<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
______________
FORM 8-B
OF CERTAIN SUCCESSOR ISSUERS FILED
FOR REGISTRATION OF SECURITIES
PURSUANT TO SECTION 12(b) OR 12(g) OF
THE SECURITIES EXCHANGE ACT OF 1934
RUBY TUESDAY, INC.
------------------
(Exact name of registrant as specified in its charter)
GEORGIA 63-0475239
------- ------------
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
4721 MORRISON DRIVE, MOBILE ALABAMA 36625
----------------------------------- -------
(Address of principal executive offices) (Zip Code)
Securities to be registered pursuant to Section 12(b) of the Act:
<TABLE>
<CAPTION>
Title of each class Name of each exchange on which
to be so registered each class is to be registered
- -------------------------------------- --------------------------------------
<S> <C>
COMMON STOCK, $.01 PAR VALUE NEW YORK STOCK EXCHANGE
SERIES A JUNIOR PARTICIPATING
PREFERRED STOCK PURCHASE RIGHTS NEW YORK STOCK EXCHANGE
</TABLE>
Securities to be registered pursuant to Section 12(g) of the Act:
NONE
<PAGE>
INFORMATION REQUIRED IN REGISTRATION STATEMENT
ITEM 1. GENERAL INFORMATION.
(a) Ruby Tuesday, Inc. ("RTI") was incorporated under the laws of the
State of Georgia on January 19, 1996 under the name "Ruby Tuesday (Georgia),
Inc."
(b) The fiscal year of RTI ends on the first Saturday after May 30.
ITEM 2. TRANSACTION OF SUCCESSION.
(a) Morrison Restaurants Inc., a Delaware corporation ("MRI"), was the
predecessor corporation which had securities registered pursuant to Section
12(b) of the Securities Exchange Act of 1934 at the time of succession.
(b) RTI succeeded to MRI as a result of the reincorporation merger of MRI
into RTI effected March 9, 1996 pursuant to an Agreement and Plan of Merger (the
"Merger Agreement") dated as of March 2, 1996. Pursuant to the Merger
Agreement, former MRI stockholders are entitled to receive one share of common
stock, $.01 par value, of RTI ("RTI Common Stock") for every two shares of
common stock, $.01 par value, of MRI held immediately prior to the effective
time of the reincorporation merger. Substantially concurrently with the
reincorporation merger, in a merger with a wholly owned subsidiary, Ruby Tuesday
(Georgia), Inc. changed its name to "Ruby Tuesday, Inc." For information
concerning the transaction of succession and related matters, see the sections
entitled "Proxy Statement Summary," "The Distribution" and "The Reincorporation"
in the Notice of Special Meeting and Proxy Statement filed with the Securities
and Exchange Commission on February 6, 1996 and incorporated by reference (file
1-12454) (the "Proxy Statement").
ITEM 3. SECURITIES TO BE REGISTERED.
RTI has 100,000,000 shares of RTI Common Stock authorized, of which
17,558,122 shares were issued as of March 11, 1996, none of which were held by
or for the account of RTI. The Series A Junior Participating Preferred Stock
Purchase Rights (the "RTI Rights"), which are described in more detail in item 4
below, are attached to the shares of RTI Common Stock, are not currently
exercisable and trade with the RTI Common Stock.
ITEM 4. DESCRIPTION OF REGISTRANT'S SECURITIES TO BE REGISTERED.
The information required by this item is contained under the section
"Description of RTI Capital Stock" in the Proxy Statement and such section is
incorporated by reference herein.
In the event that the RTI Rights become exercisable, RTI will register the
shares of RTI Series A Preferred Stock purchasable upon the exercise thereof
under the Securities Act of 1933, as amended (the "Securities Act"), if and as
required by the Securities Act and rules and regulations of the Commission
thereunder.
<PAGE>
The exercise of the RTI Rights would cause substantial dilution to a
person or group that acquires RTI and thereby effects a change in the
composition of the Board of Directors on terms not approved by the Board,
including by means of a tender offer at a premium to the prevailing market price
of the RTI Common Stock, other than a tender offer conditioned upon a
substantial number of RTI Rights being acquired. However, the RTI Rights will
not interfere with a merger or other business combination approved by the Board
of Directors because, among other things, a majority of the RTI Continuing
Directors may delay the RTI Rights Distribution Date and, following the RTI
Rights Distribution Date, may redeem the RTI Rights at a nominal redemption
price ($.005 per RTI Right).
ITEM 5. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial Statements.
Pursuant to Instruction (b) to Form 8-B, no financial statements and
schedules are required to be filed because the financial statements
which would be called by Form 10 if the securities were to be
registered on that form are included in the Proxy Statement filed as
an exhibit hereto.
(b) Exhibits.
The following documents are filed as exhibits hereto:
(i) Exhibits required to be filed by the Form 8-B:
Exhibit No. Description
----------- -----------
99.1 Agreement and Plan of Merger dated as of March 2, 1996 between
Morrison Restaurants Inc. and Ruby Tuesday (Georgia), Inc.
(included in Exhibit 3.1 hereto).
99.2 Agreement and Plan of Merger dated as of March 2, 1996 between
Ruby Tuesday (Georgia), Inc. and Ruby Tuesday, Inc., a Delaware
corporation (included in Exhibit 3.1 hereto).
99.3 Morrison Restaurants Inc. Notice of Special Meeting and Proxy
Statement dated February 6, 1996. (Filed with the Securities and
Exchange Commission on February 6, 1996 and incorporated by
reference (File No. 1-12454)).
(ii) Exhibits required to be filed by Form 10:
Exhibit No. Description
----------- -----------
3.1 Articles of Incorporation and all mergers of Ruby Tuesday, Inc.
<PAGE>
3.2 Bylaws of Ruby Tuesday, Inc.
4.1 Specimen Common Stock Certificate.
4.2 Articles of Incorporation and all mergers of Ruby Tuesday, Inc.
(filed as Exhibit 3.1 hereto).
4.3 Bylaws of Ruby Tuesday, Inc. (filed as Exhibit 3.2 hereto).
4.4 Rights Agreement dated as of March 30, 1987 between Morrison
Restaurants, Inc. (predecessor to Ruby Tuesday, Inc.) and AmSouth
National Association (predecessor of AmSouth Bank of Alabama), as
Rights Agent.(1)
4.5 Form of Rights Certificate (attached as Exhibit B to the Rights
Agreement filed as Exhibit 4.4 hereto).
10.1 Executive Supplemental Pension Plan together with First Amendment
made June 30, 1994 and Second Amendment made July 31, 1995. (2)
10.2 Morrison Restaurants Inc. Stock Incentive Plan. (3)
10.3 Morrison Restaurants Inc. Stock Incentive and Deferred
Compensation Plan for Directors together with First Amendment
dated June 29, 1995. (4)
10.4 1993 Executive Stock Option Program. (5)
10.5 1993 Management Stock Option Program (July 1, 1993 - June 30,
1996). (6)
10.6 Morrison Restaurants Inc. Long-Term Incentive Plan. (7)
10.7 Morrison Restaurants Inc. 1987 Stock Bonus and Non-Qualified
Stock Option Plan, and Related Agreement. (8)
10.8 Morrison Restaurants Inc. 1993 Non-Executive Stock Incentive
Plan. (9)
10.9 Morrison Restaurants Inc. Deferred Compensation Plan, as restated
effective January 1, 1994 together with amended and restated
Trust Agreement (dated December 1, 1992) to Deferred Compensation
Plan. (10)
10.10 Supply Agreement between Morrison Restaurants Inc. and
PYA/Monarch, Inc. dated July 8, 1988. (11)
10.11 Letter Agreement dated March 5, 1996 amending Supply Agreement
between Morrison Restaurants, Inc. and PYA/Monarch, Inc.
<PAGE>
10.12 Morrison Restaurants Inc. Management Retirement Plan together
with First Amendment made June 30, 1994 and Second Amendment made
July 31, 1995. (12)
10.13 Asset Purchase Agreement dated June 27, 1994, by and among
Morrison Restaurants Inc. and Gardner Merchant Food Services,
Inc. and the related exhibits to such agreement. (13)
10.14 Morrison Restaurants Inc. Salary Deferral Plan as amended and
restated December 31, 1993 together with amended and restated
Trust Agreement (effective January 1, 1994) First and Second
Amendments to the Plan dated October 21, 1994 and June 30, 1995,
respectively, and the First Amendment to the Trust Agreement made
June 30, 1995. (14)
10.15 Executive Group Life and Executive Accidental Death and
Dismemberment Plan. (15)
10.16 Non-Qualified Option Agreement between Morrison Restaurants Inc.
and Mr. E. E. Bishop, dated January 30, 1987. (16)
10.17 Non-Qualified Option Agreement between Morrison Restaurants Inc.
and Mr. S. E. Beall, III dated January 30, 1987. (17)
10.18 Form of Non-Qualified Stock Option Agreement for Executive
Officers Pursuant to the Morrison Restaurants Inc. Stock
Incentive Plan. (18)
10.19 First Amendment to Morrison Restaurants Inc. Stock Incentive
Plan. (19)
10.20 First Amendment to Morrison Restaurants Inc. Long-term Incentive
Plan. (20)
10.21 Amendments to Morrison Restaurants Inc. 1987 Stock Bonus and Non-
Qualified Stock Option Plan. (21)
10.22 Morrison Restaurants Inc. Executive Life Insurance Plan. (22)
10.23 Distribution Agreement dated as of March 2, 1996 among Morrison
Restaurants Inc., Morrison Fresh Cooking, Inc. and Morrison
Health Care, Inc.
10.24 Amended and Restated Tax Allocation and Indemnification Agreement
dated as of March 2, 1996 among Morrison Restaurants Inc., Custom
Management Corporation of Pennsylvania, Custom Management
Corporation, John C. Metz & Associates, Inc., Morrison
International, Inc., Morrison Custom Management Corporation of
Pennsylvania, Morrison Fresh Cooking, Inc., Ruby Tuesday, Inc., a
Delaware corporation, Ruby Tuesday (Georgia), Inc., a Georgia
corporation, Tias, Inc. and Morrison Health Care, Inc.
<PAGE>
10.25 Agreement Respecting Employee Benefit Matters dated as of March
2, 1996 among Morrison Restaurants Inc., Morrison Fresh Cooking,
Inc. and Morrison Health Care, Inc.
10.26 License Agreement dated as of March 2, 1996 between Ruby Tuesday
(Georgia), Inc. and Morrison Health Care, Inc.
10.27 Amended and Restated Operating Agreement of MRT Purchasing, LLC
dated as of March 2, 1996 among Morrison Restaurants Inc., Ruby
Tuesday, Inc., Morrison Fresh Cooking, Inc. and Morrison Health
Care, Inc.
10.28 Form of 1996 Stock Incentive Plan.
10.29 Form of Second Amendment to Stock Incentive and Deferred
Compensation Plan for Directors.
10.30 Form of First Amendment to 1993 Non-Executive Stock Incentive
Plan.
10.31 Form of Third Amendment to Executive Supplemental Pension Plan.
10.32 Form of Third Amendment to Management Retirement Plan.
10.33 Form of Third Amendment to Salary Deferral Plan.
10.34 Form of First Amendment to Deferred Compensation Plan.
10.35 Form of Second Amendment to Retirement Plan.
10.36 Form of Fourth Amendment to 1987 Stock Bonus and Non-Qualified
Stock Option Plan.
10.37 Form of Second Amendment to 1984 Long Term Incentive Plan.
10.38 Form of Indemnification Agreement to be entered into with
executive officers and directors.
10.39 Form of Change of Control Agreement to be entered into with
executive officers.
10.40 Credit Agreement dated as of March 6, 1996 among Ruby Tuesday
(Georgia), Inc., SunTrust Bank, Atlanta, for itself and as Agent
and Administrative Agent, and the other lenders signatories
thereto.
21.1 List of Subsidiaries of Ruby Tuesday, Inc.
<PAGE>
(1) Incorporated by reference to Exhibit 4.1 to Quarterly Report on Form 10-
Q of Morrison Restaurants Inc. for the fiscal quarter ended February 28,
1987 (File No. 0-1750).
(2) Incorporated by reference to Exhibit 10(a) to Annual Report on Form 10-K
of Morrison Restaurants Inc. for the fiscal year ended June 3, 1995
(File No. 1-12454).
(3) Incorporated by reference to Exhibit 10(b) to Annual Report on Form 10-K
of Morrison Restaurants Inc. for the fiscal year ended June 5, 1993
(File No. 0-1750).
(4) Incorporated by reference to Exhibit 10(c) to Annual Report on Form 10-K
of Morrison Restaurants Inc. for the fiscal year ended June 3, 1995
(File No. 1-12454).
(5) Incorporated by reference to Exhibit 10(d) to Annual Report on Form 10-K
of Morrison Restaurants Inc. for the fiscal year ended June 3, 1995
(File No. 1-12454).
(6) Incorporated by reference to Exhibit 10(e) to Annual Report on Form 10-K
of Morrison Restaurants Inc. for the fiscal year ended June 3, 1995
(File No. 1-12454).
(7) Incorporated by reference to Exhibit 28 to Registration Statement on
Form S-8 of Morrison Restaurants Inc. (Reg. No. 2-97120).
(8) Incorporated by reference to Exhibit 28.1 to Registration Statement on
Form S-8 of Morrison Restaurants Inc. (Reg. No. 33-13593).
(9) Incorporated by reference to Exhibit 10(h) to Annual Report on Form 10-K
of Morrison Restaurants Inc. for fiscal year ended June 5, 1993 (File
No. 0-1750).
(10) Incorporated by reference to Exhibit 10(i) to Annual Report on Form 10-K
of Morrison Restaurants Inc. for the fiscal year ended June 5, 1993
(File No. 0-1750).
(11) Incorporated by reference to Exhibit 10(m) to Annual Report of Form 10-K
of Morrison Restaurants Inc. for the fiscal year ended May 28, 1988
(File No. 0-1750).
(12) Incorporated by reference to Exhibit 10(n) to Annual Report on Form 10-K
of Morrison Restaurants Inc. for the fiscal year ended June 3, 1995
(File No. 1-12454).
