(b) No later than twelve noon (Nashville, Tennessee time) on the
date of each Swing Line Loan, the Swing Line Lender shall make
available to Borrower the requested Swing Line Loan by crediting
such amounts to Borrower's demand deposit account maintained with
the Administrative Agent or at Borrower's option, by effecting a
wire transfer of such amounts to Borrower's account specified by
the Borrower, by the close of business on such Business Day.
(c) On the Closing Date, each Lender shall Advance to Borrower its
Applicable Commitment Percentage with respect to the Term Loans,
in immediately available funds at the Payment Office of the
Administrative Agent. The Administrative Agent will make available
to the Borrower the Term Loans so made available by the Lenders to
the Administrative Agent, by crediting the Term Loans towards the
payment of the outstanding principal amount of the Prior Term
Debt.
(d) Unless the Administrative Agent shall have been notified by
any Lender prior to the date of a Borrowing that such Lender does
not intend to make available to the Administrative Agent such
Lender's portion of the Borrowing to be made on such date, the
Administrative Agent may assume that such Lender has made such
amount available to the Administrative Agent on such date and the
Administrative Agent may make available to Borrower a
corresponding amount. If such corresponding amount is not in fact
made available to the Administrative Agent by such Lender on the
date of Borrowing, the Administrative Agent shall be entitled to
recover such corresponding amount on demand from such Lender
together with interest at the Federal Funds Rate. If such Lender
does not pay such corresponding amount forthwith upon the
Administrative Agent's demand therefor, the Administrative Agent
shall promptly notify Borrower, and Borrower shall immediately pay
such corresponding amount to the Administrative Agent together
with interest at the rate specified for the Borrowing which
includes such amount paid and any amounts due under Section 3.13.
hereof. Nothing in this subsection shall be deemed to relieve any
Lender from its obligation to fund its Commitments hereunder or to
prejudice any rights which Borrower may have against any Lender as
a result of any default by such Lender hereunder.
(e) All Borrowings under the Revolving Credit Commitments and the
Term Loan Commitments shall be loaned by the Lenders on the basis
of their Applicable Commitment Percentage on the date of such
Borrowing. No Lender shall be responsible for any default by any
other Lender in its obligations hereunder, and each Lender shall
be obligated to make the Loans provided to be made by it
hereunder, regardless of the failure of any other Lender to fund
its Commitment hereunder.
Section 3.3. Interest.
(a) Borrower agrees to pay interest in respect of all unpaid
principal amounts of the Revolving Loans from the respective dates
such principal amounts were advanced to maturity (whether by
acceleration, notice of prepayment or otherwise) at rates per
annum equal to the applicable rates indicated below:
(i) For Base Rate Advances The Base Rate in effect from time to
time; and
(ii) For Eurodollar Advances The relevant Adjusted LIBO Rate plus
the Applicable Margin.
(b) Borrower agrees to pay interest in respect of all unpaid
principal amounts of the Term Loans made to Borrower from the date
such principal amount was advanced to maturity (whether by
acceleration, notice of prepayment or otherwise) at a rate equal
to the Adjusted LIBO Rate for three (3) month periods plus the
Applicable Margin.
(c) Borrower agrees to pay interest in respect of all unpaid
principal amounts of the Swing Line Loan made to Borrower from the
respective dates such principal amounts were advanced to maturity
(whether by acceleration, notice of prepayment or otherwise) at a
rate equal to the Base Rate minus one percent (1.0%) per annum.
(d) Overdue principal and, to the extent not prohibited by
applicable law, overdue interest, in respect of the Revolving
Loans, the Swing Line Loan, and Term Loans, and all other overdue
amounts owing hereunder, shall bear interest from each date that
such amounts are overdue:
(i) in the case of overdue principal and interest with respect to
all Loans outstanding as Eurodollar Advances, at the greater of
(A) the rate otherwise applicable for the then-current Interest
Period plus an additional two percent (2%) per annum or (B) the
rate in effect for Base Rate Advances plus an additional two
percent (2%) per annum; and
(ii) in the case of overdue principal and interest with respect to
all other Loans outstanding as Base Rate Advances or as the Term
Loans, and all other Obligations hereunder (other than Loans), at
a rate equal to the Base Rate plus an additional two percent (2%)
per annum.
(e) Interest on each Loan shall accrue from and including the date
of such Loan to but excluding the date of any repayment thereof,
provided that, if a Loan is repaid on the same day made, one day's
interest shall be paid on such Loan. Interest on all outstanding
Base Rate Advances shall be payable quarterly in arrears on or
before twelve noon (Nashville, Tennessee time) at the Payment
Office on the last day of each calendar quarter, commencing on
March 31, 1999. Interest on all outstanding Eurodollar Advances
shall be payable on or before twelve noon (Nashville, Tennessee
time) at the Payment Office on the last day of each Interest
Period applicable thereto, and, in the case of Eurodollar Advances
having an Interest Period in excess of three months, on or before
twelve noon (Nashville, Tennessee time) at the Payment Office each
three month anniversary of the initial date of such Interest
Period. Interest on all Loans shall be payable on or before twelve
noon (Nashville, Tennessee time) at the Payment Office on any
conversion of any Advances comprising such Loans into Advances of
another Type (other than in connection with the conversion from a
Base Rate Loan), prepayment (on the amount prepaid), at maturity
(whether by acceleration, notice of prepayment or otherwise) and,
after maturity, on demand. All interest payments shall be paid to
Administrative Agent in immediately available funds, free and
clear of any defenses, set-offs, counterclaims, or withholdings or
deduction for taxes.
(f) The Administrative Agent shall promptly notify the Borrower
and the other Lenders by telephone (confirmed in writing) or in
writing, upon determining the Adjusted LIBO Rate for any Interest
Period. Any such determination shall, absent manifest error, be
final, conclusive and binding for all purposes.
Section 3.4. Interest Periods; Maximum Number of Borrowings.
(a) In connection with the making or continuation of, or
conversion into, each Borrowing of Eurodollar Advances, Borrower
shall select an Interest Period to be applicable to such
Eurodollar Advances, which Interest Period shall be either a 1, 2,
3 or 6 month period. Notwithstanding the foregoing provisions of
this Section the Borrowing under the Term Loans shall be
Eurodollar Advances with Interest Periods of successive 3 month
periods as set forth in Section 2.4.
(b) Notwithstanding paragraphs (a) and (b) of this Section 3.4.:
(i) The initial Interest Period for any Borrowing of Eurodollar
Advances or Base Rate Advances, shall commence on the date of such
Borrowing (including, the date of any conversion from a Borrowing
consisting of Base Rate Advances) and each Interest Period
occurring thereafter in respect of such Borrowing shall commence
on the day on which the next preceding Interest Period expires;
(ii) If any Interest Period would otherwise expire on a day which
is not a Business Day, such Interest Period shall expire on the
next succeeding Business Day, provided that if any Interest Period
in respect of Eurodollar Advances would otherwise expire on a day
that is not a Business Day but is a day of the month after which
no further Business Day occurs in such month, such Interest Period
shall expire on the next preceding Business Day;
(iii) Any Interest Period in respect of Eurodollar Advances which
begins on a day for which there is no numerically corresponding
day in the calendar month at the end of such Interest Period
shall, subject to part (iv) below, expire on the last Business Day
of such calendar month; and
(iv) No Interest Period with respect to the Loans shall extend
beyond the applicable Maturity Date.
(c) At no time shall there be more than six (6) Eurodollar
Advances outstanding at any one time, excluding the Term Loan.
Section 3.5. Fees.
(a) Borrower shall pay to the Administrative Agent, for the
ratable benefit of each Lender based upon its respective
Applicable Commitment Percentage of the Total Commitments, a
commitment fee (the "Commitment Fee") for the period commencing on
the Closing Date to and including the Maturity Date, payable
quarterly in arrears on the last day of each calendar quarter,
commencing on March 31, 1999, and on the Maturity Date, equal to
the Commitment Fee Percentage multiplied by the average daily
unused portion of the Revolving Credit Commitments;
(b) Borrower shall pay to the Administrative Agent the amounts and
on the dates agreed to in the Fee Letter.
Section 3.6. Effective Date for Adjustment to Commitment Fee
Percentage and Applicable Margin.
The Commitment Fee Percentage and the Applicable Margin
(collectively "Applicable Percentages") shall be determined and
adjusted quarterly on the first Business Day of the Fiscal Quarter
next following the date on which the Administrative Agent receives
the officer's certificate (in form and substance acceptable to
Administrative Agent) required to be furnished by the Borrower in
accordance with the provisions of Section 6.7.(d) (each a
"Calculation Date"). Except as set forth above, each Applicable
Percentage shall be effective from one Calculation Date until the
next Calculation Date.
Section 3.7. Voluntary Prepayments of Borrowings.
(a) Borrower may, at its option, prepay Borrowings consisting of
Base Rate Advances at any time in whole, or from time to time in
part, in amounts aggregating $5,000,000 or any greater integral
multiple of $1,000,000, by paying the principal amount to be
prepaid together with interest accrued and unpaid thereon to the
date of prepayment. Upon two (2) Business Days' prior written
notice given by Borrower to Administrative Agent, Borrowings
consisting of Eurodollar Advances may be prepaid on the last day
of any applicable Interest Period, in whole, or from time to time
in part, in amounts aggregating $5,000,000 or any greater integral
multiple of $1,000,000 (except that no partial prepayment may be
made if the remaining principal amount outstanding of such
Eurodollar Advance which comprises a Revolving Loan would be less
than $10,000,000), by paying the principal amount to be prepaid,
together with interest accrued and unpaid thereon to the date of
prepayment. Prepayment of Eurodollar Advances may not be made
except on the last day of an Interest Period applicable thereto.
Each such optional prepayment shall be applied in accordance with
Section 3.7.(b) below.
(b) All voluntary prepayments shall be applied to the payment of
interest then due and owing before application to principal.
Section 3.8. Manner of Payment, Calculation of Interest, Taxes.
(a)(i) Except as otherwise specifically provided herein, all
payments under this Agreement and the other Credit Documents,
other than the payments specified in clause (ii) below, shall be
made without defense, set-off, or counterclaim to the
Administrative Agent not later than 11:00 a.m. (Nashville,
Tennessee time) on the date when due and shall be made in Dollars
in immediately available funds at the Administrative Agent's
Payment Office.
(ii) All payments made under the Swing Line Loan shall be made
without defense, setoff, or counterclaim to the Swing Line Lender
not later than 11:00 a.m. (Nashville, Tennessee time) on the date
when due and shall be made in Dollars in immediately available
funds at the Swing Line Lender's Payment Office.
(b)(i) All such payments shall be made free and clear of and
without deduction or withholding for any Taxes in respect of this
Agreement, the Notes or other Credit Documents, or any payments of
principal, interest, fees or other amounts payable hereunder or
thereunder (but excluding, except as provided in paragraph (iii)
hereof, in the case of each Lender, taxes imposed on or measured
by its net income, and franchise taxes and branch profit taxes
imposed on it (A) by the jurisdiction under the laws of which such
Lender is organized or any political subdivision thereof, and in
the case of each Lender, taxes imposed on or measured by its net
income, and franchise taxes and branch profit taxes imposed on it,
by the jurisdiction of such Lender's appropriate Lending Office or
any political subdivision thereof, and (B) by a jurisdiction in
which any payments are to be made by any Borrower hereunder, other
than the United States of America, or any political subdivision
thereof, and that would not have been imposed but for the
existence of a connection between such Lender and the jurisdiction
imposing such taxes (other than a connection arising as a result
of this Agreement or the transactions contemplated by this
Agreement), except in the case of taxes described in this clause
(B), to the extent such taxes are imposed as a result of a change
in the law or regulations of any jurisdiction or any applicable
treaty or regulations or in the official interpretation of any
such law, treaty or regulations by any government authority
charged with the interpretation or administration thereof after
the date of this Agreement). If any such Taxes are so levied or
imposed, Borrower agrees (A) to pay the full amount of such Taxes,
and such additional amounts as may be necessary so that every net
payment of all amounts due hereunder and under the Notes and other
Credit Documents, after withholding or deduction for or on account
of any such Taxes (including additional sums payable under this
Section 3.8.), will not be less than the full amount provided for
herein had no such deduction or withholding been required, (B) to
make such withholding or deduction and (C) to pay the full amount
deducted to the relevant authority in accordance with applicable
law. Borrower will furnish to the Administrative Agent and each
Lender, within 30 days after the date the payment of any Taxes is
due pursuant to applicable law, certified copies of tax receipts
evidencing such payment by Borrower. Borrower will indemnify and
hold harmless the Administrative Agent and each Lender and
reimburse the Administrative Agent and each Lender upon written
request for the amount of any such Taxes so levied or imposed and
paid by the Administrative Agent or Lender and any liability
(including penalties, interest and expenses) arising therefrom or
with respect thereto, whether or not such Taxes were correctly or
illegally asserted. A certificate as to the amount of such payment
by such Lender or the Administrative Agent, absent manifest error,
shall be final, conclusive and binding for all purposes.
(ii) Each Lender that is organized under the laws of any
jurisdiction other than the United States of America or any State
thereof (including the District of Columbia) agrees to furnish to
Borrower and the Administrative Agent, prior to the time it
becomes a Lender hereunder, two copies of either U.S. Internal
Revenue Service Form 4224 or U.S. Internal Revenue Service Form
1001 or any successor forms thereto (wherein such Lender claims
entitlement to complete exemption from U.S. Federal withholding
tax on interest paid by Borrower hereunder) and to provide to
Borrower and the Administrative Agent a new Form 4224 or Form 1001
or any successor forms thereto if any previously delivered form is
found to be incomplete or incorrect in any material respect or
upon the obsolescence of any previously delivered form; provided,
however, that no Lender shall be required to furnish a form under
this paragraph (ii) after the date that it becomes a Lender
hereunder if it is not entitled to claim an exemption from
withholding under applicable law.
(iii) Borrower shall also reimburse the Administrative Agent and
each Lender, upon written request, for any Taxes imposed
(including, without limitation, Taxes imposed on the overall net
income of the Administrative Agent or Lender or its applicable
Lending Office pursuant to the laws of the jurisdiction in which
the principal executive office or the applicable Lending Office of
the Administrative Agent or Lender is located) as the
Administrative Agent or Lender shall determine are payable by the
Administrative Agent or Lender in respect of amounts paid by or on
behalf of Borrower to or on behalf of the Administrative Agent or
Lender pursuant to paragraph (i) hereof.
(iv) In addition to the documents to be furnished pursuant to
Section 3.8.(b)(i), each Lender shall, promptly upon the
reasonable written request of the Borrower to that effect, deliver
to the Borrower such other accurate and complete forms or similar
documentation as such Lender is legally able to provide and as may
be required from time to time by any applicable law, treaty, rule
or regulation or any jurisdiction in order to establish such
Lender's tax status for withholding purposes or as may otherwise
be appropriate to eliminate or minimize any Taxes on payments
under this Agreement or the Notes.
(v) The Borrower shall not be required to pay any amounts pursuant
to Section 3.8.(b)(ii), or (iii) to any Lender for the account of
any Lending Officer of such Lender in respect of any United States
withholding taxes payable hereunder (and the Borrower, if required
by law to do so, shall be entitled to withhold such amounts and
pays such amounts to the United States Government) if the
obligation to pay such additional amounts would not have arisen
but for a failure by such Lender to comply with its obligations
under Section 3.8.(b)(ii), and such Lender shall not be entitled
to an exemption from deduction or withholding of United Stated
Federal income tax in respect of the payment of such sum by the
Borrower hereunder for the account of such Lending Office for, in
each case, any reason other than a change in United States law or
regulations by any governmental authority charged with the
interpretation or administration thereof (whether or not having
the force of law) after the date such Lender became a Lender
hereunder.
(vi) Within sixty (60) days of the written request of the
Borrower, each Lender shall execute and deliver such certificates,
forms or other documents, which can be reasonably furnished
consistent with the facts and which are reasonably necessary to
assist in applying for refunds of Taxes remitted hereunder.
(vii) To the extent that the payment of any Lender's Taxes by the
Borrower gives rise from time to time to a Tax Benefit (as
hereinafter defined) to such Lender in any jurisdiction other than
the jurisdiction which imposed such Taxes, such Lender shall pay
to the Borrower the amount of each such Tax Benefit so recognized
or received. The amount of each Tax Benefit and, therefore,
payment to the Borrower will be determined from time to time by
the relevant Lender in its sole discretion, which determination
shall be binding and conclusive on all parties hereto. Each such
payment will be due and payable by such Lender to the Borrower
within a reasonable time after the filing of the income tax return
in which such Tax Benefit is recognized or, in the case of any tax
refund, after the refund is received; provided, however if at any
time thereafter such Lender is required to rescind such Tax
Benefit or such Tax Benefit is otherwise disallowed or nullified,
the Borrower shall promptly, after notice thereof from such
Lender, repay to Lender the amount of such Tax Benefit previously
paid to the Borrower and rescinded, disallowed or nullified. For
purposed of this section, "Tax Benefit" shall mean the amount by
which any Lender's income tax liability for the taxable period in
question is reduced below what would have been payable had the
Borrower not been required to pay the Lender's Taxes. In case of
any dispute with respect to the amount of any payment the Borrower
shall have no right to any offset or withholding of payments with
respect to future payments due to any Lender under this Agreement
or the Notes.
(c) Subject to Section 3.4.(c)(ii), whenever any payment to be
made hereunder or under any Note shall be stated to be due on a
day which is not a Business Day, the due date thereof shall be
extended to the next succeeding Business Day and, with respect to
payments of principal, interest thereon shall be payable at the
applicable rate during such extension.
(d) All computations of interest and fees shall be made on the
basis of a year of 360 days for the actual number of days
(including the first day but excluding the last day) occurring in
the period for which such interest or fees are payable (to the
extent computed on the basis of days elapsed). Interest on Base
Rate Advances shall be calculated based on the Base Rate from and
including the date of such Loan to but excluding the date of the
repayment or conversion thereof. Interest on Eurodollar Advances
shall be calculated as to each Interest Period from and including
the first day thereof to but excluding the last day thereof. Each
determination by the Administrative Agent of an interest rate or
fee hereunder shall be made in good faith and, except for manifest
error, shall be final, conclusive and binding for all purposes.
(e) Payment by the Borrower to the Administrative Agent in
accordance with the terms of this Agreement shall, as to the
Borrower, constitute payment to the Lenders under this Agreement.
Section 3.9. Interest Rate Not Ascertainable, etc.
In the event that the Administrative Agent shall have determined
(which determination shall be made in good faith and, absent
manifest error, shall be final, conclusive and binding upon all
parties) that on any date for determining the Adjusted LIBO Rate
for any Interest Period, by reason of any changes arising after
the date of this Agreement affecting the London interbank market,
or the Administrative Agent's position in such market, adequate
and fair means do not exist for ascertaining the applicable
interest rate on the basis provided for in the definition of
Adjusted LIBO Rate, then, and in any such event, the
Administrative Agent shall forthwith give notice (by telephone
confirmed in writing) to Borrower and to the Lenders, of such
determination and a summary of the basis for such determination.
Until the Administrative Agent notifies Borrower that the
circumstances giving rise to the suspension described herein no
longer exist, the obligations of the Lenders to make or permit
portions of the Revolving Loans, Term Loans and the Swing Line
Loan to remain outstanding past the last day of the then current
Interest Periods as Eurodollar Advances shall be suspended, and
such affected Advances shall bear the same interest as Base Rate
Advances.
Section 3.10. Illegality.
(a) In the event that any Lender shall have determined (which
determination shall be made in good faith and, absent manifest
error, shall be final, conclusive and binding upon all parties) at
any time that the making or continuance of any Eurodollar Advance
has become unlawful by compliance by such Lender in good faith
with any applicable law, governmental rule, regulation, guideline
or order (whether or not having the force of law and whether or
not failure to comply therewith would be unlawful), then, in any
such event, the Lender shall give prompt notice (by telephone
confirmed in writing) to Borrower and to the Administrative Agent
of such determination and a summary of the basis for such
determination (which notice the Administrative Agent shall
promptly transmit to the other Lenders).
(b) Upon the giving of the notice to Borrower referred to in
subsection (a) above, (i) Borrower's right to request and such
Lender's obligation to make Eurodollar Advances shall be
immediately suspended, and such Lender shall make an Advance as
part of the requested Borrowing of Eurodollar Advances as a Base
Rate Advance, which Base Rate Advance, as the case may be, shall,
for all other purposes, be considered part of such Borrowing, and
(ii) if the affected Eurodollar Advance or Advances are then
outstanding, Borrower shall immediately, or if subject to
applicable law, no later than the date permitted by applicable
law, upon at least one Business Day's written notice to the
Administrative Agent and the affected Lender, convert each such
Advance into a Base Rate Advance or Advances, provided that if
more than one Lender is affected at any time, then all affected
Lenders must be treated the same pursuant to this Section
3.10.(b).
Section 3.11. Increased Costs.
(a) If, by reason of (x) after the date hereof, the introduction
of or any change (including, without limitation, any change by way
of imposition or increase of reserve requirements) in or in the
interpretation of any law or regulation, or (y) the compliance
with any guideline or request from any central bank or other
governmental authority or quasi-governmental authority exercising
control over banks or financial institutions generally (whether or
not having the force of law):
(i) any Lender (or its applicable Lending Office) shall be subject
to any tax, duty or other charge with respect to its Eurodollar
Advances, or its obligation to make such Advances, or the basis of
taxation of payments to any Lender of the principal of or interest
on its Eurodollar Advances or its obligation to make Eurodollar
Advances shall have changed (except for changes in the tax on the
overall net income of such Lender or its applicable Lending Office
imposed by the jurisdiction in which such Lender's principal
executive office or applicable Lending Office is located); or
(ii) any reserve (including, without limitation, any imposed by
the Board of Governors of the Federal Reserve System), special
deposit or similar requirement against assets of, deposits with or
for the account of, or credit extended by, any Lender's applicable
Lending Office shall be imposed or deemed applicable or any other
condition affecting its Eurodollar Advances or its obligation to
make Eurodollar Advances shall be imposed on any Lender or its
applicable Lending Office or the London interbank market;
and as a result thereof there shall be any increase in the cost to
such Lender of agreeing to make or making, funding or maintaining
Eurodollar Advances (except to the extent already included in the
determination of the applicable Adjusted LIBO Rate for Eurodollar
Advances) or its obligation to make Eurodollar Advances, or there
shall be a reduction in the amount received or receivable by such
Lender or its applicable Lending Office, then Borrower shall from
time to time (subject, in the case of certain Taxes, to the
applicable provisions of Section 3.8.(b)), upon written notice
from and demand by such Lender to Borrower (with a copy of such
notice and demand to the Administrative Agent), pay to the
Administrative Agent for the account of such Lender within ten
(10) Business Days after the date of such notice and demand,
additional amounts sufficient to indemnify such Lender against
such increased cost. A certificate as to the amount of such
increased cost, submitted to Borrower and the Administrative Agent
by such Lender in good faith and accompanied by a statement
prepared by such Lender describing in reasonable detail the basis
for and calculation of such increased cost, shall, except for
manifest error, be final conclusive and binding for all purposes.
(b) If any Lender shall advise the Administrative Agent that at
any time, because of the circumstances described in clauses (x) or
(y) in Section 3.11.(a) or any other circumstances beyond such
Lender's reasonable control arising after the date of this
Agreement affecting such Lender or the London interbank market or
such Lender's position in such market, the Adjusted LIBO Rate as
determined by the Administrative Agent will not adequately and
fairly reflect the cost to such Lender of funding its Eurodollar
Advances then, and in any such event:
(i) the Administrative Agent shall forthwith give notice (by
telephone confirmed in writing) to Borrower and to the other
Lenders of such advice;
(ii) Borrower's right to request and such Lender's obligation to
make or permit portions of the Loans to remain outstanding past
the last day of the then current Interest Periods as Eurodollar
Advances shall be immediately suspended; and
(iii) in the event the affected Loan is a Revolving Loan or Term
Loan, such Lender shall make a Loan as part of the requested
Borrowing under the Revolving Loan Commitments of Eurodollar
Advances as a Base Rate Advance, which such Base Rate Advance
shall, for all other purposes, be considered part of such
Borrowing.
Section 3.12. Lending Offices.
(a) Each Lender agrees that, if requested by Borrower, it will use
reasonable efforts (subject to overall policy considerations of
such Lender) to designate an alternate Lending Office with respect
to any of its Eurodollar Advances, as the case may be, affected by
the matters or circumstances described in Sections 3.8.(b), 3.9.,
3.10., 3.11. or 3.17. to reduce the liability of Borrower or avoid
the results provided thereunder, so long as such designation is
not disadvantageous to such Lender as reasonably determined by
such Lender, which determination shall be conclusive and binding
on all parties hereto. Nothing in this Section 3.12. shall affect
or postpone any of the obligations of Borrower or any right of any
Lender provided hereunder.
(b) If any Lender that is organized under the laws of any
jurisdiction other than the United States of America or any State
thereof (including the District of Columbia) issues a public
announcement with respect to the closing of its Lending Offices in
the United States such that any withholdings or deductions and
additional payments with respect to Taxes may be required to be
made by Borrower thereafter pursuant to Section 3.8.(b), such
Lender shall use reasonable efforts to furnish Borrower notice
thereof as soon as practicable thereafter; provided, however, that
no delay or failure to furnish such notice shall in any event
release or discharge Borrower from its obligations to such Lender
pursuant to Section 3.8.(b) or otherwise result in any liability
of such Lender.
Section 3.13. Funding Losses.
Except for losses, expenses and liabilities occasioned by the
circumstances set forth in Section 3.11.(b), Borrower shall
compensate each Lender, upon its written request to Borrower
(which request shall set forth the basis for requesting such
amounts in reasonable detail and which request shall be made in
good faith and, absent manifest error, shall be final, conclusive
and binding upon all of the parties hereto), for all actual
losses, expenses and liabilities (including, without limitation,
any interest paid by such Lender to lenders of funds borrowed by
it to make or carry its Eurodollar Advances, in either case to the
extent not recovered by such Lender in connection with the re-
employment of such funds but excluding loss of anticipated
profits), which the Lender may sustain: (i) if for any reason
(other than a default by such Lender) a borrowing of, or
conversion to or continuation of, Eurodollar Advances to Borrower
does not occur on the date specified therefor in a Notice of
Borrowing, Notice of Conversion/Continuation (whether or not
withdrawn), (ii) if any repayment (including mandatory prepayments
and any conversions pursuant to Section 3.10.(b)) of any
Eurodollar Advances to Borrower occurs on a date which is not the
last day of an Interest Period applicable thereto, or (iii), if,
for any reason, Borrower defaults in its obligation to repay its
Eurodollar Advances when required by the terms of this Agreement.
Section 3.14. Assumptions Concerning Funding of Eurodollar
Advances.
Calculation of all amounts payable to a Lender under this Article
3. shall be made as though that Lender had actually funded its
relevant Eurodollar Advances through the purchase of deposits in
the relevant market bearing interest at the rate applicable to
such Eurodollar Advances in an amount equal to the amount of the
Eurodollar Advances and having a maturity comparable to the
relevant Interest Period and through the transfer of such
Eurodollar Advances from an offshore office of that Lender to a
domestic office of that Lender in the United States of America;
provided, however that each Lender may fund each of its Eurodollar
Advances in any manner it sees fit and the foregoing assumption
shall be used only for calculation of amounts payable under this
Article 3.
Section 3.15. Apportionment of Payments.
Aggregate principal and interest payments in respect of Loans and
payments in respect of Commitment Fees shall be apportioned among
all outstanding Commitments and Loans to which such payments
relate, proportionately to the Lenders' respective pro rata
portions of such Commitments and outstanding Loans. The
Administrative Agent shall promptly distribute to each Lender at
its payment office specified by any Lender its share of any such
payments received by the Administrative Agent on the same Business
Day as such payment is deemed to be received by the Administrative
Agent.
Section 3.16. Sharing of Payments, Etc.
If any Lender shall obtain any payment or reduction (including,
without limitation, any amounts received as adequate protection of
a deposit treated as cash collateral under the Bankruptcy Code) of
the Obligations (whether voluntary, involuntary, through the
exercise of any right of set-off, or otherwise) in excess of its
Applicable Commitment Percentage of payments or reductions on
account of such obligations obtained by all the Lenders, such
Lender shall forthwith (i) notify each of the other Lenders and
Administrative Agent of such receipt, and (ii) purchase from the
other Lenders such participations in the affected obligations as
shall be necessary to cause such purchasing Lender to share the
excess payment or reduction, net of costs incurred in connection
therewith, ratably with each of them, provided that if all or any
portion of such excess payment or reduction is thereafter
recovered from such purchasing Lender or additional costs are
incurred, the purchase shall be rescinded and the purchase price
restored to the extent of such recovery or such additional costs,
but without interest unless the Lender obligated to return such
funds is required to pay interest on such funds. Borrower agrees
that any Lender so purchasing a participation from another Lender
pursuant to this Section 3.16. may, to the fullest extent
permitted by law, exercise all its rights of payment (including
the right of set-off) with respect to such participation as fully
as if such Lender were the direct creditor of Borrower in the
amount of such participation. Any payment received by the
Administrative Agent or any Lender following the occurrence and
during the continuation of an Event of Default shall be
distributed pro rata amongst the Lenders based upon the percentage
obtained by dividing the Obligations owing to each Lender by the
total amount of Obligations on the date of receipt of such
payment, with such amounts to be applied to the outstanding
Obligations in accordance with the terms of this Agreement.
Section 3.17. Capital Adequacy.
Without limiting any other provision of this Agreement, in the
event that any Lender shall have determined that any law, treaty,
governmental (or quasi-governmental) rule, regulation, guideline
or order regarding capital adequacy not currently in effect or
fully applicable as of the Closing Date, or any change therein or
in the interpretation or application thereof after the Closing
Date, or compliance by such Lender with any request or directive
regarding capital adequacy not currently in effect or fully
applicable as of the Closing Date (whether or not having the force
of law and whether or not failure to comply therewith would be
unlawful) from a central bank or governmental authority or body
having jurisdiction, does or shall have the effect of reducing the
rate of return on such Lender's capital as a consequence of its
obligations hereunder to a level below that which such Lender
could have achieved but for such law, treaty, rule, regulation,
guideline or order, or such change or compliance (taking into
consideration such Lender's policies with respect to capital
adequacy) by an amount deemed by such Lender to be material, then
within ten (10) Business Days after written notice and demand by
such Lender (with copies thereof to the Administrative Agent),
Borrower shall from time to time pay to such Lender additional
amounts sufficient to compensate such Lender for such reduction
(but, in the case of outstanding Base Rate Advances, without
duplication of any amounts already recovered by such Lender by
reason of an adjustment in the applicable Base Rate). Each
certificate as to the amount payable under this Section 3.17.
(which certificate shall set forth the basis for requesting such
amounts in reasonable detail), submitted to Borrower by any Lender
in good faith, shall, absent manifest error, be final, conclusive
and binding for all purposes.
Section 3.18 Limitation on Certain Payment Obligations.
(a) Each Lender or the Administrative Agent shall make written
demand on the Borrower for indemnification or compensation
pursuant to Section 3.8.(b) no later than six months after the
earlier of (i) on the date on which Lender or the Administrative
Agent makes payment of any such Taxes and (ii) the date on which
the relevant taxing authority or other governmental authority
makes written demand upon such Lender or Administrative Agent for
the payment of such Taxes.
(b) Each Lender or Administrative Agent shall make written demand
on the Borrower for indemnification or compensation pursuant to
Section 3.13. no later than six months after the event giving rise
to the claim for indemnification or compensation occurs.
(c) Each Lender or the Administrative Agent shall make written
demand on the Borrower for identification or compensation pursuant
to Section 3.11. or Section 3.17. no later than six months after
such Lender or Administrative Agent receives actual notice or
obtains actual knowledge of the promulgation of a law, rule,
order, interpretation or occurrence of another event giving rise
to a claim pursuant to such provisions.
(d) In the event that the Lenders or Administrative Agent fail to
give the Borrower notice within the time limitations set forth
above, the Borrower shall not have any obligation to pay amounts
with respect to such claims accrued prior to six months preceding
any written demand therefor.
ARTICLE 4. CONDITIONS TO BORROWINGS
The obligation of each Lender to make Advances to Borrower is
subject to the satisfaction of the following conditions:
Section 4.1. Conditions Precedent to Initial Loans.
At the time of the making of the initial Loans hereunder on the
Closing Date, all obligations of Borrower hereunder incurred prior
to the initial Loans (including, without limitation, Borrower's
obligations to reimburse the reasonable fees and expenses of
counsel to the Administrative Agent and any fees and expenses
payable to the Administrative Agent as previously agreed with
Borrower), shall have been paid in full, and the Administrative
Agent shall have received the following, in form and substance
reasonably satisfactory in all respects to the Administrative
Agent:
(a) the duly executed counterparts of this Agreement;
(b) the duly completed Revolving Credit Notes evidencing the
Revolving Credit Commitments, the duly completed Swing Line Note
evidencing the Swing Line Commitment, and duly completed Term
Notes evidencing the Term Loan Commitments;
(c) all required, duly executed Subsidiary Guaranties;
(d) certificates of the Secretary or Assistant Secretary of the
Borrower attaching and certifying copies of the resolutions of the
board of directors of the Borrower, and each Subsidiary Guarantor
providing a required Subsidiary Guarantee, authorizing as
applicable the execution, delivery and performance of the Credit
Documents;
(e) certificates of the Secretary or an Assistant Secretary of the
Borrower certifying (i) the name, title and true signature of each
officer of the Borrower executing the Credit Documents, and (ii)
the bylaws of the Borrower and each Subsidiary Guarantor;
(f) certified copies of the certificate or articles of
incorporation of the Borrower and each of its Subsidiaries
certified by the Secretary of State and by the Secretary or
Assistant Secretary of the Borrower or such Subsidiaries, as
appropriate, together with certificates of good standing or
existence, as may be available from the Secretary of State of the
jurisdiction of incorporation or organization of the Borrower and
each of its Subsidiaries, and each other jurisdiction where the
ownership of Property or the conduct of its business require the
Borrower or its Subsidiaries to be qualified, except where a
failure to be so qualified would not have a Materially Adverse
Effect;
(g) closing certificate of Borrower in substantially the form of
Exhibit G attached hereto and appropriately completed;
(h) the favorable opinion of corporate counsel to the Consolidated
Companies as to certain matters, in the form of Exhibit H, in each
case addressed to the Administrative Agent and each of the
Lenders;
(i) copies of all documents and instruments, including all
consents, authorizations and filings, required under the articles
or certificate of incorporation and bylaws or other organizational
or governing documents, under any Requirement of Law or by any
material Contractual Obligation of the Consolidated Companies, in
connection with the execution, delivery, performance, validity and
enforceability of the Credit Documents and the other documents to
be executed and delivered hereunder, and such consents,
authorizations, filings and orders shall be in full force and
effect;
(j) any other document, opinion or certificate reasonably
requested by the Administrative Agent and the Lenders assuring the
Administrative Agent and the Lenders that all corporate
proceedings and all other legal matters in connection with the
authorization, legality, validity and enforceability of the Credit
Documents are in form and substance satisfactory to the Lenders;
and
(k) a certificate from an Executive Officer of the Borrower
certifying that the first Advance under the Revolving Credit
Commitments shall be used to cancel and pay in full all Prior
Revolving Credit Debt and that the proceeds of the Term Loan
Facility shall be used to cancel and pay in full all Prior Term
Debt; and
(l) the acquisition and plan of merger documents with respect to
the acquisition of Logan's Roadhouse, Inc. and any other documents
with respect thereto that Administrative Agent reasonably
requests.
Section 4.2. Conditions to All Loans.
At the time of the making of all Loans, including the initial
Loans hereunder, (before as well as, after giving effect to such
Loans and to the proposed use of the proceeds thereon, the
following conditions shall have been satisfied or shall exist:
(a) there shall exist no Default or Event of Default;
(b) all representations and warranties by Borrower contained
herein shall be true and correct in all material respects with the
same effect as though such representations and warranties had been
made on and as of the date of such Loans except to the extent they
expressly relate to an earlier date or have been updated to the
extent permitted herein;
(c) since the date of the most recent financial statements of the
Consolidated Companies described in Section 5.14., there shall
have been no change which has had or is reasonably likely to have
a Materially Adverse Effect (whether or not any notice with
respect to such change has been furnished to the Lenders pursuant
to Section 6.7.);
(d) except for litigation disclosed in Schedule 5.5., there shall
be no action or proceeding instituted or pending before any court
or other governmental authority or, to the knowledge of any
Executive Officer of Borrower, threatened (i) which is reasonably
likely to have a Materially Adverse Effect, or (ii) seeking to
prohibit or restrict one or more of the Consolidated Companies'
right to own or operate any portion of its business or Properties,
or to compel one or more of the Borrower and its Consolidated
Companies to dispose of or hold separate all or any portion of its
businesses or Properties, where such portion or portions of such
business(es) or Properties, as the case may be, constitute a
material portion of the total businesses or Properties, of the
Consolidated Companies;
(e) the Loans to be made and the use of proceeds thereof shall not
contravene, violate or conflict with, or involve the
Administrative Agent or any Lender in a violation of, any law,
rule, injunction, or regulation, or determination of any court of
law or other governmental authority applicable to any Consolidated
Company; and
(f) the Administrative Agent shall have received such other
documents or legal opinions as the Administrative Agent or any
Lender may reasonably request, all in form and substance
reasonably satisfactory to the Administrative Agent.
Each request for a Borrowing and the acceptance by Borrower of the
proceeds thereof shall constitute a representation and warranty by
Borrower, as of the date of the Loans comprising such Borrowing,
that the applicable conditions specified in Sections 4. 1. and
4.2. have been satisfied.
ARTICLE 5. REPRESENTATIONS AND WARRANTIES
Borrower (as to itself and all other Consolidated Companies)
represents and warrants as follows:
Section 5.1. Corporate Existence; Compliance with Law.
Each of the Consolidated Companies is a corporation duly
organized, validly existing, and in good standing under the laws
of the jurisdiction of its incorporation. Each of the Consolidated
Companies (i) has the corporate power and authority and the legal
right to own and operate its Property and to conduct its business,
(ii) is duly qualified as a foreign corporation and in good
standing under the laws of each jurisdiction where its ownership
of Property or the conduct of its business requires such
qualification, and (iii) is in compliance with all Requirements of
Law, where the failure to so comply is reasonably likely to have a
Materially Adverse Effect. The jurisdiction of incorporation or
organization, and the ownership of all issued and outstanding
capital stock, for each Subsidiary as of the date of this
Agreement is accurately described on Schedule 5.1. Schedule 5.1.
may be updated from time to time by the Borrower by giving written
notice thereof to the Administrative Agent.
Section 5.2. Corporate Power; Authorization.
Each of the Borrower and its Subsidiary Guarantors has the
corporate power and authority to make, deliver and perform the
Credit Documents to which it is a party and has taken all
necessary corporate action to authorize the execution, delivery
and performance of such Credit Documents. No consent or
authorization of, or filing with, any Person (including, without
limitation, any governmental authority), is required in connection
with the execution, delivery or performance by the Borrower or its
Subsidiary Guarantors, or the validity or enforceability against
the Borrower or its Subsidiary Guarantors, of the Credit
Documents, other than such consents, authorizations or filings
which have been made or obtained.
Section 5.3. Enforceable Obligations.
This Agreement has been duly executed and delivered, and each
other Credit Document will be duly executed and delivered, by the
respective Consolidated Companies, as applicable, and this
Agreement constitutes, and each other Credit Document when
executed and delivered will constitute, legal, valid and binding
obligations of the Consolidated Companies executing the same,
enforceable against such Consolidated Companies in accordance with
their respective terms.
Section 5.4. No Legal Bar.
The execution, delivery and performance by the Consolidated
Companies of the Credit Documents do not violate their respective
articles or certificates of incorporation, bylaws or other
organizational or governing documents, or any Requirement of Law,
or any applicable judgment, court order, administrative agency
order, or cause a breach or default under any of their respective
Material Contractual Obligations.
Section 5.5. No Material Litigation.
Except as set forth on Schedule 5.5., no litigation, investigation
or proceeding of or before any court, tribunal, arbitrator or
governmental authority is pending or, to the knowledge of any
Executive Officer of the Borrower, threatened by or against any of
the Consolidated Companies, or against any of their respective
Properties or revenues, existing or future (a) with respect to any
Credit Document, or any of the transactions contemplated hereby or
thereby, or (b) which, if adversely determined, is reasonably
likely to have a Materially Adverse Effect.
Section 5.6. Investment Company Act, Etc.
Neither of the Consolidated Companies is an "investment company"
or a company "controlled" by an "investment company" (as each of
the quoted terms is defined or used in the Investment Company Act
of 1940, as amended). None of the Consolidated Companies is
subject to regulation under the Public Utility Holding Company Act
of 1935, the Federal Power Act, or any foreign, federal or local
statute or regulation limiting its ability to incur Indebtedness
for Money Borrowed, guarantee such indebtedness, or pledge its
assets to secure such indebtedness, as contemplated hereby or by
any other Credit Document.
Section 5.7. Margin Regulations.
No part of the proceeds of any of the Loans will be used for any
purpose which violates, or which would be inconsistent or not in
compliance with, the provisions of the applicable Margin
Regulations.
Section 5.8. Compliance With Environmental Laws.
(a) The Consolidated Companies have received no notices of claims
or potential liability under, and are in compliance with, all
applicable Environmental Laws, where such claims and liabilities
under, and failures to comply with, such statutes, regulations,
rules, ordinances, laws or licenses, is reasonably likely to
result in penalties, fines, claims or other liabilities to the
Consolidated Companies in amounts that would have a Materially
Adverse Effect, either individually or in the aggregate (including
any such penalties, fines, claims, or liabilities relating to the
matters set forth on Schedule 5.8.(a)), except as set forth on
Schedule 5.8.(a)).
(b) Except as set forth on Schedule 5.8.(b), none of the
Consolidated Companies has received any notice of violation, or
notice of any action, either judicial or administrative, from any
governmental authority (whether United States or foreign) relating
to the actual or alleged violation of any Environmental Law,
including, without limitation any notice of any actual or alleged
spill, leak, or other release of any Hazardous Substance, waste or
hazardous waste by any Consolidated Company or its employees or
agents, or as to the existence of any continuation on any
Properties owned by any Consolidated Company, where any such
violation, spill, leak, release or contamination is reasonably
likely to result in penalties, fines, claims or other liabilities
to the Consolidated Companies in amounts that would have a
Materially Adverse Effect, either individually or in the
aggregate.
(c) Except as set forth on Schedule 5.8.(c), the Consolidated
Companies have obtained all necessary governmental permits,
licenses and approvals for the operations conducted on their
respective Properties, including without limitation, all required
material permits, licenses and approvals for (i) the emission of
air pollutants or contaminants, (ii) the treatment or pretreatment
and discharge of waste water or storm water, (iii) the treatment,
storage, disposal or generation of hazardous wastes, (iv) the
withdrawal and usage of ground water or surface water, and (v) the
disposal of solid wastes, in any such case where the failure to
have such license, permit or approval is reasonably likely to have
a Materially Adverse Effect.
Section 5.9. Insurance.
The Consolidated Companies currently maintain insurance with
respect to their respective Properties and businesses, with
financially sound and reputable insurers, having coverages against
losses or damages of the kinds customarily insured against by
reputable companies in the same or similar businesses, such
insurance being in amounts no less than those amounts which are
customary for such companies under similar circumstances. The
Consolidated Companies have paid all material amounts of insurance
premiums now due and owing with respect to such insurance policies
and coverages, and such policies and coverages are in full force
and effect.
Section 5.10. No Default.
None of the Consolidated Companies is in default under or with
respect to any Contractual Obligation in any respect which has had
or is reasonably likely to have a Materially Adverse Effect.
Section 5.11. No Burdensome Restrictions.
Except as set forth on Schedule 5.11., none of the Consolidated
Companies is a party to or bound by any Contractual Obligation or
Requirement of Law or any provision of its respective articles or
certificates of incorporation, bylaws, or other organizational or
governing documents which has had or is reasonably likely to have
a Materially Adverse Effect.
Section 5.12. Taxes.
The Consolidated Companies have filed all Federal tax returns and,
to the knowledge of any Executive Officer of the Borrower, the
Consolidated Companies have filed all other tax returns which are
required to have been filed in any jurisdiction; the Consolidated
Companies have paid all taxes shown to be due and payable on such
Federal returns and other returns and all other taxes,
assessments, fees and other charges payable by them, in each case,
to the extent the same have become due and payable and before they
have become delinquent, except for the filing of any such returns
or the payment of any taxes, assessments, fees and other charges
the amount, applicability or validity of which is currently being
contested in good faith by appropriate proceedings and with
respect to which any Consolidated Company has set aside on its
books reserves (segregated to the extent required by GAAP) deemed
by it in good faith to be adequate. The Borrower has not received
written notice of any proposed material tax assessment with
respect to Federal income taxes against any of the Consolidated
Companies nor does any Executive Officer of the Borrower know of
any material Federal income tax liability on the part of the
Consolidated Companies other than any such assessment or liability
which is adequately reserved for on the books of the Consolidated
Companies in accordance with GAAP.
Section 5.13. Subsidiaries.
Except as disclosed on Schedule 5.13., Borrower has no other
Subsidiaries and neither Borrower nor any Subsidiary is a joint
venture partner or general partner in any partnership. Schedule
5.13. may be updated from time to time by the Borrower by giving
written notice thereof to the Administrative Agent.
Section 5.14. Financial Statements.
Borrower has furnished to the Administrative Agent and the Lenders
the audited consolidated balance sheets as of the Consolidated
Companies and the related consolidated statements of income,
shareholders' equity and cash flows for the fiscal year ending
July 31, 1998, including the related notes. The foregoing
financial statements fairly present in all material respects the
consolidated financial condition of the Consolidated Companies as
of the date thereof and results of operations for such period in
conformity with GAAP consistently applied. The Consolidated
Companies taken as a whole did not have any material contingent
obligations, contingent liabilities, or material liabilities for
known taxes, long-term leases or unusual forward or long-term
commitments required to be reflected in the foregoing financial
statements or the notes thereto that are not so reflected. Since
July 31, 1998, there have been no changes with respect to the
Consolidated Companies which has had or is reasonably likely to
have a Materially Adverse Effect.
Section 5.15. ERISA.
Except as disclosed on Schedule 5.15:
(a) Identification of Plans. None of the Consolidated Companies
nor any of their respective ERISA Affiliates maintains or
contributes to, or has during the past seven years maintained or
contributed to, any Plan that is subject to Title IV of ERISA;
(b) Compliance. Each Plan maintained by the Consolidated Companies
has at all times been maintained, by their terms and in operation,
in compliance with all applicable laws, and the Consolidated
Companies are subject to no tax or penalty with respect to any
Plan of such Consolidated Company or any ERISA Affiliate thereof,
including without limitation, any tax or penalty under Title I or
Title IV of ERISA or under Chapter 43 of the Tax Code, or any tax
or penalty resulting from a loss of deduction under Sections 162,
404, or 419 of the Tax Code, where the failure to comply with such
laws, and such taxes and penalties, together with all other
liabilities referred to in this Section 5.15. (taken as a whole),
would in the aggregate have a Materially Adverse Effect;
(c) Liabilities. The Consolidated Companies are subject to no
liabilities (including withdrawal liabilities) with respect to any
Plans of such Consolidated Companies or any of their ERISA
Affiliates, including without limitation, any liabilities arising
from Titles I or IV of ERISA, other than obligations to fund
benefits under an ongoing Plan and to pay current contributions,
expenses and premiums with respect to such Plans, where such
liabilities, together with all other liabilities referred to in
this Section 5.15. (taken as a whole), would in the aggregate have
a Materially Adverse Effect;
(d) Funding. The Consolidated Companies and, with respect to any
Plan which is subject to Title IV of ERISA, each of their
respective ERISA Affiliates, have made full and timely payment of
all amounts (A) required to be contributed under the terms of each
Plan and applicable law, and (B) required to be paid as expenses
(including PBGC or other premiums) of each Plan, where the failure
to pay such amounts (when taken as a whole, including any
penalties attributable to such amounts) would have a Materially
Adverse Effect. No Plan subject to Title IV of ERISA has an
"amount of unfunded benefit liabilities" (as defined in Section
4001(a)(18) of ERISA), determined as if such Plan terminated on
any date on which this representation and warranty is deemed made,
in any amount which, together with all other liabilities referred
to in this Section 5.15. (taken as a whole), would have a
Materially Adverse Effect if such amount were then due and
payable. The Consolidated Companies are subject to no liabilities
with respect to post-retirement medical benefits in any amounts
which, together with all other liabilities referred to in this
Section 5.15. (taken as a whole), would have a Materially Adverse
Effect if such amounts were then due and payable.
Section 5.16. Patents, Trademarks, Licenses, Etc.
Except as set forth on Schedule 5.16., (i) the Consolidated
Companies have obtained and hold in full force and effect all
material governmental authorizations, consents, approvals,
patents, trademarks, service marks, franchises, trade names,
copyrights, licenses and other such rights, free from burdensome
restrictions, which are necessary for the operation of their
respective businesses as presently conducted, and (ii) to the best
of Borrower's knowledge, no product, process, method, service or
other item presently sold by or employed by any Consolidated
Company in connection with such business infringes any patents,
trademark, service mark, franchise, trade name, copyright, license
or other right owned by any other Person and there is not
presently pending, or to the knowledge of Borrower, threatened,
any claim or litigation against or affecting any Consolidated
Company contesting such Person's right to sell or use any such
product, process, method, substance or other item where the result
of such failure to obtain and hold such benefits or such
infringement would have a Materially Adverse Effect.
Section 5.17. Ownership of Property; Liens.
Except as set forth on Schedule 5.17., (i) each Consolidated
Company has good and marketable fee simple title to or a valid
leasehold interest in all of its real property and good title to
all of its other Property, as such Properties are reflected in the
consolidated balance sheet of the Consolidated Companies as of
July 31, 1998, except where the failure to hold such title,
leasehold interest, or possession would not have a Materially
Adverse Effect, other than Properties disposed of in the ordinary
course of business since such date or as otherwise permitted by
the terms of this Agreement, subject to no Lien or title defect of
any kind, except Liens permitted by Section 7.2. and (ii) the
Consolidated Companies enjoy peaceful and undisturbed possession
under all of their respective leases.
Section 5.18. Indebtedness.
Other than as described on Schedule 5.18. herein, and as of the
date hereof, the Consolidated Companies, on a consolidated basis,
are not obligors (singularly or in the aggregate) in respect of
any Indebtedness for Borrowed Money in excess of $75,000,000
including any commitment to create or incur any Indebtedness for
Borrowed Money.
Section 5.19. Financial Condition.
On the Closing Date and after giving effect to the transactions
contemplated by this Agreement and the other Credit Documents, the
Property of each Consolidated Company at fair valuation and based
on their present fair saleable value will exceed such Consolidated
Company's debts, including contingent liabilities, (ii) the
remaining capital of such Consolidated Company will not be
unreasonably small to conduct such Consolidated Company's
business, and (iii) such Consolidated Company will not have
incurred debts, or have intended to incur debts, beyond the
Consolidated Company's ability to pay such debts as they mature.
For purposes of this Section 5.19., "debt" means any liability on
a claim, and "claim" means (a) the right to payment, whether or
not such right is reduced to judgment, liquidated, unliquidated,
fixed, contingent, matured, unmatured, disputed, undisputed,
legal, equitable, secured or unsecured, or (b) the right to an
equitable remedy for breach of performance if such breach gives
rise to a right to payment, whether or not such right to an
equitable remedy is reduced to judgment, fixed, contingent,
matured, unmatured, disputed, undisputed, secured or unsecured.
Section 5.20. Labor Matters.
Except as set forth in Schedule 5.20., the Consolidated Companies
have experienced no strikes, labor disputes, slow downs or work
stoppages due to labor disagreements which is reasonably likely to
have, a Materially Adverse Effect, and, to the best knowledge of
the Executive Officers of the Borrower, there are no such strikes,
disputes, slow downs or work stoppages threatened against any
Consolidated Company except as disclosed in writing to the
Administrative Agent. The hours worked and payment made to
employees of the Consolidated Companies have not been in violation
in any material respect of the Fair Labor Standards Act or any
other applicable law dealing with such matters, and all payments
due from the Consolidated Companies, or for which any claim may be
made against the Consolidated Companies, on account of wages and
employee health and welfare insurance and other benefits have been
paid or accrued as liabilities on the books of the Consolidated
Companies, in each case where the failure to comply with such laws
or to pay or accrue such liabilities is reasonably likely to have
a Materially Adverse Effect.
Section 5.21. Payment or Dividend Restrictions.
Except as described on Schedule 5.21., none of the Consolidated
Companies is party to or subject to any agreement or understanding
restricting or limiting the payment of any dividends or other
distributions by any such Consolidated Company.
Section 5.22. Disclosure.
(a) Neither this Agreement nor any financial statements delivered
to the Lenders nor in the most recent version of any other
document, certificate or written statement furnished to the
Lenders by or on behalf of any Consolidated Company in connection
with the transactions contemplated hereby contains any untrue
statement of a material fact or omits to state a material fact
necessary in order to make the statements contained therein or
herein not misleading, it being understood that the representation
set forth in this Section 5.22.(a) shall not apply to any forward
looking statements, any financial projections or other pro forma
financial information.
(b) The financial projections and other pro forma financial
information contained in the information referred to in subsection
(a) above were based on good faith estimates and assumptions
believed by the applicable Consolidated Companies to be reasonable
at the time made and at the time furnished to the Administrative
Agent and/or any Lender, it being recognized by the Lenders that
such projections and other pro forma financial information as to
future events such projections and other pro forma financial
information may differ from the projected results for such period
or periods.
Section 5.23. Notice of Violations.
The Borrower has not received notice, and no Consolidated Company
has received notice, that it is in violation of any Requirement of
Law, judgment, court order, rule, or regulation that would be
expected to have a Materially Adverse Effect.
Section 5.24. Filings.
The Borrower has filed all reports and statements required to be
filed with the Securities and Exchange Commission. As of their
respective dates, the reports and statements referred to above
complied in all material respects with all rules and regulations
promulgated by the Securities and Exchange Commission and did not
contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which
they were made, not misleading.
Section 5.25.
Borrower is not aware of any facts or circumstances (not disclosed
in writing to Administrative Agent) concerning the acquisition of
Logan's Roadhouse, Inc. which will cause an Event of Default or
which will have a Material Adverse Effect upon the Consolidated
Companies.
ARTICLE 6. AFFIRMATIVE COVENANTS
So long as any Commitment remains in effect hereunder or any Note
shall remain unpaid, Borrower will:
Section 6.1. Corporate Existence, Etc.
Preserve and maintain, and cause each of the Consolidated
Companies to preserve and maintain, its corporate existence
(except as otherwise permitted pursuant to Section 7.3.), its
material rights, franchises, and licenses, and its material
patents and copyrights (for the scheduled duration thereof),
trademarks, trade names, service marks, and other intellectual
property rights, necessary or desirable in the normal conduct of
its business, and its qualification to do business as a foreign
corporation in all jurisdictions where it conducts business or
other activities making such qualification necessary, where the
failure to be so qualified is reasonably likely to have a
Materially Adverse Effect.
Section 6.2. Compliance with Laws, Etc.
Comply, and cause each Consolidated Company to comply, with all
Requirements of Law (including, without limitation, the
Environmental Laws) and all Contractual Obligations applicable to
or binding on any of them where the failure to comply with such
Requirements of Law and Contractual Obligations is reasonably
likely to have a Materially Adverse Effect.
Section 6.3. Payment of Taxes and Claims, Etc.
File and cause each Consolidated Company to file all Federal,
state, local and foreign tax returns that are required to be filed
by each of them and pay all taxes that have become due pursuant to
such returns or pursuant to any assessment in respect thereof
received by any Consolidated Company; and each Consolidated
Company will pay or cause to be paid all other taxes, assessments,
fees and other governmental charges and levies which, to the
knowledge of any of the Executive Officers of any Consolidated
Company, are due and payable before the same become delinquent,
except any such taxes and assessments as are being contested in
good faith by appropriate and timely proceedings and as to which
adequate reserves have been established in accordance with GAAP.
Section 6.4. Keeping of Books.
Keep, and cause each Consolidated Company to keep, proper books of
record and account, containing complete and accurate entries of
all their respective financial and business transactions.
Section 6.5. Visitation, Inspection, Etc.
Permit, and cause each Consolidated Company to permit, any
representative of the Administrative Agent or any Lender, at the
Administrative Agent's or such Lender's expense, to visit and
inspect any of its Property, to examine its books and records and
to make copies and take extracts therefrom, and to discuss its
affairs, finances and accounts with its officers, all at such
reasonable times and as often as the Administrative Agent or such
Lender may reasonably request after reasonable prior notice to
Borrower; provided, however, that at any time following the
occurrence and during the continuance of a Default or an Event of
Default, no prior notice to Borrower shall be required.
Section 6.6. Insurance; Maintenance of Properties.
(a) Maintain or cause to be maintained with financially sound and
reputable insurers, insurance with respect to its Properties and
business, and the Properties and business of the Consolidated
Companies, against loss or damage of the kinds customarily insured
against by reputable companies in the same or similar businesses,
such insurance to be of such types and in such amounts and subject
to such deductibles and self-insurance programs as the Borrower in
its judgment deems reasonable; provided, however, that in any
event Borrower shall use its best efforts to maintain, or cause to
be maintained, insurance in amounts and with coverages not
materially less favorable to any Consolidated Company as in effect
on the date of this Agreement, except where the costs of
maintaining such insurance would, in the reasonable judgment of
the Borrower, be excessive.
(b) Cause, and cause each of the Consolidated Companies to cause,
all Properties used or useful in the conduct of its business to be
maintained and kept in good condition, repair and working order
and supplied with all necessary equipment and cause to be made all
necessary repairs, renewals, replacements, settlements and
improvements thereof, all as in the reasonable judgment of
Borrower may be necessary so that the business carried on in
connection therewith may be properly and advantageously conducted
at all times; provided, however, that nothing in this Section
shall prevent Borrower from discontinuing the operation or
maintenance of any such Properties if such discontinuance is, in
the reasonable judgment of Borrower, desirable in the conduct of
its business or the business of any Consolidated Company.
(c) Cause a summary, set forth in format and detail reasonably
acceptable to the Administrative Agent, of the types and amounts
of insurance (property and liability) maintained by the
Consolidated Companies to be delivered to the Administrative Agent
on or before thirty (30) days after the Closing Date.
Section 6.7. Financial Reports.
The Borrower will furnish to the Administrative Agent and each
Lender:
(a) Within forty-five (45) days after the end of each of the first
three quarter-annual periods of each Fiscal Year (and, in any
event, in each case as soon as prepared), the quarterly Financial
Report of the Borrower as of the end of that period, prepared on a
consolidated and consolidating basis and accompanied by a
certificate, dated the date of furnishing, signed by a Financial
Officer of the Borrower to the effect that such Financial Report
accurately presents in all material respects the consolidated and
consolidating financial condition of the Consolidated Companies
and that such Financial Report has been prepared in accordance
with GAAP consistently applied (subject to year end adjustments),
except that such Financial Report need not be accompanied by
notes.
(b) Within ninety (90) days after the end of each Fiscal Year
(and, in any event, as soon as available), the annual Financial
Report of the Borrower (with accompanying notes) for that Fiscal
Year prepared on a consolidated and consolidating basis (which
Financial Report shall be reported on by the Borrower's
independent certified public accountants, such report to state
that such Financial Report fairly presents in all material
respects the consolidated and consolidating financial condition
and results of operation of the Consolidated Companies in
accordance with GAAP and to be without any material qualifications
or exceptions). The audit opinion in respect of the consolidated
Financial Report shall be the unqualified opinion of one of the
nationally recognized "Big Five" firms of independent certified
public accountants.
(c) Within forty-five (45) days after the end of each of its first
three quarterly accounting periods and within ninety (90) days
after the end of each Fiscal Year, a statement certified as true
and correct by a Financial Officer of the Borrower, substantially
in the form of Exhibit I hereto, with back-up material setting
forth in reasonable detail such calculations attached thereto and
stating whether any Default or Event of Default has occurred and
is continuing, and if a Default or Event of Default has occurred
and is continuing, stating the Borrower's intentions with respect
thereto;
(d) Within forty-five (45) days after the end of each of its
quarterly accounting periods (including the year end quarterly
period), a statement certified as true and correct by a Financial
Officer of the Borrower setting forth the calculation of the
Financial Requirements under Section 7.1. as of the last day of
such quarterly accounting period.
(e) Promptly upon the filing thereof or otherwise becoming
available, copies of all financial statements, annual, quarterly
and special reports (including, without limitation, Borrower's 8-
K, 10-K, and 10-Q reports), proxy statements and notices sent or
made available generally by Borrower to its public security
holders, of all regular and periodic reports and all registration
statements and prospectuses, if any, filed by any of them with any
securities exchange or with the Securities and Exchange
Commission, and of all press releases and other statements made
available generally to the public containing Material developments
in the business or financial condition of Borrower and the other
Consolidated Companies.
(f) As soon possible and in any event within thirty (30) days
after the Borrower or any Consolidated Company knows or has reason
to know that any "Reportable Event" (as defined in Section 4043(b)
of ERISA) with respect to any Plan has occurred (other than such a
Reportable Event for which the PBGC has waived the 30-day notice
requirement under Section 4043(a) of ERISA) and such Reportable
Event involves a matter that has had, or is reasonably likely to
have, a Materially Adverse Effect, a statement of a Financial
Officer of the applicable Consolidated Company setting forth
details as to such Reportable Event and the action which the
applicable Consolidated Company proposes to take with respect
thereto, together with a copy of the notice of such Reportable
Event given to the PBGC if a copy of such notice is available to
the applicable Consolidated Company.
(g) With reasonable promptness, such other information relating to
the Borrower's performance of this Agreement or its financial
condition as may reasonably be requested from time to time by the
Administrative Agent.
(h) Concurrently with the furnishing of the annual consolidated
Financial Report required pursuant to Section 6.7.(b) hereof,
furnish or cause to be furnished to Administrative Agent and each
Lender a certificate of compliance in a form reasonably
satisfactory to Administrative Agent prepared by one of the
nationally recognized "Big Five" accounting firms stating that in
making the examination necessary for their audit, they have
obtained no knowledge of any Default or Event of Default, or if
they have obtained such knowledge, disclosing the nature, details,
and period of existence of such event.
Section 6.8. Notices Under Certain Other Indebtedness.
Immediately upon its receipt thereof, Borrower shall furnish the
Administrative Agent a copy of any notice received by it or any
other Consolidated Company from the holder(s) of Indebtedness (or
from any trustee, agent, attorney, or other party acting on behalf
of such holder(s)) in an amount which, in the aggregate, exceeds
$10,000,000.00 where such notice states or claims (i) the
existence or occurrence of any default or event of default with
respect to such Indebtedness under the terms of any indenture,
loan or credit agreement, debenture, note, or other document
evidencing or governing such Indebtedness, or (ii) the existence
or occurrence of any event or condition which requires or permits
holder(s) of any Indebtedness of the Consolidated Companies to
exercise rights under any Change in Control Provision.
Section 6.9. Notice of Litigation.
The Borrower shall notify the Administrative Agent of any actions,
suits or proceedings instituted by any Person against the
Consolidated Companies where the uninsured portion of the money
damages sought (which shall include any deductible amount to be
paid by the Borrower or any Consolidated Company) is singularly or
in the aggregate in excess of $10,000,000.00 or which is
reasonably likely to have a Materially Adverse Effect. Said notice
is to be given along with the quarterly and annual reports
required by Section 6.7. hereof, and is to specify the amount of
damages being claimed or other relief being sought, the nature of
the claim, the Person instituting the action, suit or proceeding,
and any other significant features of the claim.
Section 6.10. Subsidiary Guarantees.
(a) The Borrower shall cause each Subsidiary except for Excluded
Subsidiaries to execute and deliver on or before the Closing Date
a Subsidiary Guarantee in substantially the same form as set forth
in Exhibit J. The delivery of such documents shall be accompanied
by such other documents as the Administrative Agent may reasonably
request (e.g., certificates of incorporation, articles of
incorporation and bylaws, membership operating agreements, opinion
letters and appropriate resolutions of the Board of Directors of
any such Subsidiary Guarantor).
(b) The Borrower shall cause each Subsidiary following the Closing
Date to execute and deliver Subsidiary Guarantees. The delivery of
such documents shall be accompanied by such other documents as the
Administrative Agent may reasonably request (e.g., certificates of
incorporation, articles of incorporation and bylaws, membership
operating agreements, opinion letters and appropriate resolutions
of the Board of Directors of any such Subsidiary Guarantor).
(c) Notwithstanding the provisions of Subsection (b) of this
Section 6.10, in the event Borrower (or a Subsidiary) shall create
or acquire a Subsidiary after the Closing Date, and Borrower is
desirous that such Subsidiary be an Excluded Subsidiary, Borrower
shall notify Administrative Agent of such request in writing.
Administrative Agent, with the consent of Required Lenders, may
consent (in their sole discretion) to a Subsidiary being an
Excluded Subsidiary.
Section 6.11. Existing Business.
Remain and cause each Consolidated Company to remain engaged in
business of the same general nature and type as conducted on the
Closing Date.
Section 6.12. ERISA information and Compliance.
Comply and cause each Consolidated Company to comply with ERISA
and all other applicable laws governing any pension or profit
sharing plan or arrangement to which any Consolidated Company is a
party. The Borrower shall provide and shall cause each
Consolidated Company to provide Administrative Agent with notice
of any "reportable event" or "prohibited transaction" or the
imposition of a "withdrawal liability" within the meaning of
ERISA.
ARTICLE 7. NEGATIVE COVENANTS
So long as any Commitment remains in effect hereunder or any Note
shall remain unpaid:
Section 7.1. Financial Requirements.
The Borrower shall not:
(i) Leverage Ratio. Suffer or permit, as of the last day of any
fiscal quarter, the ratio of Total Funded Debt to Total
Capitalization (all on a consolidated basis) to be more than .40
to 1.0, as calculated for the most recently concluded quarter and
including the immediately three (3) preceding fiscal quarters.
(ii) Total Funded Debt to Consolidated EBITDA. Permit, as of the
last day of any fiscal quarter, the ratio of Total Funded Debt to
Consolidated EBITDA to be greater than 2.0 to 1.0, as calculated
for the most recently concluded quarter and including the
immediately three (3) preceding fiscal quarters.
(iii) Interest Coverage Ratio. Suffer or permit, as of the last
day of any fiscal quarter, its Interest Coverage Ratio to be less
than 3.0 to 1.0, as calculated for the most recently concluded
quarter and including the immediately three (3) preceding fiscal
quarters.
Section 7.2. Liens.
The Borrower will not, and will not permit any Consolidated
Company to, create, assume or suffer to exist any Lien upon any of
their respective Properties whether now owned or hereafter
acquired; provided, however, that this Section 7.2. shall not
apply to the following:
(a) any Lien for taxes not yet due or taxes or assessments or
other governmental charges which are being actively contested in
good faith by appropriate proceedings and as to which adequate
reserves have been established in accordance with GAAP;
(b) any customary Liens, pledges or deposits in connection with
worker's compensation, unemployment insurance, or social security,
or deposits incidental to the conduct of the business of any
Consolidated Company or the ownership of any of their Properties
which were not incurred in connection with the borrowing of money
or the obtaining of advances or credit and which do not in the
aggregate Materially detract from the value of their Properties or
Materially impair the use thereof in the operation of their
businesses;
(c) any customary Liens to secure the performance of tenders,
statutory obligations, surety and appeal bonds, and similar
obligations and as to which adequate reserves have been
established in accordance with GAAP;
(d) any Lien incurred in connection with Purchase Money
Indebtedness and placed upon any Property at the time of its
acquisition (or within 60 days thereafter) by any Consolidated
Company to secure all or a portion of the purchase price therefor,
provided that the aggregate amount of Indebtedness secured by such
purchase money Liens must never exceed an amount equal to Fifty
Million Dollars ($50,000,000), and provided, that any such Lien
shall not encumber any other Properties of any Consolidated
Company;
(e) statutory Liens of carriers, warehousemen, mechanics,
materialmen and other Liens imposed by law created in the ordinary
course of business for amounts not yet due or which are being
contested in good faith by appropriate proceedings and as to which
adequate reserves have been established in accordance with GAAP;
(f) Liens consisting of encumbrances in the nature of zoning
restrictions, easements, rights and restrictions of record on the
use of real property on the date of the acquisition thereof and
statutory Liens of landlords and lessors which in any case do not
materially detract from the value of such real property or impair
the use thereof;
(g) any Lien in favor of the United States of America or any
department or agency thereof, or in favor of any state government
or political subdivision thereof, or in favor of a prime
contractor under a government contract of the United States, or of
any state government or any political subdivision thereof, and, in
each case, resulting from acceptance of partial, progress, advance
or other payments in the ordinary course of business under
government contracts of the United States, or of any state
government or any political subdivision thereof, or subcontracts
thereunder;
(h) any Lien existing on the date hereof and disclosed on the
consolidated Financial Reports of Borrower; and
(i) statutory Liens arising under ERISA created in the ordinary
course of business for amounts not yet due and as to which
adequate reserves have been established in accordance with GAAP.
Section 7.3. Merger and Sale of Assets.
The Borrower will not, without the prior written consent of the
Required Lenders, merge or consolidate with any other corporation
or sell, lease or transfer or otherwise dispose of all or, during
the term of this Agreement, a substantial part of its Property
(for purposes of this Section 7.3., "substantial" means Property
sold, leased, transferred or otherwise disposed of other than in
the ordinary course of business with a book value aggregating an
amount greater than 7.5% of the aggregate book value of the
Borrower and all Consolidated Companies determined on the date of
such sale, lease, transfer or disposition), to any Person, nor
shall the Borrower permit any Consolidated Company to take any of
the above actions; provided that notwithstanding any of the
foregoing limitations, if no Default or Event of Default shall
then exist or immediately thereafter will exist, Consolidated
Companies may take the following actions (none of which shall be
included in calculating the percentage in the immediately
preceding parenthetical):
(a) Any Consolidated Company may merge or consolidate with (i) the
Borrower (provided that the Borrower shall be the continuing or
surviving corporation) or (ii) any one or more other Subsidiaries
provided that either the continuing or surviving corporation shall
remain a Consolidated Company;
(b) Any Consolidated Company may sell, lease, transfer or
otherwise dispose of any of its assets to (i) the Borrower, or
(ii) any other Consolidated Company; and
(c) Any Consolidated Company may merge or consolidate with any
other corporation as long as such Consolidated Company is the
surviving corporation.
Section 7.4. Transactions with Affiliates.
The Borrower will not, and will not permit any Consolidated
Company to, enter into or be a party to any transaction or
arrangement with any Affiliate (including, without limitation, the
purchase from, sale to or exchange of property with, or the
rendering of any service by or for, any Affiliates), except in the
ordinary course of and pursuant to the reasonable requirements of
such Consolidated Company's business and upon fair and reasonable
terms no less favorable to such Consolidated Company than such
party would obtain in a comparable arm's-length transaction with a
Person other than an Affiliate.
Section 7.5. Nature of Business.
The Borrower will not, and will not permit any Consolidated
Company to, engage in any business if, as a result, the general
nature of the business, taken on a consolidated basis, which would
then be engaged in by any Consolidated Company would be
fundamentally changed from the general nature of the business
engaged in by the Consolidated Companies on the date of this
Agreement.
Section 7.6. Regulations G, T, U and X.
The Borrower will not nor will it permit any Consolidated Company
to take any action that would result in any non-compliance of the
Advances made hereunder with Regulations G, T, U and X of the
Board of Governors of the Federal Reserve System.
Section 7.7. ERISA Compliance.
The Borrower will not, and will not permit any Consolidated
Company to, incur any material "accumulated funding deficiency"
within the meaning of Section 302(a)(2) of ERISA, or any material
liability under Section 4062 of ERISA to the Pension Benefit
Guaranty Corporation ("PBGC") established thereunder in connection
with any Plan.
Section 7.8. Investments, Loans, and Advances.
The Borrower will not, and will not permit any Consolidated
Company to, make or permit to remain outstanding any loans or
advances to or investments in any Person or to an Excluded
Subsidiary, except that, subject to all other provisions of this
Section 7.8., the foregoing restriction shall not apply to:
(a) investments in direct obligations of the United States of
America or any agency thereof having maturities of less than one
year;
(b) investments in commercial paper maturing within one year from
the date of creation thereof of the highest credit rating of a
Rating Agency;
(c) investments in bankers' acceptances and certificates of
deposit having maturities of less than one year issued by
commercial banks in the United States of America having capital
and surplus in excess of $50,000,000;
(d) the endorsement of negotiable or similar instruments in the
ordinary course of business;
(e) investments in direct obligations of any political
subdivisions of the United States of America or any State of the
United States of America having a debt rating from Standard and
Poor's Corporation or Moody's Investors Services, Inc. of AA or
better;
(f) any other investments with a maturity of less than one year
and having a credit rating of "AI/PI" or "AA" (or their
equivalent) from S & P or Moody's, or upon the discontinuance of
either or both of such services, any other nationally recognized
rating service;
(g) investments in money market funds so long as the entire
investment therein is fully insured or so long as the fund is a
fund operated by a commercial bank of the type specified in (c)
above or in a brokerage account with a broker reasonably
acceptable to Administrative Agent;
(h) investments in stock of any existing Subsidiary;
(i) investments in stock or assets, or any combination thereof, of
any Subsidiary created or acquired after the Closing Date;
(j) investments received in settlement of debt created in the
ordinary course of business; and
(k) loans, advances to, or investments in any Person (including an
Excluded Subsidiary) which in the aggregate do not exceed
$25,000,000.
Section 7.9. Sales and Leasebacks.
Except for transfers and leases which are allowed under the
provisions of Section 7.3., the Borrower will not, and will not
permit any Consolidated Company to, enter into any arrangement,
directly or indirectly, with any Person by which any Consolidated
Entity shall sell or transfer any Property, whether now owned or
hereafter acquired, and by which any Consolidated Entity shall then
or thereafter rent or lease as lessee such Property or any part
thereof or other Property that such Consolidated Entity intends to
use for substantially the same purpose or purposes as the Property
sold or transferred.
Section 7.10. Guaranties.
The Borrower shall not, and will not permit any Consolidated
Company to, enter into any Guaranty, except that, subject to all
other provisions of this Article, the foregoing restriction shall
not apply to:
(a) Subsidiary Guaranties;
(b) Guaranties executed by one Consolidated Company in favor of or
to another Consolidated Company for the obligations of another
Consolidated Company;
(c) endorsements of instruments for deposit or collection in the
ordinary course of business; and
(d) such other Guaranties that do not cause a breach or violation
of Financial Requirements set forth in Section 7.1.
Section 7.11. Limitation on Total Funded Debt.
The Borrower will not permit any Consolidated Company to incur or
suffer to exist Total Funded Debt which violates the Financial
Requirements of Section 7.1.
ARTICLE 8. EVENTS OF DEFAULT
Upon the occurrence and during the continuance of any of the
following specified events (each an "Event of Default"):
Section 8.1. Payments.
Borrower shall fail to make promptly when due (including, without
limitation, by mandatory prepayment) any principal payment with
respect to the Loans, or Borrower shall fail to make any payment of
interest, fee or other amount payable hereunder within five (5)
Business Days of the due date thereof.
Section 8.2. Covenants Without Notice.
Borrower shall fail to observe or perform any covenant or agreement
contained in Sections 6.1., 6.2., 6.3., 6.5., 6.7., 6.8., 6.9.,
6.10., 6.11., 6.12., 7.1., 7.2., 7.3., 7.6., 7.7., 7.8., 7.9., and
7.10. herein.
Section 8.3. Other Covenants.
Borrower shall fail to observe or perform any covenant or agreement
contained in this Agreement, other than those referred to in
Sections 8.1. and 8.2., and such failure shall remain unremedied
for 30 days after the earlier of (i) an Executive Officer or
Financial Officer of the Borrower obtaining knowledge thereof, or
(ii) written notice thereof shall have been given to Borrower by
Administrative Agent or any Lender;
Section 8.4. Representations.
Any representation or warranty made or deemed to be made by
Borrower or any other Consolidated Company or by any of its
officers under this Agreement or any other Credit Document
(including the Schedules attached thereto), or any certificate or
other document submitted to the Administrative Agent or the Lenders
by any such Person pursuant to the terms of this Agreement or any
other Credit Document, shall be incorrect in any material respect
when made or deemed to be made or submitted;
Section 8.5. Non-Payments of Other Indebtedness.
Any Consolidated Company shall fail to make when due (whether at
stated maturity, by acceleration, on demand or otherwise, and after
giving effect to any applicable grace period) any payment of
principal of or interest on any Indebtedness (other than the
Obligations) exceeding $10,000,000 individually or in the
aggregate;
Section 8.6. Defaults Under Other Agreements.
Any Consolidated Company shall fail to observe or perform within
any applicable grace period any covenants or agreements contained
in any agreements or instruments relating to any of its
Indebtedness exceeding $10,000,000 individually or in the
aggregate, or any other event shall occur if the effect of such
failure or other event is to accelerate, or to permit the holder of
such Indebtedness or any other Person to accelerate, the maturity
of such Indebtedness; or any such Indebtedness shall be required to
be prepaid (other than by a regularly scheduled required
prepayment) in whole or in part prior to its stated maturity;
Section 8.7. Bankruptcy.
Any Consolidated Company shall commence a voluntary case concerning
itself under the Bankruptcy Code or applicable foreign bankruptcy
laws; or an involuntary case for bankruptcy is commenced against
any Consolidated Company and the petition is not converted within
10 days, or is not dismissed within 60 days, after commencement of
the case, or a custodian (as defined in the Bankruptcy Code) or
similar official under applicable foreign bankruptcy laws is
appointed for, or takes charge of, all or any substantial part of
the Property of any Consolidated Company; or any Consolidated
Company commences proceedings of its own bankruptcy or to be
granted a suspension of payments or any other proceeding under any
reorganization, arrangement, adjustment of debt, relief of debtors,
dissolution, insolvency or liquidation or similar law of any
jurisdiction, whether now or hereafter in effect, relating to any
Consolidated Company or there is commenced against any Consolidated
Company any such proceeding which remains undismissed for a period
of 60 days; or any Consolidated Company is adjudicated insolvent or
bankrupt; or any order of relief or other order approving any such
case or proceeding is entered; or any Consolidated Company suffers
any appointment of any custodian or the like for it or any
substantial part of its Property to continue undischarged or
unstayed for a period of 60 days; or any Consolidated Company makes
a general assignment for the benefit of creditors; or any
Consolidated Company shall fail to pay, or shall state that it is
unable to pay, or shall be unable to pay, its debts generally as
they become due; or any Consolidated Company shall call a meeting
of its creditors with a view to arranging a composition or
adjustment of its debts; or any Consolidated Company shall by any
act or failure to act indicate its consent to, approval of or
acquiescence in any of the foregoing; or any corporate action is
taken by any Consolidated Company for the purpose of effecting any
of the foregoing;
Section 8.8. ERISA.
A Plan of a Consolidated Company or a Plan subject to Title IV of
ERISA of any of its ERISA Affiliates:
(i) shall fail to be funded in accordance with the minimum funding
standard required by applicable law, the terms of such Plan,
Section 412 of the Tax Code or Section 302 of ERISA for any plan
year or a waiver of such standard is sought or granted with respect
to such Plan under applicable law, the terms of such Plan or
Section 412 of the Tax Code or Section 303 of ERISA; or
(ii) is being, or has been, terminated or the subject of
termination proceedings under applicable law or the terms of such
Plan; or
(iii) shall require a Consolidated Company to provide security
under applicable law, the terms of such Plan, Section 401 or 412 of
the Tax Code or Section 306 or 307 of ERISA; or
(iv) results in a liability to a Consolidated Company under
applicable law, the terms of such Plan, or Title IV of ERISA;
and there shall result from any such failure, waiver, termination
or other event a liability to the PBGC or a Plan that would have a
Materially Adverse Effect.
Section 8.9. Money Judgment.
Judgments or orders for the payment of money in excess of
$10,000,000 (which is not covered by insurance) individually or in
the aggregate or otherwise having a Materially Adverse Effect shall
be rendered against Borrower or any other Consolidated Company and
such judgment or order shall continue unsatisfied (in the case of a
money judgment) and in effect for a period of 30 days during which
execution shall not be effectively stayed or deferred (whether by
action of a court, by agreement or otherwise);
Section 8.10. Ownership of Credit Parties.
If Borrower ceases to own all of the Voting Stock of any Subsidiary
Guarantor.
Section 8.11. Change In Control of Borrower.
Any "person" or "group" (within the meaning of Section 13(d) and
14(d)(2) of the Exchange Act) shall become the "beneficial
owner(s)" (as defined in Rule 13d-3) of more than thirty percent
(30%) of the shares of the outstanding common stock of Borrower
entitled to vote for members of Borrower's board of directors, or
(b) any event or condition shall occur or exist which, pursuant to
the terms of any change of control provision, requires or permits
the holder(s) of Indebtedness of any Consolidated Company which
individually or in the aggregate is equal to or exceeds $10,000,000
to require that such Indebtedness be redeemed, repurchased,
defeased, prepaid, or repaid, in whole or in part, or the maturity
of such Indebtedness to be accelerated in any respect.
Section 8.12. Default Under Other Credit Documents.
There shall exist or occur any "Event of Default" as provided under
the terms of any Credit Document, or any Credit Document ceases to
be in full force and effect or the validity or enforceability
thereof is disaffirmed by or on behalf of Borrower or any other
Consolidated Company, or at any time it is or becomes unlawful for
Borrower or any other Consolidated Company to perform or comply
with its obligations under any Credit Document, or the obligations
of Borrower or any other Consolidated Company, any Credit Document
are not or cease to be legal, valid and binding on Borrower or any
such Consolidated Company.
Then, and in any such event, and at any time thereafter if any
Event of Default shall then be continuing, the Administrative Agent
may, and upon the written or telex request of the Required Lenders,
shall, by written notice to Borrower, take any or all of the
following actions, without prejudice to the rights of the
Administrative Agent, any Lender or the holder of any Note to
enforce its claims against Borrower or any Subsidiary Guarantor:
(i) declare all Commitments terminated, whereupon the Commitments
of each Lender shall terminate immediately and any Facility Fee
shall forthwith become due and payable without any other notice of
any kind; (ii) declare the principal of and any accrued interest on
the Loans, and all other Obligations owing hereunder to be,
whereupon the same shall become, forthwith due and payable without
presentment, demand, protest or other notice of any kind, all of
which are hereby waived by the Borrower; provided, that, if an
Event of Default specified in Section 8.7. shall occur, no notice
shall be required before those matters set forth herein and in
subpart (i) above shall be effective; (iii) may exercise all
remedies under any Subsidiary Guarantee; and (iv) may exercise any
other rights or remedies available under the Credit Documents, at
law or in equity.
ARTICLE 9. THE AGENT
Section 9.1. Appointment of Administrative Agent.
Each Lender hereby designates SunTrust as Administrative Agent to
administer all matters concerning the Loans and to act as herein
specified. Each Lender hereby irrevocably authorizes, and each
holder of any Note by the acceptance of a Note shall be deemed
irrevocably to authorize, the Administrative Agent to take such
actions on its behalf under the provisions of this Agreement, the
other Credit Documents, and all other instruments and agreements
referred to herein or therein, and to exercise such powers and to
perform such duties hereunder and thereunder as are specifically
delegated to or required of the Administrative Agent by the terms
hereof and thereof and such other powers as are reasonably
incidental thereto. The Administrative Agent may perform any of its
duties hereunder by or through its agents or employees. The
provisions of this Section 9.1. are solely for the benefit of
Administrative Agent and Lenders, and the Borrower shall not have
rights as a third party beneficiary of any provisions hereof.
Section 9.2. Nature of Duties of Administrative Agent.
The Administrative Agent shall have no duties or responsibilities
except those expressly set forth in this Agreement and the other
Credit Documents. Neither the Administrative Agent nor any of its
respective officers, directors, employees or agents shall be liable
for any action taken or omitted by it as such hereunder or in
connection herewith, unless caused by its or their gross negligence
or willful misconduct. The duties of the Administrative Agent
shall be ministerial and administrative in nature; the
Administrative Agent shall not have by reason of this Agreement a
fiduciary relationship in respect of any Lender; and nothing in
this Agreement, express or implied is intended to or shall be so
construed as to impose upon the Administrative Agent any
obligations in respect of this Agreement or the other Credit
Documents except as expressly set forth herein.
Section 9.3. Lack of Reliance on the Administrative Agent.
(a) Independently and without reliance upon the Administrative
Agent, each Lender, to the extent it deems appropriate, has made
and shall continue to make (i) its own independent investigation of
the financial condition and affairs of the Consolidated Companies
in connection with the taking or not taking of any action in
connection herewith, and (ii) its own appraisal of the
creditworthiness of the Consolidated Companies, and, except as
expressly provided in this Agreement, the Administrative Agent
shall have no duty or responsibility, either initially or on a
continuing basis, to provide any Lender with any credit or other
information with respect thereto, whether coming into its
possession before the making of the Loans or at any time or times
thereafter.
(b) The Administrative Agent shall not be responsible to any Lender
for any recitals, statements, information, representations or
warranties herein or in any document, certificate or other writing
delivered in connection herewith or for the execution,
effectiveness, genuineness, validity, enforceability,
collectibility, priority or sufficiency of this Agreement, the
Notes, the Subsidiary Guaranties, or any other documents
contemplated hereby or thereby, or the financial condition of the
Consolidated Companies, or be required to make any inquiry
concurring either the performance or observance of any of the
terms, provisions or conditions of this Agreement, the Notes, the
Subsidiary Guaranties, or the other documents contemplated hereby
or thereby, or the financial condition of the Consolidated
Companies, or the existence or possible existence of any Default or
Event of Default.
Section 9.4. Certain Rights of the Administrative Agent.
If the Administrative Agent shall request instructions from the
Required Lenders with respect to any action or actions (including
the failure to act) in connection with this Agreement, the
Administrative Agent shall be entitled to refrain from such act or
taking such act, unless and until the Administrative Agent shall
have received instructions from the Required Lenders; and the
Administrative Agent shall not incur liability to any Person by
reason of so refraining. Without limiting the foregoing, no Lender
shall have any right of action whatsoever against the
Administrative Agent as a result of the Administrative Agent's
acting or refraining from acting hereunder in accordance with the
instructions of the Required Lenders.
Section 9.5. Reliance by Administrative Agent.
The Administrative Agent shall be entitled to rely, and shall be
fully protected in relying, upon any note, writing, resolution,
notice, statement, certificate, telex, teletype or telecopier
message, cable gram, radiogram, order or other documentary,
teletransmission or telephone message believed by it to be genuine
and correct and to have been signed, sent or made by the proper
Person. The Administrative Agent may consult with legal counsel
(including counsel for any Consolidated Company), independent
public accountants and other experts selected by it and shall not
be liable for any action taken or omitted to be taken by it in good
faith in accordance with the advice of such counsel, accountants or
experts.
Section 9.6. Indemnification of Administrative Agent.
To the extent the Administrative Agent is not reimbursed and
indemnified by the Consolidated Companies, each Lender will
reimburse and indemnify the Administrative Agent, ratably according
to the respective amounts of the Loans outstanding under all
Facilities (or if no amounts are outstanding, ratably in accordance
with the Total Commitments), in either case, for and against any
and all liabilities, obligations, losses, damages, penalties,
actions, judgments, including counsel fees and disbursements) or
disbursements of any suits, costs, expenses (in kind or nature
whatsoever which may be imposed on, incurred by or asserted against
the Administrative Agent in performing its duties hereunder, in any
way relating to or arising out of this Agreement or the other
Credit Documents; provided that no Lender shall be liable to the
Administrative Agent for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting from the Administrative
Agent's gross negligence or willful misconduct.
Section 9.7. The Administrative Agent in its Individual Capacity.
With respect to its obligation to lend under this Agreement, the
Loans made by it and the Notes issued to it, the Administrative
Agent shall have the same rights and powers hereunder as any other
Lender or holder of a Note and may exercise the same as though it
were not performing the duties specified herein; and the terms
"Lenders", "Required Lenders" "holders of Notes", or any similar
terms shall, unless the context clearly otherwise indicates,
include the Administrative Agent in its individual capacity. The
Administrative Agent may accept deposits from, lend money to, and
generally engage in any kind of banking, trust, financial,
advisory, or other business with the Consolidated Companies or any
Affiliate of the Consolidated Companies as if it were not
performing the duties specified herein, and may accept fees and
other consideration from the Consolidated Companies for services in
connection with this Agreement and otherwise without having to
account for the same to the Lenders.
Section 9.8. Holders of Notes.
The Administrative Agent may deem and treat the payee of any Note
as the owner thereof for all purposes hereof unless and until a
written notice of the assignment or transfer thereof shall have
been filed with the Administrative Agent. Any request, authority or
consent of any Person who, at the time of making such request or
giving such authority or consent, is the holder of any Note shall
be conclusive and binding on any subsequent holder, transferee or
assignee of such Note or of any Note or Notes issued in exchange
therefor.
Section 9.9. Successor Administrative Agent.
(a) The Administrative Agent may resign at any time by giving
written notice thereof to the Lenders and Borrower and may be
removed at any time with or without cause by the Required Lenders;
provided, however, the Administrative Agent may not resign or be
removed until a successor Administrative Agent has been appointed
and shall have accepted such appointment. Upon any such
resignation or removal, the Required Lenders shall have the right
to appoint a successor Administrative Agent subject to Borrower's
prior written approval. If no successor Administrative Agent shall
have been so appointed by the Required Lenders, and shall have
accepted such appointment, within 30 days after the retiring
Administrative Agent's giving of notice of resignation or the
Required Lenders' removal of the retiring Administrative Agent,
then the retiring Administrative Agent may, on behalf of the
Lenders, appoint a successor Administrative Agent subject to
Borrower's prior written approval, which shall be a bank which
maintains an office in the United States, or a commercial bank
organized under the laws of the United States of America or any
State thereof, or any Affiliate of such bank, having a combined
capital and surplus of at least $100,000,000. In the event that the
Administrative Agent is no longer a Lender hereunder, the
Administrative Agent shall promptly resign as Administrative Agent.
(b) Upon the acceptance of any appointment as the Administrative
Agent hereunder by a successor Administrative Agent, such successor
Administrative Agent shall thereupon succeed to and become vested
with all the rights, powers, privileges and duties of the retiring
Administrative Agent, and the retiring Administrative Agent shall
be discharged from its duties and obligations under this Agreement.
After any retiring Administrative Agent's resignation or removal
hereunder as Administrative Agent, the provisions of this Article
9. shall inure to its benefit as to any actions taken or omitted to
be taken by it while it was an Administrative Agent under this
Agreement.
ARTICLE 10. MISCELLANEOUS
Section 10.1. Notices.
All notices, requests and other communications to any party
hereunder shall be in writing (including bank wire, telex, telecopy
or similar teletransmission or writing) and shall be given to such
party at its address or applicable teletransmission number set
forth on the signature pages hereof, or such other address or
applicable teletransmission number as such party may hereafter
specify by notice to the Administrative Agent and Borrower. Each
such notice, request or other communication shall be effective (i)
if given by telex, when such telex is transmitted to the telex
number specified in this Section and the appropriate answerback is
received, (ii) if given by mall, three (3) Business Days after such
communication is deposited in the mails with first class postage
prepaid, addressed as aforesaid, (iii) if given by telecopy, when
such telecopy is transmitted to the telecopy number specified in
this Section and the appropriate confirmation is received, or (iv)
if given by any other means (including, without limitation, by air
courier), when delivered or received at the address specified in
this Section provided that notices to the Administrative Agent
shall not be effective until received.
Section 10.2. Amendments, Etc.
No amendment or waiver of any provision of this Agreement or the
other Credit Documents, nor consent to any departure by any
Consolidated Company therefrom, shall in any event be effective
under the same shall be in writing and signed by the Required
Lenders, and then such waiver or consent shall be effective only in
the specific instance and for the specific purpose for which given;
provided that no amendment, waiver or consent shall, unless in
writing and signed by all the Lenders, do any of the following: (i)
waive any of the conditions specified in Section 4.1. or 4.2., (ii)
increase the Commitments or other contractual obligations to
Borrower under this Agreement, (iii) reduce the principal of, or
interest on, the Notes or any fees hereunder, (iv) postpone any
date fixed for the payment in respect of principal of, or interest
on, the Notes or any fees hereunder, (v) change the percentage of
the Commitments or of the aggregate unpaid principal amount of the
Notes, or the number or identity of Lenders which shall be required
for the Lenders or any of them to take any action hereunder, (vi)
modify the definition of "Required Lenders," (vii) reduce any
obligation owed under or release any Subsidiary Guarantee (except
as required under Section 6.10.(c)), or (viii) modify this Section
10.2. Notwithstanding the foregoing, no amendment, waiver or
consent shall, unless in writing and signed by the Administrative
Agent in addition to the Lenders required hereinabove to take such
action, affect the rights or duties of the Administrative Agent
under this Agreement or under any other Credit Document.
Section 10.3. No Waiver; Remedies Cumulative.
No failure or delay on the part of the Administrative Agent, any
Lender or any holder of a Note in exercising any right or remedy
hereunder or under any other Credit Document, and no course of
dealing between any Consolidated Company and the Administrative
Agent, any Lender or the holder of any Note shall operate as a
waiver thereof, nor shall any single or partial exercise of any
right or remedy hereunder or under any other Credit Document
preclude any other or further exercise thereof or the exercise of
any other right or remedy hereunder or thereunder. The rights and
remedies herein expressly provided are cumulative and not exclusive
of any rights or remedies which the Administrative Agent, any
Lender, or the holder of any Note would otherwise have. No notice
to or demand on any Consolidated Company not required hereunder or
under any other Credit Document in any case shall entitle any
Consolidated Company to any other or further notice or demand in
similar or other circumstances or constitute a waiver of the rights
of the Administrative Agent, the Lenders, or the holder of any Note
to any other or further action in any circumstances without notice
or demand.
Section 10.4. Payment of Expenses, Etc.
Borrower shall:
(i) whether or not the transactions hereby contemplated are
consummated, pay all reasonable, out-of-pocket costs and expenses
of the Administrative Agent in connection with the preparation,
execution and delivery of, preservation of rights under,
enforcement of, and, after a Default or Event of Default or, upon
the request of the Borrower, refinancing, renegotiation or
restructuring of, this Agreement and the other Credit Documents and
the documents and instruments referred to therein, and any
amendment, waiver or consent relating thereto (including, without
limitation, the reasonable fees actually incurred and disbursements
of counsel for the Administrative Agent), and in the case of
enforcement of this Agreement or any Credit Document after an Event
of Default, all such reasonable, out-of-pocket costs and expenses
(including, without limitation, the reasonable fees actually
incurred and reasonable disbursements and charges of counsel), for
any of the Lenders;
(ii) subject, in the case of certain Taxes, to the applicable
provisions of Section 3.8.(b), pay and hold each of the Lenders
harmless from and against any and all present and future stamp,
documentary, and other similar Taxes with respect to this
Agreement, the Notes and any other Credit Documents, any collateral
described therein, or any payments due thereunder, and hold each
Lender harmless from and against any and all liabilities with
respect to or resulting from any delay or omission to pay such
Taxes; and
(iii) indemnify the Administrative Agent and each Lender, and their
respective officers, directors, employees, representatives and
agents from, and hold each of them harmless against, any and all
costs, losses, liabilities, claims, damages or expenses incurred by
any of them (whether or not any of them is designated a party
thereto) (an "Indemnitee") arising out of or by reason of any
investigation, litigation or other proceeding related to any actual
or proposed use of the proceeds of any of the Loans or any
Consolidated Company entering into and performing of the Agreement,
the Notes, or the other Credit Documents, including, without
limitation, the reasonable fees actually incurred and disbursements
of counsel incurred in connection with any such investigation,
litigation or other proceeding, provided, however, Borrower shall
not be obligated to indemnify, any Indemnitee for any of the
foregoing arising out of such Indemnitee's gross negligence or
willful misconduct;
(iv) without limiting the Indemnities set forth in subsection (iii)
above, indemnify each Indemnitee for any and all expenses and costs
(including without limitation, remedial, removal, response,
abatement, cleanup, investigative, closure and monitoring costs),
losses, claims (including claims for contribution or indemnity and
including the cost of investigating or defending any claim and
whether or not such claim is ultimately defeated, and whether such
claim arose before, during or after any Consolidated Company's
ownership, operation, possession or control of its business,
Property or facilities or before, on, or after the date hereof, and
including also any amounts paid incidental to any compromise or
settlement by the Indemnitee or Indemnitees to the holders of any
such claim), lawsuits, liabilities, obligations, actions,
judgments, suits, disbursements, encumbrances, liens, damages
(including without limitation damages for contamination or
destruction of natural resources), penalties and fines of any kind
or nature whatsoever (including without limitation in all cases the
reasonable fees actually incurred, other charges and disbursements
of counsel in connection therewith) incurred, suffered or sustained
by that Indemnitee based upon, arising under or relating to
Environmental Laws based on, arising out of or relating to in whole
or in part, the existence or exercise of any rights or remedies by
any Indemnitee under this Agreement, any other Credit Document or
any related documents.