(13) Incorporated by reference to Exhibit (2) to the Current Report on Form
8-K dated July 27, 1995 of Morrison Restaurants Inc. (File No. 1-12454).
(14) Incorporated by reference to Exhibit 10(p) to Annual Report on Form 10-K
of Morrison Restaurants Inc. for the fiscal year ended June 3, 1995
(File No. 1-12454).
(15) Incorporated by reference to Exhibit 10(q) to Annual Report on Form 10-K
of Morrison Restaurants Inc. for the fiscal year ended June 3, 1989
(File No. 0-1750).
<PAGE>
(16) Incorporated by reference to Exhibit 10(s) to the Annual Report on Form
10-K of Morrison Restaurants Inc. for the fiscal year ended June 2, 1990
(File No. 0-1750).
(17) Incorporated by reference to Exhibit 10(t) to the Annual Report on Form
10-K of Morrison Restaurants Inc. for the fiscal year ended June 2, 1990
(File No. 0-1750).
(18) Incorporated by reference to Exhibit 10(v) to the Annual Report on Form
10-K of Morrison Restaurants Inc. for the fiscal year ended June 5, 1993
(File No. 0-1750).
(19) Incorporated by reference to Exhibit 10(x) to the Annual Report on Form
10-K of Morrison Restaurants Inc. for the fiscal year ended June 4, 1994
(File No. 1-12454).
(20) Incorporated by reference to Exhibit 10(y) to the Annual Report on Form
10-K of Morrison Restaurants Inc. for the fiscal year ended June 4, 1994
(File No. 1-12454).
(21) Incorporated by reference to Exhibit 10(z) to the Annual Report on Form
10-K of Morrison Restaurants Inc. for the fiscal year ended June 4, 1994
(File No. 1-12454).
(22) Incorporated by reference to Exhibit 10(a)(a) to the Annual Report on
Form 10-K of Morrison Restaurants Inc. for the fiscal year ended June 4,
1994 (File No. 1-12454).
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 12 of the Securities Exchange Act of
1934, the registrant has duly caused this registration statement to be signed on
its behalf by the undersigned, thereunto duly authorized.
RUBY TUESDAY, INC.
By: /s/ J. Russell Mothershed
-------------------------------
J. Russell Mothershed
Senior Vice President, Finance
Date: March 15, 1996
<PAGE>
EXHIBIT 3.1
ARTICLES OF MERGER
AND NAME CHANGE
OF
RUBY TUESDAY, INC.
(a Delaware corporation)
WITH AND INTO
RUBY TUESDAY (GEORGIA), INC.
(a Georgia corporation)
Pursuant to Section 14-2-1105(a) of the Georgia Business Corporation Code,
the undersigned corporation adopts the following Articles of Merger:
FIRST: Attached hereto as Exhibit A is an executed copy of the Agreement
---------
and Plan of Merger (the "Plan of Merger") by and between Ruby Tuesday, Inc., a
Delaware corporation ("RTI-Delaware") and Ruby Tuesday (Georgia), Inc., a
Georgia corporation ("RTI-Georgia").
SECOND: Article I of the Articles of Incorporation of RTI-Georgia is
hereby amended pursuant to Section 14-2-1002(6) of the Georgia Business
Corporation Code to change the name of RTI-Georgia to "Ruby Tuesday, Inc."
THIRD: Pursuant to Section 14-2-1104(a) of the Georgia Business
Corporation Code, neither the approval of the shareholders of RTI-Georgia nor
the approval of the stockholder of RTI-Delaware was required.
FOURTH: Pursuant to Section 14-2-1104(b) of the Georgia Business
Corporation Code, the Plan of Merger has been approved and adopted by the
Written Consent Action of the Board of Directors of RTI-Georgia dated February
23, 1996.
FIFTH: A request for publication of a notice of filing the Articles of
Merger and payment therefor will be made as required by Section 14-2-1105.1(b)
of the Georgia Business Corporation Code.
SIX: The merger shall be effective on and as of 12:02 a.m. on March 9,
1996.
<PAGE>
IN WITNESS WHEREOF, Ruby Tuesday (Georgia), Inc. has duly executed these
Articles of Merger this 7th day of March, 1996.
RUBY TUESDAY (GEORGIA), INC.
A Georgia Corporation
By:/s/ J. Russell Mothershed
---------------------------
Name: J. Russell Mothershed
---------------------
Title: Vice President
--------------------
ATTEST:
/s/ Pfilip G. Hunt
- ----------------------
Secretary
-2-
<PAGE>
AGREEMENT AND PLAN OF MERGER OF
RUBY TUESDAY, INC.
WITH AND INTO
RUBY TUESDAY (GEORGIA), INC.
This AGREEMENT AND PLAN OF MERGER (the "Agreement") is made and
entered into as of the 2nd day of March, 1996, by and between Ruby Tuesday
(Georgia), Inc., a Georgia corporation ("RTI") and Ruby Tuesday, Inc., a
Delaware corporation ("RTI-Delaware") and wholly-owned subsidiary of RTI (as the
surviving corporation in the merger between Morrison Restaurants Inc. and RTI)
(RTI-Delaware and RTI hereinafter sometimes collectively referred to as the
"Constituent Corporations");
W I T N E S S E T H:
WHEREAS, RTI-Delaware has authorized capitalization consisting of
1,000 shares of common stock, $0.01 par value ("RTI-Delaware Common Stock"); and
WHEREAS, RTI has authorized capitalization consisting of: (i)
100,000,000 shares of common stock, $0.01 par value ("RTI Common Stock"); and
(ii) 250,000 shares of preferred stock $0.01 par value ("RTI Preferred Stock");
and
WHEREAS, the Board of Directors of RTI has determined that it is
advisable and for the benefit of each of the Constituent Corporations and its
shareholders that RTI-Delaware be merged with and into RTI on the terms and
conditions hereinafter set forth; and
WHEREAS, the Board of Directors of RTI, as the holder of all of the
stock of RTI-Delaware immediately prior to the merger contemplated hereby, has
approved this Agreement and the merger contemplated hereby;
NOW, THEREFORE, for and in consideration of the premises and of the
mutual agreements, promises and covenants contained herein, and in accordance
with the applicable provisions of the Georgia Business Corporation Code and
Delaware General Corporation Law, the parties hereto hereby agree as follows:
SECTION 1. Merger
1.1 On the Effective Time (as hereinafter defined), RTI-Delaware
shall be merged with and into RTI and RTI shall survive the merger (the
"Merger"); the Merger shall in all respects have the effect provided for in the
Georgia Business Corporation Code ("Georgia Code"), the Delaware General
Corporation Law ("Delaware Law") and in this Agreement.
1.2 RTI, the corporation surviving the Merger (hereinafter sometimes
referred to as the "Surviving Corporation"), shall continue its corporate
existence under the laws of the State of Georgia.
<PAGE>
1.3 Without limiting the foregoing, on and after the Effective Time,
the separate existence of RTI-Delaware shall cease, and, in accordance with the
terms of this Agreement, the Surviving Corporation shall possess all the rights,
privileges, immunities and franchises, of a public or private nature, of each of
the Constituent Corporations; and all debts due on whatever account, including
subscriptions to shares, and all other choses in action and all and every other
interest of or belonging to or due to either of the Constituent Corporations
shall be taken and deemed to be transferred to and invested in the Surviving
Corporation without further act or deed; and all property, rights and
privileges, powers and franchises and all and every other interest shall
thereafter effectively be the property of the Surviving Corporation as they were
of the respective Constituent Corporations and the title to any real estate,
whether by deed or otherwise, vested in either of said Constituent Corporations
shall not revert or be in any way impaired by reason of this Merger. The
Surviving Corporation shall thenceforth be responsible and liable for all the
liabilities and obligations of the Constituent Corporations. Any claim existing
or action or proceeding pending by or against either of said Constituent
Corporations may be prosecuted as if the Merger had not taken place, or the
Surviving Corporation may be substituted in its place. Neither the rights of
creditors nor any liens upon property of either of the Constituent Corporations
shall be impaired by the Merger.
1.4 Prior to and from and after the Effective Time, the Constituent
Corporations shall take all such action as shall be necessary or appropriate in
order to effectuate the Merger. If at any time the Surviving Corporation shall
consider or be advised that any further assignments or assurances in law or any
other actions are necessary, appropriate or desirable to vest in said
corporation, according to the terms hereof, the title to any property or rights
of RTI-Delaware, the last acting officers of RTI-Delaware, or the corresponding
officers of the Surviving Corporation, shall and will execute and make all such
proper assignments and assurances and take all action necessary and proper to
vest title in such property or rights in the Surviving Corporation, and
otherwise to carry out the purposes of this Agreement.
SECTION 2. Terms of Transaction
2.1 Upon the Effective Time, by virtue of the Merger:
(a) Each share of RTI Common Stock issued and outstanding
immediately prior to the Effective Time and the right associated
therewith to purchase RTI Preferred Stock ("Right") shall continue to
represent one share of RTI Common Stock, which shall be the common
stock of the Surviving Corporation, and one Right to purchase RTI
Preferred Stock, which shall be the preferred stock of the Surviving
Corporation.
(b) Each share of RTI-Delaware Common Stock outstanding and owned
of record by RTI and any shares of RTI-Delaware Common Stock held in
the treasury of RTI-Delaware immediately prior to the Effective Time
shall be cancelled and all certificates representing such shares shall
be cancelled and no cash or securities or other property shall be
issued in respect thereof.
2.2 After the Effective Time, each outstanding certificate
representing shares of RTI Common Stock immediately prior to the Effective Time
shall continue to evidence ownership of, and to represent the same number of
shares of, the Surviving Corporation's Common Stock.
-2-
<PAGE>
SECTION 3. Directors and Officers
On the Effective Time, the persons who are directors and officers of
RTI immediately prior to the Effective Time shall continue as the directors and
officers of the Surviving Corporation and shall continue to hold office as
provided in the Articles of Incorporation and Bylaws of the Surviving
Corporation until their successors are elected and qualified or their earlier
resignation, removal or death.
SECTION 4. Charter and Bylaws
4.1 From and after the Effective Time, the Articles of Incorporation
of RTI as in effect immediately prior to the Effective Time shall be the
Articles of Incorporation of the Surviving Corporation and shall continue in
effect until the same shall be altered, amended or repealed as therein provided
or as provided by law, except that Article I of such Articles of Incorporation
shall be amended upon the Effective Time to read in its entirety as follows:
"The name of the corporation is 'Ruby Tuesday, Inc.' (hereinafter the
'Corporation')."
4.2 From and after the Effective Time, the Bylaws of RTI as in effect
immediately prior to the Effective Time shall be the Bylaws of the Surviving
Corporation and shall continue in effect until the same shall be altered,
amended or repealed as therein provided or as provided by law.
SECTION 5. Effectiveness of Merger
If this Agreement is not terminated and abandoned pursuant to the
provisions of Section 6 hereof, this Agreement shall be executed and a
Certificate of Ownership and Merger shall be filed and recorded in accordance
with the laws of the State of Delaware and Articles of Merger shall be filed and
recorded in accordance with the laws of the State of Georgia, as appropriate.
The Merger shall become effective as of 12:02 a.m., March 9, 1996 (said date is
herein referred to as the "Effective Time").
SECTION 6. Termination
At any time prior to the filing and recordation of a Certificate of
Ownership and Merger with the Secretary of State of Delaware or the filing and
recordation of Articles of Merger with the Secretary of State of Georgia, the
Board of Directors of RTI may terminate and abandon this Agreement
notwithstanding earlier approval by such Board or, although not required,
favorable action on the Merger by the shareholders of the Constituent
Corporations.
SECTION 7. Amendments
The Boards of Directors of the Constituent Corporations, prior to the
Effective Time, may jointly amend, modify and supplement this Agreement in such
manner as they may deem appropriate at any time, provided, however, that no such
amendment, modification or supplement shall cause the Merger to require the
approval of the shareholders of RTI or the sole shareholder of RTI-Delaware
pursuant to the Georgia Code or the Delaware Law.
-3-
<PAGE>
SECTION 8. Miscellaneous
8.1 This Agreement may be executed in counterparts, each of which
when so executed shall be deemed to be an original but all of which together
shall constitute one and the same instrument.
8.2 Except as otherwise provided in this Agreement, nothing contained
herein is intended, nor shall be construed, to confer upon or give any person,
firm or corporation, other than the Constituent Corporations and their
respective shareholders, any rights or remedies under or by reason of this
Agreement.
8.3 This Agreement and the legal relations between the parties hereto
shall be governed by and construed in accordance with the laws of the State of
Georgia.
-4-
<PAGE>
IN WITNESS WHEREOF, each Constituent Corporation has caused this
Agreement to be executed on its behalf and its corporate seal to be affixed
hereto and the foregoing attested, all by its duly authorized officers, as of
the date hereinabove first written.
Ruby Tuesday, Inc.
By: /s/ Samuel E. Beall III
-----------------------
Samuel E. Beall III
Chairman of the Board
and Chief Executive Officer
ATTEST:
By: /s/ Pfilip G. Hunt
-----------------------
Pfilip G. Hunt
Senior Vice President,
General Counsel and Secretary
[CORPORATE SEAL]
Ruby Tuesday (Georgia), Inc.
By: /s/ Samuel E. Beall III
---------------------------
Samuel E. Beall III
Chairman of the Board
and Chief Executive Officer
ATTEST:
By: /s/ Pfilip G. Hunt
-----------------------
Pfilip G. Hunt
Senior Vice President,
General Counsel and Secretary
[CORPORATE SEAL]
-5-
<PAGE>
ARTICLES OF MERGER
OF
MORRISON RESTAURANTS INC.
(a Delaware corporation)
WITH AND INTO
RUBY TUESDAY (GEORGIA), INC.
(a Georgia corporation)
Pursuant to Section 14-2-1105(a) of the Georgia Business Corporation Code,
the undersigned corporation adopts the following Articles of Merger:
FIRST: Attached hereto as Exhibit A is an executed copy of the Agreement
---------
and Plan of Merger (the "Plan of Merger") by and between Morrison Restaurants
Inc., a Delaware corporation ("Morrison") and Ruby Tuesday (Georgia), Inc., a
Georgia corporation ("RTI-Georgia").