If and to the extent that the obligations of Borrower under this
Section 10.4. are unenforceable for any reason, Borrower hereby
agrees to make the maximum contribution to the payment and
satisfaction of such obligations which is permissible under
applicable law.
Section 10.5. Right of Setoff.
In addition to and not in limitation of all rights of offset that
any Lender or other holder of a Note may have under applicable law,
each Lender or other holder of a Note shall, upon the occurrence
and during the continuation of any Event of Default and whether or
not such Lender or such holder has made any demand or any
obligations under the Credit Documents have matured, have the right
to appropriate and apply to the payment of any obligations
hereunder and under the other Credit Documents, all deposits of any
Consolidated Company (general or special, time or demand,
provisional or final) then or thereafter held by and other
indebtedness or Property then or thereafter owing by such Lender or
other holder to any Consolidated Company, whether or not related to
this Agreement or any transaction hereunder.
Section 10.6. Benefit of Agreement; Assignments and
Participations.
(a) This Agreement shall be binding upon and inure to the benefit
of and be enforceable by the respective successors and assigns of
the parties hereto, provided that Borrower may not assign or
transfer any of its interest hereunder without the prior written
consent of the Lenders.
(b) Any Lender may make, carry or transfer Loans at, to or for the
account of, any of its branch offices or the office of an Affiliate
of such Lender.
(c) Each Lender may assign all or a portion of its interests,
rights and obligations under this Agreement (including all or a
portion of its Commitment and the Loans at the time owing to it and
the Notes held by it) to any Eligible Assignee; provided, however,
that (i) the Administrative Agent and, except during the
continuance of a Default or Event of Default, the Borrower must
give their prior written consent to such assignment (which consent
shall not be unreasonably withheld or delayed) unless such
assignment is to an Affiliate of the assigning Lender, (ii) the
amount of the Commitments of the assigning Lender subject to each
assignment (determined as of the date the assignment and acceptance
with respect to such assignment is delivered to the Administrative
Agent) shall not be less than an amount equal to $10,000,000 or
greater integral multiplies thereof, and (iii) the parties to each
such assignment shall execute and deliver to the Administrative
Agent an Assignment and Acceptance, together with the Note or Notes
subject to such assignment and, unless such assignment is to an
Affiliate of such Lender, a processing and recordation fee of
$3,500. Borrower shall not be responsible for such processing and
recordation fee or any costs or expenses incurred by any Lender or
the Administrative Agent in connection with such assignment.
Notwithstanding the foregoing, the assigning Lender must retain
after the consummation of such Assignment and Acceptance, a minimum
amount of Commitments or Loans, as the case may be, of $10,000,000;
provided, however, no such minimum amount shall be required with
respect to any such assignment made at any time there exists an
Event of Default hereunder. From and after the effective date
specified in each Assignment and Acceptance, which effective date
shall be at least five (5) Business Days after the execution
thereof, the assignee thereunder shall be a party hereto and to the
extent of the interest assigned by such Assignment and Acceptance,
have the rights and obligations of a Lender under this Agreement.
Within five (5) Business Days after receipt of the notice and the
Assignment and Acceptance, Borrower, at its own expense, shall
execute and deliver to the Administrative Agent, in exchange for
the surrendered Note or Notes, a new Note or Notes to the order of
such assignee in a principal amount equal to the applicable
Commitments or Loans assumed by it pursuant to such Assignment and
Acceptance and new Note or Notes to the assigning Lender in the
amount of its retained Commitment or Commitments or amount of its
retained Loans. Such new Note or Notes shall be in aggregate and a
principal amount equal to the aggregate principal amount of such
surrendered Note or Notes, shall be dated the date of the
surrendered Note or Notes which they replace, and shall otherwise
be in substantially the form attached hereto.
(d) Each Lender may, without the consent of the Borrower, sell
participations to one or more banks or other entities in all or a
portion of its rights and obligations under this Agreement
(including all or a portion of its Commitments in the Loans owing
to it and the Notes held by it), provided, however, that (i) such
Lender's obligations under this Agreement shall remain unchanged,
(ii) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations, (iii) the
participating bank or other entity shall not be entitled to the
benefit (except through its selling Lender) of the cost protection
provisions contained in Article 4. of this Agreement, and (iv)
Borrower and the Administrative Agent and other Lenders shall
continue to deal solely and directly with each Lender in connection
with such Lender's rights and obligations under this Agreement and
the other Credit Documents, and such Lender shall retain the sole
right to enforce the obligations of Borrower relating to the Loans
and to approve any amendment, modification or waiver of any
provisions of this Agreement. Any Lender selling a participation
hereunder shall provide prompt written notice to Administrative
Agent of the name of such participant.
(e) Any Lender or participant may, in connection with the
assignment or participation or proposed assignment or
participation, pursuant to this Section, disclose to the assignee
or participant or proposed assignee or participant any information
relating to Borrower or the other Consolidated Companies furnished
to such Lender by or on behalf of Borrower or any other
Consolidated Company. With respect to any disclosure of
confidential, non-public, proprietary information, such proposed
assignee or participant shall agree to use the information only for
the purpose of making any necessary credit judgments with respect
to this credit facility and not to use the information in any
manner prohibited by any law, including without limitation, the
securities laws of the United States. The proposed participant or
assignee shall agree not to disclose any of such information except
as permitted by Section 10.15. hereof. The proposed participant or
assignee shall further agree to return all documents or other
written material and copies thereof received from any Lender, the
Administrative Agent or Borrower relating to such confidential
information unless otherwise properly disposed of by such entity.
(f) Any Lender may at any time assign all or any portion of its
rights under this Agreement and the Notes issued to it to a Federal
Reserve Bank; provided that no such assignment shall release the
Lender from any of its obligations hereunder.
(g) If (i) any Taxes referred to in Section 3.8.(b) have been
levied or imposed so as to require withholdings and reductions by
the Borrower and payment by the Borrower of additional amounts to
any Lender as a result thereof, (ii) or any Lender shall make
demand for payment of any material additional amounts as
compensation for increased costs pursuant to Section 3.11., or for
its reduced rate of return pursuant to Section 4.16., or (iii) any
Lender shall decline to consent to a modification or waiver of the
terms of this Agreement or the other Credit Documents requested by
Borrower, then and in such event, upon request from the Borrower
delivered to such Lender and the Administrative Agent, such Lender
shall assign, in accordance with the provisions of
Section 10.6.(c), all of its rights and obligations under this
Agreement and the other Credit Documents to another Lender or an
Eligible Assignee selected by the Borrower and consented to by the
Administrative Agent in consideration for the payment by such
assignee to the Lender of the principal of and interest on the
outstanding Loans accrued to the date of such assignment and the
assumption of such Lender's Total Commitment, together with any and
all other amounts owing to such Lender under any provisions of this
Agreement or the other Credit Documents accrued to the date of such
assignment.
Section 10.7. Governing Law; Submission to Jurisdiction; Waiver of
Jury Trial.
(a) THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER AND UNDER THE NOTES SHALL BE CONSTRUED IN ACCORDANCE WITH
AND BE GOVERNED BY THE LAW OF THE STATE OF TENNESSEE.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT,
THE NOTES OR ANY OTHER COURT DOCUMENT, MAY BE BROUGHT IN ANY
FEDERAL OR STATE COURT LOCATED IN DAVIDSON COUNTY, TENNESSEE, AND,
BY EXECUTION AND DELIVERY OF THIS AGREEMENT, BORROWER HEREBY
ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND
UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS.
(c) THE PARTIES HERETO HEREBY IRREVOCABLY WAIVE THEIR RIGHT TO A
TRIAL BY JURY, AND BORROWER HEREBY IRREVOCABLY WAIVES ANY
OBJECTION, INCLUDING, WITHOUT LIMITATION, ANY OBJECTION TO THE
LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS,
WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY SUCH
ACTION OR PROCEEDING IN SUCH RESPECTIVE JURISDICTIONS.
(d) nothing herein shall affect the right of the Administrative
Agent, any Lender, any holder of a Note or any Consolidated Company
to serve process in any other manner permitted by law or to
commence legal proceedings or otherwise proceed against Borrower in
any other jurisdiction.
Section 10.8. Independent Nature of Lenders' Rights.
The amounts payable at any time hereunder to each Lender shall be a
separate and independent debt, and each Lender shall be entitled to
protect and enforce its rights pursuant to this Agreement and its
Notes, and it shall not be necessary for any other Lender to be
joined as an additional party in any proceeding for such purpose.
Section 10.9. Counterparts.
This Agreement may be executed in any number of counterparts and by
the different parties hereto on separate counterparts, each of
which when so executed and delivered shall be an original, but all
of which shall together constitute one and the same instrument.
Section 10.10. Effectiveness; Survival.
(a) This Agreement shall become effective on the date (the
"Effective Date") on which all of the parties hereto shall have
signed a copy hereof (whether the same or different copies) and
shall have delivered the same to the Administrative Agent pursuant
to Section 11.1. or, in the case of the Lenders, shall have given
to the Administrative Agent written (which may be delivered by
facsimile) or telex notice (actually received) that the same has
been signed and mailed to them.
(b) The obligations of Borrower under Sections 3.8.(b), 3.11.,
3.13., 3.14., 3.17. and 10.4. hereof shall survive the payment in
full of the Notes after the Maturity Date. All representations and
warranties made herein, in the certificates, reports, notices, and
other documents delivered pursuant to this Agreement shall survive
the execution and delivery of this Agreement, the other Credit
Documents, and such other agreements and documents, the making of
the Loans hereunder, and the execution and delivery of the Notes.
Section 10.11. Severability.
In case any provision in or obligation under this Agreement or any
other Credit Documents shall be invalid, illegal or unenforceable,
in whole or in part, in any jurisdiction, the validity, legality
and enforceability of the remaining provisions or obligations, or
of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.
Section 10.12. Independence of Covenants.
All covenants hereunder shall be given independent effect so that
if a particular action or condition is not permitted by any of such
covenants, the fact that it would be permitted by an exception to,
or be otherwise within the limitation of, another covenant, shall
not avoid the occurrence of a Default or an Event of Default if
such action is taken or condition exists.
Section 10.13. Change in Accounting Principles, Fiscal Year or Tax
Laws.
If (i) any preparation of the financial statements referred to in
Section 6.7. hereafter occasioned by the promulgation of rules,
regulations, pronouncements and opinions by or required by the
Financial Accounting Standards Board or the American Institute of
Certified Public Accounts (or successors thereto or agencies with
similar functions) result in a material change in the method of
calculation of financial covenants, standards or terms found in
this Agreement, (ii) there is any change in Borrower's fiscal
quarter or fiscal year, or (iii) there is a material change in
federal tax laws which materially affects any of the Consolidated
Companies' ability to comply with the financial covenants,
standards or terms found in this Agreement, Borrower and the
Required Lenders agree to enter into negotiations in order to amend
such provisions so as to equitably reflect such changes with the
desired result that the criteria for evaluating any of the
Consolidated Companies' financial condition shall be the same after
such changes as if such changes had not been made. Unless and
until such provisions have been so amended, the provisions of this
Agreement shall Govern.
Section 10.14. Headings Descriptive; Entire Agreement.
The headings of the several sections and subsections of this
Agreement are inserted for convenience only and shall not in any
way affect the meaning or construction of any provision of this
Agreement. This Agreement, the other Credit Documents, and the
agreements and documents required to be delivered pursuant to the
terms of this Agreement constitute the entire agreement among the
parties hereto and thereto regarding the subject matters hereof and
thereof and supersede all prior agreements, representations and
understandings related to such subject matters.
Section 10.15. Disclosure of Confidential Information.
The Administrative Agent and the Lenders agree to use their best
efforts to hold in confidence and not disclose any confidential
information (other than information (i) which was publicly known
from a source other than the Borrower or a Subsidiary, at the time
of disclosure (except pursuant to disclosure in connection with
this Agreement), (ii) which subsequently becomes publicly known
through no act or omission by them, or (iii) which otherwise
becomes known to them, other than through disclosure by the
Borrower or a Subsidiary or by any other Person whom the
Administrative Agent or such Lender has reason to believe disclosed
such information in violation of or contrary to the confidentiality
requirements or policies of the Borrower or a Subsidiary) delivered
or made available by or on behalf of the Borrower or any Subsidiary
to them (including without limitation any non-public information
obtained pursuant to Section 6.5. or 7.7.) in connection with or
pursuant to this Agreement which is proprietary in nature and
clearly marked or labeled as being confidential information,
provided that nothing herein shall prevent the Administrative Agent
or any Lender from delivery of copies of any financial statements
and other documents delivered to the Administrative Agent or such
Lender, and disclosing any other information disclosed to the
Administrative Agent or such Lender, by or on behalf of the
Borrower or any Subsidiary in connection with or pursuant to this
Agreement to (i) the Administrative Agent's or such Lender's
directors, officers, employees, agents and professional
consultants, (ii) any other Lender, (iii) any Person to which such
Lender offers to assign its Notes or Commitments or any part
thereof (which person agrees to be bound by the provisions of this
Section 10.15), (iv) any Person to which such Lender sells or
offers to sell a participation in all or any part of its Notes or
Commitments (which Person agrees to be bound by the provisions of
this Section 10.15), (v) any federal or state regulatory authority
having jurisdiction over the Administrative Agent or such Lender,
and (vi) any other person to which such delivery or disclosure may
be necessary (a) to effect compliance with any law, rule,
regulation or order applicable to the Administrative Agent or such
Lender, (b) in response to any subpoena or other local process, (c)
in connection with any litigation to which the Administrative Agent
or such Lender is a party or (d) in order to protect such Lender's
investment in its Notes.
Section 10.16. Usury.
The parties to this Agreement intend to conform strictly to
applicable usury laws as presently in effect. Accordingly, if the
transactions contemplated hereby would be usurious under applicable
law (including the laws of the United States of America and the
State of Tennessee), then, in that event, notwithstanding anything
to the contrary in any Loan Document or agreement executed in
connection with the indebtedness described herein, Borrower,
Administrative Agent, and Lenders agree as follows: (i) the
aggregate of all consideration that constitutes interest under
applicable law which is contracted for, charged, or received under
any of the Loan Documents or agreements, or otherwise in connection
with the indebtedness described herein, shall under no circumstance
exceed the maximum lawful rate of interest permitted by applicable
law, and any excess shall be credited on the indebtedness by the
holder thereof (or, if the indebtedness described herein shall have
been paid in full, refunded to the Borrower); and (ii) in the event
that the maturity of the indebtedness described herein is
accelerated as a result of any Event of Default or otherwise, or in
the event of any required or permitted prepayment, then such
consideration that constitutes interest may never include more than
the maximum amount of interest permitted by applicable law, and
excess interest, if any, for which this Agreement provides, or
otherwise, shall be cancelled automatically as of the date of such
acceleration or prepayment and, if previously paid, shall be
credited on the indebtedness described herein (or, if the
indebtedness shall have been paid in full, refunded to the
Borrower).
Section 10.17. Time is of the Essence.
Time is of the essence is interpreting and performing this
Agreement and all other Credit Documents.
Section 10.18. Construction
Should any provision of this Agreement require judicial
interpretation, the parties hereto agree that the Court
interpreting or construing the same shall not apply a presumption
that the terms hereof shall be more strictly construed against one
party by reason of the rule of construction that a document is to
be more strictly construed against the party who itself or its
agents prepared the same, it being agreed that Borrower,
Administrative Agent, and Lenders and their respective agents have
participated in the preparation hereof.
[THIS SPACE INTENTIONALLY LEFT BLANK]
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed and delivered in Nashville, Tennessee by their
duly authorized officers as of the day and year first above
written.
BORROWER
CBRL GROUP, INC.
By: /s/ Michael A. Woodhouse
Title: Senior VP/Finance and CFO
Address for notice:
P.O. Box 787
305 Hartman Drive
Lebanon, TN 37088-0787
(615) 443-9399 (fax)
[Signatures Continued on Next Page]
<PAGE>
SUNTRUST BANK, NASHVILLE, N.A.,
as Administrative Agent
By: /s/Allen K. Oakley
Title: Managing Director
Address for notice:
201 Fourth Avenue North
Nashville, Tennessee 37219
[Signatures Continued on Next Page]
<PAGE>
SUNTRUST BANK, NASHVILLE, N.A.,
As Lender
By: /s/Allen K. Oakley
Title: Managing Director
Address for notice:
201 Fourth Avenue North
Nashville, TN 37219
Payment Office:
201 Fourth Avenue North
Nashville, TN 37219
REVOLVING CREDIT COMMITMENT $300,000,000.00
TERM LOAN COMMITMENT $50,000,000.00
APPLICABLE COMMITMENT PERCENTAGE 100%
<PAGE>
EXHIBIT A
FORM OF REVOLVING CREDIT NOTE
U.S. $_______________ February ____, 1999
Nashville, Tennessee
FOR VALUE RECEIVED, the undersigned CBRL GROUP, INC., a Tennessee
corporation (herein called the "Borrower"), hereby promises to pay
to the order of ______________________ a _________________________
(herein together with any subsequent holder hereof, called the
"Lender"), for the account of its applicable Lending Office, the
lesser of (i) the principal sum of _____________________ AND NO/100
UNITED STATES DOLLARS ($__________) and (ii) the outstanding
principal amount of the Advances made by the Lender to the Borrower
as Revolving Loans pursuant to the terms of the Credit Agreement,
referred to below, on the Maturity Date (as defined in the Credit
Agreement). The Borrower likewise promises to pay interest on the
outstanding principal amount of each such Advance, at such interest
rates, payable at such times, and computed in such manner, as are
specified for such Advance in the Credit Agreement in strict
accordance with the terms thereof.
The Lender shall record all Advances made pursuant to its Revolving
Credit Commitment under the Credit Agreement and all payments of
principal of such Advances and, prior to any transfer hereof, shall
endorse such Advances and payments on the schedule annexed hereto
and made a part hereof, or on any continuation thereof which shall
be attached hereto and made a part hereof or on the books and
records of the Lender, which endorsement shall constitute prima
facie evidence of the accuracy of the information so endorsed;
provided, however, that delay or failure of the Lender to make any
such endorsement or recordation shall not affect the obligations of
the Borrower hereunder or under the Credit Agreement with respect
to the Advances evidenced hereby.
Any principal or, to the extent not prohibited by applicable law,
interest due under this Revolving Credit Note that is not paid on
the due date therefor, whether on the Maturity Date, whether or not
resulting from the acceleration of maturity upon the occurrence of
an Event of Default, shall bear interest from the date due to
payment in full at the rate as provided in Section 3.3 of the
Credit Agreement.
All payments of principal and interest shall be made in lawful
money of the United States of America in immediately available
funds at the Payment Office of the Administrative Agent specified
in the Credit Agreement.
This Revolving Credit Note is issued pursuant to, and is one of the
Revolving Credit Notes referred to in, the Credit Agreement dated
as of February 16, 1999 among the Borrower, SunTrust Bank,
Nashville, N.A., individually and as Administrative Agent, and the
other lenders set forth on the signature pages thereof (as the same
may hereafter be amended, modified or supplemented from time to
time, the "Credit Agreement") and each assignee thereof becoming a
"Lender" as provided therein, and the Lender is and shall be
entitled to all benefits thereof and all Credit Documents executed
and delivered to the Lenders or the Administrative Agent in
connection therewith. Terms defined in the Credit Agreement are
used herein with the same meanings. The Credit Agreement, among
other things, contains provisions for acceleration of the maturity
hereof upon the happening of certain stated events.
The Borrower agrees to make payments of principal on the Advances
outstanding hereunder as Revolving Loans on the dates and in the
amounts specified in the Credit Agreement for such Advances in
strict accordance with the terms thereof.
This Revolving Credit Note may be prepaid in whole or in part
strictly in accordance with the terms and conditions of the Credit
Agreement.
In case an Event of Default shall occur and be continuing, the
principal of and all accrued interest on this Revolving Credit Note
may automatically become, or be declared, due and payable in the
manner and with the effect provided in the Credit Agreement. The
Borrower agrees to pay, and save the Lender harmless against any
liability for the payment of, all reasonable out-of-pocket costs
and expenses, including reasonable attorneys' fees actually
incurred, arising in connection with the enforcement by the Lender
of any of its rights under this Revolving Credit Note or the Credit
Agreement.
THIS REVOLVING CREDIT NOTE HAS BEEN EXECUTED AND DELIVERED IN
TENNESSEE AND THE RIGHTS AND OBLIGATIONS OF THE LENDER AND THE
BORROWER HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS (WITHOUT GIVING EFFECT TO THE CONFLICT OF LAW
PRINCIPLES THEREOF) OF THE STATE OF TENNESSEE.
The Borrower expressly waives any presentment, demand, protest or
notice in connection with this Revolving Credit Note, now or
hereafter required by applicable law. TIME IS OF THE ESSENCE OF
THIS REVOLVING CREDIT NOTE.
IN WITNESS WHEREOF, the Borrower has caused this Revolving Credit
Note to be executed and delivered by its duly authorized officers
as of the date first above written.
CBRL GROUP, INC.
By:
Title:
Revolving Credit Note (cont'd)
ADVANCES AND PAYMENTS OF PRINCIPAL
Last Day of
Amount Amount of Applicable
Of Interest Principal Interest Notation
Date Advance Rate Prepaid Period Made By
- ----- ------- -------- --------- ----------- ---------
EXHIBIT B
TO CREDIT AGREEMENT
FORM OF TERM NOTE
$____________________ February ___, 1999
Nashville, Tennessee
FOR VALUE RECEIVED, CBRL GROUP, INC., a [Tennessee] corporation
(the "Borrower") promises and agrees to pay to the order of
________________________ (herein together with any subsequent
holder hereof, called the "Lender") for the account of the
applicable Lending Office in lawful money of the United States of
America, the principal sum of ______________________________
($___________________) on the Maturity Date, together with interest
on the principal balance outstanding from time to time hereon
computed as provided in the Credit Agreement, through the Maturity
Date. Interest for each year shall be computed based upon a 360-day
year for the actual number of days elapsed.
This Term Note is issued pursuant to, and is one of the Term Notes
referred to in, the Credit Agreement dated as of February 16, 1999
among the Borrower, SunTrust Bank, Nashville, N.A., individually
and as Administrative Agent, and the other lenders set forth on the
signature pages thereof (as the same may hereafter be amended,
modified or supplemented from time to time, the "Credit Agreement")
and each assignee thereof becoming a "Lender" as provided therein,
and the Lender is and shall be entitled to all benefits thereof and
all Credit Documents executed and delivered to the Lenders or the
Administrative Agent in connection therewith. Terms defined in the
Credit Agreement are used herein with the same meanings. The
Credit Agreement, among other things, contains provisions for
acceleration of the maturity hereof upon the happening of certain
stated events.
Interest shall accrue on all amounts outstanding under this Note at
the Term Loan Rate in accordance with Section 3.3 of the Credit
Agreement. Borrower promises to pay interest on the outstanding
principal amount hereunder, at such interest rates, payable at such
times, and computed in such manner, as in accordance with the terms
of the Credit Agreement and the terms hereof.
The terms and conditions of any prepayment of this Note shall be
governed by the Credit Agreement.
The Borrower agrees to make payments of principal on the Advance
outstanding hereunder as Term Loans on the dates and in the amounts
specified in the Credit Agreement for such Advances in strict
accordance with the terms thereof.
In case an Event of Default shall occur and be continuing, the
principal of and all accrued interest on this Term Note may
automatically become, or be declared, due and payable in the manner
and with the effect provided in the Credit Agreement. The Borrower
agrees to pay, and save the Lender harmless against any liability
for the payment of, all reasonable out-of-pocket costs and
expenses, including reasonable attorneys' fees actually incurred,
arising in connection with the enforcement by the Lender of any of
its rights under this Term Note or the Credit Agreement.
THIS TERM NOTE HAS BEEN EXECUTED AND DELIVERED IN TENNESSEE AND THE
RIGHTS AND OBLIGATIONS OF THE LENDER AND THE BORROWER HEREUNDER
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS
(WITHOUT GIVING EFFECT TO THE CONFLICT OF LAW PRINCIPLES THEREOF)
OF THE STATE OF TENNESSEE.
The Borrower expressly waives any presentment, demand, protest or
notice in connection with this Term Note, now or hereafter required
by applicable law. TIME IS OF THE ESSENCE OF THIS TERM NOTE.
IN WITNESS WHEREOF, the Borrower has caused this Term Note to be
executed and delivered by its duly authorized officers as of the
date first above written.
CBRL GROUP, INC.
By:______________________________________
Title:____________________________________
EXHIBIT C
FORM OF SWING LINE NOTE
U.S. $10,000,000 February ____, 1999
Nashville, Tennessee
FOR VALUE RECEIVED, the undersigned CBRL GROUP, INC., a Tennessee
corporation (herein called the "Borrower"), hereby promises to pay
to the order of ______________________ a _________________________
(herein together with any subsequent holder hereof, called the
"Swing Line Lender"), for the account of its applicable Lending
Office, the lesser of (i) the principal sum of TEN MILLION AND
NO/100 UNITED STATES DOLLARS ($10,000,000) and (ii) the outstanding
principal amount of the Advances made by the Lender to the Borrower
as a Swing Line Loan pursuant to the terms of the Credit Agreement,
referred to below, on the Maturity Date (as defined in the Credit
Agreement). The Borrower likewise promises to pay interest on the
outstanding principal amount of each such Advance, at such interest
rates, payable at such times, and computed in such manner, as are
specified for such Advance in the Credit Agreement in strict
accordance with the terms thereof.
The Lender shall record all Advances made pursuant to its Swing
Line Commitment under the Credit Agreement and all payments of
principal of such Advances and, prior to any transfer hereof, shall
endorse such Advances and payments on the schedule annexed hereto
and made a part hereof, or on any continuation thereof which shall
be attached hereto and made a part hereof or on the books and
records of the Lender, which endorsement shall constitute prima
facie evidence of the accuracy of the information so endorsed;
provided, however, that delay or failure of the Lender to make any
such endorsement or recordation shall not affect the obligations of
the Borrower hereunder or under the Credit Agreement with respect
to the Advances evidenced hereby.
Any principal or, to the extent not prohibited by applicable law,
interest due under this Swing Line Note that is not paid on the due
date therefor, whether on the Maturity Date, whether or not
resulting from the acceleration of maturity upon the occurrence of
an Event of Default, shall bear interest from the date due to
payment in full at the rate as provided in Section 3.3 of the
Credit Agreement.
All payments of principal and interest shall be made in lawful
money of the United States of America in immediately available
funds at the Payment Office of the Administrative Agent specified
in the Credit Agreement.
This Swing Line Note is issued pursuant to, and is one of the
Revolving Credit Notes referred to in, the Credit Agreement dated
as of February 16, 1999 among the Borrower, SunTrust Bank,
Nashville, N.A., individually and as Administrative Agent, and the
other lenders set forth on the signature pages thereof (as the same
may hereafter be amended, modified or supplemented from time to
time, the "Credit Agreement") and each assignee thereof becoming a
"Lender" as provided therein, and the Lender is and shall be
entitled to all benefits thereof and all Credit Documents executed
and delivered to the Lenders or the Administrative Agent in
connection therewith. Terms defined in the Credit Agreement are
used herein with the same meanings. The Credit Agreement, among
other things, contains provisions for acceleration of the maturity
hereof upon the happening of certain stated events.
The Borrower agrees to make payments of principal on the Advances
outstanding hereunder as a Swing Line Loan on the dates and in the
amounts specified in the Credit Agreement for such Advances in
strict accordance with the terms thereof.
This Swing Line Note may be prepaid in whole or in part strictly in
accordance with the terms and conditions of the Credit Agreement.
In case an Event of Default shall occur and be continuing, the
principal of and all accrued interest on this Swing Line Note may
automatically become, or be declared, due and payable in the manner
and with the effect provided in the Credit Agreement. The Borrower
agrees to pay, and save the Lender harmless against any liability
for the payment of, all reasonable out-of-pocket costs and
expenses, including reasonable attorneys' fees actually incurred,
arising in connection with the enforcement by the Lender of any of
its rights under this Swing Line Note or the Credit Agreement.
THIS SWING LINE NOTE HAS BEEN EXECUTED AND DELIVERED IN TENNESSEE
AND THE RIGHTS AND OBLIGATIONS OF THE LENDER AND THE BORROWER
HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS (WITHOUT GIVING EFFECT TO THE CONFLICT OF LAW PRINCIPLES
THEREOF) OF THE STATE OF TENNESSEE.
The Borrower expressly waives any presentment, demand, protest or
notice in connection with this Swing Line Note, now or hereafter
required by applicable law. TIME IS OF THE ESSENCE OF THIS SWING
LINE NOTE.
IN WITNESS WHEREOF, the Borrower has caused this Swing Line Note to
be executed and delivered by its duly authorized officers as of the
date first above written.
CBRL GROUP, INC.
By:
Name:
Title:
<PAGE>
Swing Line Note (cont'd)
ADVANCES AND PAYMENTS OF PRINCIPAL
Last Day of
Amount Amount of Applicable
Of Interest Principal Interest Notation
Date Advance Rate Prepaid Period Made By
- ----- ------- -------- --------- ----------- ---------
EXHIBIT D
FORM OF ASSIGNMENT AND ACCEPTANCE AGREEMENT
THIS ASSIGNMENT AND ACCEPTANCE AGREEMENT (this "Assignment
Agreement") is dated as of the _____ day of _____________________,
(the "Effective Date"), between
___________________________("Assignor")and_______________________
("Assignee"). The parties hereto agree as follows:
1. PRELIMINARY STATEMENT. The Assignor is a party to a Credit
Agreement (which, as amended, modified and/or restated from time to
time, is herein called the "Credit Agreement") described in Item 1
of Schedule 1 attached hereto ("Schedule 1"). Capitalized terms
used herein and not otherwise defined herein shall have the
meanings attributed to them in the Credit Agreement.
2. ASSIGNMENT AND ASSUMPTION. The Assignor hereby sells and assigns
to the Assignee, and the Assignee hereby purchases, accepts and
assumes from the Assignor, all interest in and to the Assignor's
rights and obligations under the Credit Agreement such that after
giving effect to such assignment the Assignee shall have purchased
pursuant to this Assignment Agreement the Applicable Commitment
Percentage specified in Item 3 of Schedule 1 relating to the
facilities listed in Item 3 of Schedule 1 and the other Loan
Documents (as such term is defined in the Credit Agreement)
(herein, the "Loan Documents"). The aggregate Revolving Credit
Commitment, Term Loan Commitment and Applicable Commitment
Percentage purchased by the Assignee hereunder is set forth in Item
4 of Schedule 1.
3.EFFECTIVE DATE. The effective date of this Assignment Agreement
(the "Effective Date") shall be the date set forth in the preamble.
As of the Effective Date, (i) the Assignee shall have the rights
and obligations of a Lender under the Credit Agreement and related
Loan Documents with respect to the rights and obligations assigned
to the Assignee hereunder and (ii) the Assignor shall relinquish
its rights and be released from its corresponding obligations under
the Loan Documents with respect to the rights and obligations
assigned to the Assignee hereunder.
4. PAYMENT OBLIGATIONS. On and after the Effective Date, the
Assignee shall be entitled to receive from the Administrative Agent
all payments of principal, interest and fees with respect to the
interest assigned hereby. The Assignee shall advance funds directly
to the Administrative Agent with respect to its Revolving Credit
Commitment, Term Loan Commitment and Loans and reimbursement
payments made on or after the Effective Date with respect to the
interest assigned hereby. In the event that either party hereto
receives any payment to which the other party hereto is entitled
under this Assignment Agreement, then the party receiving such
amount shall promptly remit it to the other party hereto.
5. REPRESENTATIONS OF THE ASSIGNOR. The Assignor represents and
warrants that it is the legal and beneficial owner of the interest
being assigned by it hereunder and that such interest is free and
clear of any adverse claim created by or against the Assignor.
6. REPRESENTATIONS OF THE ASSIGNEE. The Assignee (i) confirms that
it has received a copy of the Credit Agreement, together with
copies of the financial statements requested by the Assignee and
such other documents and information as it has deemed appropriate
to make its own credit analysis and decision to enter into this
Assignment Agreement, (ii) agrees that it will, independently and
without reliance upon the Administrative Agent, the Assignor or any
other Lender and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit
decisions in taking or not taking action under the Loan Documents,
(iii) represents that it is acquiring its interest in the Revolving
Credit Commitment, Term Loan Commitment and Loans in connection
therewith for its own account for investment purposes and not with
a view to further distribution thereof, (iv) agrees that it shall
require any proposed assignee to furnish similar representations to
the Administrative Agent; (v) represents that it has total assets
in excess of $1,000,000,000; (vi) appoints and authorizes the
Administrative Agent to take such action as agent on its behalf and
to exercise such powers under the Loan Documents as are delegated
to the Administrative Agent by the terms thereof, together with
such powers as are reasonably incidental thereto, (vii) agrees that
it will perform in accordance with their terms all of the
obligations which by the terms of the Credit Agreement and the
other Loan Documents are required to be performed by it as a
Lender, (viii) agrees that its payment instructions and notice
instructions are as set forth in the attachment to Schedule 1; and
(ix) attaches two duly completed copies of the United States
Internal Revenue Service Form 1001 or 4224, as applicable, or
successor applicable form, as the case may be, certifying that
Assignee is entitled to receive payments under the Credit
Agreement, and the other Loan Documents without deduction or
withholding of any United States federal income taxes, and of
Internal Revenue Service Form W-8 or W-9, as applicable, or
successor applicable form, as the case may be, to establish an
exemption from United States backup withholding tax.
7. ENTIRE AGREEMENT, ETC.. This Assignment Agreement and the
attached Notice of Assignment embody the entire agreement and
understanding between the parties hereto and supersede all prior
agreements and understandings between the parties hereto relating
to the subject matter hereof. The Administrative Agent and the
Borrower are third-party beneficiaries of this Assignment
Agreement.
8. GOVERNING LAW. This Assignment Agreement shall be governed by
the laws of the State of Tennessee.
9. NOTICES. Notices shall be given under this Assignment Agreement
in the manner set forth in the Credit Agreement. For the purpose
hereof, the addresses of the parties hereto (until notice of a
change is delivered) shall be the address set forth in the
attachment to Schedule 1.
IN WITNESS WHEREOF, the parties hereto have executed this
Assignment Agreement by their duly authorized officers as of the
date first above written.
ASSIGNEE: ASSIGNOR:
By:_____________________ By:_____________________
Title:__________________ Title:__________________
SCHEDULE 1
to Assignment Agreement
1. Description and Date of Credit Agreement:
Credit Agreement dated as of February 16, 1999 by and among CBRL
Group, Inc., the Lenders party thereto, and SunTrust Bank,
Nashville, N.A., as Administrative Agent
2. Date of Assignment Agreement: ____________, 19____
3. Amounts (As of Date of Item 2 above):
a. Total Commitments (Loans) under Credit Agreement: $________
b. Assignee's Applicable Commitment Percentage purchased under
the Assignment Agreement ____________%
4. Assignee's Revolving Credit Commitment
and Revolving Credit Loan Amount Purchased hereunder: $____________
5. Assignee's Term Loan Commitment and Term Loan
Amount Purchased $____________
6. Effective Date: __________, 19_____
Accepted and Agreed:
ASSIGNEE: ASSIGNOR:
By: _______________________ By:______________________
Title:_____________________ Title:___________________
ATTACHMENT TO SCHEDULE 1
TO ASSIGNMENT AGREEMENT
Assignee Notice Information
Notice: Institution ___________________
Address: Name: ___________________
___________________
___________________
Payment Instructions: Wire payment to
____________________
for the account of
____________________,
Account No. _________
____________________
Lending Office: ____________________
____________________
Address of Administrative Agent SunTrust Bank, Nashville, N.A.,
Administrative Agent
201 Fourth Avenue North
Nashville, Tennessee 37219
Attn:__________________________
Wiring Instructions from Wire payment to _________________
Assignee to SunTrust Bank, For the account of SunTrust
Nashville, N.A., Administrative Bank, Nashville, N.A. account
Agent, Administrative Agent: no. ________________________
ATTACHMENT 1
TO ASSIGNMENT AGREEMENT
NOTICE OF ASSIGNMENT
_______________________, 19______
To: CBRL Group, Inc.
________________________________
________________________________
________________________________
Attn:___________________________
and
SunTrust Bank, Nashville, N.A., Administrative Agent
201 Fourth Avenue, North
Nashville, Tennessee 37219
Attn: ______________________
From: ______________________________ (the "Assignor")
______________________________ (the "Assignee")
(1) We refer to that certain Credit Agreement (the "Credit
Agreement") described in Item 1 of Schedule 1 attached hereto
("Schedule 1"). Capitalized terms used herein and not otherwise
defined herein or in such consent shall have the meanings
attributed to them in the Credit Agreement.
(2) The Assignor and the Assignee have entered into an Assignment
and Acceptance, dated as of __________, 19_____ (the "Assignment"),
pursuant to which, among other things, the Assignor has sold,
assigned, delegated and transferred to the Assignee, and the
Assignee has purchased, accepted and assumed from the Assignor the
Applicable Commitment Percentage specified in Item 3 of Schedule 1
relating to the facilities listed in Item 3 of Schedule 1,
including, without limitation, all of Assignor's interest in the
Loans and Commitments related thereto (including without limitation
the Revolving Credit Commitments and Term Loan Commitments).
(3) The Assignee, by signing below, represents to SunTrust Bank,
Nashville, N.A., as Administrative Agent ("Administrative Agent")
and to the Borrower that Assignee is an "Eligible Assignee" as such
term is defined in the Credit Agreement, that the Assignment
complies with all provisions of Section 10.6. of the Credit
Agreement, and that Assignee is a commercial bank organized under
the laws of the United States and has total assets in excess of
$1,000,000,000.
(4) Assignee represents to Administrative Agent and Borrower that
Assignee is acquiring its interest in the Revolving Credit
Commitment, Term Loan Commitments and Loans in connection therewith
for its own account for investment purposes and not with a view to
further distribution thereof, and agrees that it shall require any
proposed assignee to furnish similar representations to the
Administrative Agent and the Borrower. By executing this Notice
below, Assignee agrees that it shall be deemed to make all
representations of a Lender contained in, and shall be bound by all
duties and obligations of a Lender contained in the Credit
Agreement.
(5) The Assignor and the Assignee hereby give to the Borrower and
the Administrative Agent notice of the assignment and delegation
referred to herein. The Assignor will confer with the
Administrative Agent before the date specified in Item 5 of
Schedule 1 to determine if the Assignment Agreement will become
effective on such date pursuant to Section 2 hereof, and will
confer with the Administrative Agent to determine the Effective
Date pursuant to Section 3 hereof if it occurs thereafter. The
Assignor shall notify the Administrative Agent if the Assignment
Agreement does not become effective on any proposed Effective Date
as a result of the failure to satisfy the conditions precedent
agreed to by the Assignor and the Assignee. At the request of the
Administrative Agent, the Assignor will give the Administrative
Agent written confirmation of the satisfaction of the conditions
precedent.
(6) If Revolving Credit Notes and Term Notes are outstanding on the
Effective Date, the Assignor and the Assignee request and direct
that the Administrative Agent prepare and cause the Borrower to
execute and deliver new Revolving Credit Notes or Term Notes or, as
appropriate, replacement notes, to the Assignee. The Assignor and,
if applicable, the Assignee each agree to deliver to the
Administrative Agent the original Revolving Credit Notes received
by it from the Borrower upon its receipt of new Revolving Credit
Notes and Term Notes in the appropriate amount.
(7) The Assignee advises the Administrative Agent that notice and
payment instructions are set forth in the Attachment to Schedule 1.
(8) Each party consenting to the Assignment in the space indicated
below hereby releases the Assignor from any obligations to it which
have been assigned to the Assignee.
ASSIGNOR: ASSIGNEE:
__________________________ ___________________________
By: ______________________ By:________________________
Title:____________________ Title:_____________________
ACKNOWLEDGED BY AND ACKNOWLEDGED BY AND
CONSENTED TO CONSENTED TO
SUNTRUST BANK, NASHVILLE, N.A., CBRL GROUP, INC.
ADMINISTRATIVE AGENT
By: __________________________ By:____________________
Title:________________________ Title:_________________
EXHIBIT E
TO CREDIT AGREEMENT
NOTICE OF BORROWING
Via fax (615)
Attn:
SunTrust Bank, Nashville, N.A., Administrative Agent
201 Fourth Avenue North
Nashville, Tennessee 37219
Date: ________________, __________
Re: Credit Agreement dated February 16, 1999 by and among CBRL
GROUP, INC. (the "Borrower"), the Lenders listed therein, and
SunTrust Bank, Nashville, N.A., as Administrative Agent (as may be
amended from time to time, the "Credit Agreement")
This Notice of Borrowing is made by the Borrower pursuant to
Section 3.1.(a)(i) of the Credit Agreement. Capitalized terms not
otherwise defined in this Notice of Borrowing have the same meaning
as in the Credit Agreement. The individual signing this request
certifies that (i) he or she is an individual authorized by the
Borrower to submit this Notice of Borrowing to the Administrative
Agent pursuant to the Credit Agreement, (ii) the undersigned hereby
irrevocably gives notice of and requests, pursuant to Section
3.1.(a)(i) of the Credit Agreement, a Borrowing under the Revolving
Loans (the "Proposed Borrowing"), and (iii) the amount of the
Proposed Borrowing is available to the Borrower pursuant to the
Credit Agreement. The information below is true and correct as of
the date of this Notice of Borrowing and relates to the Revolving
Loans described in the Credit Agreement and the Proposed Borrowing:
1. Current principal amount outstanding under the Revolving Loans:
$__________________
2. Available Amount [$300,000,000 minus (1) ]:
$________________
3. Amount of Proposed Borrowing: _____________________
4. Date of Proposed Borrowing:
5. Will the Proposed Borrowing be a Base Rate Advance?
_______________________
6. Will the Proposed Borrowing be a Eurodollar Advance?
7. If Proposed Borrowing is a Eurodollar Advance, the applicable
interest period is __________ month/months with a maturity date of
___________.
Any Notices of Borrowing for Eurodollar Advances must be given
three (3) Business Days prior to the Proposed Borrowing. All
Notices of Borrowing received after 11:00 A.M. shall be deemed
received on the next Business Day.
8. (a) Deposit proceeds of borrowing into the Borrower's account
maintained with agent: ____________
(check if applicable)
OR
(b) Wire transfer proceeds of borrowing according to the following
instructions:
ABA No. _____________________________
Account No. _________________________
Name of Bank: _______________________
Customer Reference:__________________
Other Information:___________________
_____________________________________
In connection with the Proposed Borrowing, the undersigned
represents on the date hereof and on the date of the Proposed
Borrowing (a) it has not obtained knowledge that there exists any
Default or Event of Default and (b) all representations and
warranties by the Borrower contained in the Credit Agreement are
true and correct in all material respects.
Very truly yours,
CBRL GROUP, INC.
By:_____________________________
Title:__________________________
EXHIBIT F
TO CREDIT AGREEMENT
NOTICE OF SWING LINE LOAN
Via fax (615)
Attn: _______________
SunTrust Bank, Nashville, N.A., Administrative Agent
201 Fourth Avenue North
Nashville, Tennessee 37230-5110
Date: ____________, _________
Re: Credit Agreement dated February 16, 1999 by and among CBRL
GROUP, INC. (the "Borrower"), the Lenders listed therein, and
SunTrust Bank, Nashville, N.A., as Administrative Agent (as may be
amended from time to time, the "Credit Agreement")
This Notice of Swing Line Loan is made by the Borrower pursuant to
Section 3.1.(a)(i)(ii) of the Credit Agreement. Capitalized terms
not otherwise defined in this Notice of Swing Line Loan have the
same meaning as in the Credit Agreement. The individual signing
this request certifies that (i) he or she is an individual
authorized by the Borrower to submit this Notice of Swing Line Loan
to the Administrative Agent pursuant to the Credit Agreement, (ii)
the undersigned hereby irrevocably gives notice of and requests,
pursuant to Section 3.1.(a)(ii) of the Credit Agreement, a Swing
Line Loan (the "Proposed Swing Line Loan"), and (iii) the amount of
the Proposed Swing Line Loan is available to the Borrower pursuant
to the Credit Agreement. The information below is true and correct
as of the date of this Notice of Swing Line Loan and relates to the
Swing Line Loan described in the Credit Agreement and the Proposed
Swing Line Loan:
1. Current principal amount outstanding under the Swing Line
Loans:
$_______________
2. Available Amount [$10,000,000 minus (1)]: $________________
3. Amount of proposed Swing Line Loan: __________________
4. Date of proposed Swing Line Loan:__________________
Any Swing Line Loan Notice for Swing Line Rate Advances must be by
11:00 A.M. on a Business Day. Notices received after 11:00 A.M.
shall be deemed received on the next Business Day.
8. (a)Deposit proceeds of Swing Line Loan into the borrower's
account maintained with agent:
(check if applicable)
OR
(b) Wire transfer proceeds of Swing Line Loan according to the
following instructions:
ABA No. _____________________________________
Account No.__________________________________
Name of Bank:________________________________
Customer Reference:__________________________
Other Information:____________________________
_____________________________________________
In connection with the Proposed Swing Line Loan, the undersigned
represents on the date hereof and on the date of the Proposed Swing
Line Loan (a) it has not obtained knowledge that there exists any
Default or Event of Default and (b) all representations and
warranties by the Borrower contained in the Credit Agreement are
true and correct in all material respects.
Very truly yours,
CBRL GROUP, INC.
By:___________________________
Title:_________________________
EXHIBIT G
CLOSING CERTIFICATE
The undersigned, being the ______________________of CBRL GROUP,
INC., a Tennessee corporation (the "Borrower"), hereby gives this
certificate to induce SUNTRUST BANK, NASHVILLE, N.A., as
administrative agent for itself and the other Lenders (in such
capacity, the "Administrative Agent") and each of the other
Lenders, to consummate certain financial accommodations with the
Borrower pursuant to the terms of the Credit Agreement dated as of
even date herewith (the "Credit Agreement"). Capitalized terms used
herein and not defined herein have the same meanings assigned to
them in the Credit Agreement.
The undersigned hereby certifies to the Administrative Agent and
the Lenders that:
1. In his/her aforesaid capacity as the ______________________ of
the Borrower, [he/she] has knowledge of the business and financial
affairs of the Borrower sufficient to issue this certificate and is
authorized and empowered to issue this certificate for and on
behalf of the Borrower.
2. All representations and warranties contained in the Credit
Agreement are true and correct in all material respects on and as
of the date hereof.
3. After giving effect to the Loans to be made to the Borrower
pursuant to the Credit Agreement on the date hereof, no Default or
Event of Default has occurred and is continuing.
4. Since the date of the audited financial statements of the
Consolidated Companies described in Section 5.14. of the Credit
Agreement, there has been no change which has had or is reasonably
likely to have a Material Adverse Effect.
5. Except as may be described on Schedule 5.5. of the Credit
Agreement, no action or proceeding has been instituted or is
pending before any court or other governmental authority, or, to
the knowledge of any of the Consolidated Companies, threatened (i)
which is reasonably likely to have a Material Adverse Effect, or
(ii) seeking to prohibit or restrict one or more Consolidated
Companies' ownership or operation of any portion of its businesses
or assets, where such portion or portions of such businesses or
assets, as the case may be, constitute a material portion of the
total businesses or assets of the Consolidated Companies.