SECOND: Pursuant to Section 14-2-1101 of the Georgia Business Corporation
Code, the Plan of Merger has been approved and adopted by the stockholders of
Morrison at a special meeting held March 7, 1996 and by the sole shareholder of
RTI-Georgia by Written Consent Action dated February 23, 1996.
THIRD: A request for publication of a notice of filing the Articles of
Merger and payment therefor will be made as required by Section 14-2-1105.1(b)
of the Georgia Business Corporation Code.
FOURTH: The merger shall be effective on and as of 12:01 a.m. on March 9,
1996.
<PAGE>
IN WITNESS WHEREOF, Ruby Tuesday (Georgia), Inc. has duly executed these
Articles of Merger this 7th day of March, 1996.
RUBY TUESDAY (GEORGIA), INC.
A Georgia Corporation
By:/s/ J. Russell Mothershed
-----------------------------
Name: J. Russell Mothershed
------------------------
Title: Vice President
------------------------
ATTEST:
/s/ Pfilip G. Hunt
- ----------------------
Secretary
-2-
<PAGE>
AGREEMENT AND PLAN OF MERGER OF
MORRISON RESTAURANTS INC.
WITH AND INTO
RUBY TUESDAY (GEORGIA), INC.
This AGREEMENT AND PLAN OF MERGER (the "Agreement") is made and
entered into as of the 2nd day of March, 1996, by and between Morrison
Restaurants Inc., a Delaware corporation ("Morrison") and Ruby Tuesday
(Georgia), Inc., a Georgia corporation ("RTI-Georgia") and wholly-owned
subsidiary of Morrison (Morrison and RTI-Georgia hereinafter sometimes
collectively referred to as the "Constituent Corporations");
W I T N E S S E T H:
WHEREAS, Morrison has authorized capitalization consisting of: (i)
100,000,000 shares of common stock, $0.01 par value ("Morrison Common Stock");
and (ii) 250,000 shares of preferred stock, $0.01 par value ("Morrison Preferred
Stock"); and
WHEREAS, RTI-Georgia has authorized capitalization consisting of: (i)
100,000,000 shares of common stock, $0.01 par value ("RTI-Georgia Common
Stock"); and (ii) 250,000 shares of preferred stock $0.01 par value ("RTI-
Georgia Preferred Stock"); and
WHEREAS, the Board of Directors of each of the Constituent
Corporations has determined that it advisable and for the benefit of each of the
Constituent Corporations and its shareholders that Morrison be merged with and
into RTI-Georgia on the terms and conditions hereinafter set forth; and
WHEREAS, the Board of Directors of each of the Constituent
Corporations has approved this Agreement and the merger contemplated hereby and
has directed that this Agreement be submitted to a vote of its respective
shareholders;
NOW, THEREFORE, for and in consideration of the premises and of the
mutual agreements, promises and covenants contained herein, and in accordance
with the applicable provisions of the Georgia Business Corporation Code and
Delaware General Corporation Law, the parties hereto hereby agree as follows:
SECTION 1. Merger
1.1 Upon the Effective Time (as hereinafter defined), Morrison shall
be merged with and into RTI-Georgia and RTI-Georgia shall survive the merger
(the "Merger"); the Merger shall in all respects have the effect provided for in
the Georgia Business Corporation Code, the Delaware General Corporation Law and
in this Agreement.
<PAGE>
1.2 RTI-Georgia, the corporation surviving the Merger (hereinafter
sometimes referred to as the "Surviving Corporation"), shall continue its
corporate existence under the laws of the State of Georgia.
1.3 Without limiting the foregoing, on and after the Effective Time,
the separate existence of Morrison shall cease, and, in accordance with the
terms of this Agreement, the Surviving Corporation shall possess all the rights,
privileges, immunities and franchises, of a public or private nature, of each of
the Constituent Corporations; and all debts due on whatever account, including
subscriptions to shares, and all other choses in action and all and every other
interest of or belonging to or due to either of the Constituent Corporations
shall be taken and deemed to be transferred to and invested in the Surviving
Corporation without further act or deed; and all property, rights and
privileges, powers and franchises and all and every other interest shall
thereafter effectively be the property of the Surviving Corporation as they were
of the respective Constituent Corporations and the title to any real estate,
whether by deed or otherwise, vested in either of said Constituent Corporations
shall not revert or be in any way impaired by reason of this Merger. The
Surviving Corporation shall thenceforth be responsible and liable for all the
liabilities and obligations of the Constituent Corporations. Any claim existing
or action or proceeding pending by or against either of said Constituent
Corporations may be prosecuted as if the Merger had not taken place, or the
Surviving Corporation may be substituted in its place. Neither the rights of
creditors nor any liens upon property of either of the Constituent Corporations
shall be impaired by the Merger.
1.4 Prior to and from and after the Effective Time, the Constituent
Corporations shall take all such action as shall be necessary or appropriate in
order to effectuate the Merger. If at any time the Surviving Corporation shall
consider or be advised that any further assignments or assurances in law or any
other actions are necessary, appropriate or desirable to vest in said
corporation, according to the terms hereof, the title to any property or rights
of Morrison, the last acting officers of Morrison, or the corresponding officers
of the Surviving Corporation, shall and will execute and make all such proper
assignments and assurances and take all action necessary and proper to vest
title in such property or rights in the Surviving Corporation, and otherwise to
carry out the purposes of this Agreement.
SECTION 2. Terms of Transaction
2.1 Upon the Effective Time:
(a) Each share of Morrison Common Stock issued and outstanding
immediately prior to the Effective Time shall, by virtue of the Merger and
without any action on the part of the holder thereof, thereupon be
converted into one-half of one share of RTI-Georgia Common Stock, the
shares of RTI-Georgia Common Stock required for such purpose being drawn
from authorized but unissued shares of RTI-Georgia, provided, however, that
cash shall be paid in lieu of the issuance of fractional shares in
accordance with the provisions of Section 2.2 hereof.
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<PAGE>
(b) Each share of RTI-Georgia Common Stock outstanding and owned of
record by Morrison immediately prior to the Effective Time shall be
cancelled and retired and returned to the status of authorized but unissued
capital stock of the Surviving Corporation and all certificates
representing such shares shall be cancelled and no cash or securities or
other property shall be issued in respect thereof.
(c) Each share of Morrison Common Stock held in the treasury of
Morrison immediately prior to the Effective Time shall be cancelled and
retired and all certificates representing such shares shall be cancelled.
(d) Each Right (a "Right") associated with each share of Morrison
Common Stock governed by that certain Rights Agreement between Morrison and
AmSouth Bank, National Association, dated March 30, 1987 (the "Shareholder
Rights Plan"), to purchase shares of Preferred Stock from Morrison, under
certain circumstances and pursuant to the Shareholder Rights Plan, shall,
by virtue of the Merger and without further action on the part of the
holder thereof or any other person, be converted into a Right to purchase
twice as many fractional shares of RTI-Georgia Preferred Stock from RTI-
Georgia at the same price per share pursuant to, and subject to the
conditions set forth in, the Shareholder Rights Plan in effect as of the
Effective Time. The same number of shares of RTI-Georgia Preferred Stock
designated as "Series A Junior Participating Preferred Stock" shall be
reserved for issuance upon the exercise of the Rights pursuant to the
Shareholder Rights Plan as is equal to the number of shares of Morrison
Preferred Stock so designated and reserved as of the Effective Time.
2.2 No fractional shares of RTI-Georgia Common Stock shall be issued as a
result of the Merger. Fractional shares will be aggregated into whole shares of
RTI-Georgia Common Stock and sold in the open market at prevailing prices on
behalf of holders of Morrison Common Stock who would otherwise have been
entitled to receive a fractional share as soon as practicable after the Merger
by an independent agent retained by the Surviving Corporation. Any holder of
Morrison Common Stock who would otherwise have been entitled to receive a
fractional share of RTI-Georgia Common Stock shall be entitled to receive
instead a cash payment in an amount equal to the portion of the total sales
proceeds allocable to such fractional share ("Cash Consideration").
2.3 After the Effective Time, each outstanding certificate representing
shares of Morrison Common Stock immediately prior to the Effective Time shall be
deemed for all purposes to evidence ownership of, and to represent the
appropriate whole number of, RTI-Georgia Common Stock into which the shares of
Morrison Common Stock formerly represented by such certificate shall have been
converted as herein provided, plus the right to receive the Cash Consideration
in lieu of any fractional shares. After the Effective Time, whenever
certificates which formerly represented shares of Morrison Common Stock are
presented for exchange or registration of transfer, the Surviving Corporation
will cause to be issued in respect thereof certificates representing the
appropriate whole number of shares of RTI-Georgia Common Stock and, if
applicable, payment of the Cash Consideration in lieu of any fractional shares.
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<PAGE>
SECTION 3. Directors and Officers
On the Effective Time, the persons who are directors and officers of RTI-
Georgia immediately prior to the Effective Time shall continue as the directors
and officers of the Surviving Corporation and shall continue to hold office as
provided in the Articles of Incorporation and Bylaws of the Surviving
Corporation until their successors are elected and qualified or their earlier
resignation, removal or death.
SECTION 4. Charter and Bylaws
4.1 From and after the Effective Time, the Articles of Incorporation of
RTI-Georgia as in effect immediately prior to the Effective Time shall be the
Articles of Incorporation of the Surviving Corporation and shall continue in
effect until the same shall be altered, amended or repealed as therein provided
or as provided by law.
4.2 From and after the Effective Time, the Bylaws of RTI-Georgia as in
effect immediately prior to the Effective Time shall be the Bylaws of the
Surviving Corporation and shall continue in effect until the same shall be
altered, amended or repealed as therein provided or as provided by law.
SECTION 5. Shareholder Approval; Effectiveness of Merger
This Agreement shall be submitted for approval to the shareholders of
Morrison as provided by the Delaware General Corporation Law and to the sole
shareholder of RTI-Georgia as provided by the Georgia Business Corporation Code.
If this Agreement is duly authorized and adopted by the requisite vote or
written consent of such shareholders and is not terminated and abandoned
pursuant to the provisions of Section 6 hereof, this Agreement shall be executed
and a Certificate of Merger shall be filed and recorded in accordance with the
laws of the State of Delaware and Articles of Merger shall be filed in
accordance with the laws of the State of Georgia, as soon as practicable after
the last approval by such shareholders or sole shareholder. The Merger shall
become effective as of 12:01 a.m., March 9, 1996 (said date is herein referred
to as the "Effective Time").
SECTION 6. Termination
At any time prior to the filing and recordation of a Certificate of Merger
with the Secretary of State of Delaware or the filing and recordation of
Articles of Merger with the Secretary of State of Georgia, the Board of
Directors of Morrison or the Board of Directors of RTI-Georgia may terminate and
abandon this Agreement notwithstanding earlier approval by each such Board or
favorable action on the Merger by the shareholders of Morrison or the sole
shareholder of RTI-Georgia.
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<PAGE>
SECTION 7. Amendments
The Boards of Directors of the Constituent Corporations, prior to the
Effective Time, may jointly amend, modify and supplement this Agreement in such
manner as they may deem appropriate at any time before approval or adoption
hereof by the shareholders of Morrison or the sole shareholder of RTI-Georgia.
Any amendment, modification or supplement to this Agreement after the approval
or adoption by the sole shareholder of RTI-Georgia or the shareholders of
Morrison, but prior to the Effective Time, shall require the approval or
adoption thereof by such shareholders, provided, however, that the approval or
adoption thereof by the shareholders of Morrison shall not be required with
respect to any amendment, modification or supplement hereto that does not alter
(a) the amount or kinds of shares, securities, cash, property and/or rights to
be received hereunder in exchange for any of the shares of Morrison, (b) any
term of the Articles of Incorporation of the Surviving Corporation as provided
for herein, or (c) any of the terms and conditions of this Agreement if such
alteration would not adversely affect the holders of any class of series of
stock of Morrison.
SECTION 8. Miscellaneous
8.1 This Agreement may be executed in counterparts, each of which when so
executed shall be deemed to be an original but all of which together shall
constitute one and the same instrument.
8.2 With respect to all leases and other agreements, instruments or
obligations under which either of the Constituent Corporations is obligated to
obtain a consent prior to the Merger herein contemplated or in order to comply
with the conditions thereof, or to vest the respective interest therein in the
Surviving Corporation, the Constituent Corporations shall each exercise all
reasonable efforts to obtain such consent prior to the Effective Time.
8.3 Except as otherwise provided in this Agreement, nothing contained
herein is intended, nor shall be construed, to confer upon or give any person,
firm or corporation, other than the Constituent Corporations and their
respective shareholders, any rights or remedies under or by reason of this
Agreement.
8.4 This Agreement and the legal relations between the parties hereto
shall be governed by and construed in accordance with the laws of the State of
Georgia.
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<PAGE>
IN WITNESS WHEREOF, each Constituent Corporation has caused this Agreement
to be executed on its behalf and its corporate seal to be affixed hereto and the
foregoing attested, all by its duly authorized officers, as of the date
hereinabove first written.
Morrison Restaurants Inc.
By: /s/ Samuel E. Beall III
-------------------------------
Samuel E. Beall III
Chairman of the Board
and Chief Executive Officer
ATTEST:
By: /s/ Pfilip G. Hunt
------------------------------
Pfilip G. Hunt
Senior Vice President,
General Counsel and Secretary
[CORPORATE SEAL]
Ruby Tuesday (Georgia), Inc.
By: /s/ Samuel E. Beall III
-------------------------------
Samuel E. Beall III
Chairman of the Board
and Chief Executive Officer
ATTEST:
By: /s/ Pfilip G. Hunt
------------------------------
Pfilip G. Hunt
Senior Vice President,
General Counsel and Secretary
[CORPORATE SEAL]
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<PAGE>
EFFECTIVE DATE:
01/19/96
ARTICLES OF INCORPORATION
OF
RUBY TUESDAY (GEORGIA), INC.