6. The Advances to be made on the date hereof are being used solely
for the purposes provided in the Credit Agreement, and such
Advances and use of proceeds thereof will not contravene, violate
or conflict with, or involve the Administrative Agent or any Lender
in a violation of, any law, rule, injunction, or regulation, or
determination of any court of law or other governmental authority,
applicable to the Borrower or any of the Consolidated Companies.
7. The conditions precedent set forth in Sections 4.1. and 4.2. of
the Credit Agreement have been or will be satisfied (or have been
pursuant to the terms of the Credit Agreement) prior to or
concurrently with the making of the Loans under the Credit
Agreement on the date hereof.
8. The execution, delivery and performance by any of the
Consolidated Companies of the Credit Documents will not violate any
Requirement of Law or cause a breach or default under any of their
respective Contractual Obligations.
9. The Borrower has the corporate power and authority to make,
deliver and perform the Credit Documents to which it is party and
has taken all necessary corporate action to authorize the
execution, delivery and performance of such Credit Documents. No
consents or authorization of, or filing with, any Person
(including, without limitation, any governmental authority), is
required in connection with the execution, delivery, or performance
by the Borrower, or the validity or enforceability against any
Borrower, of the Credit Documents, other than such consents,
authorizations or filings which have been made or obtained.
IN WITNESS WHEREOF, the undersigned has executed this certificate
in his/her aforesaid capacity as of this ____ day of February,
1999.
CBRL GROUP, INC.
By:________________
Title:______________
EXHIBIT I
[FORM OF] COMPLIANCE CERTIFICATE
[Date]
SunTrust Bank, Nashville, N.A., Administrative Agent
201 Fourth Avenue North
Nashville, Tennessee 37219
Ladies and Gentlemen:
The undersigned, CBRL GROUP, INC. (the "Borrower"), refers to the
Credit Agreement dated as of February 16, 1999 (as amended,
modified, extended or restated from time to time, the "Credit
Agreement"), among the Borrower, the financial institutions party
thereto as Lenders, and SunTrust Bank, Nashville, N.A., as
Administrative Agent. Capitalized terms used herein and not
otherwise defined herein shall have the meaning's assigned to such
terms in the Credit Agreement.
Pursuant to Section 6.7.(c) of the Credit Agreement, the Borrower
hereby certifies that the computations set forth in the Attachment
to Compliance Certificate attached hereto are true and accurate
computations of the ratios and other items required to be so
computed pursuant to the Credit Agreement.
The Borrower further certifies that (i) the Borrower is in
compliance with such covenants, (ii) that no Default or Event of
Default has occurred and is continuing, (iii) the representations
and warranties set forth in Article 5 of the Credit Agreement are
true and correct in all Material respects as of the date hereof and
(iv) no change has occurred in the financial condition of the
Borrower and the Consolidated Companies, taken as a whole, since
the Closing Date which has had or is reasonably likely to have a
Materially Adverse Effect.
CBRL GROUP, INC.
By:______________________
Title:____________________
ATTACHMENT TO COMPLIANCE CERTIFICATE
This Attachment to Compliance Certificate is made with respect to
the Borrower's quarterly accounting period ended ______________.
All capitalized terms used herein and not defined herein have the
respective meanings specified in the Credit Agreement.
The undersigned, being a Financial Officer of the Borrower, hereby
certifies to the Administrative Agent and the Lenders that set
forth below are the computations necessary to determine that the
Borrower and the Consolidated Companies are in compliance with
Section 7.1. of the Credit Agreement:
S. Section 7.1.(i)/Leverage Ratio. The following amounts shall be
determined as of the end of the Borrower's most recently concluded
fiscal quarter and including the immediately three (3) preceding
fiscal quarters:
1. Total Funded Debt
(see item 6 under subsection B below) $_______________
2. Total Capitalization $_______________
3. Leverage Coverage Ratio
(item (1) divided by item (2)) $_______________
4. Maximum Leverage Ratio pursuant to
Section 7.1.(i) .40 to 1.0 $_______________
T. Section 7.1.(ii) Total Funded Debt to Consolidated EBITDA. The
following amounts shall be determined as of the end of the
Borrower's fiscal quarter and including the immediately three (3)
preceeding fiscal quarters:
1. Indebtedness for Borrowed Money of
Consolidated Companies $________________
2. Capital Lease Obligations of
Consolidated Companies $________________
3. Present value of all minimum lease
commitments to make payments with respect
to operating leases of the Consolidated
Companies $_________________
4. Guarantees of the Consolidated Companies $_________________
5. Redemption Amount with respect to any
redeemable preferred stock of any Consolidated
Company required to be redeemed within
the next 12 months $___________________
6. Total Funded Debt(sum of items (1)
through (5)) $____________________
7. Consolidated Net Income (Loss) $____________________
8. Consolidated Income Taxes $____________________
9. Consolidated Interest Expenses $_____________________
10. Consolidated Depreciation and Amortization $___________________
11. Consolidated EBITDA
(items 7 through 10) $___________________
12. Total Funded Debt to Consolidated
EBITDA Ratio (item (6) divided by item (11)) $___________________
13. Maximum Ratio of Total Funded Debt to
Consolidated EBITDA 2.0 to 1.0 required
pursuant to Section 7.1.(ii) $____________________
U. Section 7.1(iii) Interest Coverage Ratio. The following amount
shall be determined as of the end of the Borrower's most recently
concluded fiscal quarter and including the immediately three (3)
preceding fiscal quarters:
1. Consolidated EBIT
(Section B above item 7 plus items 8 and 9) $__________________
2. Consolidated Interest Expense $__________________
3. Minimum Consolidated EBIT to Consolidated
Interest Expense Ratio required pursuant to
Section 7.1.(iii) 3.0 to 1.0 $___________________
IN WITNESS WHEREOF, this Attachment to Compliance Certificate is
duly executed and delivered this ______ day of ____________, ____.
CBRL GROUP, INC.
By:________________________
Title:_____________________*
*Must be a Financial Officer
EXHIBIT J
FORM OF SUBSIDIARY GUARANTY
THIS SUBSIDIARY GUARANTY (this "Guaranty") is made as of the
day of February, 1999 by _____________________ (the "Guarantor") in
favor of the Administrative Agent, for the ratable benefit of the
Lenders, under the Credit Agreement referred to below;
WITNESSETH:
WHEREAS, CBRL Group, Inc., a Tennessee corporation (the
"Borrower"), the lenders listed therein (the "Lenders"), and
SunTrust Bank, Nashville, N.A. as Administrative Agent (the
"Administrative Agent"), have entered into that certain Credit
Agreement dated as of February 16, 1999 (as the same may have been
or may hereafter be amended or supplemented from time to time, the
"Credit Agreement") providing, subject to the terms and conditions
thereof, for extensions of credit to be made by the Lenders to the
Borrower;
WHEREAS, it is a requirement of Section 6.10. of the Credit
Agreement that each Subsidiary Guarantor shall execute and deliver
this Guaranty whereby each Subsidiary Guarantor shall guarantee the
payment when due of principal, interest and other amounts that
shall be at any time payable by the Borrower under the Credit
Agreement, the Notes and the other Credit Documents; and
WHEREAS, in consideration of the financial and other support that
the Borrower provided, and such financial and other support as the
Borrower may in the future provide, to the Guarantor, the Guarantor
is willing to guarantee the obligations of the principal under the
Credit Agreement, the Notes, and the other Credit Documents.
NOW, THEREFORE, in consideration of the premises, and other good
and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as follows:
SECTION 11. Definitions. Terms defined in the Credit Agreement and
not otherwise defined herein have, as used herein the respective
meanings provided for therein.
SECTION 12. Representations and Warranties. Guarantor represents and
warrants (which representations and warranties shall be deemed to
have been renewed upon each Borrowing under the Credit Agreement)
that:
(a) It (i) is a corporation duly organized or formed, validly
existing and in good standing under the laws of its jurisdiction of
organization or formation; (ii) has all requisite power, and has all
material governmental licenses, authorizations, consents and
approvals necessary to own its assets and carry on its business as
now being or as proposed to be conducted, and (iii) is qualified to
do business in all jurisdictions in which the nature of the business
conducted by it makes such qualification necessary and where failure
so to qualify would have a Materially Adverse Effect.
(b) It has all necessary power and authority to execute, deliver and
perform its obligations under this Guaranty; the execution, delivery
and performance of this Guaranty have been duly authorized by all
necessary organizational action; and this Guaranty has been duly and
validly executed and delivered by it and constitutes its legal, valid
and binding obligation, enforceable in accordance with its terms.
(c) Neither the execution and delivery by it of this Guaranty nor
compliance with the terms and provisions hereof will conflict with or
result in a breach of, or require any consent under, organizational
documents or any material applicable law or regulation or any order,
writ, injunction or decree of any court or governmental authority or
agency, or any material Contractual Obligation to which it is a party
or by which it is bound or to which it is subject, or constitute a
default under any such material Contractual Obligation, or result in
the creation or imposition of any Lien upon any of its revenues or
assets pursuant to the terms of any such material Contractual
Obligation.
SECTION 13. Covenants. Guarantor covenants that so long as any Lender
has any Commitment outstanding under the Credit Agreement or any
amount payable under the Credit Agreement or any Note shall remain
unpaid, that, if necessary, will enable the Borrower to fully comply
with those covenants and agreements set forth in the Credit Agreement
(including, without limitation, Articles 6 and 7 thereof).
SECTION 14. The Guaranty. Guarantor hereby unconditionally guarantees
the full and punctual payment (whether at stated maturity, upon
acceleration or otherwise) of the principal of and interest on each
Note issued by the Borrower pursuant to the Credit Agreement, and the
full and punctual payment of all other amounts payable by the
Borrower under the Credit Agreement and the other Credit Documents
including, without limitation, the Obligations (all of the foregoing,
including without limitation, interest accruing or what would have
accrued after the filing of a petition in bankruptcy or other
insolvency proceeding, being referred to collectively as the
"Guaranteed Obligations"). Upon failure by the Borrower to pay
punctually any such amount, Guarantor agrees that it shall forthwith
on demand pay the amount not so paid at the place and in the manner
specified in the Credit Agreement, the Notes or the relevant Credit
Document, as the case may be. Guarantor acknowledges and agrees that
this is a guarantee of payment when due, and not of collection, and
that this Guaranty may be enforced up to the full amount of the
Guaranteed Obligations without proceeding against the Borrower, any
other Subsidiary Guarantor, any security for the Guaranteed
Obligations, or against any other Person that may have liability on
all or any portion of the Guaranteed Obligations. The Guarantor's
obligations under this Guaranty and the obligations of any other
Subsidiary Guarantor under a Subsidiary Guaranty, are joint and
several.
SECTION 15. Guaranty Unconditional. The obligations of Guarantor
hereunder shall be unconditional and absolute and, without limiting
the generality of the foregoing, shall not be released, discharged or
otherwise affected by:
(i) any extension, renewal, settlement, compromise, waiver or release
in respect of any obligation of the Borrower under the Credit
Agreement, any Note, or any other Credit Document, by operation of
law or otherwise or any obligation of any other guarantor of any of
the Obligations;
(ii) any modification or amendment of or supplement to the Credit
Agreement, any Note, or any other Credit Document;
(iii) any release, nonperfection or invalidity of any direct or
indirect security for any obligation of the Borrower under the Credit
Agreement, any Note, any Credit Document, or any obligations of any
other guarantor of any of the Obligations;
(iv) any change in the existence, structures or ownership of the
Borrower or any other guarantor of any of the Obligations, or any
insolvency, bankruptcy, reorganization or other similar proceeding
affecting the Borrower, or any other guarantor of the Obligations, or
its assets or any resulting release or discharge of any obligation of
the Borrower, or any other guarantor of any of the Obligations;
(v) the existence of any claim, setoff, or other rights which any
Subsidiary Guarantor may have at any time against the Borrower, any
other guarantor of any of the Obligations, the Administrative Agent,
any Lender or any other Person, whether in connection herewith or any
unrelated transactions, provided that nothing herein shall prevent
the assertion of any such claim by separate suit or compulsory
counterclaim;
(vi) any invalidity or unenforceability relating to or against the
Borrower, or any other guarantor of any of the Obligations, for any
reason related to the Credit Agreement, any other Credit Document, or
any provision of applicable law or regulation purporting to prohibit
the payment by the Borrower or any other guarantor of the
Obligations, of the principal of or interest on any Note or any other
amount payable by the Borrower under the Credit Agreement, the Notes,
or any other Credit Document; or
(vii) any other act or omission to act or delay of any kind by the
Borrower, any other guarantor of the Obligations, the Administrative
Agent, any Lender, or any other Person or any other circumstance
whatsoever which might, but for the provisions of this paragraph,
constitute a legal or equitable, discharge of any Guarantor's
obligations hereunder.
SECTION 16. Discharge Only Upon Payment In Full, Reinstatement In
Certain Circumstances. Guarantor's obligations hereunder shall remain
in full force and effect until all Guaranteed Obligations shall have
been paid in full and the Commitments under the Credit Agreement
shall have terminated or expired. If at any time any payment of the
principal of or interest on any Note or any other amount payable by
the Borrower or any other party under the Credit Agreement or any
other Credit Document is rescinded or must be otherwise restored or
returned upon the insolvency, bankruptcy or reorganization of the
Borrower or otherwise, Guarantor's obligations hereunder with respect
to such payment shall be reinstated as though such payment had been
due but not made at such time.
SECTION 17. Waiver of Notice. Guarantor irrevocably waives acceptance
hereof, presentment, demand, protest and, to the fullest extent
permitted by law, any notice not provided for herein as well as any
requirement that at any time any action be taken by any Person
against the Borrower, any other guarantor of the Obligations, or any
other Person.
SECTION 18. Judgment Currency.
(a) Guarantor shall pay all amounts due hereunder in U.S. Dollars,
and such obligations hereunder to make payments in U.S. Dollars shall
not be discharged or satisfied by any tender or recovery pursuant to
any judgment expressed in or converted into any currency other than
U.S. Dollars, except to the extent that such tender or recovery
results in the effective receipt by the Lenders and the
Administrative Agent of the full amount of U.S. Dollars expressed to
be payable under this Guaranty or the Credit Agreement. If for the
purpose of obtaining or enforcing against Guarantor in any court or
in any jurisdiction, it becomes necessary to convert into or from any
currency other than U.S. Dollars (such other currency being
hereinafter referred to as the "Judgment Currency") an amount due in
U.S. Dollars, the conversion shall be made, and the currency
equivalent determined, in each case, as on the Business Day
immediately preceding the day on which the judgment is given (such
Business Day being hereinafter referred to as the "Judgment Currency
Conversion Date").
(b) If there is a change in the rate of exchange between the Judgment
Currency Conversion Date and the date of actual payment of the
amounts due, the Guarantor covenants and agrees to pay, or cause to
be paid, such additional amounts, if any (but in any event not a
lesser amount), as may be necessary to insure that the amount paid in
the Judgment Currency, when converted at the rate of exchange
prevailing on the date of payment, will produce the amount of U.S.
Dollars which could have been purchased with the amount of Judgment
Currency stipulated in the judgment or judicial award at the rate of
exchange prevailing on the Judgment Currency Conversion Date.
(c) For purposes of determining the currency equivalent for this
Section, such amounts shall include any premium and costs payable in
connection with the purchase of U.S. Dollars.
(d) The currency equivalent of U.S. Dollars shall mean, with respect
to any monetary amount in a currency other than U.S. Dollars, at any
time for the determination thereof, the amount of U.S. Dollars
obtained by converting such foreign currency involved in such
computation into U.S. Dollars at the spot rate for the purchase of
U.S. Dollars with the applicable foreign currency as quoted by the
Administrative Agent at approximately 11:00 a.m. (Nashville,
Tennessee time) on the date of determination thereof specified herein
or, if the date of determination thereof is not otherwise specified
herein, on the date two (2) Business Days prior to such
determination.
SECTION 19. Stay of Acceleration. If acceleration of the time for
payment of any amount payable by the Borrower under the Credit
Agreement, any Note or any other Credit Document is stayed upon the
insolvency, bankruptcy or reorganization of the Borrower, all such
amounts otherwise subject to acceleration under the terms of the
Credit Agreement, any Note or any other Credit Document shall
nonetheless be payable by Guarantor hereunder forthwith on demand by
the Administrative Agent made at the request of the Required Lenders.
SECTION 20. Postponement of Subrogation. Guarantor subordinates and
agrees not to exercise any rights against Borrower which it may
acquire by way of subrogation or contribution, by any payment made
hereunder or otherwise, until all the Guaranteed Obligations shall
have been irrevocably paid in full. If any amount shall be paid to
Guarantor on account of such subrogation or contribution rights at
any time when all the Guaranteed Obligations shall not have been paid
in full, such amount shall be held in trust for the benefit of
Lenders and shall forthwith be paid to Lenders to be credited and
applied to the Guaranteed Obligations, in accordance with the terms
of the Credit Agreement.
SECTION 21. Savings Clause. (a) It is the intent that Guarantor's
maximum obligations hereunder shall be, but not in excess of:
(i) in a case or proceeding commenced by or against Guarantor under
the Bankruptcy Code on or within one year from the date on which any
of the Guaranteed Obligations are incurred, the maximum amount which
would not otherwise cause the Guaranteed Obligations (or any other
obligations of Guarantor to Lenders) to be avoidable or unenforceable
against such Guarantor under (A) Section 548 of the Bankruptcy Code
or (B) any state fraudulent transfer or fraudulent conveyance act or
statute applied in such case or proceeding by virtue of Section 544
of the Bankruptcy Code; or
(ii) In a case or proceeding commenced by or against Guarantor under
the Bankruptcy Code subsequent to one year from the date on which any
of the Guaranteed Obligations are incurred, the maximum amount which
would not otherwise cause the Guaranteed Obligations to be avoidable
or unenforceable against Guarantor under any state fraudulent
transfer or fraudulent conveyance act or statute applied in any such
case or proceeding by virtue of Section 544 of the Bankruptcy Code;
or
(iii) in a case or proceeding commenced by or against Guarantor under
any law, statute or regulation other than the Bankruptcy Code
(including, without limitation, any other bankruptcy, reorganization,
arrangement, moratorium, readjustment of debt, dissolution,
liquidation or similar debtor relief laws), the maximum amount which
would not otherwise cause the Guaranteed Obligations to be avoidable
or unenforceable against Guarantor under such law, statute or
regulation including, without limitation, any state fraudulent
transfer or fraudulent conveyance act or statute applied in any such
case or proceeding.
(The substantive laws under which the possible avoidance or
unenforceability of the Guaranteed Obligations (or any other
obligations of Guarantor to Lenders) shall be determined in any such
case or proceeding shall hereinafter be referred to as the "Avoidance
Provisions").
(b) To the end set forth in Section 11(a), but only to the extent
that the Guaranteed Obligations would otherwise be subject to
avoidance under the Avoidance Provisions, if Guarantor is not deemed
to have received valuable consideration, fair value or reasonably
equivalent value for the Guaranteed Obligations, or if the Guaranteed
Obligations would render Guarantor insolvent, or leave Guarantor with
an unreasonably small capital to conduct its business, or cause
Guarantor to have incurred debts (or to have intended to have
incurred debts) beyond its ability to pay such debts as they mature,
in each case as of the time any of the Guaranteed Obligations are
deemed to have been incurred under the Avoidance Provisions and after
giving effect to the contribution by Guarantor, the maximum
Guaranteed Obligations for which Guarantor shall be liable hereunder
shall be reduced to that amount which, after giving effect thereto,
would not cause the Guaranteed Obligations (or any other obligations
of Guarantor to Lenders), as so reduced, to be subject to avoidance
under the Avoidance Provisions. This Section 11(b) is intended solely
to preserve the rights of Lenders hereunder to the maximum extent
that would not cause the Guaranteed Obligations of Guarantor to be
subject to avoidance under the Avoidance Provisions, and neither the
Guarantor nor any other Person shall have any right or claim under
this Section 11 as against Lenders that would not otherwise be
available to such person under the Avoidance Provisions.
SECTION 22. Notices. All notices, requests and other communications
to any party hereunder shall be given or made by telecopier or other
writing and telecopied, or mailed or delivered to the intended
recipient at its address or telecopier set forth on the signature
pages hereof or such other address or telecopy number as such party
may hereafter specify for such purpose by notice to the
Administrative Agent in accordance with the provisions of Section
10.1. of the Credit Agreement. Except as otherwise provided in this
Guaranty, all such communications shall be deemed to have been duly
given when transmitted by telecopier, or personally delivered or, in
the case of a mailed notice sent by certified mail return receipt
requested, on the date set forth on the receipt (provided, that any
refusal to accept any such notice shall be deemed to be notice
thereof as of the time of any such in each case given or addressed as
aforesaid.
SECTION 23. No Waivers. No failure or delay by the Administrative
Agent or any Lenders in exercising any right, power or privilege
hereunder shall operate as a waiver thereof nor shall any single or
partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The
rights and remedies provided in this Guaranty, the Credit Agreement,
the Notes, and the other Credit Documents shall be cumulative and not
exclusive of any rights or remedies provided by law.
SECTION 24. Successors and Assigns. This Guaranty is for the benefit
of the Administrative Agent and the lenders and their respective
successors and permitted assigns and in the event of an assignment of
any amounts payable under the Credit Agreement, the Notes, or the
other Credit Documents, the rights hereunder, to the extent
applicable to the indebtedness so assigned, may be transferred with
such indebtedness. This Guaranty shall be binding upon Guarantor and
its successors and permitted assigns.
SECTION 25. Changes in Writing. Neither this Guaranty nor any
provision hereof may be changed, waived, discharged or terminated
orally, but only in writing signed by Guarantor and the
Administrative Agent with the consent of the Required Lenders.
SECTION 26. GOVERNING LAW; SUBMISSION TO JURISDICTION WAIVER OF JURY
TRIAL. THIS GUARANTY SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF TENNESSEE. GUARANTOR HEREBY SUBMITS TO
THE NONEXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR
THE MIDDLE DISTRICT OF TENNESSEE AND OF ANY TENNESSEE STATE COURT
SITTING IN NASHVILLE, TENNESSEE AND FOR PURPOSES OF ALL LEGAL
PROCEEDINGS ARISING OUT OF OR RELATING TO THIS GUARANTY (INCLUDING,
WITHOUT LIMITATION, ANY OF THE OTHER CREDIT DOCUMENTS) OR THE
TRANSACTIONS CONTEMPLATED HEREBY. GUARANTOR IRREVOCABLY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW
OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH PROCEEDING
BROUGHT IN SUCH A COURT AND ANY CLAIM THAT ANY SUCH PROCEEDING
BROUGHT IN SUCH A COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
GUARANTOR, AND THE ADMINISTRATIVE AGENT AND THE LENDERS ACCEPTING
THIS GUARANTY, HEREBY IRREVOCABLY WAIVE ANY AND ALL RIGHT TO TRIAL BY
JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS
GUARANTY OR THE TRANSACTIONS CONTEMPLATED HEREBY.
SECTION 27. Taxes, etc. All payments required to be made by Guarantor
hereunder shall be made without setoff or counterclaim and free and
clear of and without deduction or withholding for or on account of,
any present or future taxes, levies, imposts, duties or other charges
of whatsoever nature imposed by any government or any political or
taxing authority thereof, provided, however, that if Guarantor is
required by law to make such deduction or withholding, such Guarantor
shall forthwith pay to the Administrative Agent or any Lender, as
applicable, such additional amount as results in the net amount
received by the Administrative Agent or any Lender as applicable,
equaling the full amount which would have been received by the
Administrative Agent or any Lender, as applicable, had no such
deduction or withholding been made.
[SIGNATURES APPEAR ON THE FOLLOWING PAGE]
IN WITNESS WHEREOF, Guarantor has caused this Guaranty to be duly
executed by its authorized officers as of the day and year first
above written.
GUARANTOR:
By:_____________________
Title:__________________
ADDRESS FOR NOTICES:
Telecopier No.:_________________
ACCEPTED BY:
SUNTRUST BANK, NASHVILLE, N.A.,
ADMINISTRATIVE AGENT for Lenders
By:_________________________
Title:______________________
EXHIBIT K
CONTINUATION/CONVERSION NOTICE
Via fax __________________
Attn:_____________________
SunTrust Bank, Nashville, N.A., as Administrative Agent
201 Fourth Avenue North
Nashville, Tennessee 37219
Date:_______________, ________
Re: Credit Agreement dated February 16, 1999 by and among CBRL GROUP,
INC. (the "Borrower"), the Lenders recited therein, and SunTrust
Bank, Nashville, N.A., as Administrative Agent (as may be amended
from time to time, the "Credit Agreement")
Capitalized terms not otherwise defined in this
Continuation/Conversion Notice have the same meaning as in the Credit
Agreement. The individual signing this request certifies that (i) he
or she is an individual authorized by the Borrower to submit
Continuation/Conversion Notices to the Administrative Agent pursuant
to the Credit Agreement and (ii) the undersigned hereby irrevocably
gives notice of and requests, pursuant to Section 3.1.(b) of the
Credit Agreement, the continuation or conversion of a Borrowing under
the Credit Agreement (the "Continued/Converted Borrowing").
1. IDENTIFICATION OF EXISTING LOAN TO BE CONTINUED/CONVERTED:
Amount
Base Rate Advance $________________________
Eurodollar Advance - expiring $________________________
Continuation/Conversion Requests to convert all or a portion of an
outstanding Borrowing consisting of Base Rate Advances into a
Borrowing consisting of Eurodollar Advances, or to continue
outstanding a Borrowing consisting of Eurodollar Advances for a new
Interest Period, must be given at lease three (3) Business Days prior
to the proposed Continuation/Conversion. All Continuation/Conversion
Notices received after 11:00 A.M. shall be deemed received on the
next Business Day.
2. DATE A CONTINUED/CONVERTED ADVANCE IS TO
BECOME EFFECTIVE: ________________________
<PAGE>
3. (a) INTEREST PERIOD for EURODOLLAR
ADVANCE CONTINUED/CONVERTED BORROWING (indicate one):
____ one (1) month period
____ two (2) month period
____ three (3) month period
____ six (6) month period
(b) MATURITY DATE:_________________
In connection with the Continued/Converted Borrowing the undersigned
represents on the date hereof and on the date of the
Continued/Converted Borrowing (a) there exist no Default or Event of
Default and (b) all representations and warranties by the Borrower
contained in the Credit Agreement are true and correct in all
material respects.
Very truly yours,
BORROWER:
CBRL GROUP, INC.
By:___________________
Title:________________
Exhibit 10(b)
FIRST AMENDMENT TO CREDIT AGREEMENT
THIS FIRST AMENDMENT TO CREDIT AGREEMENT (the "Amendment") is
dated this the 29th day of July, 1999 by and between CBRL GROUP,
INC., a Tennessee corporation ("Borrower") and SUNTRUST BANK,
NASHVILLE, N.A., a national banking association as agent (the
"Administrative Agent") for the Lenders, as described and defined
below.
RECITALS:
A. Borrower, Administrative Agent and the Lenders are parties to a
Credit Agreement dated as of February 16, 1999 (as amended or
restated from time to time, the "Credit Agreement").
B. SunTrust Bank, Nashville, N.A., Fifth-Third Bank, Hibernia
National Bank, First Union National Bank, First American National
Bank, Mercantile Bank National Association, The First National
Bank of Chicago, Wachovia Bank, N.A. and Union Planters National
Bank, presently constitute all the Lenders under the Credit
Agreement.
C. The Borrower and the requisite percentage of Required Lenders
desire to amend the Credit Agreement as hereinafter provided.
D. Terms not defined herein shall have the meanings ascribed to
such terms in the Credit Agreement.
E. Attached hereto as collective Exhibit A are the requisite
consents of the Required Lenders, consenting to this Amendment and
to the Administrative Agent's execution and delivery of this
Amendment on behalf of Lenders.
NOW, THEREFORE, in consideration of the foregoing and the
covenants and agreements contained herein, and other good and
valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties hereto agree as follows:
Section 1. Section 1.1 of the Credit Agreement concerning
"Definitions; Construction" is amended as follows:
The definition of "Applicable Margin" is deleted and the following
is substituted in lieu thereof:
"Applicable Margin" shall mean the number of basis points per
annum determined in accordance with the table set forth below
based upon Borrower's Ratio of Total Funded Debt to Consolidated
EBITDAR:
<TABLE>
RATIO OF TOTAL FUNDED DEBT TO CONSOLIDATED EBITDAR
<CAPTION>
<S> <C> <C> <C> <C> <C>
TIER ONE TIER TWO TIER THREE TIER FOUR TIER FIVE TIER SIX
less than greater than greater than greater than greater than greater than
or equal to 0.625 but 1.00 but less 1.50 but less 1.75 but less 2.00
0.625 less than or than or equal than or equal than or equal
equal to 1.00 to 1.50 to 1.75 to 2.00
62.5 Basis 75.0 basis 100 basis 125 basis 150 basis 175 basis
points per points per points per points per points per points per
annum annum annum annum annum annum
</TABLE>
provided, however, that:
(a) The Applicable Margin in effect as of the date of execution
and delivery of this Amendment shall be the number of basis points
under the heading "Tier Four" as described in the table above and
shall remain in effect until November 1, 1999 and at such time the
Applicable Margin shall then be the number of basis points under
the heading "Tier Five" until such time as the Applicable Margin
may be adjusted as hereinafter provided; and
(b) So long as no Default or Event of Default has occurred and is
continuing under this Agreement, adjustments, if any, to the
Applicable Margin based on changes in the ratio set forth above
shall be made and become effective on the Effective Date set forth
in Section 3.6. herein.
The definition of "Commitment Fee Percentage" is deleted and the
following is substituted in lieu thereof:
"Commitment Fee Percentage" shall mean the number of basis points
per annum determined in accordance with the table set forth below
based upon Borrower's Ratio of Total Funded Debt to Consolidated
EBITDAR:
<TABLE>
RATIO OF TOTAL FUNDED DEBT TO CONSOLIDATED EBITDAR
<CAPTION>
<S> <C> <C> <C> <C> <C>
TIER ONE TIER TWO TIER THREE TIER FOUR TIER FIVE TIER SIX
less than greater than greater than greater than greater than greater than
or equal to 0.625 but 1.00 but less 1.50 but less 1.75 but less 2.00
0.625 less than or than or equal than or equal than or equal
equal to 1.00 to 1.50 to 1.75 to 2.00
12.5 Basis 15.0 basis 20 basis 25 basis 37.5 basis 37.5 basis
points per points per points per points per points per points per
annum annum annum annum annum annum
</TABLE>
provided, however, that:
(a) The Commitment Fee Percentage in effect as of the date of
execution and delivery of this Amendment shall be the number of
basis points under the heading "Tier Four" as described in the
table above and shall remain in effect until November 1, 1999 and
at such time the Commitment Fee Percentage shall be the number of
basis points under the heading "Tier Five" until such time as the
Commitment Fee Percentage may be adjusted as hereinafter provided;
and
(b) So long as no Default or Event of Default has occurred and is
continuing under this Agreement, adjustments, if any, to the
Commitment Fee Percentage based on changes in the ratio set forth
above shall be made and become effective on the Effective Date set
forth in Section 3.6. herein.
Definitions for "Consolidated EBITDAR," "Consolidated EBITR" and
"Consolidated Rent Expense" are added as follows:
"Consolidated EBITDAR" shall mean, as measured on a consolidated
basis over a rolling four fiscal quarter period, the sum of
(i) Consolidated Net Income (Loss), plus (ii) consolidated income
taxes, plus (iii) Consolidated Interest Expense plus
(iv) consolidated depreciation and amortization expense, plus (v)
Consolidated Rent Expense
"Consolidated EBITR" shall mean, as measured on a consolidated
basis over a rolling four fiscal quarter period, the sum of
(i) Consolidated Net Income (Loss), plus (ii) consolidated income
taxes, plus (iii) Consolidated Interest Expense, plus Consolidated
Rent Expense.
"Consolidated Rent Expense" shall mean, for any fiscal period of
Borrower, total rental expenses attributable to Operating Leases
of the Consolidated Companies on a consolidated basis.
The definition of "Interest Coverage Ratio" is deleted and the
following is substituted in lieu thereof.
"Interest Coverage Ratio" shall mean, at any date of calculation,
the ratio of Consolidated EBITR to Consolidated Interest Expense
plus Consolidated Rent Expense.
The definition of Letter of Credit Fee Percentage is deleted and
the following is substituted in lieu thereof:
"Letter of Credit Fee Percentage" shall mean the number of basis
points per annum determined in accordance with the table set forth
below based upon Borrower's Ratio of Total Funded Debt to
Consolidated EBITDAR:
<TABLE>
RATIO OF TOTAL FUNDED DEBT TO CONSOLIDATED EBITDAR
<CAPTION>
<S> <C> <C> <C> <C> <C>
TIER ONE TIER TWO TIER THREE TIER FOUR TIER FIVE TIER SIX
less than greater than greater than greater than greater than greater than
or equal to 0.625 but 1.00 but less 1.50 but less 1.75 but less 2.00
0.625 less than or than or equal than or equal than or equal
equal to 1.00 to 1.50 to 1.75 to 2.00
62.5 Basis 75.0 basis 100 basis 125 basis 150 basis 175 basis
points per points per points per points per points per points per
annum annum annum annum annum annum
</TABLE>
(a) The Letter of Credit Fee Percentage in effect as of the date
of execution and delivery of this Amendment shall be the number of
basis points under the heading "Tier Four" as described in the
table above and shall remain in effect until November 1, 1999 and
at such time the Letter of Credit Fee Percentage shall then be the
number of basis points under the heading "Tier Five" until such
time as the Letter of Credit Fee Percentage may be adjusted as
hereinafter provided; and
(b) So long as no Default or Event of Default has occurred and is
continuing under this Agreement, adjustments, if any, to the
Letter of Credit Fee Percentage based on changes in the ratios set
forth above shall be made and become effective on the Effective
Date set forth in Section 3.6. herein.
The definition of "Total Funded Debt to Consolidated EBITDA" is
replaced with the following:
"Total Funded Debt to Consolidated EBITDAR" shall mean that ratio
determined in accordance with Section 7.1.(ii) herein.
Section 2. Section 7.1 of the Credit Agreement Concerning
"Financial Requirements" is amended by deleting Section 7.1(ii)
and the following is substituted in lieu thereof:
(i) Total Funded Debt to Consolidated EBITDAR. Permit, as of the
last day of any fiscal quarter, the ratio of Total Funded Debt to
Consolidated EBITDAR to be greater than 2.5 to 1.0, as calculated
for the most recently concluded quarter and including the
immediately three (3) preceding fiscal quarters.
Section 3. In consideration for the Lenders' consent to this
Amendment, the Borrower shall pay, concurrently with
Administrative Agent's execution hereof, a fee equal to one tenth
of one percent of the Total Commitments. Such fee shall be paid
to the Administrative Agent for payment to the Lenders in
accordance with their Applicable Commitment Percentage.
Section 4. All other documents executed and delivered in connection
with the Credit Agreement are hereby amended to the extent
necessary to conform to this Amendment. Except as specifically
amended herein, the Credit Agreement shall remain unamended and in
full force and effect.
Section 5. Borrower represents and warrants that the execution and
terms of this Amendment have been duly authorized by all necessary
corporate action.
Section 6. This Amendment shall be governed by and construed in
accordance with the laws of the State of Tennessee.
Section 7. This Amendment may be executed in one or more
counterparts, all of which shall, taken together, constitute one
original. The parties agree that facsimile signatures shall be
deemed to be and treated as original signatures of such parties.
IN WITNESS WHEREOF, the parties hereto have duly executed this
First Amendment to Credit Agreement as of the day and date first
set forth above.
CBRL GROUP, INC.
By: /s/Michael A. Woodhouse
Title: /s/Executive Vice President and COO
SUNTRUST BANK, NASHVILLE, N.A., as
Administrative Agent for the Lenders
By: /s/Allen K. Oakley
Title: /s/ Managing Director
Exhibit 10(c)
SECOND AMENDMENT TO CREDIT AGREEMENT
THIS SECOND AMENDMENT TO CREDIT AGREEMENT (the "Amendment") is
dated this the 30th day of September, 1999 by and between CBRL
GROUP, INC., a Tennessee corporation ("Borrower") and SUNTRUST
BANK, NASHVILLE, N.A., a national banking association as agent
(the "Administrative Agent") for the Lenders, as described and
defined below.
RECITALS:
A. Borrower, Administrative Agent and the Lenders are parties to a
Credit Agreement dated as of February 16, 1999, and as amended by
a First Amendment to Credit Agreement dated July 29, 1999 (as
amended or restated from time to time, the "Credit Agreement").
B. SunTrust Bank, Nashville, N.A., Fifth-Third Bank, Hibernia
National Bank, First Union National Bank, First American National
Bank, Mercantile Bank National Association, Bank One, NA (as
successors to The First National Bank of Chicago), Wachovia Bank,
N.A. and Union Planters National Bank, presently constitute all
the Lenders under the Credit Agreement.
C. The Borrower and the requisite percentage of Required Lenders
desire to amend the Credit Agreement as hereinafter provided.
D. Terms not defined herein shall have the meanings ascribed to
such terms in the Credit Agreement.
E. Attached hereto as collective Exhibit A are the requisite
consents of the Required Lenders, consenting to this Amendment and
to the Administrative Agent's execution and delivery of this
Amendment on behalf of Lenders.
NOW, THEREFORE, in consideration of the foregoing and the
covenants and agreements contained herein, and other good and
valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties hereto agree as follows:
Section 1. The Credit Agreement is amended as follows:
(a) As of the date of this Amendment the following Lenders hereby
increase their Revolving Credit Commitment in the following
amounts:
Increase
SunTrust Bank, Nashville, N.A. $10,710,000
Wachovia Bank, N.A. $10,000,000
Bank One, NA $ 7,145,000
First Union National Bank $ 7,145,000
Union Planters Bank, $ 5,000,000
National Association
(b) The Revolving Credit Commitments are increased as of the date
of this Amendment from $300,000,000 to $340,000,000. The amount of
the total Commitments, the Revolving Credit Commitments and the
Applicable Commitment Percentages are amended as follows:
SunTrust Bank, Nashville, N.A.
Revolving Credit Commitment $74,995,714.29
Applicable Commitment Percentage 21.98%
Commitment $85,710,000.00
Wachovia Bank, N.A.
Revolving Credit Commitment $70,000,000.00
Applicable Commitment Percentage 20.51%
Commitment $80,000,000.00
Bank One, NA
(successor to The First National Bank
of Chicago)
Revolving Credit Commitment $50,002,142.86
Applicable Commitment Percentage 14.65%
Commitment $57,145,000.00
First Union National Bank
Revolving Credit Commitment $50,002,142.86
Applicable Commitment Percentage 14.65%
Commitment $57,145,000.00
Union Planters Bank, National
Association
Revolving Credit Commitment $26,428,571.43
Applicable Commitment Percentage 7.69%
Commitment $30,000,000.00
Mercantile Bank, National Association
Revolving Credit Commitment $12,857,142.86
Applicable Commitment Percentage 3.85%
Commitment $15,000,000.00
First American National Bank
Revolving Credit Commitment $30,000,000.00
Applicable Commitment Percentage 8.97%
Commitment $35,000,000.00
Hibernia National Bank
Revolving Credit Commitment $12,857,142.86
Applicable Commitment Percentage 3.85%
Commitment $15,000,000.00
Fifth-Third Bank
Revolving Credit Commitment $12,857,142.86
Applicable Commitment Percentage 3.85%
Commitment $15,000,000.00
(c) Borrower shall execute a First Amended and Restated Revolving
Credit Note to each of the Lenders listed in subsection (a) of
this Section, in the forms as set forth in collective Exhibit B.
Section 2. In consideration for the increase in the Revolving
Credit Commitments, the Borrower shall pay, concurrently with
Administrative Agent's execution hereof, a fee equal to three
tenths of one percent of the increase of the Revolving Credit
Commitments, payable to the Lenders set forth in Section 1(a) of
this Amendment. Such fee shall be paid to the Administrative Agent
for payment to such Lenders on a Pro Rata basis.
Section 3. All other documents executed and delivered in connection
with the Credit Agreement are hereby amended to the extent
necessary to conform to this Amendment. Except as specifically
amended herein, the Credit Agreement shall remain unamended and in
full force and effect.
Section 4. Borrower represents and warrants that the execution and
terms of this Amendment have been duly authorized by all necessary
corporate action.
Section 5. This Amendment shall be governed by and construed in
accordance with the laws of the State of Tennessee.
Section 6. This Amendment may be executed in one or more
counterparts, all of which shall, taken together, constitute one
original. The parties agree that facsimile signatures shall be
deemed to be and treated as original signatures of such parties.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Second Amendment to Credit Agreement as of the day and date first
set forth above.
CBRL GROUP, INC.
By: /s/Michael A. Woodhouse
Title: Executive Vice President and COO
SUNTRUST BANK, NASHVILLE, N.A., as
Administrative Agent for the Lenders
By: /s/Allen K. Oakley
Title: Managing Director
Exhibit 10(g)
CBRL GROUP, INC.
AMENDED AND RESTATED STOCK OPTION PLAN
(Formerly, the Cracker Barrel Old Country Store, Inc.
Amended and Restated Stock Option Plan)
Cracker Barrel Old Country Store, Inc. ("Cracker Barrel"), CBRL
Acquisition Corp. ("Acquisition Corp.") and CBRL Group, Inc. (the
"Company") entered into a Plan of Merger, dated as of October 9,
1998 (the "Plan of Merger") pursuant to which Acquisition Corp., a
wholly-owned subsidiary of the Company, was merged with and into
Cracker Barrel (the "Merger"). The purpose of the Merger was to
create a holding company structure within which Cracker Barrel's
business will be conducted as a wholly-owned subsidiary of the
Company. At the effective date of the Merger, each share of
common stock of Cracker Barrel was converted by operation of law
into one share of common stock of the Company.
Following the Merger, each outstanding option to purchase shares
of common stock of Cracker Barrel pursuant to the Cracker Barrel
Old Country Store, Inc. Amended and Restated Stock Option Plan
continues outstanding as an option to purchase the same number of
shares of common stock of the Company, upon the same terms and
conditions as were applicable immediately prior to the effective
date of the Merger and without any further action on the part of
the option holder.
The entire text of the Plan following the effective date of the
Merger, and as now amended and restated to make certain conforming
changes, is as follows:
1. Name and Purpose. The purpose of this Plan, which shall be
known as the "CBRL Group, Inc. Amended and Restated Stock Option
Plan" is to provide a means whereby the Company may, through the
grant of Options to purchase Common Stock of the Company, attract
and retain qualified individuals (including officers and directors
who are also employees) and motivate those employees to exert
their best efforts on behalf of the Company and its Subsidiaries.
2. Definitions. For purposes of this Plan, the following terms
when capitalized shall have the meaning designated herein unless a
different meaning is plainly required by the context. Where
applicable, the masculine pronoun shall mean or include the
feminine and the singular shall include the plural:
(a) "Board" means the Board of Directors of the Company.
(b) "Common Stock" means Common Stock of the Company having a par
value of 01/100 ($.01) dollars.
(c) "Disability" means disabled within the meaning of Section
22(e)(3) of the Internal Revenue Code.
(d) "Effective Date" means the date on which this Plan, in its
present form, was approved by the Shareholders, November 25, 1997.
(e) "Fair Market Value" of the Common Stock of the Company shall
be the last reported sale price of the Common Stock as reported by
The Nasdaq National Market ("Nasdaq") on the day preceding the day
of the grant of the Option, and if such date is not a trading day,
then the last reported sale price of the last trading day
immediately preceding the day of the grant of the Option.
(f) "Internal Revenue Code" means the Internal Revenue Code of
1986, as amended.
(g) "Option" means a stock option granted pursuant to the Plan.
(h) "Optionee" means any employee who receives Options granted
under this Plan as well as the holder of any Options granted under
this Plan prior to the Effective Date.
(i) "Parent" means a parent corporation as defined in Section
424(e) and (g) of the Internal Revenue Code.
(j) "Plan" means the CBRL Group, Inc. Amended and Restated Stock
Option Plan.
(k) "Retirement" means an employee who terminates his employment
relationship with the Company at such time when such employee's
age is at least 55 years, and the employee has 7 years tenure with
the Company or longer. Retirement specifically excludes severance
agreements with the Company or termination for Just Cause.
(l) "Shareholders" means the holders of the outstanding shares of
the Company's Common Stock.
(m) "Subsidiary" means an affiliated employer during any period
that 50% or more of its common stock or, in the case of a
partnership, 50% or more of the capital interest thereof is owned
directly or indirectly by the Company or during any period that it
is a member with the Company in a controlled group of corporations
or is otherwise under common control with the Company within the
meaning of Section 414(b) and (c) of the Internal Revenue Code.
(n) "Just Cause" means matters which, in the judgment of the
Committee, constitute any one or more of the following:
(i) Intoxication while on duty.
(ii) Theft or dishonesty in the conduct of the Company's business.
(iii) Willful neglect or negligence in the management of the
Company's business.
(iv) Conviction of a crime involving moral turpitude.
3. Administration.
(a) The Plan shall be administered by a committee (the
"Committee") appointed by the Board of Directors of the Company
(the "Board"). The Committee shall consist of two or more non-
employee directors. Eligibility requirements for members of the
Committee shall conform with Rule 16(b)-3 promulgated pursuant to
the Securities Exchange Act of 1934, as amended, or any successor
rule or regulation. No person, other than members of the
Committee, shall have any discretion concerning decisions
regarding the Plan.
(b) The Company shall grant to employees chosen by the Committee
to participate in the Plan Options under, and in accordance with,
the provisions of the Plan. Each Option granted shall be
evidenced by a stock option agreement in such form and containing
such provisions not inconsistent with this Plan.
(c) Without limiting the generality of the foregoing, the
Committee shall have full and final authority in its discretion to
interpret provisions of the Plan, to determine from time to time
the individuals in the eligible group to whom the Options shall be
granted and the number of shares to be covered by each proposed
Option; to determine the purchase price of the shares covered by
each Option and the time or times at which Options shall be
granted; to interpret the Plan; to make, amend and rescind rules
and regulations relating to the Plan; to determine the terms and
provisions of the instruments by which Options shall be evidenced;
and to make all other determinations necessary or advisable for
the administration of the Plan.
4. Eligibility. The persons eligible to participate in the Plan
as recipients of Options shall include the employees of the
Company or of any Subsidiary of the Company (hereinafter called
"employees"). The word "employees" does not include Directors of
the Company as such, but does include Directors of the Company who
are otherwise employed by the Company. Nothing contained in this
Plan, nor in any Option granted pursuant to the Plan, shall confer
upon any employee any right to continue in the employ of the
Company or any Subsidiary nor limit in any way the right of the
Company or any Subsidiary to terminate his employment at any time.
5. Shares Subject to the Plan.
(a) The shares to be delivered by the Company upon exercise of
options granted under this Plan are authorized and unissued shares
of Common Stock.
(b) The aggregate number of shares of Common Stock which may be
sold pursuant to options granted under this Plan shall not exceed
17,525,702 shares; subject, however, to the adjustment provided in
Paragraph 9 in the event of stock splits, stock dividends,
exchanges of shares, or the like occurring after the Effective
Date. No Option may be granted under this Plan which could cause
such maximum limit to be exceeded.
(c) Shares of Common Stock covered by an option which is no longer
exercisable shall again be available for sale pursuant to a grant
of Options under this Plan.
6. Terms of Options. The Options granted under this Plan shall
contain the following terms and conditions:
(a) Option Price. The Option price per share of Common Stock
shall be equal to the Fair Market Value of the Company's Common
Stock on the date specified by the Committee.
(b) Time and Issuance of Options. From time to time the Committee
shall select from among those who are then eligible, the
individuals to whom Options shall be granted and shall determine
the number of shares to be covered by each Option. Each
individual thus selected shall, at such time as the Committee
shall determine, be granted an Option with respect to the number
of shares of Common Stock thus determined. The recommendation or
selection of an employee as a participant in any grant of Options
under the Plan shall not be deemed to entitle the employee to such
Option prior to the time when it shall be granted by the
Committee; and the granting of any Option under the Plan shall not
be deemed either to entitle such employee to, or to disqualify
such employee from, any participation in any other grant of
Options under the Plan. In making any determination as to
individuals to whom Options shall be granted and as to the number
of shares to be covered by such Options, the Committee shall take
into account the duties of the respective individuals, their
present and potential contributions to the success of the Company,
and such other factors as the Committee shall deem relevant in
accomplishing the purposes of the Plan.
(c) Period Within Which Option May be Exercised. Each Option
granted under the Plan shall specify the period for which the
Option thereunder is granted and shall provide that the Option
shall expire at the end of such period.
(d) Transferability. The Committee shall determine whether
Options granted under this Plan may be assigned or transferred by
the Optionee and, if an option is transferable, the Committee
shall be authorized to restrict transferability to certain persons
or classes of persons. In the event of death of an Optionee,
Options shall be transferable by will by the laws of descent and
distribution.
(e) Amendment of the Option. Material amendments to an
outstanding Option require approval by the Committee and must be
agreed upon by the Optionee.
(f) Termination of Service. If an Optionee's employment with the
Company is terminated, then the Optionee shall have the following
time periods within which to exercise unexercised Options or
portions of the options held by that Optionee in the following
described circumstances:
(i) Exercise in the Event of Death or Disability. If an Optionee
shall die (i) while an employee of the Company or of a Subsidiary
or (ii) within 90 days after termination of his employment with
the Company or a Subsidiary, other than for termination for Just
Cause, his Option may be exercised, to the extent that the
Optionee shall have been entitled to do so at the date of his
termination of employment, by the person or persons to whom the
Optionee's rights under the Option pass by will or applicable law,
or if no such person has such right, by his executors or
administrators, at any time, or from time to time, for a period of
one year after the date of the Optionee's death, but in no event
later than the expiration date. In the event an Optionee's
employment with the Company is terminated as a result of
Disability, the Optionee may exercise options, to the extent the
Optionee was entitled to do so at the date of his termination of
employment for a period of one year, but in no event later than
the expiration date of the Option.
(ii) Exercise in the Event of Termination of Employment. If an
Optionee's employment by the Company or a Subsidiary shall
terminate for any reason other than Disability, Retirement, death
or Just Cause, he may exercise his Option, to the extent that he
may be entitled to do so at the date of the termination of his
employment, at any time, or from time to time, for a period of 90
days after the date of termination, but in no event later than the
expiration date of the Option. Whether authorized leave of
absence for military or governmental service shall constitute
termination of employment for purposes of this Plan shall be
determined by the Committee. In the event an Optionee's
employment with the Company or any Subsidiary is terminated for
Just Cause, the Option shall terminate as of the date of the
employee's termination and will no longer be exercisable.
(iii) Exercise in the Event of Retirement. If an Optionee ceases
to be an employee by reason of Retirement, the former employee may
exercise Options, to the extent the Optionee was entitled to do so
at the date of termination at any time during the remaining life
of the Option, but in no event later than the expiration date of
the Option.
(g) Rights as a Shareholder. The Optionee shall have no rights as
a shareholder with respect to any shares covered by his Option
until the issuance of a stock certificate to him for such shares.
No adjustment shall be made for dividends or other rights for
which the record date is prior to the issuance of such stock
certificate, except as provided in Paragraph 9.
(h) Partial Exercise. Unless otherwise provided in the option
agreement, any exercise of an Option granted under this Plan may
be made in whole or in part.
7. Exercise of Options. The Committee expressly reserves the
right to determine the manner in which Options may be exercised
pursuant to this Plan. The Committee, in its discretion, may
determine the manner in exercising Options as of the date of the
Option grant and inform Optionees in the written agreement
required under this Plan. The manner of exercising Options may
vary from grant to grant, within the discretion of the Committee.
An Option granted under this Plan may be exercised by written
notice to the Company, signed by the Optionee, or by such other
person as is entitled to exercise such Option. The notice of
exercise shall be delivered to the Company at its principal
office, shall state the number of shares with respect to which the
Option is being exercised, and shall be accompanied by payment in
full of the Option price for such shares in cash, by surrender of
fully-paid shares of Company Common Stock or by certified check to
the Company. Upon the exercise of an Option and full payment
thereof, the Company shall deliver or cause to be delivered, as
soon as practicable, to the Optionee exercising his Option a
certificate or certificates for the number of shares of stock with
respect to which the Option is so exercised. The shares of stock
shall be registered in the name of the exercising Optionee or in
such name jointly with him as he may direct in the written notice
of exercise referred to in this paragraph. It shall be a
condition to the obligation of the Company to issue or transfer
shares of stock upon exercise of an Option by delivery of shares
that the Optionee pay to the Company, upon its demand, such amount
as may be requested by the Company for the purpose of satisfying
its liability to withhold Federal, state or local income or other
taxes incurred by reason of the exercise of such Option or the
transfer of shares thereupon. If the amount requested is not
paid, the Company may refuse to issue or transfer shares of stock
upon exercise of the Option. All shares purchased upon the
exercise of the Option as provided herein shall be fully paid and
nonassessable.
8. Previously Granted Options. All Options previously granted
shall remain outstanding and effective after the Effective Date
and shall be subject to all terms and conditions of this Plan, as
amended and restated, with respect to such outstanding Options and
such terms and conditions as may be set forth in the relevant
stock option agreements. If the terms and conditions of any stock
option agreements granted prior to the Effective Date are
different from this Plan, the terms and conditions contained in
such option agreements shall remain effective. Hereafter, the
Plan and the relevant stock option agreements granted hereunder
shall govern all option grants.
9. Adjustments to Reflect Capital Changes. The following
adjustments shall be made to reflect changes in the capitalization
of the Company:
(a) Recapitalization. The number and kind of shares subject to
outstanding Options, the exercise price for such shares, and the
number and kind of shares available for Options subsequently
granted under the Plan shall be appropriately adjusted to reflect
any stock dividend, stock split, combination or exchange of
shares, merger, consolidation or other change in capitalization
with a similar substantive effect upon the Plan or the Options
outstanding under the Plan. The Committee shall have the power to
determine the amount of the adjustment to be made in each case.
(b) Certain Reorganizations. After any reorganization, merger or
consolidation in which the Company is not the surviving
corporation, each Optionee shall, at no additional cost, be
entitled to exercise all of his Options, whether vested or not,
and upon any exercise of an Option to receive (subject to any
required action by shareholders), in lieu of the number of shares
of the Common Stock exercisable pursuant to such Option, the
number and class of shares of stock or other securities to which
such Optionee would have been entitled pursuant to the terms of
the reorganization, merger or consolidation had such Optionee been
the holder of record of a number of shares of stock equal to the
total number of shares covered by such Option. Comparable rights
shall accrue to each Optionee in the event of successive
reorganizations, mergers or consolidations of the character
described above.
(c) Acceleration. In the event of change of control as defined
herein, any outstanding Options shall be immediately exercisable
(without regard to any limitation imposed by the Plan or the Board
at the time the Option was granted, which permits all or any part
of the Option to be exercised only after the lapse of time), and
will remain exercisable until the expiration date of the Options.
(i) A "change of control" shall be deemed to have occurred if:
(1) without prior approval of the Board, any "person" becomes a
beneficial owner, directly or indirectly, of securities of the
Company representing 20% or more of the combined voting power of
the Company's then outstanding securities; or
(2) without prior approval of the Board, as a result of, or in
connection with, or within two years following, a tender or
exchange offer for the voting stock of the Company, a merger or
other business combination to which the Company is a party, the
sale or other disposition of all or substantially all of the
assets of the Company, a reorganization of the Company, or a proxy
contest in connection with the election of members of the Board,
the persons who were directors of the Company immediately prior to
any of such transactions cease to constitute a majority of the
Board or of the board of directors of any successor to the Company
(except for resignations due to death, Disability or normal
Retirement).
(ii) A person shall be deemed the "beneficial owner" of any
securities:
(1) which such person or any of its Affiliates or Associates
beneficially owns, directly or indirectly; or
(2) which such person or any of its Affiliates or Associates has,
directly or indirectly, (1) the right to acquire (whether such
right is exercisable immediately or only after the passage of
time), pursuant to any agreement, arrangement or understanding or
upon the exercise of conversion rights, exchange rights, warrants
or options, or otherwise, or (2) the right to vote pursuant to any
agreement, arrangement or understanding; or
(3) which are beneficially owned, directly or indirectly, by any
other person with which such person or any of its Affiliates or
Associates has any agreement, arrangement or understanding for the
purpose of acquiring, holding, voting or disposing of any
securities.
(iii) A "person" shall mean any individual, firm, company,
partnership, other entity or group.
(iv) The terms "Affiliate" or "Associate" shall have the
respective meanings ascribed to such terms in Rule 12b-2 of the
General Rules and Regulations promulgated by the Securities and
Exchange Commission under the Securities Exchange Action of 1934,
as in effect on the date the Plan is approved by the shareholders
of the Company and becomes effective.
10. Amendment and Termination of Plan. The Board may from time to
time, with respect to any Common Stock on which Options have not
been granted, suspend or discontinue the Plan or amend it in any
respect whatsoever. This Plan is intended to comply with all
applicable requirements of Rule 16b-3 or its successors under the
1934 Act, insofar as participants subject to Section 16 of that
Act are concerned. To the extent any provision of the Plan does
not so comply, the provision shall, to the extent permitted by law
and deemed advisable by the Committee, be deemed null and void
with respect to such participants.
11. Indemnification of Committee. In addition to such other
rights of indemnification as they may have as members of the Board
or as members of the Committee, the members of the Committee shall
be indemnified by the Company against all costs and expenses
reasonably incurred by them in connection with any action, suit or
proceeding to which they or any of them may be party by reason of
any action taken or failure to act under or in connection with the
Plan, or any Option granted thereunder, and against all amounts
paid by them in settlement thereof (provided such settlement is
approved by legal counsel selected by the Company) or paid by them
in satisfaction of a judgment in any such action, suit or
proceeding, except a judgment based upon finding of bad faith.
Upon the institution of any such action, suit or proceeding, a
Committee member shall notify the Company in writing, giving the
Company an opportunity, at its own expense, to handle and defend
the same before such Committee member undertakes to handle it on
his own behalf.
12. Right to Receive Options. Neither the adoption of the Plan
nor any action of the Committee shall be deemed to give any person
any right to be granted an Option, or any other right under the
Plan, unless and until the Committee grants a person an Option,
and then his or her rights shall be only those prescribed in the
instrument evidencing the Option.
13. Company Responsibility. All expenses of this Plan, including
the cost of maintaining records, shall be borne by the Company.
The Company shall have no responsibility or liability (other than
under applicable securities laws) for any act or thing done or
left undone with respect to the price, time, quantity, or other
conditions and circumstances of the purchase of shares under the
terms of the Plan, so long as the Company acts in good faith.
14. Securities Laws. The Board shall take all necessary or
appropriate actions to ensure that all option issuances and all
exercises thereof under this Plan are in full compliance with all
Federal and state securities laws.
15. No Obligation to Exercise Option. The grant of an Option
shall impose no obligation upon any Optionee to exercise the
Option.
16. Current Printing. This document was reprinted as of October
26, 1999.
Exhibit 10(m)
September 3, 1999
CONFIDENTIAL
Dear Larry:
I am pleased to confirm our offer of employment for the position
of Senior Vice President of Finance and Chief Financial officer of
CBRL Group, Inc. We believe you share our enthusiasm for the
opportunities that lie ahead and that you bring the ability and
professionalism to assist and share in our continued growth and
success. This letter will serve to confirm the details of our
offer.
Position: Senior Vice President of Finance and Chief Financial
Officer
Employment Date: We anticipate a start date approximately three
weeks from date of acceptance. Should your situation allow an
earlier start date, we will welcome you aboard at your earliest
opportunity.
Compensation: $240,000 base salary.
Annual Bonus Plan: Your annual bonus potential will be one hundred
percent of base salary. We will guarantee a first year minimum
bonus of fifty percent of your base salary. Any additional bonus
earned over that amount will be paid as if your start date had
been the first day of the fiscal year.
Long Term Incentive Program: Your targeted long-term incentive
opportunity is set at $635,000. The long-term award is
performance based (as measured on overall business results) and we
expect to issue at least some of this award in stock. The award
will vest/be awarded as early as three years out and as long as
five years out. We are working through the mechanics of the plan
at this time for the entire officer group. We will provide you
with additional information on this program under separate cover,
as it becomes available.
Stock Options: You are being recommended for a new hire stock
option grant of 30,000 shares of CBRL stock. We anticipate that
our Board of Directors will ratify this grant on September 30,
1999. These options vest on a three-year schedule. Future
grants will be established as part of the long-term incentive
program.
Additional Compensation: To assist you with the loss of your
retention bonus, we will pay you a one-time sign on bonus of
$66,666.66.
Severance/Salary: In the unlikely event that your employment with
CBRL Group, Inc. is involuntarily terminated for any reason other
than just, we will provide you with severance equal to your annual
salary to be paid at regular pay periods for one year.
Relocation Expense: We will provide a third party relocation
package for the sale of your home. In addition we will cover any
reasonable and necessary costs for moving you and your household
goods to Nashville. It is our intention to "keep you whole" with
regard to the cost of relocation. Realizing that you will begin
employment prior to relocation to Nashville, we agree to cover
interim living expenses for you in Nashville until you have
purchased a home or for a period of up to six months. We will
also pay for reasonable travel expense for your trips between
Nashville and Dallas.
Employee Benefits: We will provide you an annual physical
examination and an additional package of Life and Disability
insurance over and above what is provided in our normal group
benefits plan. As agreed, we will waive the usual ninety-day
waiting period for group health coverage, which will be furnished
to you at no cost.
Vacation: Your vacation eligibility will be for a minimum of
three (3) weeks per year.
Nothing contained in this letter is intended to create, nor shall
be construed to create, a contract of employment.
I hope that this captures the essential elements of our offer to
your satisfaction. Please call if you would like to discuss this
further. We believe that this is a good match between you and
CBRL Group, Inc., and we are looking forward to your joining us in
the near future. Please sign and return a copy of this letter in
the enclosed overnight envelope.
Sincerely, Acceptance
/s/ Norman J. Hill /s/ L. E. White
Norman J. Hill Larry White
Senior Vice President
Human Resources September 7, 1999
Date Signed
Exhibit 10(n)
September 16, 1998
Mr. Richard K. Arras
2090 Dogwood Estates Cove
Germantown, TN 38139
Dear Rick:
I am pleased to confirm our offer of employment for the position
of President and Chief Operating Officer of Cracker Barrel Old
Country Store, Inc. We believe you share our enthusiasm for the
opportunities that lie ahead and that you bring the ability and
professionalism to assist and share in our continued growth and
success. This letter will serve to confirm the details of our
offer.
Position: President and Chief Operating Officer
Employment Date: To be determined (10/12/98)
Compensation: $340,000.00 annual base salary.
Bonus: As we have discussed, you will participate in our Officer's
Bonus Plan. This bonus plan is based on how the company performs
on earnings per share goals and on your individual performance.
Your bonus target will be 100% of your base salary.
Stock Options: On the date you sign and return this letter,
Cracker Barrel will award you an option on 150,000 shares of
Cracker Barrel stock at the market closing price on the previous
day.
These options become vested on a schedule of one-third each year
over three years. You will have ten years from the date of this
award to exercise these options, except in the case that your
employment ends prior to that time. In that case you will have
ninety days from the last day of your employment to exercise your
options.
You will also be eligible immediately to participate in the
regular stock option program as granted by the Board of Directors.
For your proposed position, these options are expected to be in
the range of 30,000 to 50,000 shares annually.
Additionally, in order to protect your interests in your P.S.A.R.
grants which you now have with your current employer, we will
provide you a restricted stock grant program consisting of 25,000
shares of Cracker Barrel stock to be vested at twenty percent each
year over five years. The first twenty percent will vest one year
from your start date.
Additional Compensation: We will pay you a one-time sign on bonus
of $200,000.00 on your start date.
Severance: We will provide a severance package consisting of:
1.) One year's base salary and estimated bonus if involuntarily
terminated for performance other than just cause, and
2.) Six hundred thousand dollars ($600,000.00) which decreases by
twenty percent per year over five years, payable for termination
other than just cause.
Relocation Expense: Cracker Barrel will provide a full, third-
party relocation package.
Employee Benefits: You will participate in the Executive Benefit
Program.
Nothing contained in this letter is intended to create, nor shall
it be construed to create, a contract of employment.
I hope that this captures the essential elements of our offer to
your satisfaction. Please call if you would like to discuss this
further.
We believe that this is a good match between you and Cracker
Barrel, and we are looking forward to your joining us in the near
future. Please sign and return a copy of this letter in the
enclosed overnight envelope.
Sincerely, Acceptance
/s/ Ronald N. Magruder /s/ Richard K. Arras
Ronald N. Magruder Richard K. Arras
President and
Chief Operating Officer 9/18/98
Date Signed
Exhibit 10(o)
October 8, 1999
Mr. Dan W. Evins
Chairman & CEO
CBRL Group, Inc.
106 Castle Heights Avenue North
Lebanon, Tennessee 37087
Re: Employee Retention Agreement
Dear Mr. Evins:
The Board of Directors of the CBRL Group, Inc. recognizes the contribution
that you have made to CBRL Group, Inc. or one of its direct or indirect
subsidiaries (collectively, the "Company") and wishes to ensure your
continuing commitment to the Company and its business operations.
Accordingly, in exchange for your continuing commitment to the Company, and
your energetic focus on continually improving operations, the Company promises
you the following benefits if your employment with the Company is terminated
in certain circumstances:
1. DEFINITIONS. As used in this Agreement, the following terms have the
following meanings which are equally applicable to both the singular and
plural forms of the terms defined:
1.1 "Cause" means any one of the following:
(a) personal dishonesty;
(b) willful misconduct;
(c) breach of fiduciary duty; or
(d) conviction of any felony or crime involving moral turpitude.
1.2 "Change in Control" means: (a) that after the date of this Agreement, a
person becomes the beneficial owner, directly or indirectly, of securities of
the Company representing 20% or more of the combined voting power of the
Company's then outstanding voting securities, unless that acquisition was
approved by a vote of at least 2/3 of the directors in office immediately
prior to the acquisition; (b) that during any period of 2 consecutive years
following the date of this Agreement, individuals who at the beginning of the
period constitute members of the Board of Directors of the Company cease for
any reason to constitute a majority of the Board unless the election, or the
nomination for election by the Company's shareholders, of each new director
was approved by a vote of at least 2/3 of the directors then still in office
who were directors at the beginning of the 2-year period; (c) a merger,
consolidation or reorganization of the Company (but this provision does not
apply to a recapitalization or similar financial restructuring which does not
involve a material change in ownership of equity of the Company and which does
not result in a change in membership of the Board of Directors); or (d) a sale
of all or substantially all of the Company's assets.
1.3 "Change in Control Period" means a 2-year year period beginning the day
after a Change in Control occurs.
1.4 "Change in Duties or Compensation" means any one of: (a) a material change
in your duties and responsibilities for the Company (without your consent)
from those duties and responsibilities for the Company in effect at the time a
Change in Control occurs, which change results in the assignment of duties and
responsibilities inferior to your duties and responsibilities at the time such
Change in Control occurs (it being understood and acknowledged by you that a
Change in Control that results in two persons of which you are one having
similar or sharing duties and responsibilities shall not be a material change
in your duties and responsibilities); (b) a reduction in your salary or a
material change in benefits (excluding discretionary bonuses), from the salary
and benefits in effect at the time a Change in Control occurs; or (c) a change
in the location of your work assignment from your location at the time a
Change in Control occurs to any other city or geographical location that is
located further than 50 miles from that location.
2. TERMINATION OF EMPLOYMENT; SEVERANCE. Your immediate supervisor or the
Company's Board of Directors may terminate your employment, with or without
cause, at any time by giving you written notice of your termination, such
termination of employment to be effective on the date specified in the notice.
You also may terminate your employment with the Company at any time. The
effective date of termination (the "Effective Date") shall be the last day of
your employment with the Company, as specified in a notice by you, or if you
are terminated by the Company, the date that is specified by the Company in
its notice to you. The following subsections set forth your rights to
severance in the event of the termination of your employment in certain
circumstances by either the Company or you. Section 5 also sets forth certain
restrictions on your activities if your employment with the Company is
terminated, whether by the Company or you. That section shall survive any
termination of this Agreement or your employment with the Company.
2.1 Termination by the Company for Cause. If you are terminated for Cause,
the Company shall have no further obligation to you, and your participation in
all of the Company's benefit plans and programs shall cease as of the
Effective Date. In the event of a termination for Cause, you shall not be
entitled to receive severance benefits described in Section 3.
2.2 Termination by the Company Without Cause Other Than During a Change in
Control Period. If your employment with the Company is terminated by the
Company without Cause at a time other than during a Change in Control Period,
you shall be entitled to only those severance benefits provided by the
Company's severance policy or policies then in effect. You shall not be
entitled to receive benefits pursuant to Section 3 of this Agreement.
2.3 Termination by the Company Without Cause During a Change in Control
Period. If your employment with the Company is terminated by the Company
without Cause during a Change in Control Period, you shall be entitled to
receive Benefits pursuant to Section 3. A termination within 90 days prior to
a Change in Control which occurs solely in order to make you ineligible for
the benefits of this Agreement shall be considered a termination without Cause
during a Change in Control Period.
2.4 Termination By You For Change in Duties or Compensation During a Change
in Control Period. If during a Change in Control Period there occurs a Change
in Duties or Compensation you may terminate your employment with the Company
at any time within 30 days after the occurrence of the Change in Duties or
Compensation, by giving to the Company not less than 120 nor more than 180
days notice of termination. During the notice period that you continue to
work, any reduction in your Compensation will be restored. At the option of
the Company, following receipt of this notice, it may: (a) change or cure,
within 15 days, the condition that you claim has caused the Change in Duties
or Compensation, in which case, your rights to terminate your employment with
the Company pursuant to this Section 2.4 shall cease (unless there occurs
thereafter another Change in Duties or Compensation) and you shall continue in
the employment of the Company notwithstanding the notice that you have given;
(b) allow you to continue your employment through the date that you have
specified in your notice; or (c) immediately terminate your employment
pursuant to Section 2.3. If you terminate your employment with the Company
pursuant to this Section 2.4, you shall be entitled to receive Benefits
pursuant to Section 3. Your failure to provide the notice required by this
Section 2.4 shall result in you having no right to receive any further
compensation from the Company except for any base salary or vacation earned
but not paid, plus any bonus earned and accrued by the Company through the
Effective Date.
3. SEVERANCE BENEFITS. If your employment with the Company is terminated as
described in Section 2.3 or 2.4, you shall be entitled to the benefits
specified in subsections 3.1, 3.2, and 3.3 (the "Benefits") for the period of
time set forth in the applicable section.
3.1 Salary Payment or Continuance. You will be paid a single lump sum payment
in an amount equal to 2.99 times the average of your annual base salary and
any bonus payments for the 3 years immediately preceding the Effective Date.
The determination of the amount of this payment shall be made by the Company's
actuaries and benefit consultants and, absent manifest error, shall be final,
binding and conclusive upon you and the Company.
3.2 Continuation of Benefits. During the 2 years following the Effective Date
(the "Severance Period") that results in benefits under this Article 3, you
shall continue to receive the medical, prescription, dental, employee life and
group life insurance benefits at the levels to which you were entitled on the
day preceding the Effective Date, or reasonably equivalent benefits, to the
extent continuation is not prohibited or limited by applicable law. In no
event shall substitute plans, practices, policies and programs provide you
with benefits which are less favorable, in the aggregate, than the most
favorable of those plans, practices, policies and programs in effect for you
at any time during the 120-day period immediately preceding the Effective
Date. However, if you become reemployed with another employer and are eligible
to receive medical or other welfare benefits under another employer-provided
plan, Company payments for these medical and other welfare benefits shall
cease.
4. EFFECT OF TERMINATION ON STOCK OPTIONS AND RESTRICTED STOCK. In the event
of any termination of your employment, all stock options and restricted stock
held by you that are vested prior to the Effective Date shall be owned or
exercisable in accordance with their terms; all stock options held by you that
are not vested prior to the Effective Date shall lapse and be void; however,
if your employment with the Company is terminated as described in Sections 2.3
or 2.4, then, if your option or restricted stock grants provide for immediate
vesting in the event of a Change in Control, the terms of your option or
restricted stock agreement shall control. If your option or restricted stock
agreement does not provide for immediate vesting, you shall receive, within
30 days after the Effective Date, a lump sum cash distribution equal to: (a)
the number of shares of the Company's ordinary shares that are subject to
options or restricted stock grants held by you that are not vested as of the
Effective Date multiplied by (b) the difference between: (i) the closing price
of a share of the Company's ordinary shares on the NASDAQ National Market
System as reported by The Wall Street Journal as of the day prior to the
Effective Date (or, if the market is closed on that date, on the last
preceding date on which the market was open for trading), and (ii) the
applicable exercise prices or stock grant values of those non-vested shares.
5. DISCLOSURE OF INFORMATION. You recognize and acknowledge that, as a result
of your employment by the Company, you have or will become familiar with and
acquire knowledge of confidential information and certain trade secrets that
are valuable, special, and unique assets of the Company. You agree that all
that confidential information and trade secrets are the property of the
Company. Therefore, you agree that, for and during your employment with the
Company and continuing following the termination of your 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. The parties agree that nothing in this Section
6 shall be construed as prohibiting the Company from pursuing any remedies
available to it for any breach or threatened breach of this Section 6,
including, without limitation, the recovery of damages from you or any person
or entity acting in concert with you.
6. GENERAL PROVISIONS.
6.1 Other Plans. Nothing in this Agreement shall affect your rights during
your employment to receive increases in compensation, responsibilities or
duties or to participate in and receive benefits from any pension plan,
benefit plan or profit sharing plans except plans which specifically address
benefits of the type addressed in Sections 3 and 4 of this Agreement. In
addition, you are a party to a written employment agreement with the Company
or an affiliate, and it is the intention of the parties to this Agreement that
you will enjoy the maximum benefits provided in circumstances of a Change in
Control in either of those documents. Therefore, we specifically agree that
whenever the terms and conditions of this Agreement and your employment
agreement conflict, the terms and conditions which maximize your benefits
resulting from a Change in Control will be effective. Where one document is
silent, the provisions of the other document will be effective.
6.2 Death During Severance Period. If you die during the Severance Period, any
Benefits remaining to be paid to you shall be paid to the beneficiary
designated by you to receive those Benefits (or in the absence of designation,
to your surviving spouse or next of kin).
6.3 Notices. Any notices to be given under this Agreement may be
effected by personal delivery in writing or by mail, registered or certified,
postage prepaid with return receipt requested. Mailed notices shall be
addressed to the parties at the addresses appearing on the first page of this
Agreement (to the attention of the Secretary in the case of notices to the
Company), but each party may change the delivery address by written notice in
accordance with this Section 7.3. Notices delivered personally shall be
deemed communicated as of actual receipt; mailed notices shall be deemed
communicated as of the second day following deposit in the United States Mail.
6.4 Entire Agreement. This Agreement supersedes all previous oral or written
agreements, understandings or arrangements between the Company and you
regarding a termination of your employment with the Company or a change in
your status, scope or authority and the salary, benefits or other compensation
that you receive from the Company as a result of the termination of your
employment with the Company (the "Subject Matter"), all of which are wholly
terminated and canceled. This Agreement contains all of the covenants and
agreements between the parties with respect to the Subject Matter. Each party
to this Agreement acknowledges that no representations, inducements, promises,
or agreements, orally or otherwise, have been made with respect to the Subject
Matter by any party, or anyone acting on behalf of any party, which are not
embodied in this Agreement. Any subsequent agreement relating to the Subject
Matter or any modification of this Agreement will be effective only if it is
in writing signed by the party against whom enforcement of the modification is
sought.
6.5 Partial Invalidity. If any provision in this Agreement is held by a court
of competent jurisdiction to be invalid, void, or unenforceable, the remaining
provisions shall nevertheless continue in full force without being impaired or
invalidated in any way.
6.6 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Tennessee, and it shall be enforced
or challenged only in the courts of the State of Tennessee.
6.7 Waiver of Jury Trial. The Company and you expressly waive any right to a
trial by jury in any action or proceeding to enforce or defend any rights
under this Agreement, and agree that any such action or proceeding shall be
tried before a court and not a jury. You irrevocably waive, to the fullest
extent permitted by law, any objection that you may have now or hereafter to
the specified venue of any such action or proceeding and any claim that any
such action or proceeding has been brought in an inconvenient forum.
6.8 Miscellaneous. Failure or delay of either party to insist upon compliance
with any provision of this Agreement will not operate as and is not to be
construed to be a waiver or amendment of the provision or the right of the
aggrieved party to insist upon compliance with the provision or to take
remedial steps to recover damages or other relief for noncompliance. Any
express waiver of any provision of this Agreement will not operate, and is not
to be construed, as a waiver of any subsequent breach, irrespective of whether
occurring under similar or dissimilar circumstances. You may not assign any of
your rights under this Agreement. The rights and obligations of the Company
under this Agreement shall benefit and bind the successors and assigns of the
Company. The Company agrees that if it assigns this Agreement to any
successor company, it will ensure that its terms are continued.
Certain Additional Payments by the Company.
a. The Company will pay you an amount (the "Additional Amount") equal to the
excise tax under the United States Internal Revenue Code of 1986, as amended
(the "Code"), if any, incurred by you by reason of the payments under this
Agreement and any other plan, agreement or understanding between you and the
Company or its parent, subsidiaries or affiliates (collectively, "Separation
Payments") constituting excess parachute payments under Section 280G of the
Code (or any successor provision). In addition, the Company will pay an
amount equal to all excise taxes and federal, state and local income taxes
incurred by you with respect to receipt of the Additional Amount. All
determinations required to be made under this Section 6.9 including whether an
Additional Amount is required and the amount of any Additional Amount, will be
made by the independent auditors engaged by the Company immediately prior to
the Change in Control (the "Accounting Firm"), which will provide detailed
supporting calculations to the Company and you. In computing taxes, the
Accounting Firm will use the highest marginal federal, state and local income
tax rates applicable to you and will assume the full deductibility of state
and local income taxes for purposes of computing federal income tax liability,
unless you demonstrate that you will not in fact be entitled to such a
deduction for the year of payment.
b. The Additional Amount, computed assuming that all of the Separation
Payments constitute excess parachute payments as defined in Section 280G of
the Code (or any successor provision), will be paid to you at the time that
the payments made pursuant to Section 3.1 is made unless the Company, prior to
the Severance Period, provides you with an opinion of the Accounting Firm that
you will not incur an excise tax on part or all of the Separation Payments.
That opinion will be based upon the applicable regulations under Sections 280G
and 4999 of the Code (or any successor provisions) or substantial authority
within the meaning of Section 6662 of the Code. If that opinion applies only
to part of the Separation Payments, the Company will pay you the Additional
Amount with respect to the part of the Separation Payments not covered by the
opinion.
c. The amount of the Additional Amount and the assumptions to be utilized in
arriving at the determination, shall be made by the Company's Accounting Firm,
whose decision shall be final and binding upon both you and the Company. You
must notify the Company in writing no later than 30 days after you are
informed of any claim by the Internal Revenue Service that, if successful,
would require the payment by the Company of the Additional Amount. You must
also cooperate fully with the Company and give the Company any information
reasonably requested relating to the claim, and take all action in connection
with contesting the claim as the Company reasonably requests in writing from
time to time.
If all of the terms and conditions in this Agreement are agreed to by you,
please signify your agreement by executing the enclosed duplicate of this
letter and returning it to us. At the date of your return, this letter shall
constitute a fully enforceable Agreement between us.
CBRL GROUP, INC.
By: /s/ Michael A. Woodhouse
Michael A. Woodhouse
Title: Executive Vice President & COO
By: /s/ James F. Blackstock
James F. Blackstock
Title: Vice President, Secretary
The foregoing is fully agreed to and accepted by:
Company Employee's Signature:
Name: Dan W. Evins
Title: Chairman & Chief Executive Officer
Exhibit 10(p)
October 13, 1999
Michael A. Woodhouse
417 Bethlehem Road
Lebanon, TN 37087
Re: Employee Retention Agreement
Dear Mike:
The Board of Directors of the CBRL Group, Inc. recognizes the
contribution that you have made to CBRL Group, Inc. or one of its
direct or indirect subsidiaries (collectively, the "Company") and
wishes to ensure your continuing commitment to the Company and its
business operations. Accordingly, in exchange for your continuing
commitment to the Company, and your energetic focus on continually
improving operations, the Company promises you the following
benefits if your employment with the Company is terminated in
certain circumstances:
1. DEFINITIONS. As used in this Agreement, the following terms
have the following meanings which are equally applicable to both
the singular and plural forms of the terms defined:
1.1 "Cause" means any one of the following:
(a) personal dishonesty;
(b) willful misconduct;
(c) breach of fiduciary duty; or
(d) conviction of any felony or crime involving moral turpitude.
1.2 "Change in Control" means: (a) that after the date of this
Agreement, a person becomes the beneficial owner, directly or
indirectly, of securities of the Company representing 20% or more
of the combined voting power of the Company's then outstanding
voting securities, unless that acquisition was approved by a vote
of at least 2/3 of the directors in office immediately prior to
the acquisition; (b) that during any period of 2 consecutive years
following the date of this Agreement, individuals who at the
beginning of the period constitute members of the Board of
Directors of the Company cease for any reason to constitute a
majority of the Board unless the election, or the nomination for
election by the Company's shareholders, of each new director was
approved by a vote of at least 2/3 of the directors then still in
office who were directors at the beginning of the 2-year period;
(c) a merger, consolidation or reorganization of the Company (but
this provision does not apply to a recapitalization or similar
financial restructuring which does not involve a material change
in ownership of equity of the Company and which does not result in
a change in membership of the Board of Directors); or (d) a sale
of all or substantially all of the Company's assets.
1.3 "Change in Control Period" means a 2-year year period
beginning the day after a Change in Control occurs.
1.4 "Change in Duties or Compensation" means any one of: (a) a
material change in your duties and responsibilities for the
Company (without your consent) from those duties and
responsibilities for the Company in effect at the time a Change in
Control occurs, which change results in the assignment of duties
and responsibilities inferior to your duties and responsibilities
at the time such Change in Control occurs (it being understood and
acknowledged by you that a Change in Control that results in two
persons of which you are one having similar or sharing duties and
responsibilities shall not be a material change in your duties and
responsibilities); (b) a reduction in your salary or a material
change in benefits (excluding discretionary bonuses), from the
salary and benefits in effect at the time a Change in Control
occurs; or (c) a change in the location of your work assignment
from your location at the time a Change in Control occurs to any
other city or geographical location that is located further than
50 miles from that location.
2. TERMINATION OF EMPLOYMENT; SEVERANCE. Your immediate
supervisor or the Company's Board of Directors may terminate your
employment, with or without cause, at any time by giving you
written notice of your termination, such termination of employment
to be effective on the date specified in the notice. You also may
terminate your employment with the Company at any time. The
effective date of termination (the "Effective Date") shall be the
last day of your employment with the Company, as specified in a
notice by you, or if you are terminated by the Company, the date
that is specified by the Company in its notice to you. The
following subsections set forth your rights to severance in the
event of the termination of your employment in certain
circumstances by either the Company or you. Section 5 also sets
forth certain restrictions on your activities if your employment
with the Company is terminated, whether by the Company or you.
That section shall survive any termination of this Agreement or
your employment with the Company.
2.1 Termination by the Company for Cause. If you are terminated
for Cause, the Company shall have no further obligation to you,
and your participation in all of the Company's benefit plans and
programs shall cease as of the Effective Date. In the event of a
termination for Cause, you shall not be entitled to receive
severance benefits described in Section 3.
<PAGE>
2.2 Termination by the Company Without Cause Other Than During a
Change in Control Period. If your employment with the Company is
terminated by the Company without Cause at a time other than
during a Change in Control Period, you shall be entitled to only
those severance benefits provided by the Company's severance
policy or policies then in effect. You shall not be entitled to
receive benefits pursuant to Section 3 of this Agreement.
2.3 Termination by the Company Without Cause During a Change in
Control Period. If your employment with the Company is terminated
by the Company without Cause during a Change in Control Period,
you shall be entitled to receive Benefits pursuant to Section 3. A
termination within 90 days prior to a Change in Control which
occurs solely in order to make you ineligible for the benefits of
this Agreement shall be considered a termination without Cause
during a Change in Control Period.
2.4 Termination By You For Change in Duties or Compensation During
a Change in Control Period. If during a Change in Control Period
there occurs a Change in Duties or Compensation you may terminate
your employment with the Company at any time within 30 days after
the occurrence of the Change in Duties or Compensation, by giving
to the Company not less than 120 nor more than 180 days notice of
termination. During the notice period that you continue to work,
any reduction in your Compensation will be restored. At the
option of the Company, following receipt of this notice, it may:
(a) change or cure, within 15 days, the condition that you claim
has caused the Change in Duties or Compensation, in which case,
your rights to terminate your employment with the Company pursuant
to this Section 2.4 shall cease (unless there occurs thereafter
another Change in Duties or Compensation) and you shall continue
in the employment of the Company notwithstanding the notice that
you have given; (b) allow you to continue your employment through
the date that you have specified in your notice; or (c)
immediately terminate your employment pursuant to Section 2.3. If
you terminate your employment with the Company pursuant to this
Section 2.4, you shall be entitled to receive Benefits pursuant to
Section 3. Your failure to provide the notice required by this
Section 2.4 shall result in you having no right to receive any
further compensation from the Company except for any base salary
or vacation earned but not paid, plus any bonus earned and accrued
by the Company through the Effective Date.
3. SEVERANCE BENEFITS. If your employment with the Company is
terminated as described in Section 2.3 or 2.4, you shall be
entitled to the benefits specified in subsections 3.1, 3.2, and
3.3 (the "Benefits") for the period of time set forth in the
applicable section.
3.1 Salary Payment or Continuance. You will be paid a single lump
sum payment in an amount equal to 2.99 times the average of your
annual base salary and any bonus payments for the 3 years
immediately preceding the Effective Date. The determination of
the amount of this payment shall be made by the Company's
actuaries and benefit consultants and, absent manifest error,
shall be final, binding and conclusive upon you and the Company.
3.2 Continuation of Benefits. During the 2 years following the
Effective Date (the "Severance Period") that results in benefits
under this Article 3, you shall continue to receive the medical,
prescription, dental, employee life and group life insurance
benefits at the levels to which you were entitled on the day
preceding the Effective Date, or reasonably equivalent benefits,
to the extent continuation is not prohibited or limited by
applicable law. In no event shall substitute plans, practices,
policies and programs provide you with benefits which are less
favorable, in the aggregate, than the most favorable of those
plans, practices, policies and programs in effect for you at any
time during the 120-day period immediately preceding the Effective
Date. However, if you become reemployed with another employer and
are eligible to receive medical or other welfare benefits under
another employer-provided plan, Company payments for these medical
and other welfare benefits shall cease.
4. EFFECT OF TERMINATION ON STOCK OPTIONS AND RESTRICTED STOCK. In
the event of any termination of your employment, all stock options
and restricted stock held by you that are vested prior to the
Effective Date shall be owned or exercisable in accordance with
their terms; all stock options held by you that are not vested
prior to the Effective Date shall lapse and be void; however, if
your employment with the Company is terminated as described in
Sections 2.3 or 2.4, then, if your option or restricted stock
grants provide for immediate vesting in the event of a Change in
Control, the terms of your option or restricted stock agreement
shall control. If your option or restricted stock agreement does
not provide for immediate vesting, you shall receive, within 30
days after the Effective Date, a lump sum cash distribution equal
to: (a) the number of shares of the Company's ordinary shares that
are subject to options or restricted stock grants held by you that
are not vested as of the Effective Date multiplied by (b) the
difference between: (i) the closing price of a share of the
Company's ordinary shares on the NASDAQ National Market System as
reported by The Wall Street Journal as of the day prior to the
Effective Date (or, if the market is closed on that date, on the
last preceding date on which the market was open for trading), and
(ii) the applicable exercise prices or stock grant values of those
non-vested shares.
5. DISCLOSURE OF INFORMATION. You recognize and acknowledge that,
as a result of your employment by the Company, you have or will
become familiar with and acquire knowledge of confidential
information and certain trade secrets that are valuable, special,
and unique assets of the Company. You agree that all that
confidential information and trade secrets are the property of the
Company. Therefore, you agree that, for and during your
employment with the Company and continuing following the
termination of your 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. The parties
agree that nothing in this Section 6 shall be construed as
prohibiting the Company from pursuing any remedies available to it
for any breach or threatened breach of this Section 6, including,
without limitation, the recovery of damages from you or any person
or entity acting in concert with you.
6. GENERAL PROVISIONS.
6.1 Other Plans. Nothing in this Agreement shall affect your
rights during your employment to receive increases in
compensation, responsibilities or duties or to participate in and
receive benefits from any pension plan, benefit plan or profit
sharing plans except plans which specifically address benefits of
the type addressed in Sections 3 and 4 of this Agreement.
6.2 Death During Severance Period. If you die during the Severance
Period, any Benefits remaining to be paid to you shall be paid to
the beneficiary designated by you to receive those Benefits (or in
the absence of designation, to your surviving spouse or next of
kin).
6.3 Notices. Any notices to be given under this Agreement may be
effected by personal delivery in writing or by mail, registered or
certified, postage prepaid with return receipt requested. Mailed
notices shall be addressed to the parties at the addresses
appearing on the first page of this Agreement (to the attention of
the Secretary in the case of notices to the Company), but each
party may change the delivery address by written notice in
accordance with this Section 7.3. Notices delivered personally
shall be deemed communicated as of actual receipt; mailed notices
shall be deemed communicated as of the second day following
deposit in the United States Mail.
6.4 Entire Agreement. This Agreement supersedes all previous oral
or written agreements, understandings or arrangements between the
Company and you regarding a termination of your employment with
the Company or a change in your status, scope or authority and the
salary, benefits or other compensation that you receive from the
Company as a result of the termination of your employment with the
Company (the "Subject Matter"), all of which are wholly terminated
and canceled. This Agreement contains all of the covenants and
agreements between the parties with respect to the Subject Matter.
Each party to this Agreement acknowledges that no representations,
inducements, promises, or agreements, orally or otherwise, have
been made with respect to the Subject Matter by any party, or
anyone acting on behalf of any party, which are not embodied in
this Agreement. Any subsequent agreement relating to the Subject
Matter or any modification of this Agreement will be effective
only if it is in writing signed by the party against whom
enforcement of the modification is sought.
6.5 Partial Invalidity. If any provision in this Agreement is held
by a court of competent jurisdiction to be invalid, void, or
unenforceable, the remaining provisions shall nevertheless
continue in full force without being impaired or invalidated in
any way.
6.6 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Tennessee,
and it shall be enforced or challenged only in the courts of the
State of Tennessee.
6.7 Waiver of Jury Trial. The Company and you expressly waive any
right to a trial by jury in any action or proceeding to enforce or
defend any rights under this Agreement, and agree that any such
action or proceeding shall be tried before a court and not a jury.
You irrevocably waive, to the fullest extent permitted by law, any
objection that you may have now or hereafter to the specified
venue of any such action or proceeding and any claim that any such
action or proceeding has been brought in an inconvenient forum.
6.8 Miscellaneous. Failure or delay of either party to insist upon
compliance with any provision of this Agreement will not operate
as and is not to be construed to be a waiver or amendment of the
provision or the right of the aggrieved party to insist upon
compliance with the provision or to take remedial steps to recover
damages or other relief for noncompliance. Any express waiver of
any provision of this Agreement will not operate, and is not to be
construed, as a waiver of any subsequent breach, irrespective of
whether occurring under similar or dissimilar circumstances. You
may not assign any of your rights under this Agreement. The
rights and obligations of the Company under this Agreement shall
benefit and bind the successors and assigns of the Company. The
Company agrees that if it assigns this Agreement to any successor
company, it will ensure that its terms are continued.
6.9 Certain Additional Payments by the Company.
The Company will pay you an amount (the "Additional Amount") equal
to the excise tax under the United States Internal Revenue Code of
1986, as amended (the "Code"), if any, incurred by you by reason
of the payments under this Agreement and any other plan, agreement
or understanding between you and the Company or its parent,
subsidiaries or affiliates (collectively, "Separation Payments")
constituting excess parachute payments under Section 280G of the
Code (or any successor provision). In addition, the Company will
pay an amount equal to all excise taxes and federal, state and
local income taxes incurred by you with respect to receipt of the
Additional Amount. All determinations required to be made under
this Section 6.9 including whether an Additional Amount is
required and the amount of any Additional Amount, will be made by
the independent auditors engaged by the Company immediately prior
to the Change in Control (the "Accounting Firm"), which will
provide detailed supporting calculations to the Company and you.
In computing taxes, the Accounting Firm will use the highest
marginal federal, state and local income tax rates applicable to
you and will assume the full deductibility of state and local
income taxes for purposes of computing federal income tax
liability, unless you demonstrate that you will not in fact be
entitled to such a deduction for the year of payment.
The Additional Amount, computed assuming that all of the
Separation Payments constitute excess parachute payments as
defined in Section 280G of the Code (or any successor provision),
will be paid to you at the time that the payments made pursuant to
Section 3.1 is made unless the Company, prior to the Severance
Period, provides you with an opinion of the Accounting Firm that
you will not incur an excise tax on part or all of the Separation
Payments. That opinion will be based upon the applicable
regulations under Sections 280G and 4999 of the Code (or any
successor provisions) or substantial authority within the meaning
of Section 6662 of the Code. If that opinion applies only to part
of the Separation Payments, the Company will pay you the
Additional Amount with respect to the part of the Separation
Payments not covered by the opinion.
The amount of the Additional Amount and the assumptions to be
utilized in arriving at the determination, shall be made by the
Company's Accounting Firm, whose decision shall be final and
binding upon both you and the Company. You must notify the
Company in writing no later than 30 days after you are informed of
any claim by the Internal Revenue Service that, if successful,
would require the payment by the Company of the Additional Amount.
You must also cooperate fully with the Company and give the
Company any information reasonably requested relating to the
claim, and take all action in connection with contesting the claim
as the Company reasonably requests in writing from time to time.
If all of the terms and conditions in this Agreement are agreed to
by you, please signify your agreement by executing the enclosed
duplicate of this letter and returning it to us. At the date of
your return, this letter shall constitute a fully enforceable
Agreement between us.
CBRL GROUP, INC.
By: /s/ Dan W. Evins
Dan W. Evins
Chairman and Chief Executive Officer
The foregoing is fully agreed to and accepted by:
Company Employee' s Signature: ________________________
Please Print or Type Name: ___________________________
Please Print or Type Title: ____________________________
Exhibit 10(q)
October 13, 1999
Lawrence E. White
201 Gillespie Drive #18304
Franklin, TN 37067
Re: Employee Retention Agreement
Dear Larry:
The Board of Directors of the CBRL Group, Inc. recognizes the
contribution that you have made to CBRL Group, Inc. or one of its
direct or indirect subsidiaries (collectively, the "Company") and
wishes to ensure your continuing commitment to the Company and its
business operations. Accordingly, in exchange for your continuing
commitment to the Company, and your energetic focus on continually
improving operations, the Company promises you the following
benefits if your employment with the Company is terminated in
certain circumstances:
1. DEFINITIONS. As used in this Agreement, the following terms
have the following meanings which are equally applicable to both
the singular and plural forms of the terms defined:
1.1 "Cause" means any one of the following:
(a) personal dishonesty;
(b) willful misconduct;
(c) breach of fiduciary duty; or
(d) conviction of any felony or crime involving moral turpitude.
1.2 "Change in Control" means: (a) that after the date of this
Agreement, a person becomes the beneficial owner, directly or
indirectly, of securities of the Company representing 20% or more
of the combined voting power of the Company's then outstanding
voting securities, unless that acquisition was approved by a vote
of at least 2/3 of the directors in office immediately prior to
the acquisition; (b) that during any period of 2 consecutive years
following the date of this Agreement, individuals who at the
beginning of the period constitute members of the Board of
Directors of the Company cease for any reason to constitute a
majority of the Board unless the election, or the nomination for
election by the Company's shareholders, of each new director was
approved by a vote of at least 2/3 of the directors then still in
office who were directors at the beginning of the 2-year period;
(c) a merger, consolidation or reorganization of the Company (but
this provision does not apply to a recapitalization or similar
financial restructuring which does not involve a material change
in ownership of equity of the Company and which does not result in
a change in membership of the Board of Directors); or (d) a sale
of all or substantially all of the Company's assets.
1.3 "Change in Control Period" means a 2-year year period
beginning the day after a Change in Control occurs.