The undersigned, for the purposes of forming a corporation pursuant to
the Georgia Business Corporation Code, does hereby certify as follows:
I.
NAME
The name of the corporation is "Ruby Tuesday (Georgia), Inc."
(hereinafter the "Corporation").
II.
BUSINESS
The purpose for which the Corporation is organized is to engage in any
lawful act or activity for which corporations may be organized under the Georgia
Business Corporation Code.
III.
CAPITALIZATION
(a) The total number of shares of capital stock which the Corporation
shall have authority to issue is One Hundred Million Two Hundred Fifty Thousand
(100,250,000), divided into two classes as follows:
(1) One Hundred Million (100,000,000) shares of common stock, $.01
par value per share ("Common Stock"); and
(2) Two Hundred Fifty Thousand (250,000) shares of preferred
stock, $.01 par value per share ("Preferred Stock").
(b) The preferences, limitations and relative rights of the Common
Stock and the Preferred Stock are as follows:
(1) The holders of Common Stock shall be entitled to one vote for
each share on all matters required or permitted to be voted on by
stockholders of the Corporation.
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<PAGE>
After payment or provision for the payment of dividends on any
series of Preferred Stock then outstanding to the extent provided by the
Board of Directors of the Corporation in resolutions providing for the
issuance thereof, the Board of Directors of the Corporation may declare and
pay dividends on the Common Stock as and to the extent permitted by law.
(2) The Preferred Stock entitles the holders thereof to the rights
and preferences set out or determined as provided below.
Any unissued shares of Preferred Stock may be issued from time to
time in one or more series. All shares of Preferred Stock shall be
identical and of equal rank, except with respect to particular variations
in the relative rights and preferences as between different series which
may be fixed and determined by the Board of Directors of the Corporation as
hereinafter provided, and each share of any series of Preferred Stock shall
be identical in all respects with the other shares of such series except
that, if dividends thereon are cumulative, as to the date from which
dividends thereon shall accumulate.
Different series of Preferred Stock shall not be construed to
constitute different classes of stock for the purpose of voting by classes,
except to the extent such voting by classes is expressly required by law.
Before any shares of Preferred Stock of any particular series
shall be issued, the Board of Directors of the Corporation shall, by
resolution adopted, fix and determine, and is hereby expressly empowered to
fix and determine, in the manner provided by law, the following provisions,
rights and preferences of shares of any such series:
(A) The distinctive designation of such series and the number
of shares which shall constitute such series, which number may be
increased (except where otherwise provided by the Board of Directors
of the Corporation in creating such a series) or decreased (but not
below the number of shares thereof then issued) from time to time by
action of the Board of Directors of the Corporation;
(B) The amount of capital of such series;
(C) The annual rate of any dividends which may be payable on
shares of such series, whether dividends shall be cumulative, and the
conditions upon which and the date when such dividends shall begin to
accumulate on all shares of such series issued prior to the record
date for the first dividend of such series;
(D) Whether the shares of any such series shall be redeemable,
and if so, the time or times when, the conditions under which and the
price or prices at which shares of such series shall be redeemable and
the purchase, retirement or sinking fund provisions, if any, for the
purchase or redemption of such shares;
(E) The amount payable on shares of such series in the event
of voluntary or involuntary liquidation, dissolution or winding up of
the affairs of the Corporation;
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<PAGE>
(F) The rights, if any, of the holders of shares of such
series to convert such shares into, or exchange such shares for,
shares of Common Stock or shares of any other series of Preferred
Stock and the terms and conditions of such conversion or exchange; and
(G) Whether or not the holders of shares of such series have
voting rights, and the extent of such voting rights, if any.
The holders of Preferred Stock are entitled to receive, when and as
declared by the Board of Directors of the Corporation, but only from funds
legally available for the payment of dividends, cash dividends at the
annual rate for each particular series as fixed and determined by the Board
of Directors of the Corporation as herein authorized, and no more; such
dividends shall be payable before any dividend on Common Stock shall be
paid or set apart for payment. Any arrearages in the payment of dividends
shall not bear interest.
In the event of any dissolution, liquidation or winding up of the
affairs of the Corporation, whether voluntary or involuntary, after payment
or provisions for payment of the debts and other liabilities of the
Corporation, the holders of shares of each series of Preferred Stock shall
be entitled to receive in cash, out of the net assets of the Corporation,
an amount equal to the amount fixed and determined by the Board of
Directors of the Corporation in any resolution providing for the issuance
of any particular series of Preferred Stock, plus an amount equal to any
dividends payable to such holder which are then unpaid, either under the
provisions of the resolution of the Board of Directors of the Corporation
providing for the issuance of such series of Preferred Stock or by
declaration of the Board of Directors of the Corporation, on each such
share up to the date fixed for distribution, and no more, before any
distribution shall be made to the holders of Common Stock. Neither the
merger or consolidation of the Corporation, nor the sale, lease or
conveyance of all or a part of its assets, shall be deemed to be a
liquidation, dissolution or winding up of the affairs of the Corporation.
(3) Fifty Thousand (50,000) shares of Preferred Stock shall be
designated as "Series A Junior Participating Preferred Stock" and shall
have the preferences, limitations and relative rights set forth on Exhibit
A hereto.
IV.
REGISTERED OFFICE AND AGENT
The address of the Corporation's registered office in the State of Georgia
is 66 Luckie Street, Suite 604, Atlanta, Georgia 30303. The name of the
Corporation's registered agent at such address is The Prentice-Hall Corporation
System, Inc.
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<PAGE>
V.
PRINCIPAL OFFICE
The mailing address of the initial principal office of the Corporation
is 4721 Morrison Drive, Post Office Box 160266, Mobile, Alabama 36625.
VI.
CORPORATE EXISTENCE
The existence of the Corporation shall be perpetual.
VII.
BOARD OF DIRECTORS
(a) The business and affairs of the Corporation shall be managed by,
or under the direction of, a Board of Directors comprised as follows:
(1) The initial number of directors shall be such as may be
determined by the incorporator and thereafter the number of directors of
the Corporation shall be not less than three and not more than twelve, the
exact number within such minimum and maximum limits to be fixed and
determined from time to time by resolution of a majority of the Board of
Directors or by the affirmative vote of the holders of at least 80% of all
outstanding shares entitled to be voted in the election of directors,
voting together as a single class.
(2) At the first Special Meeting of Stockholders, the Board of
Directors shall be divided into three classes, each consisting, as nearly
as may be possible, of one-third of the total number of directors
constituting the entire Board of Directors. At the first Special Meeting
of Stockholders, the first class of directors shall be elected for a term
expiring upon the next following Annual Meeting of Stockholders and upon
the election and qualification of their respective successors, the second
class of directors shall be elected for a term expiring upon the second
next Annual Meeting of Stockholders and upon the election and qualification
of their respective successors, and the third class of directors shall be
elected for a term expiring upon the third next Annual Meeting of
Stockholders and upon the election and qualification of their respective
successors. At each succeeding Annual Meeting of Stockholders, successors
to the class of directors whose term expires at that Annual Meeting of
Stockholders shall be elected for a three-year term. If the number of
directors has changed, any increase or decrease shall be apportioned among
the classes so as to maintain the number of directors in each class as
nearly equal as possible, and any additional director of any class elected
to fill a vacancy resulting from an increase in such a class shall hold
office for a term that shall coincide with the remaining term of that
class, unless
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<PAGE>
otherwise required by law, but in no case shall a decrease in the number of
directors for a class shorten the term of an incumbent director.
(3) A director shall hold office until the Annual Meeting of
Stockholders upon which his term expires and until his successor shall be
elected and qualified, subject, however, to prior death, resignation,
retirement, disqualification or removal from office. Directors may be
removed only for cause by the vote of at least 80% of the outstanding
shares entitled to vote at an election of directors, at a meeting of
stockholders called expressly for that purpose.
(4) Nominations for the election of directors may be made by the Board
of Directors or a committee appointed by the Board of Directors, or by any
stockholder entitled to vote generally in the election of directors;
provided, however, any stockholder entitled to vote generally in the
election of directors may nominate one or more persons for election as
directors at a meeting only if written notice of such stockholder's intent
to make such nomination or nominations has been given, either by personal
delivery or by the United States mail, postage prepaid, to the Secretary of
the Corporation not later than (i) with respect to any election to be held
at the Annual Meeting of Stockholders, 90 days in advance of such meeting,
and (ii) with respect to any election to be held at a Special Meeting of
Stockholders for the election of directors, the close of business on the
seventh day following the date on which notice of such meeting is first
given to stockholders. Each such notice shall set forth:
(A) the name and address of the stockholder who intends to make
the nomination and of the person or persons to be nominated;
(B) a representation that the stockholder is a holder of record
of shares of the Corporation entitled to vote at such meeting and
intends to appear in person or by proxy at the meeting to nominate the
person or persons specified in the notice;
(C) a description of all arrangements or understandings between
the stockholder and each nominee and any other person or persons
(naming such person or persons) pursuant to which the nomination or
nominations are to be made by the stockholder;
(D) such other information regarding each nominee proposed by
such stockholder as would be required to be included in a proxy
statement filed pursuant to the then current proxy rules of the
Securities and Exchange Commission, if the nominees were to be
nominated by the Board of Directors; and
(E) the consent of each nominee to serve as a director of the
Corporation if so elected.
The chairman of the meeting may refuse to acknowledge the nomination of any
person not made in compliance with the foregoing procedure.
-5-
<PAGE>
(5) Any vacancy on the Board of Directors that results from an
increase in the number of directors or from prior death, resignation,
retirement, disqualification or removal from office of a director shall be
filled by a majority of the Board of Directors then in office, though less
than a quorum, or by the sole remaining director. Any director elected to
fill a vacancy resulting from prior death, resignation, retirement,
disqualification or removal from office of a director, shall have the same
remaining term as that of his predecessor.
(6) At any meeting of stockholders with respect to which notice of
such purpose has been given, the entire Board of Directors or any
individual director may be removed, with cause, by the affirmative vote of
the holders of 80% of all outstanding shares entitled to be voted at an
election of directors.
(7) Notwithstanding the foregoing, whenever the holders of any one or
more classes or series of Preferred Stock issued by the Corporation shall
have the right, voting separately by class or series, to elect directors at
an Annual or Special Meeting of Stockholders, the election, term of office,
filling of vacancies and other features of such directorships shall be
governed by the terms of these Articles of Incorporation or the resolutions
of the Board of Directors creating such class or series, as the case may
be, applicable thereto, and such directors so elected shall not be divided
into classes pursuant to this Section (a) of Article VII unless expressly
provided by such terms.
(b) Except as may be prohibited by law, by the Bylaws of the Corporation,
or by these Articles of Incorporation, the Board of Directors shall have the
right to make, alter, amend, change, add to, or repeal the Bylaws of the
Corporation, and have the right (which, to the extent exercised, shall be
exclusive) to establish the rights, powers, duties, rules and procedures that
from time to time shall govern the Board of Directors, each of its members,
including without limitation, the vote required for any action and the election
of officers of the Corporation by the Board of Directors, and that from time to
time shall affect the directors' powers to manage the business and affairs of
the Corporation; no Bylaw shall be adopted by stockholders that shall impair or
impede the implementation of the foregoing.
(c) The directors of the Corporation shall not be required to be elected by
written ballots.
(d) The Board of Directors of the Corporation, when evaluating any offer of
another party to (a) make a tender or exchange offer for any equity security of
the Corporation, (b) merge or consolidate the Corporation with another
corporation or (c) purchase or otherwise acquire all or substantially all of the
properties and assets of the Corporation, shall, in evaluating what is in the
best interests of the Corporation and its stockholders, consider not only the
consideration being offered by another party, in relation to the then current
market price, but also in relation to the then current value of the Corporation
in a freely negotiated transaction and in relation to the Board of Directors'
then estimate of the future value of the Corporation as an independent entity.
Furthermore, the Board of Directors is authorized, in connection with the
exercise of its judgment in determining what is in the best interests of the
Corporation and its stockholders, to give due consideration to all relevant
factors, including, without limitation, the social, legal, and economic effects
on the employees, customers, suppliers and management services clients under
contract to the
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<PAGE>
Corporation and its subsidiaries, and on the communities in which the
Corporation and its subsidiaries operate or are located.
(e) Notwithstanding any other provisions of these Articles of Incorporation
or the Bylaws of the Corporation (and notwithstanding the fact that a lesser
percentage for separate class vote for certain actions may be permitted by law,
by these Articles of Incorporation or by the Bylaws of the Corporation), the
affirmative vote of the holders of not less than 80% of the votes entitled to be
cast by the holders of all then outstanding shares of capital stock, voting
together as a single class, shall be required to make, alter, amend, change, add
to or repeal any provision of these Articles of Incorporation or the Bylaws of
the Corporation which is or which is proposed to be inconsistent with this
Article VII; provided, however, that this Section (e) shall not apply to, and
such 80% vote shall not be required to alter, amend, change, add to or repeal
any provisions of the Bylaws relating to this Article VII, or Article VII of
these Articles of Incorporation, recommended by not less than 80% of the members
of the Board of Directors.
(f) The invalidity or unenforceability of this Article VII or any portion
hereof, or of any action taken pursuant to this Article VII, shall not affect
the validity or enforceability of any other provision of these Articles of
Incorporation, any action taken pursuant to such other provision, or any action
taken pursuant to this Article VII.
VIII.
DIRECTORS' LIABILITY
To the fullest extent permitted by the Georgia Business Corporation Code,
as the same exists or may hereafter be amended, a director of the Corporation
shall not be liable to the Corporation or its stockholders for monetary damages
for breach of fiduciary duty as a director.
IX.
INDEMNIFICATION
Except as prohibited by law, the Corporation may indemnify any person who
is or was a director, officer, employee or agent of the Corporation or is or was
serving at the request of the Corporation as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust or other
enterprise (including, without limitation, any employee benefit plan) and may
take such steps as may be deemed appropriate by the Board of Directors,
including purchasing and maintaining insurance, entering into contracts
(including, without limitation, contracts of indemnification between the
Corporation and its directors and officers), creating a trust fund, granting
security interests or using other means (including, without limitation, a letter
of credit) to ensure the payment of such amounts as may be necessary to effect
such indemnification.