1.4 "Change in Duties or Compensation" means any one of: (a) a
material change in your duties and responsibilities for the
Company (without your consent) from those duties and
responsibilities for the Company in effect at the time a Change in
Control occurs, which change results in the assignment of duties
and responsibilities inferior to your duties and responsibilities
at the time such Change in Control occurs (it being understood and
acknowledged by you that a Change in Control that results in two
persons of which you are one having similar or sharing duties and
responsibilities shall not be a material change in your duties and
responsibilities); (b) a reduction in your salary or a material
change in benefits (excluding discretionary bonuses), from the
salary and benefits in effect at the time a Change in Control
occurs; or (c) a change in the location of your work assignment
from your location at the time a Change in Control occurs to any
other city or geographical location that is located further than
50 miles from that location.
2. TERMINATION OF EMPLOYMENT; SEVERANCE. Your immediate
supervisor or the Company's Board of Directors may terminate your
employment, with or without cause, at any time by giving you
written notice of your termination, such termination of employment
to be effective on the date specified in the notice. You also may
terminate your employment with the Company at any time. The
effective date of termination (the "Effective Date") shall be the
last day of your employment with the Company, as specified in a
notice by you, or if you are terminated by the Company, the date
that is specified by the Company in its notice to you. The
following subsections set forth your rights to severance in the
event of the termination of your employment in certain
circumstances by either the Company or you. Section 5 also sets
forth certain restrictions on your activities if your employment
with the Company is terminated, whether by the Company or you.
That section shall survive any termination of this Agreement or
your employment with the Company.
2.1 Termination by the Company for Cause. If you are terminated
for Cause, the Company shall have no further obligation to you,
and your participation in all of the Company's benefit plans and
programs shall cease as of the Effective Date. In the event of a
termination for Cause, you shall not be entitled to receive
severance benefits described in Section 3.
2.2 Termination by the Company Without Cause Other Than During a
Change in Control Period. If your employment with the Company is
terminated by the Company without Cause at a time other than
during a Change in Control Period, you shall be entitled to only
those severance benefits provided by the Company's severance
policy or policies then in effect. You shall not be entitled to
receive benefits pursuant to Section 3 of this Agreement.
2.3 Termination by the Company Without Cause During a Change in
Control Period. If your employment with the Company is terminated
by the Company without Cause during a Change in Control Period,
you shall be entitled to receive Benefits pursuant to Section 3. A
termination within 90 days prior to a Change in Control which
occurs solely in order to make you ineligible for the benefits of
this Agreement shall be considered a termination without Cause
during a Change in Control Period.
2.4 Termination By You For Change in Duties or Compensation During
a Change in Control Period. If during a Change in Control Period
there occurs a Change in Duties or Compensation you may terminate
your employment with the Company at any time within 30 days after
the occurrence of the Change in Duties or Compensation, by giving
to the Company not less than 120 nor more than 180 days notice of
termination. During the notice period that you continue to work,
any reduction in your Compensation will be restored. At the
option of the Company, following receipt of this notice, it may:
(a) change or cure, within 15 days, the condition that you claim
has caused the Change in Duties or Compensation, in which case,
your rights to terminate your employment with the Company pursuant
to this Section 2.4 shall cease (unless there occurs thereafter
another Change in Duties or Compensation) and you shall continue
in the employment of the Company notwithstanding the notice that
you have given; (b) allow you to continue your employment through
the date that you have specified in your notice; or (c)
immediately terminate your employment pursuant to Section 2.3. If
you terminate your employment with the Company pursuant to this
Section 2.4, you shall be entitled to receive Benefits pursuant to
Section 3. Your failure to provide the notice required by this
Section 2.4 shall result in you having no right to receive any
further compensation from the Company except for any base salary
or vacation earned but not paid, plus any bonus earned and accrued
by the Company through the Effective Date.
3. SEVERANCE BENEFITS. If your employment with the Company is
terminated as described in Section 2.3 or 2.4, you shall be
entitled to the benefits specified in subsections 3.1, 3.2, and
3.3 (the "Benefits") for the period of time set forth in the
applicable section.
3.1 Salary Payment or Continuance. You will be paid a single lump
sum payment in an amount equal to 2.00 times the average of your
annual base salary and any bonus payments for the 3 years
immediately preceding the Effective Date. The determination of
the amount of this payment shall be made by the Company's
actuaries and benefit consultants and, absent manifest error,
shall be final, binding and conclusive upon you and the Company.
3.2 Continuation of Benefits. During the 2 years following the
Effective Date that results in benefits under this Article 3 (the
"Severance Period"), you shall continue to receive the medical,
prescription, dental, employee life and group life insurance
benefits at the levels to which you were entitled on the day
preceding the Effective Date, or reasonably equivalent benefits,
to the extent continuation is not prohibited or limited by
applicable law. In no event shall substitute plans, practices,
policies and programs provide you with benefits which are less
favorable, in the aggregate, than the most favorable of those
plans, practices, policies and programs in effect for you at any
time during the 120-day period immediately preceding the Effective
Date. However, if you become reemployed with another employer and
are eligible to receive medical or other welfare benefits under
another employer-provided plan, Company payments for these medical
and other welfare benefits shall cease.
4. EFFECT OF TERMINATION ON STOCK OPTIONS AND RESTRICTED STOCK. In
the event of any termination of your employment, all stock options
and restricted stock held by you that are vested prior to the
Effective Date shall be owned or exercisable in accordance with
their terms; all stock options held by you that are not vested
prior to the Effective Date shall lapse and be void; however, if
your employment with the Company is terminated as described in
Sections 2.3 or 2.4, then, if your option or restricted stock
grants provide for immediate vesting in the event of a Change in
Control, the terms of your option or restricted stock agreement
shall control. If your option or restricted stock agreement does
not provide for immediate vesting, you shall receive, within 30
days after the Effective Date, a lump sum cash distribution equal
to: (a) the number of shares of the Company's ordinary shares that
are subject to options or restricted stock grants held by you that
are not vested as of the Effective Date multiplied by (b) the
difference between: (i) the closing price of a share of the
Company's ordinary shares on the NASDAQ National Market System as
reported by The Wall Street Journal as of the day prior to the
Effective Date (or, if the market is closed on that date, on the
last preceding date on which the market was open for trading), and
(ii) the applicable exercise prices or stock grant values of those
non-vested shares.
5. DISCLOSURE OF INFORMATION. You recognize and acknowledge that,
as a result of your employment by the Company, you have or will
become familiar with and acquire knowledge of confidential
information and certain trade secrets that are valuable, special,
and unique assets of the Company. You agree that all that
confidential information and trade secrets are the property of the
Company. Therefore, you agree that, for and during your
employment with the Company and continuing following the
termination of your 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. The parties
agree that nothing in this Section 6 shall be construed as
prohibiting the Company from pursuing any remedies available to it
for any breach or threatened breach of this Section 6, including,
without limitation, the recovery of damages from you or any person
or entity acting in concert with you.
6. GENERAL PROVISIONS.
6.1 Other Plans. Nothing in this Agreement shall affect your
rights during your employment to receive increases in
compensation, responsibilities or duties or to participate in and
receive benefits from any pension plan, benefit plan or profit
sharing plans except plans which specifically address benefits of
the type addressed in Sections 3 and 4 of this Agreement.
6.2 Death During Severance Period. If you die during the Severance
Period, any Benefits remaining to be paid to you shall be paid to
the beneficiary designated by you to receive those Benefits (or in
the absence of designation, to your surviving spouse or next of
kin).
6.3 Notices. Any notices to be given under this Agreement may be
effected by personal delivery in writing or by mail, registered or
certified, postage prepaid with return receipt requested. Mailed
notices shall be addressed to the parties at the addresses
appearing on the first page of this Agreement (to the attention of
the Secretary in the case of notices to the Company), but each
party may change the delivery address by written notice in
accordance with this Section 7.3. Notices delivered personally
shall be deemed communicated as of actual receipt; mailed notices
shall be deemed communicated as of the second day following
deposit in the United States Mail.
6.4 Entire Agreement. This Agreement supersedes all previous oral
or written agreements, understandings or arrangements between the
Company and you regarding a termination of your employment with
the Company or a change in your status, scope or authority and the
salary, benefits or other compensation that you receive from the
Company as a result of the termination of your employment with the
Company (the "Subject Matter"), all of which are wholly terminated
and canceled. This Agreement contains all of the covenants and
agreements between the parties with respect to the Subject Matter.
Each party to this Agreement acknowledges that no representations,
inducements, promises, or agreements, orally or otherwise, have
been made with respect to the Subject Matter by any party, or
anyone acting on behalf of any party, which are not embodied in
this Agreement. Any subsequent agreement relating to the Subject
Matter or any modification of this Agreement will be effective
only if it is in writing signed by the party against whom
enforcement of the modification is sought.
6.5 Partial Invalidity. If any provision in this Agreement is held
by a court of competent jurisdiction to be invalid, void, or
unenforceable, the remaining provisions shall nevertheless
continue in full force without being impaired or invalidated in
any way.
6.6 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Tennessee,
and it shall be enforced or challenged only in the courts of the
State of Tennessee.
6.7 Waiver of Jury Trial. The Company and you expressly waive any
right to a trial by jury in any action or proceeding to enforce or
defend any rights under this Agreement, and agree that any such
action or proceeding shall be tried before a court and not a jury.
You irrevocably waive, to the fullest extent permitted by law, any
objection that you may have now or hereafter to the specified
venue of any such action or proceeding and any claim that any such
action or proceeding has been brought in an inconvenient forum.
6.8 Miscellaneous. Failure or delay of either party to insist upon
compliance with any provision of this Agreement will not operate
as and is not to be construed to be a waiver or amendment of the
provision or the right of the aggrieved party to insist upon
compliance with the provision or to take remedial steps to recover
damages or other relief for noncompliance. Any express waiver of
any provision of this Agreement will not operate, and is not to be
construed, as a waiver of any subsequent breach, irrespective of
whether occurring under similar or dissimilar circumstances. You
may not assign any of your rights under this Agreement. The
rights and obligations of the Company under this Agreement shall
benefit and bind the successors and assigns of the Company. The
Company agrees that if it assigns this Agreement to any successor
company, it will ensure that its terms are continued.
6.9 Certain Additional Payments by the Company.
The Company will pay you an amount (the "Additional Amount") equal
to the excise tax under the United States Internal Revenue Code of
1986, as amended (the "Code"), if any, incurred by you by reason
of the payments under this Agreement and any other plan, agreement
or understanding between you and the Company or its parent,
subsidiaries or affiliates (collectively, "Separation Payments")
constituting excess parachute payments under Section 280G of the
Code (or any successor provision). In addition, the Company will
pay an amount equal to all excise taxes and federal, state and
local income taxes incurred by you with respect to receipt of the
Additional Amount. All determinations required to be made under
this Section 6.9 including whether an Additional Amount is
required and the amount of any Additional Amount, will be made by
the independent auditors engaged by the Company immediately prior
to the Change in Control (the "Accounting Firm"), which will
provide detailed supporting calculations to the Company and you.
In computing taxes, the Accounting Firm will use the highest
marginal federal, state and local income tax rates applicable to
you and will assume the full deductibility of state and local
income taxes for purposes of computing federal income tax
liability, unless you demonstrate that you will not in fact be
entitled to such a deduction for the year of payment.
The Additional Amount, computed assuming that all of the
Separation Payments constitute excess parachute payments as
defined in Section 280G of the Code (or any successor provision),
will be paid to you at the time that the payments made pursuant to
Section 3.1 is made unless the Company, prior to the Severance
Period, provides you with an opinion of the Accounting Firm that
you will not incur an excise tax on part or all of the Separation
Payments. That opinion will be based upon the applicable
regulations under Sections 280G and 4999 of the Code (or any
successor provisions) or substantial authority within the meaning
of Section 6662 of the Code. If that opinion applies only to part
of the Separation Payments, the Company will pay you the
Additional Amount with respect to the part of the Separation
Payments not covered by the opinion.
The amount of the Additional Amount and the assumptions to be
utilized in arriving at the determination, shall be made by the
Company's Accounting Firm, whose decision shall be final and
binding upon both you and the Company. You must notify the
Company in writing no later than 30 days after you are informed of
any claim by the Internal Revenue Service that, if successful,
would require the payment by the Company of the Additional Amount.
You must also cooperate fully with the Company and give the
Company any information reasonably requested relating to the
claim, and take all action in connection with contesting the claim
as the Company reasonably requests in writing from time to time.
If all of the terms and conditions in this Agreement are agreed to
by you, please signify your agreement by executing the enclosed
duplicate of this letter and returning it to us. At the date of
your return, this letter shall constitute a fully enforceable
Agreement between us.
CBRL GROUP, INC.
By: /s/ Dan W. Evins
Dan W. Evins
Chairman and Chief Executive Officer
The foregoing is fully agreed to and accepted by:
Company Employee's Signature: ________________________
Please Print or Type Name: ___________________________
Please Print or Type Title: ___________________________
Exhibit 10(r)
October 13, 1999
Richard K. Arras
5182 Colleton Way
Brentwood, TN 37027
Re: Employee Retention Agreement
Dear Rick:
The Board of Directors of the CBRL Group, Inc. recognizes the
contribution that you have made to CBRL Group, Inc. or one of its
direct or indirect subsidiaries (collectively, the "Company") and
wishes to ensure your continuing commitment to the Company and its
business operations. Accordingly, in exchange for your continuing
commitment to the Company, and your energetic focus on continually
improving operations, the Company promises you the following
benefits if your employment with the Company is terminated in
certain circumstances:
1. DEFINITIONS. As used in this Agreement, the following terms
have the following meanings which are equally applicable to both
the singular and plural forms of the terms defined:
1.1 "Cause" means any one of the following:
(a) personal dishonesty;
(b) willful misconduct;
(c) breach of fiduciary duty; or
(d) conviction of any felony or crime involving moral turpitude.
1.2 "Change in Control" means: (a) that after the date of this
Agreement, a person becomes the beneficial owner, directly or
indirectly, of securities of the Company representing 20% or more
of the combined voting power of the Company's then outstanding
voting securities, unless that acquisition was approved by a vote
of at least 2/3 of the directors in office immediately prior to
the acquisition; (b) that during any period of 2 consecutive years
following the date of this Agreement, individuals who at the
beginning of the period constitute members of the Board of
Directors of the Company cease for any reason to constitute a
majority of the Board unless the election, or the nomination for
election by the Company's shareholders, of each new director was
approved by a vote of at least 2/3 of the directors then still in
office who were directors at the beginning of the 2-year period;
(c) a merger, consolidation or reorganization of the Company (but
this provision does not apply to a recapitalization or similar
financial restructuring which does not involve a material change
in ownership of equity of the Company and which does not result in
a change in membership of the Board of Directors); or (d) a sale
of all or substantially all of the Company's assets.
1.3 "Change in Control Period" means a 2-year year period
beginning the day after a Change in Control occurs.
1.4 "Change in Duties or Compensation" means any one of: (a) a
material change in your duties and responsibilities for the
Company (without your consent) from those duties and
responsibilities for the Company in effect at the time a Change in
Control occurs, which change results in the assignment of duties
and responsibilities inferior to your duties and responsibilities
at the time such Change in Control occurs (it being understood and
acknowledged by you that a Change in Control that results in two
persons of which you are one having similar or sharing duties and
responsibilities shall not be a material change in your duties and
responsibilities); (b) a reduction in your salary or a material
change in benefits (excluding discretionary bonuses), from the
salary and benefits in effect at the time a Change in Control
occurs; or (c) a change in the location of your work assignment
from your location at the time a Change in Control occurs to any
other city or geographical location that is located further than
50 miles from that location.
2. TERMINATION OF EMPLOYMENT; SEVERANCE. Your immediate
supervisor or the Company's Board of Directors may terminate your
employment, with or without cause, at any time by giving you
written notice of your termination, such termination of employment
to be effective on the date specified in the notice. You also may
terminate your employment with the Company at any time. The
effective date of termination (the "Effective Date") shall be the
last day of your employment with the Company, as specified in a
notice by you, or if you are terminated by the Company, the date
that is specified by the Company in its notice to you. The
following subsections set forth your rights to severance in the
event of the termination of your employment in certain
circumstances by either the Company or you. Section 5 also sets
forth certain restrictions on your activities if your employment
with the Company is terminated, whether by the Company or you.
That section shall survive any termination of this Agreement or
your employment with the Company.
2.1 Termination by the Company for Cause. If you are terminated
for Cause, the Company shall have no further obligation to you,
and your participation in all of the Company's benefit plans and
programs shall cease as of the Effective Date. In the event of a
termination for Cause, you shall not be entitled to receive
severance benefits described in Section 3.
2.2 Termination by the Company Without Cause Other Than During a
Change in Control Period. If your employment with the Company is
terminated by the Company without Cause at a time other than
during a Change in Control Period, you shall be entitled to only
those severance benefits provided by the Company's severance
policy or policies then in effect. You shall not be entitled to
receive benefits pursuant to Section 3 of this Agreement.
2.3 Termination by the Company Without Cause During a Change in
Control Period. If your employment with the Company is terminated
by the Company without Cause during a Change in Control Period,
you shall be entitled to receive Benefits pursuant to Section 3. A
termination within 90 days prior to a Change in Control which
occurs solely in order to make you ineligible for the benefits of
this Agreement shall be considered a termination without Cause
during a Change in Control Period.
2.4 Termination By You For Change in Duties or Compensation During
a Change in Control Period. If during a Change in Control Period
there occurs a Change in Duties or Compensation you may terminate
your employment with the Company at any time within 30 days after
the occurrence of the Change in Duties or Compensation, by giving
to the Company not less than 120 nor more than 180 days notice of
termination. During the notice period that you continue to work,
any reduction in your Compensation will be restored. At the
option of the Company, following receipt of this notice, it may:
(a) change or cure, within 15 days, the condition that you claim
has caused the Change in Duties or Compensation, in which case,
your rights to terminate your employment with the Company pursuant
to this Section 2.4 shall cease (unless there occurs thereafter
another Change in Duties or Compensation) and you shall continue
in the employment of the Company notwithstanding the notice that
you have given; (b) allow you to continue your employment through
the date that you have specified in your notice; or (c)
immediately terminate your employment pursuant to Section 2.3. If
you terminate your employment with the Company pursuant to this
Section 2.4, you shall be entitled to receive Benefits pursuant to
Section 3. Your failure to provide the notice required by this
Section 2.4 shall result in you having no right to receive any
further compensation from the Company except for any base salary
or vacation earned but not paid, plus any bonus earned and accrued
by the Company through the Effective Date.
3. SEVERANCE BENEFITS. If your employment with the Company is
terminated as described in Section 2.3 or 2.4, you shall be
entitled to the benefits specified in subsections 3.1, 3.2, and
3.3 (the "Benefits") for the period of time set forth in the
applicable section.
3.1 Salary Payment or Continuance. You will be paid a single lump
sum payment in an amount equal to 2.99 times the average of your
annual base salary and any bonus payments for the 3 years
immediately preceding the Effective Date. The determination of
the amount of this payment shall be made by the Company's
actuaries and benefit consultants and, absent manifest error,
shall be final, binding and conclusive upon you and the Company.
3.2 Continuation of Benefits. During the 2 years following the
Effective Date (the "Severance Period") that results in benefits
under this Article 3, you shall continue to receive the medical,
prescription, dental, employee life and group life insurance
benefits at the levels to which you were entitled on the day
preceding the Effective Date, or reasonably equivalent benefits,
to the extent continuation is not prohibited or limited by
applicable law. In no event shall substitute plans, practices,
policies and programs provide you with benefits which are less
favorable, in the aggregate, than the most favorable of those
plans, practices, policies and programs in effect for you at any
time during the 120-day period immediately preceding the Effective
Date. However, if you become reemployed with another employer and
are eligible to receive medical or other welfare benefits under
another employer-provided plan, Company payments for these medical
and other welfare benefits shall cease.
4. EFFECT OF TERMINATION ON STOCK OPTIONS AND RESTRICTED STOCK. In
the event of any termination of your employment, all stock options
and restricted stock held by you that are vested prior to the
Effective Date shall be owned or exercisable in accordance with
their terms; all stock options held by you that are not vested
prior to the Effective Date shall lapse and be void; however, if
your employment with the Company is terminated as described in
Sections 2.3 or 2.4, then, if your option or restricted stock
grants provide for immediate vesting in the event of a Change in
Control, the terms of your option or restricted stock agreement
shall control. If your option or restricted stock agreement does
not provide for immediate vesting, you shall receive, within 30
days after the Effective Date, a lump sum cash distribution equal
to: (a) the number of shares of the Company's ordinary shares that
are subject to options or restricted stock grants held by you that
are not vested as of the Effective Date multiplied by (b) the
difference between: (i) the closing price of a share of the
Company's ordinary shares on the NASDAQ National Market System as
reported by The Wall Street Journal as of the day prior to the
Effective Date (or, if the market is closed on that date, on the
last preceding date on which the market was open for trading), and
(ii) the applicable exercise prices or stock grant values of those
non-vested shares.
5. DISCLOSURE OF INFORMATION. You recognize and acknowledge that,
as a result of your employment by the Company, you have or will
become familiar with and acquire knowledge of confidential
information and certain trade secrets that are valuable, special,
and unique assets of the Company. You agree that all that
confidential information and trade secrets are the property of the
Company. Therefore, you agree that, for and during your
employment with the Company and continuing following the
termination of your 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. The parties
agree that nothing in this Section 6 shall be construed as
prohibiting the Company from pursuing any remedies available to it
for any breach or threatened breach of this Section 6, including,
without limitation, the recovery of damages from you or any person
or entity acting in concert with you.
<PAGE>
6. GENERAL PROVISIONS.
6.1 Other Plans. Nothing in this Agreement shall affect your
rights during your employment to receive increases in
compensation, responsibilities or duties or to participate in and
receive benefits from any pension plan, benefit plan or profit
sharing plans except plans which specifically address benefits of
the type addressed in Sections 3 and 4 of this Agreement.
6.2 Death During Severance Period. If you die during the Severance
Period, any Benefits remaining to be paid to you shall be paid to
the beneficiary designated by you to receive those Benefits (or in
the absence of designation, to your surviving spouse or next of
kin).
6.3 Notices. Any notices to be given under this Agreement may be
effected by personal delivery in writing or by mail, registered or
certified, postage prepaid with return receipt requested. Mailed
notices shall be addressed to the parties at the addresses
appearing on the first page of this Agreement (to the attention of
the Secretary in the case of notices to the Company), but each
party may change the delivery address by written notice in
accordance with this Section 7.3. Notices delivered personally
shall be deemed communicated as of actual receipt; mailed notices
shall be deemed communicated as of the second day following
deposit in the United States Mail.
6.4 Entire Agreement. This Agreement supersedes all previous oral
or written agreements, understandings or arrangements between the
Company and you regarding a termination of your employment with
the Company or a change in your status, scope or authority and the
salary, benefits or other compensation that you receive from the
Company as a result of the termination of your employment with the
Company (the "Subject Matter"), all of which are wholly terminated
and canceled. This Agreement contains all of the covenants and
agreements between the parties with respect to the Subject Matter.
Each party to this Agreement acknowledges that no representations,
inducements, promises, or agreements, orally or otherwise, have
been made with respect to the Subject Matter by any party, or
anyone acting on behalf of any party, which are not embodied in
this Agreement. Any subsequent agreement relating to the Subject
Matter or any modification of this Agreement will be effective
only if it is in writing signed by the party against whom
enforcement of the modification is sought.
6.5 Partial Invalidity. If any provision in this Agreement is held
by a court of competent jurisdiction to be invalid, void, or
unenforceable, the remaining provisions shall nevertheless
continue in full force without being impaired or invalidated in
any way.
6.6 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Tennessee,
and it shall be enforced or challenged only in the courts of the
State of Tennessee.
6.7 Waiver of Jury Trial. The Company and you expressly waive any
right to a trial by jury in any action or proceeding to enforce or
defend any rights under this Agreement, and agree that any such
action or proceeding shall be tried before a court and not a jury.
You irrevocably waive, to the fullest extent permitted by law, any
objection that you may have now or hereafter to the specified
venue of any such action or proceeding and any claim that any such
action or proceeding has been brought in an inconvenient forum.
6.8 Miscellaneous. Failure or delay of either party to insist upon
compliance with any provision of this Agreement will not operate
as and is not to be construed to be a waiver or amendment of the
provision or the right of the aggrieved party to insist upon
compliance with the provision or to take remedial steps to recover
damages or other relief for noncompliance. Any express waiver of
any provision of this Agreement will not operate, and is not to be
construed, as a waiver of any subsequent breach, irrespective of
whether occurring under similar or dissimilar circumstances. You
may not assign any of your rights under this Agreement. The
rights and obligations of the Company under this Agreement shall
benefit and bind the successors and assigns of the Company. The
Company agrees that if it assigns this Agreement to any successor
company, it will ensure that its terms are continued.
6.9 Certain Additional Payments by the Company.
a. The Company will pay you an amount (the "Additional Amount")
equal to the excise tax under the United States Internal Revenue
Code of 1986, as amended (the "Code"), if any, incurred by you by
reason of the payments under this Agreement and any other plan,
agreement or understanding between you and the Company or its
parent, subsidiaries or affiliates (collectively, "Separation
Payments") constituting excess parachute payments under Section
280G of the Code (or any successor provision). In addition, the
Company will pay an amount equal to all excise taxes and federal,
state and local income taxes incurred by you with respect to
receipt of the Additional Amount. All determinations required to
be made under this Section 6.9 including whether an Additional
Amount is required and the amount of any Additional Amount, will
be made by the independent auditors engaged by the Company
immediately prior to the Change in Control (the "Accounting
Firm"), which will provide detailed supporting calculations to the
Company and you. In computing taxes, the Accounting Firm will use
the highest marginal federal, state and local income tax rates
applicable to you and will assume the full deductibility of state
and local income taxes for purposes of computing federal income
tax liability, unless you demonstrate that you will not in fact be
entitled to such a deduction for the year of payment.
b. The Additional Amount, computed assuming that all of the
Separation Payments constitute excess parachute payments as
defined in Section 280G of the Code (or any successor provision),
will be paid to you at the time that the payments made pursuant to
Section 3.1 is made unless the Company, prior to the Severance
Period, provides you with an opinion of the Accounting Firm that
you will not incur an excise tax on part or all of the Separation
Payments. That opinion will be based upon the applicable
regulations under Sections 280G and 4999 of the Code (or any
successor provisions) or substantial authority within the meaning
of Section 6662 of the Code. If that opinion applies only to part
of the Separation Payments, the Company will pay you the
Additional Amount with respect to the part of the Separation
Payments not covered by the opinion.
c. The amount of the Additional Amount and the assumptions to be
utilized in arriving at the determination, shall be made by the
Company's Accounting Firm, whose decision shall be final and
binding upon both you and the Company. You must notify the
Company in writing no later than 30 days after you are informed of
any claim by the Internal Revenue Service that, if successful,
would require the payment by the Company of the Additional Amount.
You must also cooperate fully with the Company and give the
Company any information reasonably requested relating to the
claim, and take all action in connection with contesting the claim
as the Company reasonably requests in writing from time to time.
If all of the terms and conditions in this Agreement are agreed to
by you, please signify your agreement by executing the enclosed
duplicate of this letter and returning it to us. At the date of
your return, this letter shall constitute a fully enforceable
Agreement between us.
CBRL GROUP, INC.
By: /s/ Dan W. Evins
Dan W. Evins
Chairman and Chief Executive Officer
The foregoing is fully agreed to and accepted by:
Company Employee's Signature: ________________________
Please Print or Type Name: ___________________________
Please Print or Type Title: ____________________________
Exhibit 10(s)
October 13, 1999
James F. Blackstock
533 Turtle Creek Drive
Brentwood, TN 37027
Re: Employee Retention Agreement
Dear Jim:
The Board of Directors of the CBRL Group, Inc. recognizes the
contribution that you have made to CBRL Group, Inc. or one of its
direct or indirect subsidiaries (collectively, the "Company") and
wishes to ensure your continuing commitment to the Company and its
business operations. Accordingly, in exchange for your continuing
commitment to the Company, and your energetic focus on continually
improving operations, the Company promises you the following
benefits if your employment with the Company is terminated in
certain circumstances:
1. DEFINITIONS. As used in this Agreement, the following terms
have the following meanings which are equally applicable to both
the singular and plural forms of the terms defined:
1.1 "Cause" means any one of the following:
(a) personal dishonesty;
(b) willful misconduct;
(c) breach of fiduciary duty; or
(d) conviction of any felony or crime involving moral turpitude.
1.2 "Change in Control" means: (a) that after the date of this
Agreement, a person becomes the beneficial owner, directly or
indirectly, of securities of the Company representing 20% or more
of the combined voting power of the Company's then outstanding
voting securities, unless that acquisition was approved by a vote
of at least 2/3 of the directors in office immediately prior to
the acquisition; (b) that during any period of 2 consecutive years
following the date of this Agreement, individuals who at the
beginning of the period constitute members of the Board of
Directors of the Company cease for any reason to constitute a
majority of the Board unless the election, or the nomination for
election by the Company's shareholders, of each new director was
approved by a vote of at least 2/3 of the directors then still in
office who were directors at the beginning of the 2-year period;
(c) a merger, consolidation or reorganization of the Company (but
this provision does not apply to a recapitalization or similar
financial restructuring which does not involve a material change
in ownership of equity of the Company and which does not result in
a change in membership of the Board of Directors); or (d) a sale
of all or substantially all of the Company's assets.
1.3 "Change in Control Period" means a 2-year period beginning the
day after a Change in Control occurs.
1.4 "Change in Duties or Compensation" means any one of: (a) a
material change in your duties and responsibilities for the
Company (without your consent) from those duties and
responsibilities for the Company in effect at the time a Change in
Control occurs, which change results in the assignment of duties
and responsibilities inferior to your duties and responsibilities
at the time such Change in Control occurs (it being understood and
acknowledged by you that a Change in Control that results in two
persons of which you are one having similar or sharing duties and
responsibilities shall not be a material change in your duties and
responsibilities); (b) a reduction in your salary or a material
change in benefits (excluding discretionary bonuses), from the
salary and benefits in effect at the time a Change in Control
occurs; or (c) a change in the location of your work assignment
from your location at the time a Change in Control occurs to any
other city or geographical location that is located further than
50 miles from that location.
2. TERMINATION OF EMPLOYMENT; SEVERANCE. Your immediate
supervisor or the Company's Board of Directors may terminate your
employment, with or without cause, at any time by giving you
written notice of your termination, such termination of employment
to be effective on the date specified in the notice. You also may
terminate your employment with the Company at any time. The
effective date of termination (the "Effective Date") shall be the
last day of your employment with the Company, as specified in a
notice by you, or if you are terminated by the Company, the date
that is specified by the Company in its notice to you. The
following subsections set forth your rights to severance in the
event of the termination of your employment in certain
circumstances by either the Company or you. Section 5 also sets
forth certain restrictions on your activities if your employment
with the Company is terminated, whether by the Company or you.
That section shall survive any termination of this Agreement or
your employment with the Company.
2.1 Termination by the Company for Cause. If you are terminated
for Cause, the Company shall have no further obligation to you,
and your participation in all of the Company's benefit plans and
programs shall cease as of the Effective Date. In the event of a
termination for Cause, you shall not be entitled to receive
severance benefits described in Section 3.
2.2 Termination by the Company Without Cause Other Than During a
Change in Control Period. If your employment with the Company is
terminated by the Company without Cause at a time other than
during a Change in Control Period, you shall be entitled to only
those severance benefits provided by the Company's severance
policy or policies then in effect. You shall not be entitled to
receive benefits pursuant to Section 3 of this Agreement.
2.3 Termination by the Company Without Cause During a Change in
Control Period. If your employment with the Company is terminated
by the Company without Cause during a Change in Control Period,
you shall be entitled to receive Benefits pursuant to Section 3. A
termination within 90 days prior to a Change in Control which
occurs solely in order to make you ineligible for the benefits of
this Agreement shall be considered a termination without Cause
during a Change in Control Period.
2.4 Termination By You For Change in Duties or Compensation During
a Change in Control Period. If during a Change in Control Period
there occurs a Change in Duties or Compensation you may terminate
your employment with the Company at any time within 30 days after
the occurrence of the Change in Duties or Compensation, by giving
to the Company not less than 120 nor more than 180 days notice of
termination. During the notice period that you continue to work,
any reduction in your Compensation will be restored. At the
option of the Company, following receipt of this notice, it may:
(a) change or cure, within 15 days, the condition that you claim
has caused the Change in Duties or Compensation, in which case,
your rights to terminate your employment with the Company pursuant
to this Section 2.4 shall cease (unless there occurs thereafter
another Change in Duties or Compensation) and you shall continue
in the employment of the Company notwithstanding the notice that
you have given; (b) allow you to continue your employment through
the date that you have specified in your notice; or (c)
immediately terminate your employment pursuant to Section 2.3. If
you terminate your employment with the Company pursuant to this
Section 2.4, you shall be entitled to receive Benefits pursuant to
Section 3. Your failure to provide the notice required by this
Section 2.4 shall result in you having no right to receive any
further compensation from the Company except for any base salary
or vacation earned but not paid, plus any bonus earned and accrued
by the Company through the Effective Date.
3. SEVERANCE BENEFITS. If your employment with the Company is
terminated as described in Section 2.3 or 2.4, you shall be
entitled to the benefits specified in subsections 3.1, 3.2, and
3.3 (the "Benefits") for the period of time set forth in the
applicable section.
3.1 Salary Payment or Continuance. You will be paid a single lump
sum payment in an amount equal to 2.00 times the average of your
annual base salary and any bonus payments for the 3 years
immediately preceding the Effective Date. The determination of
the amount of this payment shall be made by the Company's
actuaries and benefit consultants and, absent manifest error,
shall be final, binding and conclusive upon you and the Company.
3.2 Continuation of Benefits. During the 2 years following the
Effective Date that results in benefits under this Article 3 (the
"Severance Period"), you shall continue to receive the medical,
prescription, dental, employee life and group life insurance
benefits at the levels to which you were entitled on the day
preceding the Effective Date, or reasonably equivalent benefits,
to the extent continuation is not prohibited or limited by
applicable law. In no event shall substitute plans, practices,
policies and programs provide you with benefits which are less
favorable, in the aggregate, than the most favorable of those
plans, practices, policies and programs in effect for you at any
time during the 120-day period immediately preceding the Effective
Date. However, if you become reemployed with another employer and
are eligible to receive medical or other welfare benefits under
another employer-provided plan, Company payments for these medical
and other welfare benefits shall cease.
4. EFFECT OF TERMINATION ON STOCK OPTIONS AND RESTRICTED STOCK. In
the event of any termination of your employment, all stock options
and restricted stock held by you that are vested prior to the
Effective Date shall be owned or exercisable in accordance with
their terms; all stock options held by you that are not vested
prior to the Effective Date shall lapse and be void; however, if
your employment with the Company is terminated as described in
Sections 2.3 or 2.4, then, if your option or restricted stock
grants provide for immediate vesting in the event of a Change in
Control, the terms of your option or restricted stock agreement
shall control. If your option or restricted stock agreement does
not provide for immediate vesting, you shall receive, within 30
days after the Effective Date, a lump sum cash distribution equal
to: (a) the number of shares of the Company's ordinary shares that
are subject to options or restricted stock grants held by you that
are not vested as of the Effective Date multiplied by (b) the
difference between: (i) the closing price of a share of the
Company's ordinary shares on the NASDAQ National Market System as
reported by The Wall Street Journal as of the day prior to the
Effective Date (or, if the market is closed on that date, on the
last preceding date on which the market was open for trading), and
(ii) the applicable exercise prices or stock grant values of those
non-vested shares.
5. DISCLOSURE OF INFORMATION. You recognize and acknowledge that,
as a result of your employment by the Company, you have or will
become familiar with and acquire knowledge of confidential
information and certain trade secrets that are valuable, special,
and unique assets of the Company. You agree that all that
confidential information and trade secrets are the property of the
Company. Therefore, you agree that, for and during your
employment with the Company and continuing following the
termination of your 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. The parties
agree that nothing in this Section 6 shall be construed as
prohibiting the Company from pursuing any remedies available to it
for any breach or threatened breach of this Section 6, including,
without limitation, the recovery of damages from you or any person
or entity acting in concert with you.
6. GENERAL PROVISIONS.
6.1 Other Plans. Nothing in this Agreement shall affect your
rights during your employment to receive increases in
compensation, responsibilities or duties or to participate in and
receive benefits from any pension plan, benefit plan or profit
sharing plans except plans which specifically address benefits of
the type addressed in Sections 3 and 4 of this Agreement.
6.2 Death During Severance Period. If you die during the Severance
Period, any Benefits remaining to be paid to you shall be paid to
the beneficiary designated by you to receive those Benefits (or in
the absence of designation, to your surviving spouse or next of
kin).
6.3 Notices. Any notices to be given under this Agreement may be
effected by personal delivery in writing or by mail, registered or
certified, postage prepaid with return receipt requested. Mailed
notices shall be addressed to the parties at the addresses
appearing on the first page of this Agreement (to the attention of
the Secretary in the case of notices to the Company), but each
party may change the delivery address by written notice in
accordance with this Section 7.3. Notices delivered personally
shall be deemed communicated as of actual receipt; mailed notices
shall be deemed communicated as of the second day following
deposit in the United States Mail.
6.4 Entire Agreement. This Agreement supersedes all previous oral
or written agreements, understandings or arrangements between the
Company and you regarding a termination of your employment with
the Company or a change in your status, scope or authority and the
salary, benefits or other compensation that you receive from the
Company as a result of the termination of your employment with the
Company (the "Subject Matter"), all of which are wholly terminated
and canceled. This Agreement contains all of the covenants and
agreements between the parties with respect to the Subject Matter.
Each party to this Agreement acknowledges that no representations,
inducements, promises, or agreements, orally or otherwise, have
been made with respect to the Subject Matter by any party, or
anyone acting on behalf of any party, which are not embodied in
this Agreement. Any subsequent agreement relating to the Subject
Matter or any modification of this Agreement will be effective
only if it is in writing signed by the party against whom
enforcement of the modification is sought.
6.5 Partial Invalidity. If any provision in this Agreement is held
by a court of competent jurisdiction to be invalid, void, or
unenforceable, the remaining provisions shall nevertheless
continue in full force without being impaired or invalidated in
any way.
6.6 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Tennessee,
and it shall be enforced or challenged only in the courts of the
State of Tennessee.
6.7 Waiver of Jury Trial. The Company and you expressly waive any
right to a trial by jury in any action or proceeding to enforce or
defend any rights under this Agreement, and agree that any such
action or proceeding shall be tried before a court and not a jury.
You irrevocably waive, to the fullest extent permitted by law, any
objection that you may have now or hereafter to the specified
venue of any such action or proceeding and any claim that any such
action or proceeding has been brought in an inconvenient forum.
6.8 Miscellaneous. Failure or delay of either party to insist upon
compliance with any provision of this Agreement will not operate
as and is not to be construed to be a waiver or amendment of the
provision or the right of the aggrieved party to insist upon
compliance with the provision or to take remedial steps to recover
damages or other relief for noncompliance. Any express waiver of
any provision of this Agreement will not operate, and is not to be
construed, as a waiver of any subsequent breach, irrespective of
whether occurring under similar or dissimilar circumstances. You
may not assign any of your rights under this Agreement. The
rights and obligations of the Company under this Agreement shall
benefit and bind the successors and assigns of the Company. The
Company agrees that if it assigns this Agreement to any successor
company, it will ensure that its terms are continued.
6.9 Certain Additional Payments by the Company.
The Company will pay you an amount (the "Additional Amount")
equal to the excise tax under the United States Internal Revenue
Code of 1986, as amended (the "Code"), if any, incurred by you by
reason of the payments under this Agreement and any other plan,
agreement or understanding between you and the Company or its
parent, subsidiaries or affiliates (collectively, "Separation
Payments") constituting excess parachute payments under Section
280G of the Code (or any successor provision). In addition, the
Company will pay an amount equal to all excise taxes and federal,
state and local income taxes incurred by you with respect to
receipt of the Additional Amount. All determinations required to
be made under this Section 6.9 including whether an Additional
Amount is required and the amount of any Additional Amount, will
be made by the independent auditors engaged by the Company
immediately prior to the Change in Control (the "Accounting
Firm"), which will provide detailed supporting calculations to the
Company and you. In computing taxes, the Accounting Firm will use
the highest marginal federal, state and local income tax rates
applicable to you and will assume the full deductibility of state
and local income taxes for purposes of computing federal income
tax liability, unless you demonstrate that you will not in fact be
entitled to such a deduction for the year of payment.
The Additional Amount, computed assuming that all of the
Separation Payments constitute excess parachute payments as
defined in Section 280G of the Code (or any successor provision),
will be paid to you at the time that the payments made pursuant to
Section 3.1 is made unless the Company, prior to the Severance
Period, provides you with an opinion of the Accounting Firm that
you will not incur an excise tax on part or all of the Separation
Payments. That opinion will be based upon the applicable
regulations under Sections 280G and 4999 of the Code (or any
successor provisions) or substantial authority within the meaning
of Section 6662 of the Code. If that opinion applies only to part
of the Separation Payments, the Company will pay you the
Additional Amount with respect to the part of the Separation
Payments not covered by the opinion.
The amount of the Additional Amount and the assumptions to be
utilized in arriving at the determination, shall be made by the
Company's Accounting Firm, whose decision shall be final and
binding upon both you and the Company. You must notify the
Company in writing no later than 30 days after you are informed of
any claim by the Internal Revenue Service that, if successful,
would require the payment by the Company of the Additional Amount.
You must also cooperate fully with the Company and give the
Company any information reasonably requested relating to the
claim, and take all action in connection with contesting the claim
as the Company reasonably requests in writing from time to time.
If all of the terms and conditions in this Agreement are agreed to
by you, please signify your agreement by executing the enclosed
duplicate of this letter and returning it to us. At the date of
your return, this letter shall constitute a fully enforceable
Agreement between us.
CBRL GROUP, INC.
By: /s/ Dan W. Evins
Dan W. Evins
Chairman and Chief Executive Officer
The foregoing is fully agreed to and accepted by:
Company Employee's Signature: ________________________
Please Print or Type Name: ___________________________
Please Print or Type Title: ____________________________
Exhibit 13
SELECTED FINANCIAL DATA
<TABLE>
For each of the fiscal years ended
(In thousands except per share data)
<CAPTION>
July 30, July 31, August 1, August 2, July 28,
1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C>
OPERATING RESULTS
Total revenue $1,531,625 $1,317,104 $1,123,851 $943,287 $783,093
Cost of goods sold 538,051 450,120 387,703 324,905 264,809
Gross profit 993,574 866,984 736,148 618,382 518,284
Labor & other related
expenses 538,348 441,121 378,117 314,157 256,253
Other store operating
expenses 248,208 197,098 162,675 138,701 114,564
Store closing costs* -- -- -- 14,199 --
Store operating income 207,018 228,765 195,356 151,325 147,467
General and administrative 82,006 63,648 57,798 50,627 44,746
Amortization of goodwill 2,169 208 -- -- --
Operating income 122,843 164,909 137,558 100,698 102,721
Interest expense 11,324 3,026 2,089 369 723
Interest income 1,319 2,847 1,988 2,051 3,335
Income before income taxes 112,838 164,730 137,457 102,380 105,333
Provision for income taxes 42,653 60,594 50,859 38,865 39,290
Net income $ 70,185 $ 104,136 $ 86,598 $ 63,515 $ 66,043
SHARE DATA
Net earnings per share:
Basic $1.16 $1.68 $1.42 $1.05 $1.10
Diluted 1.16 1.65 1.41 1.04 1.09
Dividends paid per share $ .02 $ .02 $ .02 $ .02 $ .02
Weighted average
shares outstanding:
Basic 60,329 61,832 60,824 60,352 59,986
Diluted 60,610 63,028 61,456 60,811 60,554
FINANCIAL POSITION
Working capital $ (5,803) $ 60,804 $ 60,654 $ 23,289 $ 43,600
Total assets 1,277,781 992,108 828,705 676,379 604,515
Property and equipment-net 1,020,055 812,321 678,167 568,573 479,518
Long-term debt 312,000 59,500 62,000 15,500 19,500
Capital lease
obligations 902 1,102 1,302 1,468 1,598
Shareholders' equity 791,007 803,374 660,432 566,221 496,083
*Represents one-time charge to close certain stores and other write-offs.
</TABLE>
<TABLE>
MARKET PRICE AND DIVIDEND INFORMATION
The following table indicates the high and low sales prices
of the Company's common stock, as reported by The Nasdaq Stock
Market (National Market), and dividends paid.
<CAPTION>
Fiscal Year 1999 Fiscal Year 1998
Prices Dividends Prices Dividends
Quarter High Low Paid High Low Paid
<S> <C> <C> <C> <C> <C> <C>
First $30.50 $22.13 $.005 $33.13 $27.50 $.005
Second 27.88 20.13 .005 35.63 29.19 .005
Third 23.50 16.00 .005 43.00 34.19 .005
Fourth 20.50 14.81 .005 36.38 26.00 .005
</TABLE>
<TABLE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
The following table highlights operating results
over the past three fiscal years:
<CAPTION>
Period to Period
Relationship to Total Revenue Increase(Decrease)
1999 1998 1997 1999 vs 1998 1998 vs 1997
<S> <C> <C> <C> <C> <C>
Net sales:
Restaurant 76.0% 76.3% 76.8% 16% 16%
Retail 24.0 23.7 23.2 18 20
Total net sales 100.0 100.0 100.0 16 17
Franchise fees and
royalties -- -- -- -- --
Total revenue 100.0% 100.0% 100.0% 16 17
Cost of goods sold 35.1 34.2 34.5 20 16
Gross profit 64.9 65.8 65.5 15 18
Labor & other related
expenses 35.2 33.5 33.7 22 17
Other store operating
expenses 16.2 15.0 14.5 26 21
Store operating income 13.5 17.3 17.3 (10) 17
General & administrative 5.4 4.8 5.1 29 10
Amortization of goodwill 0.1 0.0 0.0 938 --
Operating income 8.0 12.5 12.2 (26) 20
Interest expense 0.7 0.2 0.2 274 45
Interest income 0.1 0.2 0.2 (54) 43
Income before income taxes 7.4 12.5 12.2 (32) 20
Provision for income taxes 2.8 4.6 4.5 (30) 19
Net income 4.6 7.9 7.7 (33) 20
</TABLE>
The following table highlights same store sales* results over
the past two years:
Period to Period Increase(Decrease)
1999 vs 1998 1998 vs 1997
(283 Stores) (257 Stores)
Restaurant (3)% 2%
Retail 2 2
Restaurant & retail (2) 2
*In the fiscal 1999 versus fiscal 1998 comparison, same store
sales consist of sales of stores open six full quarters at the
beginning of fiscal 1999. In the fiscal 1998 versus fiscal 1997
comparison, same store sales consist of sales of stores open
throughout both of the fiscal years under comparison. The
difference in methodologies did not have a material effect on the
same store sales analysis. The same store sales analysis
represents Cracker Barrel Old Country Store same store sales only.
Except for specific historical information, the matters
discussed in this Annual Report to Shareholders, as well as the
Company's Form 10-K filed with the Securities and Exchange
Commission for the year ended July 30, 1999, are forward-looking
statements that involve risks, uncertainties and other factors
which may cause actual results and performance of CBRL Group, Inc.
to differ materially from those expressed or implied by these
statements. Factors which will affect actual results include, but
are not limited to: the availability and costs of acceptable
sites for development; the effect of increased competition at
Company locations on employee recruiting and retention, labor
costs and restaurant sales; the ability of the Company to recruit,
train and retain restaurant personnel; the acceptance of the
Company's concepts as the Company continues to expand into new
geographic regions; changes in or implementation of additional
governmental rules and regulations; the effects of local or
regional Year 2000-related computer failures on utilities and
vendors serving the Company; and other factors described from time
to time in the Company's filings with the Securities and Exchange
Commission, press releases and other communications.
Cracker Barrel Old Country Store, Inc. ("Cracker Barrel")
same store restaurant sales decreased 3% in fiscal 1999 versus the
comparable 52 weeks of fiscal 1998. Same store restaurant sales
increased 2% for the comparable 52 weeks of fiscal 1998 versus
fiscal 1997. The decrease in same store sales growth from fiscal
1998 to fiscal 1999 was primarily due to menu decreases of
approximately 1% and 3% instituted in September 1998 and March
1999, respectively, and a decrease in customer traffic of
approximately 4%, partially offset by a menu increase of
approximately 4% in May 1998.
Cracker Barrel same store retail sales increased 2% in fiscal
1999 versus the comparable 52 weeks of fiscal 1998 and also
increased 2% for the comparable 52-week period in fiscal 1998
versus fiscal 1997. Same store retail sales growth from fiscal
1998 to fiscal 1999 was maintained at a 2% increase even with
restaurant customer traffic decreases primarily due to an improved
assortment of retail items in the stores and increased sales from
a significant increase in markdowns of retail merchandise.
In fiscal 1999, total net sales (restaurant and retail) in
the 283 Cracker Barrel same stores averaged $3.93 million.
Restaurant sales were 75.5% of total net sales in the same 283
stores in fiscal 1999 and 76.5% in fiscal 1998.
Total revenue, which increased 16% and 17% in fiscal 1999 and
1998, respectively, benefited from the opening of 40, 50 and 50
new Cracker Barrel stores in fiscal 1999, 1998 and 1997,
respectively, and the acquisitions of Logan's Roadhouse, Inc.
("Logan's Roadhouse") in February 1999 and Carmine Giardini's
Gourmet Market and La Trattoria Ristorante ("Carmine's") in April
1998. (See Note 7 to the Company's Consolidated Financial
Statements.)
Cost of goods sold as a percentage of total revenue increased
in fiscal 1999 to 35.1% from 34.2% in 1998. This increase was
primarily due to a significant increase in markdowns of retail
merchandise versus the prior year, higher retail shrinkage versus
the prior year and an increased mix of retail sales, which have a
higher cost of goods than restaurant sales. These increases were
partially offset by the benefit to cost of goods sold from the
inclusion of Logan's Roadhouse, which has lower cost of goods sold
as a percentage of total revenue than Cracker Barrel. Food cost
as a percentage of net restaurant sales in fiscal 1999 increased
slightly from fiscal 1998 primarily due to increases in dairy
prices. These increases were partially offset by the net benefit
to cost of goods sold from a menu increase of approximately 4% at
Cracker Barrel in May 1998, and menu decreases of approximately 1%
and 3% at Cracker Barrel in September 1998 and March 1999,
respectively. Cost of goods sold as a percentage of total revenue
decreased in fiscal 1998 to 34.2% from 34.5% in 1997. This
decrease was primarily due to improved initial mark-ons for retail
merchandise, partially offset by an increased mix of retail sales
which have a higher cost of goods than restaurant sales. Food
cost as a percentage of net restaurant sales in fiscal 1998 was
unchanged from fiscal 1997 primarily due to increases in coffee,
produce and dairy prices offset by menu increases of approximately
2% and 4% in May 1997 and May 1998, respectively.
Labor and other related expenses include all direct and
indirect labor and related costs incurred in store operations.
Labor expenses as a percentage of total revenue were 35.2%, 33.5%
and 33.7% in fiscal 1999, 1998 and 1997, respectively. The year
to year increase in fiscal 1999 versus fiscal 1998 was primarily
due to increased Cracker Barrel restaurant labor hours to improve
guest service, hourly wage inflation at Cracker Barrel stores of
approximately 4%, increases in Cracker Barrel's field management
salary structure to attract and retain quality store managers, and
increased costs related to a new group health plan implemented in
January 1999. These increases were partially offset by lower
bonus payouts under the Cracker Barrel store-level bonus program
and the benefit to labor expense from adding Logan's Roadhouse,
which has lower labor as a percentage of revenue than Cracker
Barrel. The year to year decrease in fiscal 1998 versus fiscal
1997 was primarily due to lower bonus payouts under the store-
level bonus program instituted in fiscal 1997 and enhanced
operational productivity in the stores, partially offset by store-
level hourly wage inflation of approximately 3%.
Other store operating expenses include all unit-level
operating costs, the major components of which are operating
supplies, repairs and maintenance, advertising expenses,
utilities, depreciation and amortization. Other store operating
expenses as a percentage of total revenue were 16.2%, 15.0% and
14.5% in fiscal 1999, 1998 and 1997, respectively. The year to
year increase in fiscal 1999 versus fiscal 1998 was primarily due
to incremental Cracker Barrel advertising expense, which resulted
from increased television and radio advertising and other general
advertising programs, higher Cracker Barrel store maintenance
costs, the effect of lower sales volumes on fixed costs as a
percentage of total revenue at Cracker Barrel and the inclusion of
Logan's Roadhouse, which has higher other store operating expenses
as a percentage of total revenue than Cracker Barrel. The year to
year increase in fiscal 1998 versus fiscal 1997 was primarily due
to the incremental advertising expense, resulting from increased
general advertising and the rollout of the Cracker Barrel Old
Country Store Neighborhood Program, and higher general liability
insurance costs versus the prior year.
General and administrative expenses as a percentage of total
revenue were 5.4%, 4.8% and 5.1% in fiscal 1999, 1998 and 1997,
respectively. The year to year increase in fiscal 1999 versus
fiscal 1998 was primarily due to higher Cracker Barrel recruiting
and training costs to attract and train quality store managers,
increased general and administrative expenses from the
acquisitions of Logan's Roadhouse in February 1999 and Carmine's
in April 1998 and costs related to the holding company formation.
These increases were partially offset by a decrease in corporate
bonuses versus fiscal 1998. The reduction in fiscal 1998 versus
fiscal 1997 primarily reflected improved sales volume.
Interest expense increased in fiscal 1999 to $11.3 million
from $3.0 million in fiscal 1998 and $2.1 million in fiscal 1997.
The increase from fiscal 1998 to fiscal 1999 was primarily due to
the Company's drawing a net $255 million on its bank revolving
credit facility to finance the Logan's Roadhouse acquisition and
its stock buyback program. The increase from fiscal 1997 to
fiscal 1998 was primarily due to the Company's drawing on a $50.0
million term loan on December 2, 1996 to finance Cracker Barrel's
store expansion program.
Interest income decreased to $1.3 million in fiscal 1999 from
$2.8 million in fiscal 1998. The primary reason for the decrease
was lower average funds available for investment. Interest income
increased to $2.8 million in fiscal 1998 from $2.0 million in
fiscal 1997. The primary reason for the increase was higher
average funds available for investment.
Provision for income taxes as a percent of pretax income was
37.8% for fiscal 1999, 36.8% for fiscal 1998 and 37.0% for fiscal
1997. The primary reason for the increase in the tax rate in
fiscal 1999 from fiscal 1998 was the non-deductibility of the
amortization of goodwill and costs related to the acquisition of
Logan's Roadhouse in February 1999. The primary reason for the
decrease in the tax rate in fiscal 1998 from fiscal 1997 was a
decrease in the effective state tax rates.
IMPACT OF RECENT ACCOUNTING PRONOUNCEMENTS NOT YET ADOPTED
The Company will adopt Statement of Financial Accounting Standards
("SFAS") No. 133, "Accounting for Derivative Instruments and
Hedging Activities," in the first quarter of fiscal 2001. The
Company is still evaluating the effect of adopting SFAS No. 133,
but does not expect the adoption to have a material effect on the
Company's consolidated financial statements. The American
Institute of Certified Public Accountants' Statement of Position
("SOP") 98-1, "Accounting for the Costs of Computer Software
Developed or Obtained for Internal Use," and SOP 98-5, "Reporting
of the Costs of Start-up Activities," become effective for the
Company in the first quarter of fiscal 2000. The Company does not
expect the adoption of either SOP to have a material effect on the
Company's consolidated financial statements. (See Note 2 to the
Company's Consolidated Financial Statements.)
YEAR 2000
Many software applications and computer operational programs
written in the past were not designed to recognize calendar dates
beginning in the Year 2000. The failure of such applications or
systems used by the Company or by its material suppliers to
properly recognize the dates beginning in the Year 2000 could
result in miscalculations or systems failures which potentially
could have an adverse effect on the Company's operations.
The Company's Year 2000 preparations began in fiscal 1998. The
preparations included identification, assessment and testing of
all Company software, hardware and equipment that could be
affected by the Year 2000 issue and remedial action, where
necessary, followed by further testing. Analysis to identify
internal Year 2000 deficiencies has been conducted and an
inventory of systems designated as critical has been developed.
As the Year 2000 remediation efforts progressed, the Company first
focused, wherever possible, on those systems designated critical.
The Company has completed the Year 2000 analysis and has
substantially completed the remediation efforts for all
deficiencies found. The Company's estimated total cost of
analysis and remediation of the Year 2000 issues is not
anticipated to have a material adverse effect on the Company's
consolidated financial position, results of operations or cash
flows.
The Company has also contacted material suppliers of products
and services to determine the extent to which the Company may be
vulnerable to such suppliers' failures to resolve their own Year
2000 compliance issues. To assess the Year 2000 risks to the
Company's continuity of supply of products and services, an
inventory of material suppliers was compiled. These suppliers
were sent letters and questionnaires requesting information as to
the status of their Year 2000 readiness and certification that
their information systems are Year 2000 compliant. Based on
responses received from most of these suppliers, it appears that
Year 2000 issues are being addressed. The Company has not
verified the contents, nor is it the source, of Year 2000
statements incorporated, or relied upon by the Company, in this
disclosure from persons or entities other than the Company. The
Company is continuing to pursue responses from material suppliers
that have not responded to date and will discuss with them any
material Year 2000 concerns that are identified.
The Company anticipates timely completion of the internal Year
2000 readiness efforts. However, if new systems cannot be
implemented on a timely basis, modifications to existing systems
cannot be accomplished on a timely basis, information technology
resources do not remain available, or other unanticipated events
occur, there could be material adverse effects on the Company's
consolidated financial position, results of operations and cash
flows. As part of the Year 2000 readiness efforts, the Company is
developing contingency plans to identify activities which will
need to be performed in the event of internal systems failures.
The contingency plans are expected to be completed by October 31,
1999. Although the Company has not been informed of any material
Year 2000 issues by its material suppliers, there is no assurance
that these suppliers will be Year 2000 compliant on a timely
basis. Similarly, the Company has no reliable information
concerning the expected Year 2000 effects on the nation's
securities markets, banking system, utilities and other
infrastructure. The Company therefore relies generally on the
ability of the federal government and its agencies, such as the
Internal Revenue Service and Securities and Exchange Commission to
effectively address such issues on a national scale.
Unanticipated failures or significant delays in furnishing
products or services by material suppliers or general public
infrastructure service providers could have a material adverse
effect on the Company's consolidated financial position, results
of operations and cash flows. Where practicable, the Company is
assessing and attempting to mitigate its risks with respect to the
failure of its material suppliers and public infrastructure to be
Year 2000 ready as part of its contingency planning. In the worst
case reasonably to be expected, assuming that the nation's
financial system and overall public infrastructure continue to
operate substantially as they had prior to the Year 2000, some of
the Company's internal systems may fail to operate properly and
some of its material suppliers may fail to perform effectively or
may fail to timely or completely deliver products. In those
circumstances, the Company expects to be able to conduct its
necessary business operations manually and to obtain necessary
products from alternate suppliers and business operations would
generally continue; however, there would be some disruption which
could have a material adverse effect on the Company's consolidated
financial position, results of operations and cash flows. The
Company has no basis upon which to reasonably analyze the
psychological or other direct or indirect effects on its guests,
and consumers generally, from Year 2000 issues or experiences
unrelated to the Company. The actual effect, if any, on the
Company's consolidated financial position, results of operations
or cash flows from the failure of its internal systems or of its
material suppliers to be Year 2000 ready can not be reasonably
predicted.
LIQUIDITY AND CAPITAL RESOURCES
The Company's cash generated from operating activities was
$141 million in fiscal 1999. Most of this cash was provided by
net income adjusted by depreciation and amortization. Increases
in accounts payable, taxes withheld and accrued, accrued employee
benefits, deferred income taxes and income taxes payable were
partially offset by increases in inventories, receivables, prepaid
expenses and other assets and decreases in accrued employee
compensation and other accrued expenses.
Capital expenditures were $165 million in fiscal 1999. Land
purchases and costs of new stores accounted for substantially all
of these expenditures.
The Company's internally generated cash along with cash at
July 31, 1998 and its available revolver were not sufficient to
finance all of its stock buyback programs, the acquisition of
Logan's Roadhouse, Inc. and new store growth of its Cracker Barrel
and Logan's Roadhouse concepts in fiscal 1999. As planned, the
Company increased its bank credit facility from $125 million to
$350 million during fiscal 1999.
On September 9, 1998, the Company announced that the Board of
Directors authorized the repurchase of up to 3 million shares of
the Company's common stock which allowed the Company to repurchase
approximately 5% of the approximately 62 million shares then
outstanding. During March 1999, the Company completed the
purchase of all of the 3 million shares authorized by the Board of
Directors on September 9, 1998.
On February 26, 1999, the Company announced that the Board of
Directors had authorized the repurchase of up to an additional 3
million shares of the Company's common stock. This authorization
increases the Company's stock buyback program to a total of
approximately 10% of the approximately 60 million shares then
outstanding. The purchases are to be made from time to time in
the open market at prevailing market prices. The Company began
repurchases under this second authorization upon completion of the
first 3 million share buyback program. As of July 30, 1999, the
Company has purchased a total of 967,500 shares under the second
stock buyback program.
The Company estimates that its capital expenditures for fiscal
2000 will be approximately $140 million, substantially all of
which will be land purchases and the construction of new stores.
On February 16, 1999, the Company completed its merger and
acquisition of Logan's Roadhouse, Inc. for $24 cash per share or
approximately $188 million, excluding transaction costs. (See Note
7 to the Company's Consolidated Financial Statements.) In order
to finance this acquisition and the Company's additional 3 million
share buyback authorization, the Company refinanced its $50
million term loan and $75 million revolving credit facility which
increased the rate on the Company's $50 million term loan to a
fixed interest rate of 6.11% plus the Company's credit spread of
1.00% at July 30, 1999. The term loan is still due on its
original maturity date of December 1, 2001. The credit spread
increase is primarily due to changes in the credit markets as
compared to the credit environment two years ago when the Company
entered into the $125 million bank credit facility. As part of
the February 16, 1999, bank facility refinancing, the Company
increased the total bank credit facility to $350 million from $125
million. On February 16, 1999, the Company received net proceeds
of $200 million from its revolving credit facility at a variable
rate of approximately 6%. During fiscal 1999, the Company
received net proceeds of an additional $55 million from its
revolving credit facility to fund its expansion and continue its
share buyback program. On September 30, 1999, the Company
increased its bank credit facility an additional $40 million to
$390 million. The Company is exploring refinancing a portion of
its bank credit facility with longer term financing. Management
believes that cash at July 30, 1999, along with cash generated
from the Company's operating activities and its available
revolver, will be sufficient to finance its continued operations,
its presently authorized second 3 million share buyback program
and its continued expansion plans through fiscal 2000.
<TABLE>
CONSOLIDATED BALANCE SHEET
(In thousands except share data)
<CAPTION>
July 30, July 31,
ASSETS 1999 1998
<S> <C> <C>
Current Assets:
Cash and cash equivalents $ 18,262 $ 62,593
Receivables 8,935 5,192
Inventories 100,455 91,609
Prepaid expenses 8,041 5,432
Deferred income taxes 2,457 --
Total current assets 138,150 164,826
Property and Equipment:
Land 283,245 227,000
Buildings and improvements 601,326 498,148
Buildings under capital leases 3,289 3,289
Restaurant and other equipment 275,047 223,905
Leasehold improvements 53,394 19,686
Construction in progress 31,659 22,332
Total 1,247,960 994,360
Less: Accumulated depreciation and
amortization of capital leases 227,905 182,039
Property and equipment-net 1,020,055 812,321
Goodwill - net 111,246 12,242
Other Assets 8,330 2,719
Total $1,277,781 $992,108
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 67,286 $ 38,212
Current maturities of long-term debt
and capital lease obligations 2,700 2,700
Taxes withheld and accrued 23,577 17,650
Income taxes payable 2,211 649
Deferred income taxes -- 879
Accrued employee compensation 22,632 24,192
Accrued employee benefits 17,641 11,821
Other accrued expenses 7,906 7,919
Total current liabilities 143,953 104,022
Long-term Debt 312,000 59,500
Capital Lease Obligations 902 1,102
Non-compete Agreement -- 400
Deferred Income Taxes 29,919 23,710
Commitments and Contingencies (Note 9)
Shareholders' Equity:
Preferred stock in 1999, 100,000,000
shares of $.01 par value authorized, no
shares issued; in 1998, no shares
authorized -- --
Common stock in 1999, 400,000,000 shares
of $.01 par value authorized, 62,595,662
shares issued and 58,628,162 shares
outstanding; in 1998, 150,000,000 shares
of $.50 par value authorized, 62,480,775
shares issued and outstanding 626 31,240
Additional paid-in capital 283,724 251,236
Retained earnings 590,128 520,898
874,478 803,374
Less treasury stock, at cost, 3,967,500 and
0 shares, respectively (83,471) --
Total shareholders' equity 791,007 803,374
Total $1,277,781 $992,108
</TABLE>
See notes to consolidated financial statements.
<TABLE>
CONSOLIDATED STATEMENT OF INCOME
<CAPTION>
(In thousands except per share data)
Fiscal years ended
July 30, July 31, August 1,
1999 1998 1997
<S> <C> <C> <C>
Net sales:
Restaurant $1,163,213 $1,004,702 $ 862,954
Retail 368,127 312,402 260,897
Total net sales 1,531,340 1,317,104 1,123,851
Franchise fees and royalties 285 -- --
Total revenue 1,531,625 1,317,104 1,123,851
Cost of goods sold 538,051 450,120 387,703
Gross profit 993,574 866,984 736,148
Labor & other related expenses 538,348 441,121 378,117
Other store operating expenses 248,208 197,098 162,675
Store operating income 207,018 228,765 195,356
General and administrative 82,006 63,648 57,798
Amortization of goodwill 2,169 208 --
Operating income 122,843 164,909 137,558
Interest expense 11,324 3,026 2,089
Interest income 1,319 2,847 1,988
Income before income taxes 112,838 164,730 137,457
Provision for income taxes 42,653 60,594 50,859
Net income $ 70,185 $104,136 $ 86,598
Net earnings per share - basic $1.16 $1.68 $1.42
Net earnings per share - diluted $1.16 $1.65 $1.41
</TABLE>
See notes to consolidated financial statements.
<TABLE>
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
<CAPTION>
(In thousands except per share data)
Additional Total
Common Paid-In Retained Treasury Shareholders'
Stock Capital Earnings Stock Equity
<S> <C> <C> <C> <C> <C>
Balances at August 2, 1996 $30,297 $202,951 $332,973 -- $566,221
Cash dividends declared
- $.025 per share -- -- (1,522) -- (1,522)
Exercise of stock options 236 7,288 -- -- 7,524
Tax benefit realized upon
exercise of stock options -- 1,611 -- -- 1,611
Net income -- -- 86,598 -- 86,598
Balances at August 1, 1997 30,533 211,850 418,049 -- 660,432
Cash dividends declared
- $.020 per share -- -- (1,287) -- (1,287)
Exercise of stock options 576 24,677 -- -- 25,253
Tax benefit realized upon
exercise of stock options -- 4,340 -- -- 4,340
Issuance of stock for
acquisition 131 10,369 -- -- 10,500
Net income -- -- 104,136 -- 104,136
Balances at July 31, 1998 31,240 251,236 520,898 -- 803,374
Cash dividends declared
- $.015 per share -- -- (955) -- (955)
Exercise of stock options 21 1,244 -- -- 1,265
Tax benefit realized upon
exercise of stock options -- 609 -- -- 609
Purchases of treasury stock -- -- -- $(83,471) (83,471)
Reduction in par value of
common stock (30,635) 30,635 -- -- --
Net income -- -- 70,185 -- 70,185
Balances at July 30, 1999 $ 626 $283,724 $590,128 $(83,471) $791,007
</TABLE>
See notes to consolidated financial statements.
<TABLE>
CONSOLIDATED STATEMENT OF CASH FLOWS
<CAPTION>
(In thousands)
Fiscal years ended
July 30, July 31, August 1,
1999 1998 1997
<S> <C> <C> <C>
Cash flows from operating activities:
Net income $ 70,185 $104,136 $ 86,598
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization 53,838 43,434 35,735
(Gain) loss on disposition of property
and equipment (259) 227 135
Changes in assets and liabilities,
net of effects from acquisition:
Receivables (2,270) (356) (2,033)
Inventories (8,083) (17,901) (11,799)
Prepaid expenses (1,516) (725) (3,222)
Other assets (5,814) (1,109) (436)
Accounts payable 25,104 10,196 (3,143)
Taxes withheld and accrued 3,316 3,640 1,494
Income taxes payable 798 (1,780) (1,694)
Accrued employee compensation (2,759) 1,818 6,727
Accrued employee benefits 5,754 1,860 269
Other accrued expenses (1,256) 1,345 59
Deferred income taxes 3,886 6,013 15,505
Net cash provided by
operating activities 140,924 150,798 124,195
Cash flows from investing activities:
Purchase of short-term investments -- -- (603)
Proceeds from maturities of
short-term investments -- 1,666 4,237
Purchase of property and
equipment (164,718) (180,599) (148,649)
Cash paid for acquisition, net
of cash acquired (182,392) (1,886) --
Proceeds from sale of property and
equipment 3,383 3,141 3,299
Net cash used in investing
activities (343,727) (177,678) (141,716)
Cash flows from financing activities:
Proceeds from issuance of
long-term debt 355,000 -- 50,000
Proceeds from exercise of
stock options 1,265 25,253 7,524
Tax benefit realized upon
exercise of stock options 609 4,340 1,611
Principal payments under
long-term debt, capital lease
obligations and non-compete agreement (113,976) (3,766) (4,130)
Treasury stock purchases (83,471) -- --
Dividends on common stock (955) (1,287) (1,522)
Net cash provided by
financing activities 158,472 24,540 53,483
Net (decrease) increase in cash
and cash equivalents (44,331) (2,340) 35,962
Cash and cash equivalents,
beginning of year 62,593 64,933 28,971
Cash and cash equivalents,
end of year $ 18,262 $ 62,593 $ 64,933
Supplemental disclosures of cash flow information:
Cash paid during the year for:
Interest $ 11,742 $ 4,748 $ 3,349
Income taxes 37,846 52,690 35,664
Supplemental schedule of noncash investing and
financing activities:
</TABLE>
On February 16, 1999, the Company acquired all of the capital
stock of Logan's Roadhouse, Inc. for cash of $24 per share or
approximately $188,039. In conjunction with the acquisition,
liabilities were assumed as follows:
Fair value of assets acquired $109,367
Goodwill 101,172
Cash paid for the capital stock (188,039)
---------
Liabilities assumed $ 22,500
==========
On April 1, 1998, the Company acquired all of the capital stock
of Carmine's Prime Meats, Inc. for cash of $2,500 and common stock
of $10,500. In conjunction with the acquisition, liabilities were
assumed as follows:
Fair value of assets acquired $ 1,185
Goodwill 12,450
Cash paid for the capital stock (2,500)
Common stock issued for the capital stock (10,500)
---------
Liabilities assumed $ 635
==========
See notes to consolidated financial statements.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands except share and per share data)
1. DESCRIPTION OF THE BUSINESS
CBRL Group, Inc. (the "Company") is principally engaged in
the operation and development of the Cracker Barrel Old Country
Store(R), Logan's Roadhouse(R) and Carmine Giardini's Gourmet
Market(TM) and La Trattoria Ristorante concepts. On November 26,
1998, the shareholders approved the tax-free reorganization of
Cracker Barrel Old Country Store, Inc. to a holding company
structure by approving the merger of CBRL Acquisition Corp., a
wholly-owned subsidiary of CBRL Group, Inc., with and into Cracker
Barrel Old Country Store, Inc. effective on December 31, 1998.
Immediately prior to the merger, CBRL Group, Inc. was a wholly-
owned subsidiary of Cracker Barrel Old Country Store, Inc. At the
effective date of the merger, each $.50 par value share of Cracker
Barrel Old Country Store, Inc. Common Stock was converted into a
share of $.01 par value Common Stock of CBRL Group, Inc. As a
result of the reorganization, CBRL Group, Inc. became the parent
company. CBRL Group, Inc. Common Stock is traded on the Nasdaq
Stock Market (National Market) under the symbol CBRL, formerly
utilized by Cracker Barrel Old Country Store, Inc. Also as a
result, the Company has 400,000,000 shares of $.01 par value
Common Stock authorized and 100,000,000 shares of $.01 par value
Preferred Stock authorized. The conversion of $.50 par value
Common Stock of Cracker Barrel Old Country Store, Inc. for $.01
par value Common Stock of CBRL Group, Inc. did not affect any of
the pre-existing rights of shareholders. The difference in par
value has been recorded as an increase of $30,365 to Additional
Paid-in Capital and a decrease to Common Stock by the same amount.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Fiscal year - The Company's fiscal year ends on the Friday
nearest July 31st and each quarter consists of thirteen weeks.
Principles of consolidation - The consolidated financial
statements include the accounts of the Company and its
subsidiaries, all of which are wholly owned. All significant
intercompany transactions and balances have been eliminated.
Cash and cash equivalents - The Company's policy is to
consider all highly liquid investments purchased with an original
maturity of three months or less to be cash equivalents. Cash
equivalents consist primarily of auction preferred stocks and
commercial paper. The carrying value of these instruments
approximates market value due to their very short maturities.
Outstanding but unpresented checks totaling $19,582 at July 30,
1999 were included in accounts payable. Upon presentation for
payment, they will be funded through available cash balances or
the Company's bank revolving credit facility.
Inventories - Inventories are stated at the lower of cost or
market. Cost of restaurant inventory is determined by the
first-in, first-out (FIFO) method. Cost of retail inventory is
determined by the retail method.
Start-up costs - Start-up costs of a new store are expensed
in the month in which the store opens.
Property and equipment - Property and equipment are stated at
cost. For financial reporting purposes depreciation and
amortization on these assets are computed by use of the
straight-line and double-declining balance methods over the
estimated useful lives of the respective assets, as follows:
Years
Buildings and improvements 15-45
Buildings under capital leases 20-25
Restaurant and other equipment 3-10
Leasehold improvements 5-35
Accelerated depreciation methods are generally used for
income tax purposes.
Interest is capitalized in accordance with SFAS No. 34,
"Capitalization of Interest Costs." Capitalized interest was
$1,827, $1,955 and $2,093 for fiscal years 1999, 1998 and 1997,
respectively.
Gain or loss is recognized upon disposal of property and
equipment, and the asset and related accumulated depreciation and
amortization amounts are removed from the accounts.
Maintenance and repairs, including the replacement of minor
items, are charged to expense, and major additions to property and
equipment are capitalized.
Advertising - The Company generally expenses the costs of
producing and communicating advertising the first time the
advertising takes place. Net advertising expense was $41,230,
$30,484 and $25,178 for the fiscal years 1999, 1998 and 1997,
respectively.
Insurance - The Company retains a significant portion of the
risk for its workers' compensation, employee health insurance,
general liability, and property coverages. Accordingly,
provisions are made for the Company's estimates of discounted
future claim costs for such risks. To the extent that subsequent
claim costs vary from those estimates, current earnings are
charged or credited.
Goodwill - Goodwill represents the excess of the cost over
the net tangible and identifiable intangible assets of acquired
businesses, is stated at cost and is amortized, on a straight-line
basis, over the estimated future periods to be benefited (20-30
years). On an annual basis, the Company reviews the
recoverability of goodwill based primarily upon an analysis of
undiscounted cash flows from the acquired businesses. Accumulated
amortization was $2,376 and $208 at July 30, 1999 and July 31,
1998, respectively.
Income taxes - The Company accounts for income taxes in
accordance with SFAS No. 109, "Accounting for Income Taxes."
Employer tax credits for FICA taxes paid on tip income are
accounted for by the flow-through method. Deferred income taxes
reflect the net tax effects of temporary differences between the
carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes. (See Note
8.)
Earnings per share - In February 1997, the Financial
Accounting Standards Board ("FASB") issued SFAS No. 128, "Earnings
Per Share," which requires presentation of basic and diluted
earnings per share. Basic earnings per share is computed by
dividing income available to common shareholders by the weighted
average number of common shares outstanding for the reporting
period. Diluted earnings per share reflects the potential
dilution that could occur if securities, options or other
contracts to issue common stock were exercised or converted into
common stock. As required, the Company adopted the provisions of
SFAS No. 128 in the quarter ended January 30, 1998. All prior
year weighted average and per share information was restated in
accordance with SFAS No. 128. Outstanding stock options issued by
the Company represent the only dilutive effect reflected in
diluted weighted average shares. Weighted average basic shares
were 60,328,593, 61,832,435 and 60,823,917 for 1999, 1998 and
1997, respectively. Weighted average diluted shares were
60,610,288, 63,027,542 and 61,456,300 for 1999, 1998 and 1997,
respectively.
Comprehensive income In June 1997, the FASB issued SFAS No.
130, "Reporting Comprehensive Income." SFAS No. 130, which is
effective for fiscal 1999, establishes standards for the reporting
and display of comprehensive income and its components.
Comprehensive income is defined as the change in equity of a
business enterprise during a period from transactions and other
events and circumstances from non-owner sources. Comprehensive
income for fiscal 1999, 1998 and 1997 is equal to net income as
reported.
Stock-based compensation - SFAS No. 123, "Accounting for
Stock-Based Compensation," encourages, but does not require,
companies to adopt the fair value method of accounting for stock-
based employee compensation. The Company has chosen to continue
to account for stock-based employee compensation in accordance
with Accounting Principles Board Opinion No. 25, "Accounting for
Stock Issued to Employees," and related Interpretations.(See Note
6.)
Segment Reporting In June 1997, the FASB issued SFAS No.
131, "Disclosure About Segments of an Enterprise and Related
Information." SFAS No. 131 supersedes SFAS No. 14, "Financial
Reporting for Segments of a Business Enterprise" and requires that
a public company report annual and interim financial and
descriptive information about its reportable operating segments.
Operating segments, as defined, are components of an enterprise
about which separate financial information is available that is
evaluated regularly by the chief operating decision maker in
deciding how to allocate resources and in assessing performance.
SFAS No. 131 allows aggregation of similar operating segments into
a single operating segment if the businesses are considered
similar under the criteria established by SFAS No. 131. The
Company adopted SFAS No. 131 in fiscal 1999. The Company
primarily operates restaurants under the Cracker Barrel Old
Country Store(R) and Logan's Roadhouse(R) brands. These two
brands have similar investment criteria, customer demographics and
economic and operating characteristics. Therefore, the Company has
one reportable operating segment.
Use of estimates The preparation of the consolidated
financial statements in conformity with generally accepted
accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and
liabilities and the disclosure of contingent assets and
liabilities at the date of the consolidated financial statements
and the reported amounts of revenues and costs and expenses during
the reporting period. Actual results could differ from those
estimates.
Recent accounting pronouncements not yet adopted - In June
1998, SFAS No. 133, "Accounting for Derivative Instruments and
Hedging Activities," was issued, but was subsequently amended by
SFAS No. 137. This statement specifies how to report and display
derivative instruments and hedging activities. This statement is
effective for fiscal years beginning after June 15, 2000. The
Company will adopt SFAS No. 137 in the first quarter of fiscal
2001. The Company is currently evaluating the effect of adopting
SFAS No. 133, but does not expect the adoption of SFAS No. 133 to
have a material effect on the Company's consolidated financial
statements. In March 1998, the American Institute of Certified
Public Accountants issued Statement of Position ("SOP") 98-1,
"Accounting for the Costs of Computer Software Developed or
Obtained for Internal Use." SOP 98-1 provides guidance on when
costs incurred for internal-use computer software are capitalized
or expensed and guidance on whether computer software is for
internal use. SOP 98-1 is effective for fiscal years beginning
after December 15, 1998 and applies to internal-use software costs
incurred for all projects, including those in progress upon
initial application of the SOP. In April 1998, SOP 98-5,
"Reporting of the Costs of Start-up Activities," was issued. SOP
98-5 requires that the Company expense start-up costs of new
stores as incurred rather than when the store opens as is the
Company's current practice. SOP 98-5 is effective for fiscal
years beginning after December 15, 1998. The Company does not
expect the adoption of either SOP 98-1 or SOP 98-5 to have a
material effect on the Company's consolidated financial
statements.
Reclassifications Certain reclassifications have been made
in the fiscal 1998 and 1997 consolidated financial statements to
conform to the classifications used in fiscal 1999.
3. INVENTORIES
Inventories were composed of the following at:
July 30, July 31,
1999 1998
Retail $ 77,662 $72,682
Restaurant 14,522 13,997
Supplies 8,271 4,930
-------- -------
Total $100,455 $91,609
======== =======
4. DEBT
Long-term debt consisted of the following at:
July 30, July 31,
1999 1998
Term Loan payable on or before
December 1, 2001(7.11% at July 30, 1999
and 6.36% at July 31, 1998) $ 50,000 $50,000
$300,000 Revolving Credit Facility payable
on or before December 31, 2003 (variable
interest rates, based on LIBOR, ranging
from 6.07% to 6.33% at July 30, 1999) 255,000 --
9.53% Senior Notes Payable in annual
installments of varying amounts from
January 15, 1994 to January 15, 2002,
with a final installment of $2,000
due January 15, 2003 9,500 12,000
Less current maturities 2,500 2,500
-------- ------
Long-term debt $312,000 $59,500
======== =======
The Term Loan and the Revolving Credit Facility contain certain
financial covenants as amended by the Company and its bank group on
July 29, 1999. The financial ratio covenants require that the
Company maintain a revised maximum lease adjusted funded debt to
EBITDAR (earnings before interest expense, income taxes,
depreciation and amortization and rent expense) ratio of 2.50 to
1.00 and a minimum interest coverage ratio (the ratio of earnings
before interest expense, income taxes and rent expense to interest
expense plus rent expense) of 3.00 to 1.00. The third financial
ratio covenant was not affected by this amendment and remains that
the Company maintain a maximum lease adjusted funded debt to total
capitalization ratio of .40 to 1.00.
The note agreements relating to the 9.53% Senior Notes placed
in January, 1991 in the original amount of $30,000 include, among
other provisions, requirements that the Company maintain a minimum
tangible net worth of $70,000. The agreements also contain certain
other restrictions related to the payment of cash dividends and the
purchase of treasury stock. Retained earnings not restricted under
the provisions of the agreements were approximately $414,900 at July
30, 1999.
Based on discounted cash flows of future payment streams,
assuming rates equivalent to the Company's incremental borrowing
rate on similar liabilities, the fair value of the Term Loan, the
$300,000 Revolving Credit Facility and the 9.53% Senior Notes
approximates carrying value as of July 30, 1999.
At July 30, 1999 and July 31, 1998, the Company was in
compliance with all covenants. At July 30, 1999, the Company had
$45,000 available under its $300,000 Revolving Credit Facility.
The aggregate maturities of long-term debt subsequent to July
30, 1999 are as follows:
Fiscal year
2000 $ 2,500
2001 3,000
2002 52,000
2003 2,000
2004 255,000
- ---------------------------------------------
Total $314,500
=============================================
5. COMMON STOCK
The Board of Directors granted certain executive officers
hired in fiscal 1999 and fiscal 1996 a total of 25,000 and 37,000
restricted shares, respectively, which vest over five years.
Another employee was granted 4,100 restricted shares during fiscal
1999, which vest over three years. One of the executive officers
hired in fiscal 1996 left the Company in fiscal 1999 and forfeited
12,800 restricted shares. The Company's compensation expense for
these restricted shares was $135, $150 and $150 in fiscal 1999, 1998
and 1997, respectively. The weighted average fair value of the
restricted shares granted during fiscal 1999 was $24.24 per share.
There were 31,100, 22,200 and 29,600 outstanding restricted shares
at July 30, 1999, July 31, 1998 and August 1, 1997, respectively.
6. STOCK OPTION PLANS
The Company's employee stock option plans are administered by the
Stock Option Committee (the "Committee"). Members of the Committee
are appointed by the Board of Directors and consist of members of
the Board of Directors. The Committee is authorized to determine,
at time periods within its discretion and subject to the direction
of the Board, which employees shall be granted options, the number
of shares covered by the options granted to each, and within
applicable limits, the terms and provisions relating to the exercise
of such options.
The Committee is currently authorized to grant options to purchase
an aggregate of 17,525,702 shares of the Company's Common Stock
under all employee stock option plans. The option price per share
under the employee stock option plans must be at least 100% of the
fair market value of a share of the Company's Common Stock based on
the closing price on the day preceding the day the option is
granted. Options are generally exercisable each year on a
cumulative basis at a rate of 33% of the total number of shares
covered by the option beginning one year from the date of grant,
expire ten years from the date of grant and are non-transferable.
At July 30, 1999, there were 3,564,783 shares of unissued Common
Stock reserved for issuance under the employee stock option plans.
In fiscal 1989, the Board of Directors adopted the 1989 Non-employee
Plan ("Directors Plan") for non-employee directors. The stock
options were granted with an exercise price equal to the fair market
value of the Company's Common Stock as of the date of grant and
expire one year from the retirement of the director from the Board.
An aggregate of 1,518,750 shares of the Company's Common Stock is
authorized to be issued under this plan. Due to the overall plan
limit, no shares have been granted under this plan since fiscal
1994.
A summary of the status of the Company's stock option plans for
fiscal 1999, 1998 and 1997, and changes during those years is
presented below:
<TABLE>
<CAPTION>
(Shares in thousands) 1999 1998 1997
Weighted- Weighted- Weighted-
Average Average Average
Fixed Options Shares Price Shares Price Shares Price
<S> <C> <C> <C> <C> <C> <C>
Outstanding at
beginning of year 5,816 $24.18 5,647 $21.90 5,342 $21.34
Granted 2,888 23.24 1,601 31.00 1,297 22.80
Exercised (107) 10.82 (1,146) 22.40 (464) 16.14
Forfeited or canceled (883) 24.83 (286) 24.40 (528) 23.51
- ----------------------------------------------------------------------------
Outstanding at
end of year 7,714 23.94 5,816 24.18 5,647 21.90
============================================================================
Options exercisable
at year-end 3,867 23.04 3,453 21.76 3,751 22.13
Weighted-average fair
value per share of
options granted
during the year $10.32 $12.89 $13.52
</TABLE>
The following table summarizes information about fixed
stock options outstanding at July 30, 1999:
<TABLE>
(Shares in thousands)
<CAPTION>
Options Outstanding Options Exercisable
Number Weighted-Average Weighted- Number Weighted-
Range of Outstanding Remaining Average Exercisable Average
Exercise Prices at 7/30/99 Contractual Life Exercise Price at 7/30/99 Exercise Price
<S> <C> <C> <C> <C> <C>
$ 5.38 - 10.00 252 1.05 $ 6.58 252 $ 6.58
10.01 - 20.00 1,770 6.99 18.16 980 18.08
20.01 - 30.00 4,412 6.88 25.21 2,208 25.57
30.01 31.75 1,280 8.16 31.01 427 31.01
- ---------------------------------------------------------------------------------------
5.38 31.75 7,714 6.93 23.94 3,867 23.04
========================================================================================
</TABLE>
Had the fair value of options granted under these plans
beginning in fiscal 1996 been recognized as compensation expense on
a straight-line basis over the vesting period of the grant, the
Company's net earnings and earnings per share would have been
reduced to the pro forma amounts indicated below:
1999 1998 1997
Net income:
As reported $70,185 $104,136 $86,598
Pro forma 58,831 95,442 76,767
Net earnings per share:
As reported - diluted 1.16 1.65 1.41
Pro forma - diluted .97 1.51 1.25
The pro forma effect on net income for 1999, 1998 and 1997 is not
representative of the pro forma effect on net income in future years
because it does not take into consideration pro forma compensation
expense related to grants made prior to 1996.
The fair value of each option grant is estimated on the date of
grant using the Black-Scholes option-pricing model with the
following weighted-average assumptions used for grants in fiscal
1999, 1998 and 1997: dividend yield of .1% for all years, expected
volatility of 38, 36 and 35 percent, respectively; risk-free
interest rate ranges of 4.5% to 5.9%, 5.8% to 6.0% and 6.3% to 6.7%
and expected lives of six, five and six years, respectively.
The Company recognizes a tax deduction upon exercise of non-
qualified stock options in an amount equal to the difference between
the option price and the fair market value of the common stock.
These tax benefits are credited to Additional Paid-In Capital.
7. ACQUISITIONS
On February 16, 1999, the Company acquired all of the capital
stock of Logan's Roadhouse, Inc. for cash of $24 per share or
approximately $188,039, excluding transaction costs. The
acquisition has been accounted for using the purchase method of
accounting, and accordingly, the purchase price has been allocated
to the assets purchased and the liabilities assumed based upon the
fair values at the date of acquisition. The excess of the purchase
price over the fair value of the net assets acquired was $101,172
and has been recorded as goodwill, which is being amortized on a
straight-line basis over its estimated useful life, 30 years. The
amount of goodwill amortization in 1999 was $1,546.
The net purchase price was allocated as follows:
Current assets, net of cash acquired $ 5,813
Property and equipment 97,621
Other assets 286
Goodwill 101,172
Liabilities assumed (22,500)
-------------------------------------------------------------
Purchase price, net of cash received $182,392
============================================================
The operating results of this acquired business have been
included in the consolidated statement of income from the date of
acquisition. On the basis of a proforma consolidation of the
results of operations as if the acquisition had taken place at the
beginning of fiscal 1998, rather than at February 16, 1999,
consolidated revenue, pretax income, net income and earnings per
share for fiscal 1998 and 1999 are shown in the table below. Such
proforma amounts are not necessarily indicative of what the actual
consolidated results of operations might have been if the
acquisition had been effective at the beginning of fiscal 1998.
Fiscal years ended
July 30, 1999 July 31, 1998
Consolidated revenue $1,583,628 $1,399,225
Pretax income 111,577 161,330
Net income 68,767 100,746
Earnings per share:
Basic 1.14 1.63
Diluted 1.13 1.60
On April 1, 1998, the Company acquired all of the capital stock
of Carmine's Prime Meats, Inc. for cash of $2,500 and common stock
of $10,500. The acquisition has been accounted for using the
purchase method of accounting, and accordingly, the purchase price
has been allocated to the assets purchased and the liabilities
assumed based upon fair values at the date of acquisition. The
excess of the purchase price over the fair value of the net assets
acquired was $12,450 and has been recorded as goodwill, which is
being amortized on a straight-line basis over its estimated useful
life, 20 years. The amounts of goodwill amortization in 1999 and
1998 were $623 and $208, respectively.
The net purchase price was allocated as follows:
Current assets, other than cash acquired $ 439
Property and equipment 117
Other assets 15
Goodwill 12,450
Liabilities assumed (635)
----------------------------------------------------
Purchase price, net of cash received $12,386
====================================================
The operating results of this acquired business have been
included in the consolidated statement of income from the date of
the acquisition and proforma consolidation of the results of
operations would not have been materially different from the
reported amounts for fiscal 1997 and 1998. Such proforma amounts
are not necessarily indicative of what the actual consolidated
results of operations might have been if the acquisition had been
effective at the beginning of fiscal 1997.
8. INCOME TAXES
Deferred income taxes reflect the net tax effects of temporary
differences between the carrying amounts of assets and liabilities
for financial reporting purposes and the amounts used for income tax
purposes.
Significant components of the Company's net deferred tax
liability consisted of the following at:
July 30, July 31,
1999 1998
Deferred tax assets:
Financial accruals without
economic performance $ 9,706 $ 7,606
Other 4,772 2,487
- -----------------------------------------------------------------
Deferred tax assets 14,478 10,093
- ----------------------------------------------------------------
Deferred tax liabilities:
Excess tax depreciation over book 31,308 24,575
Other 10,632 10,107
- ----------------------------------------------------------------
Deferred tax liabilities 41,940 34,682
- ----------------------------------------------------------------
Net deferred tax liability $27,462 $24,589
=================================================================
The Company provided no valuation allowance against deferred
tax assets recorded as of July 30, 1999 and July 31, 1998, as the
"more-likely-than-not" valuation method determined all deferred
assets to be fully realizable in future taxable periods.
The components of the provision for income taxes for each of the
three fiscal years were as follows:
1999 1998 1997
Current:
Federal $32,534 $48,224 $30,398
State 6,233 6,357 4,956
Deferred 3,886 6,013 15,505
- ----------------------------------------------------------------
Total income tax provision $42,653 $60,594 $50,859
================================================================
A reconciliation of the provision for income taxes as reported
and the amount computed by multiplying the income before the
provision for income taxes by the U.S. federal statutory rate of 35%
was as follows:
1999 1998 1997
Provision computed at federal
statutory income tax rate $39,497 $57,655 $48,110
State and local income taxes,
net of federal benefit 3,103 3,212 3,753
Amortization of goodwill and
acquisition costs 770 73 --
Employer tax credits for FICA taxes
paid on tip income (2,281) (1,711) (1,403)
Other-net 1,564 1,365 399
- ------------------------------------------------------------------
Total income tax provision $42,653 $60,594 $50,859
=================================================================
9. COMMITMENTS AND CONTINGENCIES
The Company has been involved in various legal matters during
fiscal 1999 which arose in the ordinary course of business and are
being defended and handled in the ordinary course of business.
In May 1999, Cracker Barrel Old Country Store, Inc. was served
with a complaint filed as a collective action alleging violations of
the federal Fair Labor Standards Act. On July 30, 1999, the same
attorneys filed a lawsuit in Rome, Georgia on behalf of 12
individuals against Cracker Barrel Old Country Store, Inc. asserting
class claims of racial discrimination in employment. Cracker Barrel
Old Country Store, Inc. denies the claims and intends to vigorously
defend these lawsuits.
While the ultimate results of such matters cannot be determined
or predicted, management does not believe that these lawsuits will
have a material adverse effect on the Company's consolidated
financial statements.
The Company maintains insurance coverage for various aspects of
its business and operations. The Company has elected, however, to
retain a portion of losses that occur through the use of various
deductibles, limits and retentions under its insurance programs.
This situation may subject the Company to some future liability for
which it is only partially insured, or completely uninsured. The
Company intends to mitigate any such future liability by continuing
to exercise prudent business judgment in negotiating the terms and
conditions of its contracts.
As of July 30, 1999 the Company operates 23 Cracker Barrel
stores, 18 Logan's Roadhouse restaurants and both Carmine's units
from leased facilities and also leases certain land, office space
and advertising billboards. These leases have been classified as
either capital or operating leases in accordance with the criteria
contained in SFAS No. 13, "Accounting for Leases." The interest
rates for capital leases vary from 10% to 17%. Amortization of
capital leases is included with depreciation expense. A majority of
the Company's lease agreements provide for renewal options and some
of these options contain escalation clauses. Certain store leases
provide for contingent lease payments based upon sales volume in
excess of specified minimum levels.
The following is a schedule by years of future minimum lease
payments under capital leases together with the present value of the
minimum lease payments as of July 30, 1999:
Fiscal year
2000 $ 371
2001 303
2002 197
2003 147
2004 147
Later years 400
- ----------------------------------------------------------------
Total minimum lease payments 1,565
Less amount representing interest 463
- ----------------------------------------------------------------
Present value of minimum lease payments 1,102
Less current portion 200
- ----------------------------------------------------------------
Long-term portion of capital lease obligations $ 902
================================================================
The following is a schedule by years of the future minimum
rental payments required under noncancelable operating leases as of
July 30, 1999:
Fiscal year
2000 $15,344
2001 7,291
2002 5,660
2003 4,363
2004 4,313
Later years 48,262
- ----------------------------------------------------------------
Total $85,233
================================================================
Rent expense under operating leases for each of the three
fiscal years was:
Minimum Contingent Total
1999 $20,343 $726 $21,069
1998 16,299 779 17,078
1997 14,163 787 14,950
10. EMPLOYEE SAVINGS PLAN
The Company has an employee savings plan, which provides for
retirement benefits for eligible employees. The plan is funded by
elective employee contributions up to 16% of their compensation and
the Company matches 25% of employee contributions for each
participant up to 6% of the employee's compensation. The Company
contributed $1,356, $1,250 and $1,188 for fiscal 1999, 1998 and
1997, respectively.