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X.
STOCKHOLDER VOTE FOR CERTAIN MATTERS
(a) In addition to any affirmative vote required by law, these
Articles of Incorporation, or the Bylaws of the Corporation and except as
otherwise expressly provided in Section (b) of this Article X, a Business
Combination (as hereinafter defined) shall require the affirmative vote of the
holders of not less than 80% of the Voting Stock (as hereinafter defined),
voting together as a single class. Such affirmative vote shall be required
notwithstanding that no vote may be required or that a lesser percentage or
separate class vote may be allowed by law, any agreement with any national
securities exchange or the National Association of Securities Dealers, Inc. (the
"NASD"), or otherwise.
(b) The provisions of Section (a) of this Article X shall not be
applicable to any particular Business Combination, and such Business Combination
shall require only such affirmative vote, if any, as is required by law, by any
other provision of these Articles of Incorporation or the Bylaws of the
Corporation, or by any agreement with any national securities exchange or the
NASD, if all of the conditions specified in either of the following Paragraphs
(1) or (2) are met:
(1) The Business Combination shall have been approved by 80% of
the Continuing Directors (as hereinafter defined), whether such approval is
made prior or subsequent to the acquisition of beneficial ownership of the
Voting Stock that caused the Interested Stockholder (as hereinafter
defined) to become an Interested Stockholder.
(2) All of the following price and procedural conditions shall
have been met:
(A) The aggregate amount of cash and the Fair Market Value (as
hereinafter defined), as of the date of the consummation of the
Business Combination (the "Consummation Date"), of the consideration
other than cash to be received per share by the holders of Common
Stock pursuant to such Business Combination shall be at least equal to
the higher amount determined under the following clauses (i) and (ii):
(i) (if applicable) the highest per share price (including
any brokerage commissions, transfer taxes and soliciting dealers'
fees) paid by the Interested Stockholder for any share of Common
Stock acquired by it (x) within the two-year period immediately
prior to the first public announcement of the proposal of the
Business Combination (the "Announcement Date"), or (y) the
transaction in which the Interested Stockholder became an
Interested Stockholder, whichever is higher; plus interest
compounded annually from the date on which the Interested
Stockholder became an Interested Stockholder (the "Determination
Date") through the Consummation Date at the rate of interest
announced by SunTrust Bank in Atlanta, Georgia (or other major
bank headquartered in Atlanta, Georgia, selected by a majority of
the Continuing Directors) from time to
-8-
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time as its "prime rate," less the aggregate amount of any cash
dividends paid and the Fair Market Value of any dividends paid
other than in cash, per share of Common Stock from the
Determination Date through the Consummation Date in an amount up
to but not exceeding the amount of such interest payable per
share of Common Stock; or
(ii) (if applicable) the Fair Market Value per share of
the Common Stock on the Announcement Date or on the Determination
Date, whichever is higher.
(B) The aggregate amount of the cash and the Fair Market Value as of
the Consummation Date of the consideration other than cash to be received
per share by the holders of shares of any class or series of outstanding
Capital Stock (as hereinafter defined), other than Common Stock, in such
Business Combination shall be at least equal to the highest amount
determined under clauses (i), (ii) and (iii) below (it being intended that
the requirements of this Paragraph (2)(B) of this Section (b) shall be
required to be met with respect to every such class or series of
outstanding Capital Stock, whether or not the Interested Stockholder has
previously acquired any shares of a particular class or series of Capital
Stock):
(i) (if applicable) the highest per share price
(including any brokerage commissions, transfer taxes and
soliciting dealers' fees) paid by the Interested Stockholder for
any share of such class or series of Capital Stock acquired by it
(x) within the two-year period immediately prior to the
Announcement Date, or (y) the transaction in which the Interested
Stockholder became an Interested Stockholder, whichever is
higher; plus interest compounded annually from the Determination
Date through the Consummation Date at the rate of interest
announced by SunTrust Bank in Atlanta, Georgia (or other major
bank headquartered in Atlanta, Georgia, selected by a majority of
the Continuing Directors) from time to time as its "prime rate,"
less the aggregate amount of any cash dividends paid and the Fair
Market Value of any dividends paid other than in cash, per share
of such class of Capital Stock from the Determination Date
through the Consummation Date in an amount up to but not
exceeding the amount of such interest payable per share of such
class of Capital Stock;
(ii) (if applicable) the Fair Market Value per share of
such class or series of Capital Stock on the Announcement Date or
on the Determination Date, whichever is higher; or
(iii) (if applicable) the highest preferential amount per
share to which the holders of shares of such class or series of
Capital Stock would be entitled in the event of any voluntary or
involuntary liquidation, dissolution or winding up of the affairs
of the Corporation, regardless of whether the Business
Combination to be consummated constitutes such an event.
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(C) The consideration to be received by holders of a particular class
or series of outstanding Capital Stock in such Business Combination shall
be in cash or in the same form as previously has been paid by or on behalf
of the Interested Stockholder in connection with its direct or indirect
acquisition of beneficial ownership of shares of such class or series of
Capital Stock. If the consideration so paid for shares of a class or series
of Capital Stock varies as to form, the form of consideration for such
class or series of Capital Stock shall either be cash or the form used to
acquire beneficial ownership of the largest number of shares of such class
or series of Capital Stock previously acquired by the Interested
Stockholder; provided that if the Interested Stockholder acquired equal
portions of such shares by forms of consideration other than cash, the form
of consideration to be paid to the holders of a class or series of Capital
Stock shall be the form last paid by the Interested Stockholder for
previously acquired shares.
(D) The holders of all outstanding shares of Capital Stock not
beneficially owned by the Interested Stockholder prior to the consummation
of such Business Combination shall be entitled to receive in such Business
Combination cash or other consideration for their shares in compliance with
Paragraphs (2)(A), (2)(B) and (2)(C) of this Section (b) (provided,
however, that the failure of any such holders who are exercising their
statutory rights to dissent from such Business Combination and receive
payment of the fair value of their shares to exchange their shares in such
Business Combination shall not be deemed to have prevented the condition
set forth in this Paragraph (2)(D) of this Section (b) from being
satisfied).
(E) After the Determination Date and prior to the Consummation Date:
(i) there shall have been no failure to declare and pay
at the regular date therefor any full quarterly dividends
(whether or not cumulative) payable in accordance with the terms
of any outstanding Capital Stock, except as approved by a
majority of the Continuing Directors;
(ii) there shall have been no reduction in the annual rate
of dividends paid on the Capital Stock (other than as necessary
to reflect any stock split, stock dividend or subdivision of the
Capital Stock), except as approved by a majority of the
Continuing Directors;
(iii) there shall have been an increase in the annual rate
of dividends paid on the Common Stock as necessary to reflect any
reclassification (including any reverse stock split),
recapitalization, reorganization, or any similar transaction that
has the effect of reducing the number of outstanding shares of
Common Stock, except as approved by a majority of the Continuing
Directors; and
(iv) such Interested Stockholder shall not have become the
beneficial owner of any additional shares of Capital Stock except
as part of a transaction that results in such Interested
Stockholder becoming an Interested Stockholder.
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(F) After the Determination Date, the Interested Stockholder shall not
have received the benefit, directly or indirectly (except proportionately
as a stockholder of the Corporation), of any loans, advances, guarantees,
pledges or other financial assistance or any tax credits or other tax
advantages provided by or through the Corporation, whether in anticipation
of or in connection with such Business Combination or otherwise.
(G) A proxy or information statement describing the proposed Business
Combination and complying with the requirements of the Securities Exchange
Act of 1934, as amended, and the rules and regulations promulgated
thereunder (the "Exchange Act"), shall be mailed to all stockholders of the
Corporation at least 30 days prior to the consummation of such Business
Combination (whether or not such proxy or information statement is required
to be mailed under the provisions of the Exchange Act). The proxy or
information statement shall contain on the first page thereof, in a
prominent place (or, if required, as near as practicable to the first page
thereof and in a prominent place), any statement regarding the advisability
(or inadvisability) of the Business Combination that a majority of the
Continuing Directors chooses to make, and if deemed advisable by a majority
of the Continuing Directors, the opinion of an investment banking firm
selected by a majority of the Continuing Directors, concerning the fairness
(or unfairness) of the terms of the Business Combination from a financial
viewpoint to the holders of the outstanding shares of Capital Stock other
than the Interested Stockholder and its Affiliates or Associates (as
hereinafter defined), such investment banking firm to be paid a reasonable
fee for its services by the Corporation.
(c) For the purpose of this Article X, the following terms shall have the
respective meanings set forth below:
(1) "Affiliate" shall have the meaning ascribed to it in Rule 12b-2
promulgated under the Exchange Act as in existence on the date this Article
X was approved by the stockholders of the Corporation. (The term
"registrant" as used in Rule 12b-2 shall mean, in this case, the
Corporation.)
(2) "Associate" shall have the meaning ascribed to it in Rule 12b-2
promulgated under the Exchange Act as in existence on the date this Article
X was approved by the stockholders of the Corporation. (The term
"registrant" as used in Rule 12b-2 shall mean, in this case, the
Corporation.)
(3) "Beneficial Owner" shall mean a person who, either itself or
through any of its Affiliates or Associates,
(A) beneficially owns, directly or indirectly, any Capital Stock;
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(B) has, directly or indirectly,
(i) the right to acquire (whether such right is exercisable
immediately or subject only to the passage of time) any Capital
Stock pursuant to any agreement, arrangement or understanding or
upon the exercise of any conversion rights, exchange rights,
warrants, options or otherwise; or
(ii) the right to vote any Capital Stock pursuant to any
agreement, arrangement or understanding; or
(C) beneficially owns, directly or indirectly, Capital Stock
through any other Person with which such Person or Affiliate or
Associate of such Person has any agreement, arrangement or
understanding for the purpose of acquiring, holding, voting or
disposing of any shares of Capital Stock.
For the purposes of determining whether a Person is an Interested
Stockholder pursuant to Paragraph (8) of this Section (c), the number
of shares of Capital Stock deemed to be outstanding shall include
shares deemed beneficially owned by such Persons through application
of this Paragraph (3) of this Section (c), but shall not include any
other shares of Capital Stock that may be issuable pursuant to any
agreement, arrangement or understanding, or upon the exercise of any
conversion rights.
(4) "Business Combination" shall mean:
(A) any merger or consolidation of the Corporation or any
Subsidiary (as hereinafter defined) with (i) any Interested
Stockholder, or (ii) any Person (whether or not itself an Interested
Stockholder) that is, or after such merger or consolidation would be,
an Affiliate or Associate of an Interested Stockholder;
(B) any sale, lease, exchange, mortgage, pledge, transfer or
other disposition (in one transaction or a series of transactions)
with any Interested Stockholder or any Affiliate or Associate of an
Interested Stockholder involving any assets or securities of the
Corporation, any Subsidiary or any Interested Stockholder or any
Affiliate or Associate of an Interested Stockholder, having an
aggregate Fair Market Value equal to or in excess of 25% of the total
assets of the Corporation as shown on the balance sheet of the
Corporation contained in the most recent annual report to stockholders
of the Corporation;
(C) the adoption of any plan or proposal for the liquidation or
dissolution of the Corporation proposed by or on behalf of an
Interested Stockholder or any Affiliate or Associate of an Interested
Stockholder;
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(D) any reclassification of securities (including any reverse
stock splits), recapitalization of the Corporation, merger or
consolidation of the Corporation with any of its Subsidiaries, or any
other transaction (whether or not with or otherwise involving an
Interested Stockholder) that has the effect, either directly or
indirectly, of increasing the proportionate share of any class or
series of Capital Stock or any securities convertible into Capital
Stock, or into equity securities of any Subsidiary that is
beneficially owned by any Interested Stockholder or an Affiliate or
Associate of an Interested Stockholder; or
(E) any agreement, contract, or other arrangement providing for
any one or more of the actions specified in Paragraphs A through D of
this Section (c)(4).
(5) "Capital Stock" shall mean capital stock of the Corporation
authorized to be issued from time to time pursuant to Article III of these
Articles of Incorporation.
(6) "Continuing Director" shall mean:
(A) any member of the Board of Directors of the Corporation who,
while such person is a member of the Board of Directors, is not an
Affiliate, Associate or representative of an Interested Stockholder
and was a member of the Board of Directors prior to the time that the
Interested Stockholder became an Interested Stockholder; and
(B) any successor of a Continuing Director who, while such
successor is a member of the Board of Directors, is not an Affiliate,
Associate or representative of an Interested Stockholder and is
recommended or elected to succeed the Continuing Director by a
majority of the Continuing Directors.
(7) "Fair Market Value" shall mean:
(A) in the case of cash, the amount of such cash;
(B) in the case of stock, the highest closing sale price during
the 30-day period immediately preceding the date in question of a
share of such stock listed on any national securities exchange
registered under the Exchange Act or, if such stock is not listed on
any such exchange, the highest closing sale price as reported by the
NASD Nasdaq Stock Market (the "Nasdaq Stock Market"), or if there is
no closing sale price reporting, the average between the highest bid
and asked prices with respect to a share of such stock as quoted by
the Nasdaq Stock Market for the 30-day period preceding the date in
question, or if no such quotations are available, the Fair Market
Value on the date in question of a share of such stock as determined
in good faith by a majority of the Continuing Directors;
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(C) in the case of property other than cash or stock, the Fair
Market Value of such property on the date in question as determined in
good faith by a majority of the Continuing Directors; and
(D) in the event of any Business Combination in which the
Corporation is the surviving entity, either or both the shares of
Common Stock or the shares of any other class or series of Capital
Stock retained by the holders of such shares shall be deemed
consideration other than cash received for purposes of Paragraphs
(2)(A) and (2)(B) of Section (b) and Paragraph (4) of Section (d) of
this Article X.