11. SUBSEQUENT EVENT
Shareholder Rights Plan
On September 7, 1999, the Board of Directors authorized and declared
a dividend of one Right on each outstanding share of the Company's
$.01 par value Common Stock. Under certain conditions, each Right
may be exercised to purchase shares of the Company's $.01 par value
Common Stock at an exercise price of $65.00. Each Right will be
adjusted under certain circumstances to allow purchase of the
Company's Common Stock with a market value equal to twice the $65.00
payment. The Right is evidenced by the Common Stock certificate and
automatically trades with the Common Stock certificate. The Right
is transferable apart from the Common Stock 10 days following a
public announcement that a person or group has acquired beneficial
ownership of 15% or more of the outstanding Common Stock, or 10
business days following the commencement or announcement of an
intention to make a tender or exchange offer resulting in beneficial
ownership by a person or group exceeding 30% of the Company's
outstanding Common Stock.
Once the threshold has been exceeded, or if the Company is acquired
in a merger or other business combination transaction, each Right
will entitle the holder, other than the acquiring person or group,
to purchase at the then current exercise price, stock of the Company
or the acquiring company having a market value of twice the exercise
price.
Each Right is nonvoting and expires on August 31, 2009, unless
redeemed by the Company, at a price of $.01, at any time prior to
the public announcement that a person or group has exceeded the
threshold.
12. QUARTERLY FINANCIAL DATA (UNAUDITED)
Quarterly financial data for fiscal 1999 and 1998 are
summarized as follows:
1st 2nd 3rd 4th
Quarter Quarter Quarter Quarter
1999
Total revenue $351,496 $367,927 $385,537 $426,665
Gross profit 232,735 228,469 255,957 276,413
Income before
income taxes 41,415 27,070 23,706 20,647
Net income 26,133 17,083 14,692 12,277
Net earnings per
share - diluted .42 .28 .25 .21
- -----------------------------------------------------------------
1998
Total revenue $312,755 $321,790 $317,364 $365,195
Gross profit 206,264 205,154 209,942 245,624
Income before
income taxes 37,553 32,080 39,154 55,943
Net income 23,733 20,274 24,745 35,384
Net earnings per
share - diluted .38 .32 .39 .56
- -----------------------------------------------------------------
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Shareholders' of CBRL Group, Inc.:
We have audited the accompanying consolidated balance sheet of CBRL
Group, Inc. and subsidiaries, formerly Cracker Barrel Old Country
Store, Inc., (the "Company") as of July 30, 1999 and July 31, 1998,
and the related consolidated statements of income, changes in
shareholders' equity, and cash flows for each of the three fiscal
years in the period ended July 30, 1999. These financial statements
are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, such consolidated financial statements present
fairly, in all material respects, the consolidated financial
position of the Company at July 30, 1999 and July 31, 1998, and the
results of its operations and its cash flows for each of the three
fiscal years in the period ended July 30, 1999 in conformity with
generally accepted accounting principles.
/s/ Deloitte & Touche LLP
Nashville, Tennessee
September 8, 1999
EXHIBIT 21.
Subsidiaries of the Registrant
The following is a list of the significant subsidiaries of the
Registrant as of July 30, 1999, all of which are wholly-owned:
State of
Parent Incorporation
CBRL Group, Inc. Tennessee
Subsidiaries
Cracker Barrel Old Country Store, Inc. Tennessee
Logan's Roadhouse, Inc. Tennessee
CBOCS Distribution, Inc. Tennessee
CBOCS Limited Partnership Michigan
CBOCS Michigan, Inc. Michigan
CBOCS West, Inc. Nevada
Rocking Chair, Inc. Nevada
Exhibit 22
[LOGO]
CBRL GROUP, INC.
305 Hartmann Drive
Lebanon, Tennessee 37087
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON TUESDAY, NOVEMBER 23, 1999
Notice is hereby given that the Annual Meeting of
Shareholders of CBRL Group, Inc. (the "Company") will be held on
Tuesday, November 23, 1999 at 10:00 a.m., local time, at the
offices of the Company, located at 305 Hartmann Drive, Lebanon,
Tennessee for the following purposes:
1. To elect 12 nominees for Director to serve on the Board
of Directors until the next annual meeting of shareholders and
until their successors are duly elected and qualified.
2. To approve the selection of Deloitte & Touche LLP as the
Company's independent auditors for the 2000 fiscal year.
3. To consider and take action on a shareholder proposal
requesting that the Board of Directors implement written non-
discriminatory policies relating to sexual orientation.
4. To transact any other business properly brought before
the meeting or any adjournment of the meeting.
Please refer to the Proxy Statement accompanying this notice
for a more complete statement regarding matters to be acted upon
at the Annual Meeting.
The Board of Directors has fixed the close of business on
September 24, 1999, as the record date for the purpose of
determining the shareholders entitled to notice of and to vote at
the Annual Meeting and any adjournment of the meeting.
By Order of the Board of Directors
Lebanon, Tennessee
October 26, 1999 James F. Blackstock, Secretary
YOUR REPRESENTATION AT THE MEETING IS IMPORTANT. TO ENSURE YOUR
REPRESENTATION, WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING,
PLEASE COMPLETE, DATE, SIGN AND RETURN THE ENCLOSED PROXY CARD.
SHOULD YOU DESIRE TO REVOKE YOUR PROXY, YOU MAY DO SO AS PROVIDED
IN THE ACCOMPANYING PROXY STATEMENT AT ANY TIME BEFORE IT IS
VOTED. IF YOU HAVE ANY QUESTIONS OR NEED ANY HELP IN VOTING YOUR
SHARES, PLEASE TELEPHONE JAMES F. BLACKSTOCK, SECRETARY, AT THE
COMPANY, 615.444.5533.
CBRL Group, Inc.
305 Hartmann Drive
Lebanon, Tennessee 37087
October 26, 1999
PROXY STATEMENT
This document constitutes the Proxy Statement of CBRL Group,
Inc. (the "Company") with respect to the Annual Meeting of its
Shareholders to be held on Tuesday, November 23, 1999. This Proxy
Statement is being furnished to holders of Company Common Stock in
connection with the solicitation of proxies by the Board of
Directors of the Company for use at the Annual Meeting to consider
and vote upon: (i) the election of 12 directors; (ii) the
approval of the appointment of auditors; (iii) a shareholder
proposal regarding non-discriminatory employment policies; and
(iv) any other business that properly comes before the Annual
Meeting or any adjournment of the meeting. Each copy of this
Proxy Statement mailed to the shareholders of the Company is
accompanied by a form of proxy for use at the Annual Meeting.
This Proxy Statement, the attached notice and the enclosed
form of proxy are first being mailed to shareholders of the
Company on or about October 26, 1999.
Date, Time and Place of Annual Meeting
The Annual Meeting will be held at the offices of the
Company, 305 Hartmann Drive, Lebanon, Tennessee at 10:00 a.m.
local time on Tuesday, November 23, 1999.
Record Date
Each of the 58,628,162 shares of Company Common Stock, $0.01
par value per share, outstanding on September 24, 1999, the record
date for the meeting (the "Record Date"), is entitled to one vote
on all matters coming before the meeting. Only shareholders of
record on the books of the Company at the close of business on
September 24, 1999 are entitled to notice of and to vote at the
meeting, either in person or by proxy.
Voting Requirements
A quorum must be present at the meeting for any business to be
conducted. The presence at the meeting, in person or by proxy, of
the holders of a majority of the shares of Common Stock
outstanding on the record date will constitute a quorum.
Abstentions and broker non-votes will be counted as present for
purposes of determining the existence of a quorum.
As of the Record Date, there were 58,628,162 shares of
Company Common Stock outstanding. Directors shall be elected by a
plurality of the votes cast in the election by the holders of
Company Common Stock represented and entitled to vote at the
Annual Meeting. Abstentions (or broker non-votes) will have no
effect in determining if a director receives a plurality of the
votes cast.
Assuming the existence of a quorum, every other proposal
submitted to the shareholders shall be approved if the votes cast
favoring the proposal exceed votes cast opposing it. Abstentions
from voting on issues other than the election of directors will
not be considered votes cast and will have the same effect as
broker non-votes. If you are the beneficial owner of shares held
in "street name" by a broker, your broker, as the record holder of
the shares, is required to vote those shares in accordance with
your instructions. If you do not give instructions to your
broker, your broker will nevertheless be entitled to vote the
shares with respect to "discretionary" items, routine matters such
as uncontested elections of directors and appointment of auditors,
but will not be permitted to vote your shares with respect to
"non-discretionary" items such as shareholder proposals or mergers
and acquisitions. In the case of non-discretionary items, the
affected shares will be treated as "broker non-votes." To avoid
giving them the effect of negative votes, broker non-votes are
disregarded for the purpose of determining the total number of
votes cast or entitled to vote with respect to a proposal.
Proxies and Revocation of Proxies
The shares represented by all properly executed proxies that
are sent to the Company will be voted as designated and each proxy
not designated will be voted: "FOR" all of the directors
nominated; "FOR" the approval of Deloitte & Touche LLP as the
Company's auditors for the 2000 fiscal year; and "AGAINST" the
shareholder proposal.
The cost of solicitation of proxies will be borne by the
Company, including expenses in connection with preparing,
assembling and mailing this Proxy Statement. The solicitation
will be made by mail, and may also be made by the Company's
officers or employees personally or by telephone or telegram. No
officers or employees of the Company will receive additional
compensation for soliciting proxies. The Company may reimburse
brokers, custodians and nominees for their expenses in sending
proxies and proxy material to beneficial owners. The Company
retains Corporate Communications, Inc., 523 Third Avenue South,
Nashville, Tennessee to assist in the management of the Company's
investor relations and other shareholder communications issues. As
part of its duties, Corporate Communications, Inc. may assist in
the solicitation of proxies. Corporate Communications, Inc.
receives a fee of approximately $2,000 per month, plus
reimbursement of out-of-pocket expenses.
As it has done previously, the Company will continue to
employ an independent tabulator to receive and tabulate the
proxies, and independent inspectors of election to certify the
results. The Company will also continue its practice of holding
the votes of all shareholders in confidence from Company
directors, officers and employees, except (i) to allow the
independent inspectors of election to certify the results of the
vote, (ii) as necessary to meet applicable legal requirements and
to assert or defend claims for or against the Company, (iii) in
case of a contested proxy solicitation, or (iv) when a shareholder
makes a written comment on the proxy card or otherwise
communicates his or her vote to management.
A shareholder of record who signs and returns a proxy in the
accompanying form may revoke the proxy at any time before the
designated proxy holder votes, by attending the Annual Meeting and
choosing to vote in person, by filing with the Secretary of the
Company a written revocation or by duly executing a written proxy
bearing a later date. Unless duly revoked, the shares represented
by the proxy will be voted at the Annual Meeting.
PROPOSAL 1 -- ELECTION OF DIRECTORS
The Company's Bylaws provide that the Board of Directors,
which consisted initially of 13 directors, must consist of not
less than 5 directors, and a majority of the Board of Directors is
empowered to establish the size of the Board. The Board of
Directors, at its regular meeting on September 30, 1999, has
established the Board size at 12 directors. Accordingly, proxies
cannot be voted for more than 12 nominees. The terms of all
present directors will expire upon the election of new directors
at the Annual Meeting. The Board of Directors proposes the
election of the nominees listed below to serve until the next
Annual Meeting and until their successors are duly elected and
qualified and have commenced serving. Eleven of the nominees are
presently directors of the Company and were elected at the Annual
Meeting held on November 24, 1998. The twelfth nominee, Michael A.
Woodhouse, presently serves as Executive Vice President and Chief
Operating Officer of the Company, and in order to fill the vacancy
resulting from Mr. Magruder's resignation, he was elected a
director by the action of the Board of Directors on September 30,
1999.
Unless contrary written instructions are received, it is
intended that the shares represented by proxies solicited by the
Board of Directors will be voted in favor of the election of all
named nominees as directors. If for any reason any nominee is
unable to serve, the persons named in the proxy have advised that
they will vote for a substitute nominee as proposed by the
Company's Board of Directors. Each nominee has consented to act
as a director, if elected, and the Board of Directors has no
reason to expect that any nominee will fail to be a candidate at
the meeting. Therefore, it does not at this time have any
substitute nominees under consideration. The information relating
to the 12 nominees set forth below has been furnished to the
Company by the named individuals.
Directors shall be elected by a plurality of the votes cast
by the shares entitled to vote in the election at the Annual
Meeting. The Board of Directors recommends that shareholders vote
"FOR" the nominees listed below. Proxies, unless they contain
contrary written instructions, will be voted "FOR" the listed
nominees.
Name, Age, Position First Became Business Experience During
with the Company a Director the Past Five Years
- --------------------- -------------- --------------------------
James C. Bradshaw, 68 1970 Practicing physician,
Director Lebanon, Tennessee
Robert V. Dale, 62 1986 Retired; President of
Diretor Windy Hill Pet Food
Company, Nashville,
Tennessee from March
1995 until the sale of
the company in July
1998; Partner in PFB
Partnership, Nashville,
Tennessee from August
1994 to March 1995;
President of Martha
White Foods, Inc.,
Nashville, Tennessee
from October 1985 to
August 1994
Dan W. Evins, 64 1970 Chairman, President and
Director, Chief Executive Officer
Chairman, of the Company; Chairman
President and and Chief Executive
Chief Executive Officer from August 1995
Officer (1) to April 1999; Chairman,
President and CEO of the
Company from 1970 until
August 1995; Member of
Board of Directors of
Clayton Homes, Inc.
Edgar W. Evins, 67 1970 Retired in June 1987;
Director (1) President, DeKalb County
Bank and Trust Company,
Alexandria, Tennessee
from 1958 until June
1987
Robert C. Hilton, 62 1981 President of Autumn
Director Capital, Nashville,
Tennessee since August
1999; Chairman,
President and CEO of
Home Technology
Healthcare, Inc.,
Nashville, Tennessee
from October 1991 to
August 1999.
Charles E. Jones, Jr., 54 1981 President, Corporate
Director Communications, Inc., an
investor/shareholder
communications and
public relations firm,
Nashville, Tennessee
Charles T. Lowe, Jr., 67 1970 Property developer and
Director investor; owner and
principal in privately-
held yacht construction
and sales companies and
warehouse company;
Retired in 1993 as
President of Travel
World, Inc., a travel
agency, Lebanon,
Tennessee
B. F. Lowery, 62 1971 Attorney; President and
Director Chairman, LoJac
Companies, asphalt
paving, highway
construction and
building materials
supplier and contractor,
Lebanon, Tennessee
Gordon L. Miller, 65 1974 Dentist, Lebanon,
Director Tennessee
Martha M. Mitchell, 59 1993 Senior Vice President
Director (since January 1987) and
Partner (since January
1993) of Fleishman-
Hillard, Inc., an
international
communications
consulting and public
relations firm, St.
Louis, Missouri
Jimmie D. White, 58 1993 Retired on December 11,
Director 1995; Senior Vice
President -Finance and
Chief Financial Officer
of the Company from 1985
to 1995
Michael A. Woodhouse, 54 1999 Executive Vice President
Director, Executive and Chief Operating
Vice President and Officer since July,
Chief Operating Officer 1999. Senior Vice
President and Chief
Financial Officer of
CBRL Group, Inc.,
September, 1998 - July,
1999. Senior Vice
President Finance and
CFO of Cracker Barrel
Old Country Store, Inc.,
December, 1995 -
September, 1998.
Dan W. Evins and Edgar W. Evins are brothers.
Certain Relationships and Related Transactions
The Company leases its store in Macon, Georgia, and
previously leased a store in Clarksville, Tennessee, from B. F.
("Jack") Lowery, a director of the Company. Under the terms of an
August 1981 agreement, Mr. Lowery purchased the land, constructed
the restaurant buildings and facilities to the Company's
specifications and leased each store to the Company for a 15-year
term. The Company vacated the Clarksville location during fiscal
year 1999. Until that location is leased to a new tenant, the
Company continues to pay rent on that site. The current
applicable annual rent for the Clarksville store is 12% of the
total initial cost of the land, building and improvements. The
annual rent for the Macon store is the greater of (i) 12% of the
total initial cost of the land, buildings and improvements, or
(ii) 5% of the total restaurant sales plus 3% of the gift shop
sales. In each case, taxes, insurance and maintenance are paid by
the Company. The Macon lease expires on June 1, 2001 with two 10-
year options remaining. During the fiscal year ended July 30,
1999, the Company paid a total of $358,521 in lease payments to
Mr. Lowery.
The Company uses the services of Corporate Communications,
Inc., a financial public relations firm in Nashville, Tennessee,
of which Charles E. Jones, Jr., a director of the Company, is
president and the major shareholder. During the past fiscal year,
the Company paid $24,000 to Corporate Communications, Inc. for
services and $414,439 for reimbursement of direct expenses
including design, preparation and distribution of the Company's
annual report, proxy materials, and quarterly reports.
The Company also uses the services of Fleishman Hillard,
Inc., a national public relations firm, in connection with its
product and service marketing efforts and in connection with
litigation response and general Company reputation public
relations activities. Martha M. Mitchell, a director, is a Senior
Partner in that firm. During the past fiscal year, the Company,
or its subsidiaries, paid $85,000 to Fleishman Hillard for its
consulting services, and $18,291 in reimbursement of direct
expenses.
The foregoing transactions were negotiated by the Company on
an arms-length basis, and management believes that these
transactions are fair and reasonable and on terms no less
favorable than those which could be obtained from unaffiliated
parties.
Committees and Meetings
During the fiscal year ended July 30, 1999, the Board of
Directors held 9 meetings. In addition, the Board of Directors
appointed a Special Committee to review the Cracker Barrel Old
Country Store, Inc. development process. That committee met once.
No incumbent director attended fewer than 75% of the total of all
meetings of the Board and all committees on which he or she served
in fiscal 1999.
Pursuant to Section 1.03 of the Company's Bylaws, the Board
of Directors may appoint, from its own membership, an Executive
Committee. The Board may determine the powers and duties of the
Executive Committee which may include "all the authority of the
Board of Directors, "except as expressly proscribed by applicable
law. The Board of Directors may also appoint other committees, and
during fiscal 1999, it appointed the following committees: Audit,
Compensation, Stock Option, Nominating.
The Executive Committee is currently composed of Robert V.
Dale, Dan W. Evins, William D. Heydel, Charles E. Jones, Jr., B.F.
("Jack") Lowery, Chairman, and Martha M. Mitchell. Generally, the
Executive Committee meets on a regular basis in months the Board
of Directors does not meet as a whole. It also meets at the call
of the Chairman of the Board, and it can be expected that the
Committee will meet from time to time during any fiscal year of
the Company when the timing of certain actions contemplated by the
Company makes it appropriate to convene the Executive Committee,
rather than the entire Board of Directors. The Executive
Committee met 3 times during the fiscal year ended July 30, 1999.
The Audit Committee is currently composed of Robert C.
Hilton, Chairman, Charles E. Jones, Jr., Gordon L. Miller and
Jimmie D. White. This committee, which met 2 times during the
fiscal year ended July 30, 1999, acts as the Board's liaison with
outside auditors, receives confidential and candid information
with respect to the status of the Company's financial condition
and the effectiveness of its internal controls with respect to
financial matters. This committee also reviews the Company's
internal accounting controls and systems, and the results of the
Company's annual audit and the Company's accounting policies and
any change in those policies.
The Compensation Committee is currently composed of Robert V.
Dale, Chairman, Edgar W. Evins, William D. Heydel and Robert C.
Hilton. This committee, which met 2 times during the fiscal year
ended July 30, 1999, reviews and recommends to the Board of
Directors the salaries, bonuses and other cash compensation of the
executive officers and other senior managers of the Company. The
Compensation Committee reviews management's performance,
particularly with respect to financial goals for the concluding
fiscal year, and the Committee reviews the Company's proposed
compensation plan for the upcoming fiscal year.
The Nominating Committee is currently composed of Robert V.
Dale, Chairman, Dan W. Evins, Robert C. Hilton, Charles E. Jones,
Jr., Charles T. Lowe, Jr. and B.F. ("Jack") Lowery. The
Nominating Committee meets once and reviews names and
qualifications of director nominees and makes recommendations to
the Board of Directors for a slate of nominees to serve as
directors prior to each Annual Meeting of shareholders. The
Nominating Committee will consider nominees recommended in writing
by shareholders who submit director nominations to the Company
prior to the deadline for shareholder proposals as further
described under "Proposals of Shareholders" later in this
document.
The Stock Option Committee is currently composed of James C.
Bradshaw, William D. Heydel, Chairman, and Martha M. Mitchell.
This committee, which met twice during the fiscal year ended July
30, 1999, reviews the Company's business plan with respect to
option grants and is responsible for the administration of the
Company's Incentive Stock Option Plan of 1982, its 1987 Stock
Option Plan and its current Amended and Restated Stock Option
Plan.
Director Compensation
The Company pays to each of its outside directors an annual
retainer of $20,000, plus $1,000 as a director's fee for each
Board meeting attended. Outside directors who are members of the
Executive Committee, Audit Committee, Compensation Committee,
Nominating Committee and Stock Option Committee receive a fee of
$1,000 for each committee meeting attended (except for 5 regular
Executive Committee meetings planned for each year for which the
members have waived additional fees and no meeting fees are
currently paid). The chairperson of these committees receives an
additional fee of $200 for each committee meeting attended. All
outside directors are reimbursed by the Company for out-of-pocket
expenses incurred in connection with attendance at meetings. No
director's fees are paid to directors who are also employees of
the Company.
INFORMATION CONCERNING THE COMPANY
General
The Company was incorporated under the laws of the State of
Tennessee on August 7, 1998, at the direction of the Company's
Board of Directors, to engage in the business of a holding company
to own one or more operating subsidiaries. The Company is the
parent of the following wholly-owned subsidiaries: Cracker Barrel
Old Country Store, Inc. (incorporated in 1969) and Logan's
Roadhouse, Inc. Each of the subsidiaries is a Tennessee
corporation. Through Cracker Barrel Old Country Store, Inc., the
Company also owns CPM Merger Corporation which operates the
Carmine Giardini's Gourmet Market and Italian restaurant business
in Florida.
The Company conducts its business from offices located at 106
Castle Heights Avenue North, and at 305 Hartmann Drive, Lebanon,
Tennessee 37087, telephone number 615.444.5533. The Company
Common Stock is traded over-the-counter and quoted on the Nasdaq
National Market under the symbol "CBRL."
Directors and Executive Officers
The Company's Board of Directors consists of 12 members.
The Directors and officers of the Company are:
Directors
James C. Bradshaw Robert C. Hilton Gordon L. Miller
Robert V. Dale Charles E. Jones, Jr. Martha M. Mitchell
Dan W. Evins Charles T. Lowe, Jr. Jimmie D. White
Edgar W. Evins B.F. ("Jack") Lowery Michael A. Woodhouse
Officers
Chairman, President and
Chief Executive Officer Dan W. Evins
Executive Vice President
and Chief Operating Officer Michael A. Woodhouse
Senior Vice President,
Chief Financial Officer and Treasurer Lawrence E. White
Vice President, General Counsel
and Secretary James F. Blackstock
Assistant Treasurer Patrick A. Scruggs
The Board of Directors as elected at the Annual Meeting of
Shareholders for which this Proxy Statement was prepared shall
serve as the Company's Board of Directors until the next annual
meeting and until their successors are duly elected and qualified
and confirmed. The officers of the Company will be elected by the
Board of Directors at the annual meeting of the Board of Directors
to be held immediately following the Annual Meeting.
Security Ownership of Certain Beneficial Owners and
Management
The Company's Common Stock was not beneficially owned,
directly or indirectly, by any 5% or greater shareholders as
reported to the Company by NASD, as of September 24, 1999.
The following information pertains to Company Common Stock
beneficially owned, directly or indirectly, by all directors and
nominees, by all named executive officers, and by all directors,
director nominees, and all executive officers as a group, as of
September 24, 1999. Unless otherwise noted, the named persons may
be contacted at the Company's executive offices and they have sole
voting and investment power with respect to the shares indicated.
<TABLE>
Class of Names of Amount and Nature of Percent Of Class
Stock Beneficial Owners Beneficial Ownership (1) (Common Stock)
- ----------- ---------------------- ------------------------ ----------------
<S> <C> <C> <C>
Common James F. Blackstock 22,467 *
James C. Bradshaw (2) 545,719 *
Robert V. Dale 79,416 *
Dan W. Evins 846,667 1.4%
Edgar W. Evins (3) 70,160 *
William D. Heydel (2) 542,827 *
Robert C. Hilton 101,299 *
Charles E. Jones, Jr. 102,761 *
Charles T. Lowe, Jr. (4) 903,796 1.5%
B. F. ("Jack") Lowery 240,125 *
Gordon L. Miller 167,167 *
Martha M. Mitchell 42,072 *
Jimmie D. White 23,340 *
Lawrence E. White (5) 0 *
Michael A. Woodhouse 83,167 *
All Officers and Directors
as a group (15 persons) 3,770,983 6.0%
*Less than one percent
</TABLE>
(1) Includes the following number of shares subject to options
exercisable by the named holders within 60 days:
James F. Blackstock 20,667 Charles T. Lowe, Jr. 66,734
James C. Bradshaw 142,670 B. F. ("Jack") Lowery 142,670
Robert V. Dale 66,734 Gordon L. Miller 66,734
Dan W. Evins 336,667 Martha M. Mitchell 41,422
Edgar W. Evins 66,734 Jimmie D. White 0
William D. Heydel 142,670 Lawrence E. White 0
Robert C. Hilton 92,046 Michael A. Woodhouse 76,667
Charles E. Jones, Jr. 92,046
All Officers and Directors as a group (15 persons) 1,354,461
The shares described in this note are deemed to be
outstanding for the purpose of computing the percentage of
outstanding Common Stock owned by each named individual and
by the group, but are not deemed to be outstanding for the
purpose of computing the percentage ownership of any other
person.
(2) Includes shares owned jointly with spouse, with whom voting
and investment power is shared: Dr. Bradshaw 403,049 and Mr.
Heydel 400,157.
(3) Includes 223 shares owned by Mr. Evins' wife in her SEP, for
which voting and investment power is shared.
Voting and investment power with respect to 43,491 shares is
shared by Mr. Lowe and his wife, the owner of these shares.
Mr. White joined the Company on September 27, 1999.
Report of the Compensation Committee and the Stock Option
Committee of the Board of Directors on Executive Compensation
The Company's compensation policies for the executive
officers and other senior management personnel of the Company and
its subsidiaries are administered by two committees of the Board
of Directors - the Compensation Committee and the Stock Option
Committee. All members of these committees are outside, non-
employee directors.
The primary components of executive compensation are base
salary, bonus and longer-term incentives such as stock options.
Total compensation is generally targeted to be competitive at not
less than the 75th percentile of the market for positions of
similar responsibilities. The Company considers it necessary and
appropriate to position compensation packages at these levels to
attract, retain and motivate executives and other key management
personnel with the essential qualifications for managing the
Company's operations and growth.
The Compensation Committee recommends to the Board of
Directors the salaries and bonus plan for the executive officers.
The Stock Option Committee administers the stock option plans
pursuant to which all employee stock options are granted.
Section 162(m) of the Internal Revenue Code limits
deductibility of certain compensation for the chief executive
officer and the four other highest paid executive officers to
$1,000,000 per year, unless certain requirements are met. The
policy of the Company is generally to design its compensation
plans and programs to ensure full deductibility. The Compensation
Committee and the Stock Option Committee attempt to balance this
policy with compensation programs designed to motivate management
to maximize shareholder wealth. If these committees determine
that the interests of the shareholders are best served by the
implementation of compensation policies that are affected by
Section 162(m), Company policies do not restrict these committees
from exercising discretion in approving compensation packages even
though that flexibility may result in certain non-deductible
compensation expenses.
Base Salary. In setting the fiscal 1999 base salary for each
executive officer, the Compensation Committee reviewed the then-
current salary for each of the officers in relation to average
salaries within the industry for comparable areas of
responsibility as presented in a report prepared for the Company
by independent executive compensation consultants. In addition,
the Compensation Committee considered the contribution made by
each executive officer during fiscal 1998, as reported by the
Chief Executive Officer, and it considered salary recommendations
made by the Chief Executive Officer based on information prepared
by management, for the executive officers other than the Chairman
and Chief Executive Officer, Dan W. Evins. Except for
recommendations from management, the Compensation Committee
employed procedures similar to those used for each of the other
executive officers to determine the fiscal 1999 salary for Dan W.
Evins.
Bonus. The Compensation Committee has determined that the
financial performance of the Company should be a significant
factor in rewarding its executive officers. Therefore, in July of
each year, the Compensation Committee reviews the expected
financial performance of the Company for the concluding fiscal
year and considers the internal budget established for the next
fiscal year in setting certain financial goals and criteria for
executive officer bonuses.
In fiscal 1999, the Company and its Cracker Barrel Old
Country Store, Inc. subsidiary operated pursuant to a Management
Incentive Plan affecting executive officers and senior managers.
The purpose of the Management Incentive Plan is to link individual
job performance and resulting compensation to the financial
performance of the Company. This ensures that all participants are
encouraged to achieve individual goals while remaining focused on
the Company's overall financial results. The Plan is also designed
to ensure that participants' financial interests remain directly
tied to those of the Company's shareholders. A participant's
target bonus percentage varies based on salary grade level.
Generally, bonus awards are calculated based on the following
factors: (i) Company financial results compared to the Company's
business plan, (ii) the individual's performance against his or
her stated goals, (iii) the individual's fiscal year base salary
amount, and (iv) the individual's target bonus percentage. Maximum
bonus percentages available to executive officers range from 90%
to 225% of base salary (225% for Mr. Evins, 180% for Mr.
Woodhouse, and 90% for Mr. Blackstock). No cash bonuses were paid
for fiscal 1999 to Mr. Evins, Mr. Woodhouse or Mr. Blackstock.
Stock Options. In contrast to salary and bonus awards, which
are generally for past work performance, stock options are
intended to engender loyalty and commitment to the Company and its
subsidiaries and to encourage future performance which contributes
to stock price appreciation. They are granted at an exercise
price which is equal to the closing market price of Company Common
Stock on the day before the date of grant, and therefore have no
realizable value until the stock trading price increases. The
Stock Option Committee has generally granted nonqualified stock
options annually. In recent years, the Committee has extended
option grants down into the organization as far as the top hourly
level positions in the stores.
Compensation Committee Stock Option Committee
---------------------- ----------------------
Robert V. Dale, Chairman William D. Heydel, Chairman
Edgar W. Evins Dr. James C. Bradshaw
William D. Heydel Martha M. Mitchell
Robert C. Hilton
Stock Performance Graph
The following graph sets forth the yearly percentage change
in the cumulative total shareholder return on Company Common Stock
during the preceding five fiscal years, ended July 30, 1999,
compared with the Standard & Poor's 400 MidCap Index and a Total
Return Index comprised of all NASDAQ companies with the same two-
digit SIC (Standard Industrial Classification) code (58 - Eating
and Drinking Places) as the Company.
1994 1995 1996 1997 1998 1999
---- ---- ---- ---- ---- ----
CBRL 100 90 92 123 131 65
NASDAQ (SIC Code 58XX) 100 120 113 112 110 111
S&P 400 MIDCAP 100 122 129 185 203 240
Summary Compensation Table.
The following table sets forth information concerning the
compensation of the Chief Executive Officer and the other most
highly compensated executive officers who served in those
capacities during the fiscal year ended July 30, 1999. During
fiscal 1999, the Company had only four executive officers.
<TABLE>
Long Term
Annual Compensation Compensation
Name Principal Position Fiscal Salary Bonus Securities Restricted Other
Underlying Stock Annual
Options Awards(1) Compensation(2)
Granted
<S> <C> <C> <C> <C> <C> <C> <C>
Dan W. Chairman of the Board, 1999 $400,400 $ -- 132,525 $ - $ 34,165
Evins President and Chief 1998 385,000 536,669 40,000 - 33,316
Executive Officer 1997 385,000 545,613 40,000 - 31,439
Ronald N. President and Chief 1999 257,833 443,857(4) 40,000 - 2,455
Magruder Operating Officer(3) 1998 350,000 390,304 40,000 - 5,106
1997 350,000 396,809 35,000 - 104,814
Michael A. Senior Vice President/ 1999 240,240 - 164,812 - 19,525
Woodhouse Finance and Chief 1998 231,000 257,601 25,000 - 17,610
Financial Officer 1997 231,000 261,894 25,000 - 95,762
Richard K. President and Chief 1999 274,318 - 183,073 603,125 243,836
Arras Operating Officer of 1998 - - - - -
Cracker Barrel Old 1997 - - - - -
Country Store,
Inc. (5)
James F. Vice President and 1999 168,000 - 26,172 - 6,936
Blackstock General Counsel, 1998 150,000 104,112 14,000 - 3,386
Corporate Secretary 1997 18,750 10,935 10,000 - -
</TABLE>
On December 11, 1995, the effective date of Mr. Woodhouse's
employment with the Company, he received a restricted stock award
of 5,000 shares worth $93,750 based on the value of Company Common
Stock on December 8, 1995. These shares vest at a rate of 20% per
year, and based on the value of Company Common Stock at the end of
fiscal 1999, were worth $75,625 No dividends are paid on these
restricted shares until the shares actually vest. On October 12,
1998, Mr. Arras received a restricted stock award of 25,000 shares
worth $603,125, based on the value of Company Common Stock on that
date. These shares vest at a rate of 20% per year.
Includes premiums paid on Life and Disability insurance for
coverage above that available to all salaried employees generally
of $32,885 for Mr. Evins, $675 for Mr. Magruder, $19,525 for Mr.
Woodhouse, $4,731 for Mr. Arras, and $4,400 for Mr. Blackstock;
moving expenses paid by the Company for Mr. Arras of $36,130; and
the Company's contributions to its 401(k) Employee Savings Plan
and any deferred compensation plan for each named officer in
fiscal 1999. This also includes a signing bonus to Mr. Arras of
$200,000.
Mr. Magruder resigned from the Company at April 12, 1999.
Includes certain severance payments due under Mr. Magruder's
employment contract.
Mr. Arras joined Cracker Barrel Old Country Store, Inc. in
October, 1998.
Options Granted During Fiscal Year Ended July 30, 1999.
The following table sets forth all options to acquire shares of
Company Common Stock granted to the named executive officers
during the fiscal year ended July 30, 1999.
<TABLE>
Potential Realizable
Values at Assumed Annual
Rates of Stock Price
Appreciation for Option
Individual Grants (1) Term (2)
Name Securities % of Total Exercise or Expiration 5% 10%
- ---- Underlying Options Base Price Date ----- -----
Options Granted $/Share ----------
Granted to -----------
------- Employees
in Fiscal
Year
----------
<S> <C> <C> <C> <C> <C> <C>
Dan W. Evins 60,000 2.1% $25.25 09-24-08 $952,775 $2,414,520
72,525 2.5% 18.375 04-20-09 838,094 2,123,896
Ronald N.
Magruder 40,000 1.4% 25.25 09-24-08 635,184 1,609,680
Michael A. 30,000 1.0% 25.25 09-24-08 476,388 1,207,260
Woodhouse 34,812 1.2% 18.375 04-20-09 402,285 1,019,470
100,000 3.5% 15.3125 07-29-09 962,995 2,440,418
Richard K. 150,00 5.2% 25.25 09-24-08 2,381,938 6,036,300
Arras 33,073 1.1% 18.375 04-20-09 382,190 968,543
James F. 14,000 0.5% 25.25 09-24-08 222,314 563,388
Blackstock 12,172 0.4% 18.375 04-20-09 140,659 356,457
</TABLE>
(1) The exercise price of the options granted is equal to the
closing market price of Company Common Stock on the day before the
date of grant. Options generally vest and become exercisable at a
rate of 1/3 of the total number of shares specified in the option
grant during each 12-month period following one year from the date
of grant for most options granted during the fiscal year ended
July 30, 1999. On April 20, 1999, the Company made a one-time
grant of options to Company and to senior Cracker Barrel Old
Country Store, Inc. senior and mid-level management in lieu of
certain cash bonuses. Those options vest in 12 months. To the
extent any optionee doesn't exercise an option as to all shares
for which the option was exercisable during any 12-month period,
the balance of the unexercised options shall accumulate and the
option with respect to those shares will be exercisable at any
later time before expiration. Options expire 10 years from the
date of the grant. The Company's existing Amended and Restated
Stock Option Plan, and its predecessor plans, provide for
immediate vesting of remaining stock options upon a defined change
in control. Pursuant to the terms of the Amended and Restated
Stock Option Plan, Mr. Magruder's options expired when not
exercised within 90 days following his resignation.
(2) The potential realizable values illustrate values that
might be realized upon exercise immediately prior to the
expiration of the term of these options using 5% and 10%
appreciation rates, as required by the Securities and Exchange
Commission, compounded annually. These values do not, and are not
intended to, forecast possible future appreciation, if any, of the
Company's stock price. Additionally, these values do not take into
consideration the provisions of the options providing for vesting
over a period of years or termination of options following
termination of employment.
Option Exercises and Fiscal Year End Values
There were no options exercised during the fiscal year ended
July 30, 1999 by the named executive officers. The following
table sets forth the number and value of unexercised options held
by the named executive officers at fiscal year end.
<TABLE>
Number of Securities Value of Unexercised In-The-
Underlying Unexercised Money Options at FY-End(1)
Options at FY-End
----------------------- ----------------------------
# Shares
Acquired Value
on Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
----------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Dan W. Evins 0 $0 290,000 175,525 $0 $0
Ronald N. Magruder 0 0 0 0 0 0
Michael A. Woodhouse 0 0 50,000 189,812 0 0
Richard K. Arras 0 0 0 183,073 0 0
James F. Blackstock 0 0 11,334 38,838 0 0
</TABLE>
(1) The last trade of Company Common Stock, as reported by
NASDAQ on July 30, 1999, was $15.125. That price was used in
calculating the value of unexercised options.
Executive Employment Agreements
An employment agreement exists with Dan W. Evins (Chairman
and Chief Executive Officer) which, upon the occurrence of certain
events, authorizes a severance payment approximately equal to
three times his annual salary in effect on the date of
termination. Although not intended primarily as a standard
employment contract, the agreement does provide for payment of a
specified annual salary which shall not be decreased, and which
may be increased from time to time. This agreement does not
preclude Mr. Evins' from participating in any other Company
benefit plans or arrangements. Under the agreement, Mr. Evins may
terminate his employment and receive the three-year severance
payment if there is a "change in control of the Company" (as
defined in the agreement), accompanied by: (1) a decrease in his
base salary or bonus percentage; or (2) a reduction in the
importance of his job responsibilities; or (3) a geographical
relocation without his consent. The three-year severance payment
shall also be made to Mr. Evins if the Company breaches the terms
of the agreement. The employment agreement also describes rights
to compensation if Mr. Evins' employment is terminated or
suspended due to death, disability, poor performance or wrongful
activities.
Effective December 11, 1995, the Company employed Mr. Michael
Woodhouse as Senior Vice President of Finance and Chief Financial
Officer. Mr. Woodhouse was granted an option under the 1987 Stock
Option Plan for 25,000 shares of Company Common Stock on his start
date, with the option vesting at a rate of 1/3 each year following
one year from the grant date and expiring 10 years after the date
of grant. To remedy Mr. Woodhouse's loss of non-vested options in
the stock of his former employer, the Company granted him 5,000
shares of restricted Company Common Stock which vests at 20% per
year.
Effective October 12, 1998, the Company's subsidiary, Cracker
Barrel Old Country Store, Inc., employed Mr. Arras as President
and Chief Operating Officer. Mr. Arras was granted an option,
under the Amended and Restated Stock Option Plan then in effect,
for 150,000 shares of common stock. That option grant vests 1/3
each year following one year from the grant date and it expires 10
years from that date. To remedy Mr. Arras's loss of certain non-
vested "stock appreciation" rights granted by his former employer,
he was granted 25,000 shares of common stock which vests 20% per
year following one year from his date of hire. If Mr. Arras's
employment is involuntarily terminated for performance rather than
for cause, he will receive a severance package consisting of one
year's base salary and estimated bonus. He will also receive a
separate payment of $600,000, but that amount decreases by 20% per
year from the date of employment.
Change in Control Agreements
On September 30, 1999, the Company Board of Directors
approved a plan responding to change in control issues. Generally,
senior officers and other key personnel in the Company and its
subsidiaries have been provided agreements stating that upon a
"change in control," they will receive specified salary payments
and other benefits. For the named executive officers, change in
control is defined to include certain circumstances in which a
person becomes the beneficial owner of securities representing 20%
or more of the combined voting power of the Company, a majority of
the Board changes within a 2-year period, or a merger,
consolidation or reorganization of the Company occurs. In
addition, these officers will receive the specified benefits if
after a change in control, there is (a) a material change in
duties and responsibilities resulting in the assignment of duties
and responsibilities inferior to the duties and responsibilities
in effect at the time of change in control, (b) a reduction in
salary or a material change in benefits (excluding discretionary
bonuses), or (c) a change in the location of work assignments from
the location at the time of a change in control to any other
location that is further than 50 miles away. For the named
executive officers of the Company, the salary payments will be
2.00 or 2.99 times the average salary and bonus for the 3 years
prior to a change in control (including, when required, a gross-up
payment to cover excise taxes) and benefits will include
continuation of and payments for health benefits for a 2-year
period. The forms of change in control agreement for the named
executive officers are attached as Exhibits to the Company's 1999
Form 10-K. Similar change in control plans have been implemented
for key personnel in the Company's subsidiaries.
PROPOSAL 2 -- APPROVAL OF APPOINTMENT OF AUDITORS
The Board of Directors has selected and appointed Deloitte &
Touche LLP as independent auditors of the Company for the 2000
fiscal year, subject to shareholder approval. Deloitte & Touche
LLP has served as the Company's independent auditors since the
fiscal year ended July 31, 1973. A representative of Deloitte &
Touche LLP is expected to be present at the Annual Meeting with
the opportunity to make a statement, if the representative
desires, and to be available to respond to appropriate questions.
For adoption of this proposal, the votes cast favoring the
proposal must exceed the votes cast opposing it. The Board of
Directors recommends that shareholders vote "FOR" the proposal.
Proxies, unless they contain contrary written instructions, will
be voted "FOR" the proposal.
PROPOSAL 3 -- SHAREHOLDER PROPOSAL
The New York City Employees' Retirement System, Office of the
Comptroller, 1 Centre Street, New York, New York 10007, has stated
that it is the beneficial owner of 114,584 shares of Company
Common Stock and has informed the Company that it intends to
present the following proposal at the Annual Meeting:
WHEREAS, in February, 1991 the management of CBRL Group, Inc.
(formerly, Cracker Barrel Old Country Store) announced a policy of
discrimination in employment against gay men and lesbians; and,
WHEREAS, although CBRL Group's management asserts that this
discrimination policy has been rescinded, the company has refused
to rehire fired workers and media reports have indicated that gay
and lesbian workers continue to be dismissed on the basis of their
sexual orientation; and,
WHEREAS, employment discrimination on the basis of sexual
orientation may deprive corporations of the services of productive
employees, leading to less efficient corporate operations which in
turn can have a negative impact on shareholder value;
RESOLVED, shareholders request the Board of Directors to
implement non-discriminatory policies relating to sexual
orientation and to add explicit prohibitions against such
discrimination to its corporate employment policy statement.
For adoption of the proposal, the votes cast favoring it must
exceed the votes cast opposing it. The Board of Directors
recommends a vote "AGAINST" this proposal for the reasons cited
below. Proxies, unless they contain contrary written
instructions, will be voted "AGAINST" the proposal.
The Company's Position
The Company does not discriminate against gays or lesbians as
guests or as employees. The Company, and its subsidiaries,
including Cracker Barrel Old Country Store, Inc., hire men and
women solely on the basis of their qualifications, experience and
performance capabilities. The Company, and its subsidiaries, do
not obtain information with respect to sexual orientation, the
Company and its subsidiaries comply with all applicable local,
state and federal employment laws, and adhere to equal opportunity
hiring policies which require them to hire without regard to race,
color, creed, age or gender.
Directly stated, the Company, and its subsidiaries, including
Cracker Barrel Old Country Store, Inc., adhere to the letter and
spirit of the law regarding nondiscrimination in the workplace,
and seek to comply at all times with all applicable laws affecting
hiring and employment. In fact, the Company and its subsidiaries
desire to hire the broadest range of qualified and capable
employees for all positions. Because the Company and its
subsidiaries already adhere to such a broad policy and because
many years ago Cracker Barrel Old Country Store, Inc. rescinded
any policies which may have been regarded as discriminatory with
respect to gay or lesbian individuals, the Board of Directors does
not believe that a formal or written non-discrimination policy
relating specifically and exclusively to sexual orientation is
appropriate or necessary. The Board of Directors for these reasons
recommends a vote "AGAINST" this shareholder proposal.
SUBMISSION OF SHAREHOLDER PROPOSALS
Shareholder proposals intended to be presented at the
Company's 2000 Annual Meeting must be received by the Company's
Secretary no later than June 15, 2000 to be eligible for inclusion
on the Company's proxy statement and form of proxy related to that
meeting. Shareholder proposals should be sent to: Corporate
Secretary, CBRL Group, Inc., P.O. Box 787, Hartmann Drive,
Lebanon, Tennessee 37088-0787. If the Company does not receive
notice of any other matter that a shareholder wishes to present at
the Annual Meeting in 2000 by September 11, 2000, and a matter is
raised at that meeting, the holders of the proxy for that meeting
will have authority to vote on the matter in accordance with their
best judgment and discretion, without any discussion of the
proposal in the proxy statement for the Annual Meeting. The
Company may exercise discretionary voting authority under proxies
solicited by it for the shareholders' 2000 Annual Meeting if it
receives notice of a proposed non-Rule 14a-8 shareholder action
after September 11, 2000.
ANNUAL REPORT AND FINANCIAL INFORMATION
A copy of the Company's Annual Report to Shareholders for
fiscal year 1999 is being mailed to each shareholder with this
Proxy Statement. A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM
10-K, AND A LIST OF ALL ITS EXHIBITS, WILL BE SUPPLIED WITHOUT
CHARGE TO ANY SHAREHOLDER UPON WRITTEN REQUEST TO THE COMPANY AT
ITS PRINCIPAL EXECUTIVE OFFICES: CBRL GROUP, INC., ATTENTION:
INVESTOR RELATIONS, P.O. BOX 787, LEBANON, TENNESSEE 37088-0787.
EXHIBITS TO THE FORM 10-K ARE AVAILABLE FOR A REASONABLE FEE.
OTHER BUSINESS
It is not anticipated that any other business will arise
during the Annual Meeting. Management of the Company has no other
business to present and does not know that any other person will
present any other business. However, if any other business
properly comes before the shareholders for a vote at the meeting,
proxy holders will vote your shares in accordance with their best
judgment.
Exhibit 23.
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in Registration
Statement Nos. 2-86602, 33-15775, 33-37567, 33-45482, 333-01465
and 333-81063 of CBRL Group, Inc. (formerly Cracker Barrel Old
Country Store, Inc.) on Form S-8 and Registration Statement
Nos. 33-59582 and 333-74363 on Form S-3 of our report dated
September 8, 1999, appearing in and incorporated by reference
in the Annual Report on Form 10-K of CBRL Group, Inc. for the
year ended July 30, 1999.
/s/ Deloitte & Touche LLP
Nashville, Tennessee
October 25, 1999
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
consolidated financial statement of CBRL Group, Inc. and subsidiaries for the
fiscal year ended July 30, 1999 and is qualified in its entirety by reference to
such consolidated financial statements.
</LEGEND>
<CIK> 0001067294
<NAME> CBRL GROUP, INC.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> JUL-30-1999
<PERIOD-START> AUG-01-1998
<PERIOD-END> JUL-30-1999
<CASH> 18,262
<SECURITIES> 0
<RECEIVABLES> 8,935
<ALLOWANCES> 0
<INVENTORY> 100,455
<CURRENT-ASSETS> 138,150
<PP&E> 1,247,960
<DEPRECIATION> 227,905
<TOTAL-ASSETS> 1,277,781
<CURRENT-LIABILITIES> 143,953
<BONDS> 312,000
0
0
<COMMON> 626
<OTHER-SE> 790,381
<TOTAL-LIABILITY-AND-EQUITY> 1,277,781
<SALES> 1,531,340
<TOTAL-REVENUES> 1,531,625
<CGS> 538,051
<TOTAL-COSTS> 786,556
<OTHER-EXPENSES> 84,175
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 11,324
<INCOME-PRETAX> 112,838
<INCOME-TAX> 42,653
<INCOME-CONTINUING> 70,185
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 70,185
<EPS-BASIC> 1.16
<EPS-DILUTED> 1.16
</TABLE>