(8) "Interested Stockholder" shall mean any Person (other than the
Corporation, any Subsidiary, or any profit-sharing, employee stock
ownership or other employee benefit plan established by the Corporation, by
any Subsidiary, or by any trustee of or fiduciary with respect to any such
plan when acting in such capacity) who:
(A) is the beneficial owner of Voting Stock representing 10% or
more of the votes entitled to be cast by the holders of all then
outstanding shares of Voting Stock;
(B) is an Affiliate or Associate of the Corporation and that at
any time within the two-year period immediately prior to the date in
question was the beneficial owner of Voting Stock representing 10% or
more of the votes entitled to be cast by the holders of all then
outstanding shares of Voting Stock; or
(C) is an assignee of or has otherwise succeeded to any shares of
Capital Stock that were at any time within the two-year period
immediately prior to the date in question beneficially owned by any
other Interested Stockholder if such assignment or succession shall
have occurred in the course of a transaction or series of transactions
not involving a public offering within the meaning of the Securities
Act of 1933, as amended.
(9) "Person" shall mean any individual, firm, corporation or other
entity and shall include any group comprised of any Person and any other
Person with whom such Person or any Affiliate or Associate of such Person
has any agreement, arrangement or understanding, either directly or
indirectly, for the purpose of acquiring, holding, voting or disposing of
Capital Stock.
(10) "Subsidiary" shall mean any corporation of which a majority of
any class of equity securities is beneficially owned by the Corporation;
provided, however, for the purposes of the definition of Interested
Stockholder as set forth in Paragraph (8) of this Section (c), the term
"Subsidiary" shall mean only a corporation of which a majority of each
class of equity security is beneficially owned by the Corporation.
(11) "Voting Stock" shall mean all Capital Stock which by its terms
may be voted on the particular matter submitted to stockholders of the
Corporation.
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<PAGE>
(d) When it appears that a particular person may be an Interested
Stockholder and that the provisions of this Article X must be applied or
interpreted, then a majority of the total number of those directors of the
Corporation who would qualify as Continuing Directors (assuming that such
particular person is in fact an Interested Stockholder) shall have the power and
the duty to interpret all of the terms and provisions of this Article X, and to
determine on the basis of information known to them after reasonable inquiry all
facts necessary to ascertain compliance with this Article X, including without
limitation:
(1) whether a person is an Interested Stockholder;
(2) the number of shares of Capital Stock or other securities
beneficially owned by such person:
(3) whether a person is an Affiliate or Associate of another; and
(4) whether the assets that are the subject of any Business
Combination have, or the consideration to be received for the issuance or
transfer of securities by the Corporation or any subsidiary in any Business
Combination has, in the aggregate a Fair Market Value equal to or in excess
of 25% of the total assets of the Corporation as shown on the balance sheet
of the Corporation contained in the most recent annual report to
stockholders of the Corporation. Any such determination shall be made in
good faith and shall be binding and conclusive on all parties.
(e) Nothing contained in this Article X shall be construed to relieve any
Interested Stockholder from any fiduciary obligation imposed by law.
(f) Whether or not any Business Combination complies with the provisions of
Section (b) of this Article X shall not be construed to impose any fiduciary
duty, obligation or responsibility on the Board of Directors or on any member
thereof to approve such Business Combination or recommend its adoption or
approval to the stockholders of the Corporation, nor shall such compliance
limit, prohibit or otherwise restrict in any manner the Board of Directors, or
any member thereof, with respect to its or his evaluations of, or actions and
responses taken toward, such Business Combination.
(g) Notwithstanding any other provisions of these Articles of Incorporation
or the Bylaws of the Corporation (and notwithstanding that a lesser percentage
or separate class vote may be permitted by law, these Articles of Incorporation
or the Bylaws of the Corporation), the affirmative vote of the holders of not
less than 80% of the vote entitled to be cast by the holders of all then
outstanding shares of Voting Stock, voting together as a single class, shall be
required to make, alter, amend, change, add to or repeal any provisions
inconsistent with this Article X; provided, however, that this Section (g) shall
not apply to, and such 80% vote shall not be required to alter, amend, change,
add to or repeal any provisions of the Bylaws relating to this Article X, or
this Article X of the Articles of Incorporation, recommended by not less than
80% of the members of the Board of Directors.
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XI.
INCORPORATOR
The name and mailing address of the incorporator is:
Name Mailing Address
---- ---------------
Pfilip G. Hunt 4721 Morrison Drive
Post Office Box 160266
Mobile, Alabama 36625
IN WITNESS WHEREOF, the undersigned, being the sole incorporator
hereinabove named, hereby further certifies that the facts herein stated are
true and, accordingly, has signed these Articles of Incorporation this 19th day
of January, 1996.
/s/ Pfilip G. Hunt
------------------
Pfilip G. Hunt
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EXHIBIT A
Series A Junior Participating Preferred Stock
---------------------------------------------
Ruby Tuesday (Georgia), Inc.
----------------------------
I. Designation and Amount
----------------------
The shares of such series shall be designated as "Series A Junior
Participating Preferred Stock" (the "Series A Preferred Stock") and the number
of shares constituting the Series A Preferred Stock shall be 50,000. Such
number of shares may be increased or decreased by resolution of the Board of
Directors; provided, that no decrease shall reduce the number of shares of
--------
Series A Preferred Stock to a number less than the number of shares then
outstanding plus the number of shares reserved for issuance upon the exercise of
outstanding options, rights or warrants or upon the conversion of any
outstanding securities issued by the Corporation convertible into Series A
Preferred Stock. Fractions of the Series A Preferred Stock may be issued, but
only in integral multiples of one one-thousandth of a share.
II. Dividends and Distributions
---------------------------
(A) Subject to the rights of the holders of any share of any series of
Preferred Stock (or any similar stock) ranking prior and superior to the
Series A Preferred Stock with respect to dividends, the holders of shares
of Series A Preferred Stock, in preference to the holders of Common Stock,
par value $.01 per share (the "Common Stock"), of the Corporation, and of
any other junior stock, shall be entitled to receive, when, as and if
declared by the Board of Directors out of funds legally available for the
purpose, quarterly dividends payable in cash on the first day of March,
June, September and December in each year (each such date being referred to
herein as a "Quarterly Dividend Payment Date"), commencing on the first
Quarterly Dividend Payment Date after the first issuance of a share or
fraction of a share of Series A Preferred Stock, in an amount per share
(rounded to the nearest cent) equal to the greater of (a) $100 or (b)
subject to the provision for adjustment hereinafter set forth, 1,000 times
the aggregate per share amount of all cash dividends, and 1,000 times the
aggregate per share amount (payable in kind) of all non-cash dividends or
other distributions, other than a dividend payable in shares of Common
Stock or a subdivision of the outstanding shares of Common Stock (by
reclassification or otherwise), declared on the Common Stock since the
immediately preceding Quarterly Dividend Payment Date or, with respect to
the first Quarterly Dividend Payment Date, since the first issuance of any
share or fraction of a share of Series A Preferred Stock. In the event the
Corporation shall at any time declare or pay any dividend on the Common
Stock payable in shares of Common Stock, or effect a subdivision or
combination or consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares of
Common Stock) into a greater or lesser number of shares of Common Stock,
then in each such case the amount to which holders of shares of Series A
Preferred Stock were entitled immediately prior to such event under clause
(b) of the preceding sentence shall be adjusted by multiplying such amount
by a fraction, the numerator of which is the number of
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shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
(B) The Corporation shall declare a dividend or distribution on the
Series A Preferred Stock as provided in paragraph (A) of this Section
immediately after it declares a dividend or distribution on the Common
Stock (other than a dividend payable in shares of Common Stock); provided
that, in the event no dividend or distribution shall have been declared on
the Common Stock during the period between any Quarterly Dividend Payment
Date and the next subsequent Quarterly Dividend Payment Date, a dividend of
$100 per share on the Series A Preferred Stock shall nevertheless be
payable on such subsequent Quarterly Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumulative on outstanding
shares of Series A Preferred Stock from the Quarterly Dividend Payment Date
next preceding the date of issue of such shares, unless the date of issue
of such shares is prior to the record date for the first Quarterly Dividend
Payment Date, in which case dividends on such shares shall begin to accrue
from the date of issue of such shares, or unless the date of issue is a
Quarterly Dividend Payment Date or is a date after the record date for the
determination of holders of shares of Series A Preferred Stock entitled to
receive a quarterly dividend and before such Quarterly Dividend Payment
Date, in either of which events such dividends shall begin to accrue and be
cumulative from such Quarterly Dividend Payment Date. Accrued but unpaid
dividends shall not bear interest. Dividends paid on the shares of Series
A Preferred Stock in an amount less than the total amount of such dividends
at the time accrued and payable on such shares shall be allocated pro rata
on a share-by-share basis among all such shares at the time outstanding.
The Board of Directors may fix a record date for the determination of
holders of shares of Series A Preferred Stock entitled to receive payment
of a dividend or distribution declared thereon, which record date shall be
not more than 60 days prior to the date fixed for the payment thereof.
III. Voting Rights
-------------
The holders of shares of Series A Preferred Stock shall have the following
voting rights:
(A) Subject to the provisions for adjustment hereinafter set forth,
each share of Series A Preferred Stock shall entitle the holder thereof to
1,000 votes (and each one one-thousandth of a share of Series A Preferred
Stock shall entitle the holder thereof to one vote) on all matters
submitted to a vote of the stockholders of the Corporation. In the event
the Corporation shall at any time declare or pay any dividend on the Common
Stock payable in shares of Common Stock, or effect a subdivision or
combination or consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares of
Common Stock) into a greater or lesser number of shares of Common Stock,
then in each such case the number of votes per share to which holders of
shares of Series A Preferred Stock were entitled immediately prior to such
event shall be adjusted by multiplying such number by a fraction, the
numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is
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the number of shares of Common Stock that were outstanding immediately
prior to such event.
(B) Except as otherwise provided herein, in any Amendment to the
Articles of Incorporation creating a series of Preferred Stock or any
similar stock, or by law, the holders of shares of Series A Preferred Stock
and the holders of shares of Common Stock and any other capital stock of
the Corporation having general voting rights shall vote together as one
class on all matters submitted to a vote of stockholders of the
Corporation.
(C) Except as set forth herein, holders of shares of Series A
Preferred Stock shall have no voting rights.
IV. Certain Restrictions
--------------------
(A) Whenever quarterly dividends or other dividends or distributions
payable on the Series A Preferred Stock as provided in Section II are in
arrears, thereafter and until all accrued and unpaid dividends and
distributions, whether or not declared, on shares of Series A Preferred
Stock outstanding shall have been paid in full, the Corporation shall not:
(i) declare or pay dividends, or make any other distributions, on
any shares of stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series A Preferred
Stock;
(ii) declare or pay dividends, or make any other distributions,
on any shares of stock ranking on a parity (either as to dividends or
upon liquidation, dissolution or winding up) with the Series A
Preferred Stock except dividends paid ratably on the Series A
Preferred Stock and all such parity stock on which dividends are
payable or in arrears in proportion to the total amounts to which the
holders of all such shares are then entitled;
(iii) redeem or purchase or otherwise acquire for consideration
shares of any stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series A Preferred
Stock, provided that the Corporation may at any time redeem, purchase
or otherwise acquire shares of any such junior stock in exchange for
shares of any stock of the Corporation ranking junior (either as to
dividends or upon dissolution, liquidation or winding up) to the
Series A Preferred Stock; or
(iv) redeem or purchase or otherwise acquire for consideration
any shares of Series A Preferred Stock, or any shares of stock ranking
on a parity with the Series A Preferred Stock, except in accordance
with a purchase offer made in writing or by publication (as determined
by the Board of Directors) to all holders of such shares upon such
terms as the Board of Directors, after consideration of the respective
annual dividend rates and other relative rights and preferences of the
respective series and classes, shall determine in good faith will
result in fair and equitable treatment among the respective series or
classes.
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(B) The Corporation shall not permit any subsidiary of the Corporation
to purchase or otherwise acquire for consideration any shares of stock of
the Corporation unless the Corporation could, under paragraph (A) of this
Section IV, purchase or otherwise acquire such shares at such time and in
such manner.
V. Reacquired Shares
-----------------
Any shares of Series A Preferred Stock purchased or otherwise acquired by
the Corporation in any manner whatsoever shall be retired and cancelled promptly
after the acquisition thereof. All such shares upon their cancellation become
authorized but unissued shares of Preferred Stock and may be reissued as part of
a new series of Preferred Stock subject to the conditions and restrictions on
issuance set forth herein, in the Articles of Incorporation, in any other
Certificate of Designation creating a series of Preferred Stock or any similar
stock or as otherwise required by law.
VI. Liquidation, Dissolution or Winding Up
--------------------------------------
Upon any liquidation, dissolution or winding up of the Corporation, no
distribution shall be made (1) to the holders of shares of stock ranking junior
(either as to dividends or upon liquidation, dissolution or winding up) to the
Series A Preferred Stock unless, prior thereto, the holders of shares of Series
A Preferred Stock shall have received $1,000 per share, plus an amount equal to
accrued and unpaid dividends and distributions thereon, whether or not declared,
to the date of such payment, provided that the holders of shares of Series A
Preferred Stock shall be entitled to receive an aggregate amount per share,
subject to the provision for adjustment hereinafter set forth, equal to 1,000
times the aggregate amount to be distributed per share to holders of shares of
Common Stock, or (2) to the holders of shares of stock ranking on a parity
(either as to dividends or upon liquidation, dissolution or winding up) with the
Series A Preferred Stock, except distributions made ratably on the Series A
Preferred Stock and all such parity stock in proportion to the total amounts to
which the holders of all such shares are entitled upon such liquidation,
dissolution or winding up. In the event the Corporation shall at any time
declare or pay any dividend on the Common Stock payable in shares of Common
Stock, or effect a subdivision or combination or consolidation of the
outstanding shares of Common Stock (by reclassification or otherwise than by
payment of a dividend in shares of Common Stock) into a greater or lesser number
of shares of Common Stock, then in each such case the aggregate amount to which
holders of shares of Series A Preferred Stock were entitled immediately prior to
such event under the proviso in clause (1) of the preceding sentence shall be
adjusted by multiplying such amount by a fraction the numerator of which is the
number of shares of Common Stock outstanding immediately after such event and
the denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
VII. Consolidation, Merger, etc.
---------------------------
In case the Corporation shall enter into any consolidation, merger,
combination or other transaction in which the shares of Common Stock are
exchanged for or changed into other stock or securities, cash and/or any other
property, then in any such case each share of Series A Preferred Stock shall at
the same time be similarly exchanged or changed into an amount per share,
subject to the provision for adjustment hereinafter set forth, equal to 1,000
times the aggregate amount of stock, securities, cash and/or any other property
(payable in kind), as the case may be, into which
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or for which each share of Common Stock is changed or exchanged. In the event
the Corporation shall at any time declare or pay any dividend on the Common
Stock payable in shares of Common Stock, or effect a subdivision or combination
or consolidation of the outstanding shares of Common Stock (by reclassification
or otherwise than by payment of a dividend in shares of Common Stock) into a
greater or lesser number of shares of Common Stock, then in each such case the
amount set forth in the preceding sentence with respect to the exchange or
change of shares of Series A Preferred Stock shall be adjusted by multiplying
such amount by a fraction, the numerator of which is the number of shares of
Common Stock outstanding immediately after such event and the denominator of
which is the number of shares of Common Stock that were outstanding immediately
prior to such event.
VIII. Redemption
----------
The shares of Series A Preferred Stock shall not be redeemable.
IX. Rank
----
The Series A Preferred Stock shall rank, with respect to the payment of
dividends and the distribution of assets, junior to all series of any other
class of the Corporation's Preferred Stock.
X. Amendment
---------
The Articles of Incorporation of the Corporation shall not be amended in
any manner which would materially alter or change the powers, preferences or
special rights of the Series A Preferred Stock so as to affect them adversely
without the affirmative vote of the holders of at least eighty percent (80%) of
the outstanding shares of Series A Preferred Stock, voting together as a single
series.
A-5
<PAGE>
EXHIBIT 3.2
BYLAWS
OF
RUBY TUESDAY (GEORGIA), INC.
As in effect January 19, 1996
-----------------------------
<PAGE>
INDEX
Page
----
ARTICLE I OFFICES ................................................... 1
ARTICLE II STOCKHOLDERS' MEETINGS .................................... 1
2.1 Places of Meetings ........................................ 1
2.2 Annual Meetings ........................................... 1
2.3 Special Meetings .......................................... 1
2.4 Meetings Without Notice ................................... 1
2.5 Voting .................................................... 1
2.6 Quorum .................................................... 2
2.7 List of Stockholders ...................................... 2
2.8 Action Without Meeting .................................... 2
ARTICLE III BOARD OF DIRECTORS......................................... 2
3.1 Powers .................................................... 2
3.2 Number, Qualification and Term............................. 2
3.3 Compensation .............................................. 3
3.4 Meetings and Quorum ....................................... 3
3.5 Executive Committee ....................................... 4
3.6 Other Committees .......................................... 5
3.7 Conference Telephone Meetings.............................. 5
3.8 Action Without Meeting .................................... 5
ARTICLE IV OFFICERS................................................... 5
4.1 Titles and Election ....................................... 5
4.2 Duties .................................................... 6
(a) Chairman of the Board of Directors.................. 6
(b) Vice Chairman of the Board of Directors............. 6
(c) President .......................................... 6
(d) Vice President ..................................... 6
(e) Secretary .......................................... 7
(f) Treasurer .......................................... 7
4.3 Chief Executive Officer and Chief Operating Officer........ 7
4.4 Chief Financial Officer and Chief Accounting Officer....... 8
4.5 Delegation of Authority ................................... 8
4.6 Compensation .............................................. 8
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Page
----
ARTICLE V RESIGNATIONS, VACANCIES AND REMOVALS....................... 8
5.1 Resignations .............................................. 8
5.2 Vacancies ................................................. 8
(a) Directors ....................................... 8
(b) Officers ....................................... 9
5.3 Removals ................................................. 9
(a) Directors ....................................... 9
(b) Officers ........................................ 9
ARTICLE VI CAPITAL STOCK.............................................. 9
6.1 Certificates of Stock ..................................... 9
6.2 Transfer of Stock ......................................... 9
6.3 Stock Transfer Records .................................... 9
6.4 Record Dates .............................................. 10
6.5 Lost Certificates ......................................... 10
ARTICLE VII FISCAL YEAR, BANK DEPOSITS, CHECKS, ETC................. 10
7.1 Fiscal Year ............................................... 10
7.2 Bank Deposits, Checks, Etc................................. 10
ARTICLE VIII BOOKS AND RECORDS.......................................... 10
8.1 Place of Keeping Books .................................... 10
8.2 Examination of Books ...................................... 11
ARTICLE IX NOTICES.................................................... 11
9.1 Requirements of Notice .................................... 11
9.2 Waivers ................................................... 11
ARTICLE X SEAL....................................................... 11
ARTICLE XI POWERS OF ATTORNEY......................................... 11
ARTICLE XII INDEMNIFICATION OF DIRECTORS, OFFICERS,
AND OTHER PERSONS.......................................... 12
12.1 Indemnified Actions ....................................... 12
12.2 Indemnification Against Expenses of Successful Party....... 12
12.3 Advances of Expenses ...................................... 12
12.4 Right of Agent to Indemnification Upon Application;
Procedure Upon Application................................. 12
12.5 Other Rights and Remedies.................................. 13
12.6 Insurance of Agents ....................................... 13
12.7 Certain Definitions ....................................... 13
12.8 Indemnification and Insurance of Other Persons ............ 13
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Page
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12.9 Survival of Indemnification ............................... 14
12.10 Savings Clause ............................................ 14
ARTICLE XIII AMENDMENTS ................................................ 14
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<PAGE>
RUBY TUESDAY (GEORGIA), INC.
BYLAWS
ARTICLE I
OFFICES
The Corporation shall at all times maintain a registered office in the
State of Georgia and a registered agent at that address but may have other
offices located in or outside of the State of Georgia as the Board of Directors
may from time to time determine.
ARTICLE II
STOCKHOLDERS' MEETINGS
2.1 Places of Meetings. All meetings of stockholders shall be held at
such place or places in or outside of the State of Georgia as the Board of
Directors may from time to time determine or as may be designated in the notice
of meeting or waiver of notice thereof, subject to any provisions of the laws of
the State of Georgia.
2.2 Annual Meetings. The annual meeting of stockholders shall be held on
such date in the month of September each year and at such time as shall be
determined by the Board of Directors from time to time or with respect to any
particular annual meeting for the purpose of electing directors and transacting
such other business as may come properly before the meeting. Written notice of
the date, time and place of the annual meeting shall be given by mail to each
stockholder entitled to vote at his address as it appears on the records of the
Corporation not less than ten (10) nor more than sixty (60) days prior to the
scheduled date thereof, unless such notice is waived as provided by Article IX
of these Bylaws.
2.3 Special Meetings. A special meeting of stockholders may be called at
any time by the Board of Directors, the Chairman of the Board of Directors or
the President. Written notice of the time, place and specific purposes of such
meeting shall be given by mail to each stockholder entitled to vote thereat at
his address as it appears on the records of the Corporation not less than ten
(10) nor more than sixty (60) days prior to the scheduled date thereof, unless
such notice is waived as provided in Article IX of these Bylaws.
2.4 Meetings Without Notice. Meetings of the stockholders may be held at
any time without notice when all the stockholders entitled to vote thereat are
present in person or by proxy.
2.5 Voting. At all meetings of stockholders, each stockholder entitled to
vote on the record date as determined under Article VI, Section 6.4 of these
Bylaws, or if not so determined, as prescribed under the laws of the State of
Georgia, shall be entitled to one vote for each share of common stock, or such
other number of votes prescribed in the Articles of Incorporation for each
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share of stock other than common stock, standing of record in his name, subject
to any restrictions or qualifications set forth in the Articles of
Incorporation, and may vote either in person or by proxy.
2.6 Quorum. At any meeting of stockholders, a majority of the number of
shares of stock outstanding and entitled to vote thereat, present in person or
by proxy, shall constitute a quorum, but a smaller interest may adjourn any
meeting from time to time, and the meeting may be held as adjourned without
further notice, subject to such limitation as may be imposed under the laws of
the State of Georgia. At any such adjourned meeting at which a quorum is
present, any business may be transacted which might have been transacted at the
originally scheduled meeting.
When a quorum is present at any meeting, a majority of the number of shares
of stock entitled to vote present thereat shall decide any question brought
before such meeting, unless the question is one upon which a different vote is
required by express provision of the laws of the State of Georgia, or the
Articles of Incorporation or these Bylaws, in which case such express provision
shall govern.
2.7 List of Stockholders. At least one (1) day before every meeting, a
complete list of the stockholders entitled to vote at the meeting, arranged in
alphabetical order and showing the address of and the number of shares
registered in the name of each stockholder, shall be prepared by the Secretary
or the transfer agent in charge of the stock ledger of the Corporation. Such
list shall be open for examination by any stockholder at the time and place of
the meeting. The stock ledger shall be the only evidence as to who are the
stockholders entitled to examine such list or the books of the Corporation or to
vote in person or by proxy at such meeting.
2.8 Action Without Meeting. Any action required by the laws of the State
of Georgia or the Articles of Incorporation to be taken at any annual or special
meeting of stockholders, or any action which may be taken at any annual or
special meeting of such stockholders, may be taken without a meeting, without
prior notice and without a vote, if a consent in writing, setting forth the
action so taken, shall be signed by all the holders of outstanding shares of
stock entitled to vote on such action.
ARTICLE III
BOARD OF DIRECTORS
3.1 Powers. The business and affairs of the Corporation shall be carried
on by or under the direction of the Board of Directors, which shall have all the
powers authorized by the laws of the State of Georgia, subject to such
limitations as may be provided by the Articles of Incorporation or these Bylaws.
3.2 Number, Qualification and Term. The initial number of directors shall
be such as may be determined by the incorporator(s) and thereafter the number of
directors shall be not less than three (3) and not more than twelve (12), the
exact number within such minimum and maximum limits to be fixed and determined
from time to time by resolution of a majority of the Board of Directors or by
the affirmative vote of the holders of at least 80% of all outstanding shares of
capital
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stock entitled to vote in the election of directors, voting together as a single
class, as provided in the Articles of Incorporation.
Directors shall be of full age, and no person shall be nominated for the
Board of Directors who shall have attained the age of seventy (70) on or before
the annual meeting of stockholders at which directors are elected, provided,
however, under special conditions in the best interests of the Corporation, as
determined by the Board of Directors or the shareholders, a person may be
nominated for the Board of Directors who has attained the age of seventy (70)
before such meeting. Directors need not be residents of the State of Georgia.
The initial Board of Directors shall be elected by the incorporator.
Thereafter, Directors shall be elected at the annual meeting of stockholders by
a plurality of the votes cast at such election. Each director shall serve until
the election and qualification of his successor or until his earlier death,
resignation or removal as provided in the Articles of Incorporation and these
Bylaws. In case of an increase in the number of directors between elections by
the stockholders, the additional directorships shall be considered vacancies and
shall be filled in the manner prescribed in Article V of these Bylaws.
The Board of Directors may, by majority vote, elect a Chairman of the Board
of Directors. The Chairman shall be a member of the Board and shall preside at
all meetings of the stockholders and of the Board of Directors and shall have
such other powers and perform such other duties as the Board of Directors may
prescribe from time to time.
3.3 Compensation. The Board of Directors, or a committee thereof, may
from time to time by resolution authorize the payment of fees or other
compensation to the directors for services as such to the Corporation,
including, but not limited to, fees for attendance at all meetings of the Board
of Directors or any committee thereof, and determine the amount of such fees and
compensation. Directors shall in any event be paid their traveling expenses for
attendance at all meetings of the Board of Directors or any committee thereof.
Nothing herein contained shall be construed to preclude any director from
serving the Corporation in any other capacity and receiving compensation
therefor in amounts authorized or otherwise approved from time to time by the
Board of Directors or a committee thereof.
3.4 Meetings and Quorum. Meetings of the Board of Directors may be held
either in or outside of the State of Georgia. A quorum shall be one-third (1/3)
of the number of directors then fixed in the manner provided in Section 3.2 of
this Article but not less than two (2) directors. The act of a majority of the
directors present at a meeting at which there is a quorum shall be the act of
the Board of Directors. If a quorum is not present at any meeting, the
Directors who are present may adjourn the meeting from time to time, without
notice other than announcement at the meeting, until a quorum is obtained,
subject to such limitation as may be imposed under the laws of the State of
Georgia.
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The Board of Directors shall, at the close of each annual meeting of
stockholders and without further notice other than these Bylaws, if a quorum of
directors is then present or as soon thereafter as may be convenient, hold a
regular meeting for the election of officers and the transaction of any other
business.
The Board of Directors may from time to time provide for the holding of
regular meetings with or without notice and may fix the times and places at
which such meetings are to be held. Meetings other than regular meetings may be
called at any time by the Chairman of the Board of Directors or the President
and must be called by the Chairman of the Board, the President, the Secretary or
an Assistant Secretary upon the request of at least three (3) directors.
Notice of each meeting, other than a regular meeting (unless required by
the Board of Directors), shall be given to each director by mailing the same to
each director at his residence or business address at least two (2) days before
the meeting or by delivering the same to him personally or by telephone,
facsimile transmission or telegraph at least one (1) day before the meeting
unless, in case of exigency, the Chairman of the Board of Directors, the
President, the Secretary or an Assistant Secretary, as the case may be, shall
prescribe a shorter notice to be given personally or by telephone, telegraph,
cable or facsimile transmission to all or any one or more of the directors at
their respective residences or places of business. Notice will be deemed to
have been given at the time it is mailed, postage-prepaid, or sent by telegraph,
cable or facsimile transmission, or given by telephone, as the case may be.
Notice of any meeting shall state the time and place of such meeting, but
need not state the purposes thereof unless otherwise required by the laws of the
State of Georgia, the Articles of Incorporation or the Board of Directors.
3.5 Executive Committee. The Board of Directors, by resolution adopted by
a majority of the number of directors then fixed in the manner provided in
Section 3.2 of this Article, may provide for an Executive Committee of three (3)
or more directors and shall elect the members thereof to serve during the
pleasure of the Board of Directors. The Executive Committee shall elect its own
chairman, unless a chairman has been designated by the Board of Directors.
Special meetings of the Executive Committee may be called by the chairman of the
committee or by the Board of Directors, and notice of meetings of the Executive
Committee shall be given by the chairman of the committee or by the Secretary,
in the manner provided in Section 3.4 of this Article for notice of meetings of
the Board of Directors.
The Board of Directors may at any time change the membership of the
Executive Committee, fill vacancies in it, designate alternate members to
replace any absent or disqualified members at any meeting of the Executive
Committee, or dissolve it.
During the intervals between the meetings of the Board of Directors, the
Executive Committee shall possess and may exercise any or all of the powers of
the Board of Directors in the management or direction of the business and
affairs of the Corporation to the extent authorized by resolution adopted by a
majority of the number of directors then fixed in the manner provided in
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Section 3.2 of this Article, subject to such limitations as may be imposed by
the laws of the State of Georgia.
Except as inconsistent with these Bylaws or the resolution of the Board of
Directors from time to time, the Executive Committee may determine its rules of
procedure and the notice to be given of its meeting, and it may appoint such
sub-committees as it shall from time to time deem necessary. A majority of the
members of the Executive Committee shall constitute a quorum. The Executive
Committee shall keep minutes of its meetings and shall report the same to the
Board of Directors.
3.6 Other Committees. The Board of Directors may by resolution provide
for such other committees as it deems desirable and may discontinue the same at
its pleasure. Each such committee shall have the powers and perform such
duties, not inconsistent with law, as may be assigned to it by the Board of
Directors.
Each such committee shall elect its own chairman, unless a chairman has
been designated by the Board of Directors.
Except as inconsistent with these Bylaws or the resolution of the Board of
Directors from time to time, each such committee may determine its rules of
procedure and the notice to be given of its meeting, and it may appoint such
committees as it shall from time to time deem necessary. Special meetings of any
such committee may be called by the chairman of that committee or by the Board
of Directors, and notice of any meeting of any such committee shall be given by
the chairman of that committee or by the Secretary in the manner provided in
Section 3.4 of this Article for notice of meetings of the Board of Directors. A
majority of the members of any such committee then in office shall constitute a
quorum. Each such committee shall keep minutes of its meetings and report the
same to the Board of Directors.
3.7 Conference Telephone Meetings. Any one or more members of the Board
of Directors or any committee thereof may participate in a meeting by means of a
conference telephone or similar communication equipment by means of which all
persons participating in the meeting can hear each other, and such participation
shall constitute presence in person at such meeting.
3.8 Action Without Meeting. To the extent authorized by Georgia law, any
action required or permitted to be taken at any meeting of the Board of
Directors or any committee thereof may be taken without a meeting if all members
of the Board of Directors or committee, as the case may be, consent thereto in
writing, and the writing or writings are filed with the minutes of the
proceedings of the Board of Director or committee.
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<PAGE>
ARTICLE IV
OFFICERS
4.1 Titles and Election. The officers of the Corporation shall be the
Chairman of the Board of Directors, the Vice Chairman of the Board of Directors,
the President, one or more Vice Presidents, the Secretary and the Treasurer, who
shall have such authority and perform such duties as may be prescribed by the
Board of Directors or as otherwise provided in these Bylaws.
The Board of Directors, in its discretion, may also at any time elect or
appoint such other officers as it may deem advisable, each of whom shall have
such authority and shall perform such duties as may be prescribed or determined
from time to time by the Board of Directors or, if not prescribed or determined
by the Board of Directors, as the Chairman of the Board, the President or the
then senior executive officer may prescribe or determine.
The Board of Directors may assign such additional titles and duties to one
or more of the officers as it shall deem appropriate.
Any person may hold more than one office if the duties can be consistently
performed by the same person.
The officers of the Corporation shall initially be elected as soon as
convenient by the Board of Directors and thereafter, in the absence of earlier
deaths, resignations or removals, shall be elected at the first meeting of the
Board of Directors following each annual meeting of stockholders. Each officer
shall hold office at the pleasure of the Board of Directors except as may
otherwise be approved by the Board of Directors, or until his earlier
resignation, removal or other termination of his employment.
The Board of Directors may require any officer or other employee or agent
to give bond for the faithful performance of his duties in such form and with
such sureties as the Board may require.
4.2 Duties. Subject to such extension, limitations, and other provisions
as the Board of Directors may from time to time prescribe or determine, the
following officers shall have the following powers and duties:
(a) Chairman of the Board of Directors. The Chairman of the Board of
Directors shall be a director and, when present, shall preside at all
meetings of the stockholders and of the Board of Directors and shall have
such other powers and perform such other duties as the Board of Directors
may prescribe from time to time.
(b) Vice Chairman of the Board of Directors. The Vice Chairman of the
Board of Directors shall be a director and, in the absence of the Chairman
of the Board, shall preside at all meetings of the stockholders and of the
Board of Directors and shall have such other powers and perform such other
duties as the Board of Directors may prescribe from time to time.
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<PAGE>
(c) President. The President shall exercise the powers and authority
and perform all of the duties commonly incident to his office and shall
perform such other duties as the Board of Directors shall specify from time
to time. In the absence or disability of the Chairman of the Board, the
President shall perform those duties of the Chairman of the Board not
assigned to the Vice Chairman of the Board, unless otherwise provided by
the Board of Directors.
(d) Vice President. The Vice President or Vice Presidents shall
perform such duties and have such powers as may be assigned to them from
time to time by the Board of Directors, the Chairman of the Board or the
President. Any Vice President may have the title of Executive Vice
President, Senior Vice President, Assistant Vice President or such other
title deemed appropriate by the Board of Directors from time to time.
In the absence or disability of the President, the Vice Presidents in
order of seniority may, unless otherwise determined by the Board of
Directors or the Chairman of the Board, exercise the powers and perform the
duties pertaining to the office of the President.
(e) Secretary. The Secretary, or in his absence an Assistant
Secretary, shall keep the minutes of all meetings of stockholders and of
the Board of Directors and any committee thereof, cause all notices to be
duly given to and served on the stockholders and directors, attend to such
correspondence as may be assigned to him, keep or cause to be kept in safe
custody the seal and corporate records of the Corporation and affix such
seal to all such instruments properly executed as may require it, have
general charge of the stock transfer books of the Corporation and shall in
general perform all duties incident to his office, and shall have such
other duties and powers as may be prescribed or determined from time to
time by the Board of Directors, the Chairman of the Board or the President.
In the absence or disability of the Secretary, the Assistant
Secretary, or if there he more than one, the Assistant Secretaries in the
order determined by the Board of Directors, or if no such determination has
been made, in the order of their election, shall perform the duties and
exercise the powers of the Secretary. Each Assistant Secretary also shall
perform such other duties and have such other powers as may be assigned to
him from time to time by the Board of Directors, the Chairman of the Board
or the President.
(f) Treasurer. The Treasurer shall have the care and custody of and
be responsible for the monies, funds, securities, financial records and
other valuable papers of the Corporation (other than his own bond, if any,
which shall be in the custody of the President); shall keep full and
accurate accounts of receipts and disbursements and shall render account
thereof whenever required by the Board of Directors, the Chairman of the
Board or the President; shall have and perform, under the supervision of
the Board of Directors, the Chairman of the Board and the President all the
powers and duties commonly incident to his office; shall deposit or cause
to be deposited all funds of the Corporation in such bank or banks, trust
company or trust companies, or with such firm or firms doing a banking
business as may be designated by the Board of Directors, the Chairman of
the Board or the President; may endorse for deposit or collection all
checks, notes, and similar
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instruments payable to the Corporation or to its order; and shall have such
other duties as may be prescribed or determined from time to time by the
Board of Directors, the Chairman of the Board or the President.
In the absence or disability of the Treasurer, the Assistant
Treasurer, or if there be more than one, the Assistant Treasurers in the
order determined by the Board of Directors, or if no such determination has
been made, in the order of their election, shall perform the duties and
exercise the powers of the Treasurer and such other duties as may be
assigned to them from time to time by the Board of Directors, the Chairman
of the Board or the President.
4.3 Chief Executive Officer and Chief Operating Officer. In its
discretion, the Board of Directors may designate either the Chairman of the
Board or the President to serve as the Chief Executive Officer or the Chief
Operating Officer, or both, of the Corporation.
The Chief Executive Officer shall, subject to the direction and control of
the Board of Directors, have general supervision, direction and control of the
business and officers of the Corporation and have the powers and duties
otherwise customary to the office.
The Chief Operating Officer shall, subject to the direction and control of
the Board of Directors, have general supervision, management and control of the
operations and personnel of the Corporation and the powers and duties otherwise
customary to the office.
4.4 Chief Financial Officer and Chief Accounting Officer. In its
discretion, the Board of Directors may at any time designate any officer as the
Chief Financial Officer, the Chief Accounting Officer, or both, of the
Corporation.
4.5 Delegation of Authority. The Board of Directors may at any time
delegate the powers and duties of any officer for the time being to any other
officer, director or employee.
4.6 Compensation. The compensation of the officers shall be fixed by the
Board of Directors or a committee thereof and the fact that any officer is a
director shall not preclude him from receiving compensation or from voting upon
the resolution providing the same.
ARTICLE V
RESIGNATIONS, VACANCIES AND REMOVALS
5.1 Resignations. Any director or officer may resign at any time by
giving written notice thereof to the Board of Directors, the Chairman of the
Board, the President or the Secretary. Any such resignation shall take effect
at the time specified therein or, if the time be not specified, upon receipt
thereof; and unless otherwise specified therein, the acceptance of any
resignation shall not be necessary to make it effective.
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5.2 Vacancies.
(a) Directors. Any vacancy in the Board of Directors caused by reason
of death, incapacity, resignation, removal, increase in the authorized
number of directors or otherwise may be filled by a majority vote of the
remaining directors though less than a quorum, or by the sole remaining
director.
Any director so elected by the Board of Directors shall serve until
the next annual meeting of stockholders at which directors of the class in
which such director serves are to be elected and until the election and
qualification of his successor or until his earlier death, resignation or
removal as provided in the Articles of Incorporation or these Bylaws. The
Board of Directors also may reduce their authorized number by the number of
vacancies in the Board, provided such reduction does not reduce the Board
to less than the minimum authorized by the laws of the State of Georgia or
the Articles of Incorporation, or to less than the number of directors then
in office.
(b) Officers. The Board of Directors may at any time or from time to
time fill any vacancy among the officers of the Corporation.
5.3 Removals.
(a) Directors. The entire Board of Directors, or any individual
member thereof, may be removed only as provided in the Articles of
Incorporation.
(b) Officers. Subject to the provisions of any validly existing
agreement, the Board of Directors may at any meeting remove from office any
officer, with or without cause, and may elect or appoint a successor.
ARTICLE VI
CAPITAL STOCK
6.1 Certificates of Stock. Every stockholder shall be entitled to a
certificate or certificates for shares of the capital stock of the Corporation
in such form as may be prescribed or authorized by the Board of Directors, duly
numbered and setting forth the number and kind of shares represented thereby.
Such certificates shall be signed by the Chairman of the Board, the Vice
Chairman of the Board, the President or a Vice President, and by the Treasurer,
an Assistant Treasurer, the Secretary or an Assistant Secretary. If and to the
extent permitted by Georgia law, any or all of such signatures may be in
facsimile if the certificate is countersigned by a transfer agent or registered
by a registrar other than the Corporation itself or an employee of the
Corporation. The transfer agent or registrar may sign either manually or by
facsimile.
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In case any officer, transfer agent or registrar who has signed or whose
facsimile signature has been placed on a certificate has ceased to be such
officer, transfer agent or registrar before the certificate has been issued,
such certificate may nevertheless be issued and delivered by the Corporation
with the same effect as if he were such officer, transfer agent or registrar at
the date of issue.
6.2 Transfer of Stock. Shares of the capital stock of the Corporation
shall be transferable only upon the books of the Corporation upon the surrender
of the certificate or certificates properly assigned and endorsed for transfer.
The Board of Directors may appoint a transfer agent and one or more co-
transfer agents and a registrar and one or more co-registrars and may make or
authorize such agents to make all such rules and regulations deemed expedient
concerning the issue, transfer and registration of shares of stock. If the
Corporation has a transfer agent or registrar acting on its behalf, the
signature of any officer or representative thereof may be in facsimile.
6.3 Stock Transfer Records. Unless the Corporation has a stock transfer
agent to keep such records, the Secretary shall keep a stock book or books
containing the names, alphabetically arranged, with the address of every
stockholder showing the number of shares of each kind, class or series of stock
held of record.
The person in whose name shares of stock stand on the books of the
Corporation shall be deemed by the Corporation to be the owner thereof for all
purposes.
6.4 Record Dates. In order that the Corporation may determine the
stockholders entitled to notice of or to vote at any meeting of stockholders or
any adjournment thereof, or to express consent to corporate action in writing
without a meeting, or entitled to receive payment of any dividend or other
distribution or allotment of any rights, or entitled to exercise any rights in
respect of any change, conversion or exchange of stock or for the purpose of any
other lawful action, the Board of Directors shall fix in advance a record date
which, in the case of a meeting, shall not be less than ten (10) nor more than
sixty (60) days prior to the scheduled date of such meeting and which, in the
case of any other action, shall be not more than sixty (60) days prior to any
such action permitted by the laws of the State of Georgia.
A determination of stockholders of record entitled to notice of or to vote
at a meeting of stockholders shall apply to any adjournment of the meeting;
provided, however, that the Board of Directors may fix a new record date for the
adjourned meeting.
6.5 Lost Certificates. In case of loss, mutilation or destruction of a
stock certificate, a duplicate certificate may be issued upon such terms as may
be determined or authorized by the Board of Directors, the Chairman of the Board
or the President.
-10-
<PAGE>
ARTICLE VII
FISCAL YEAR, BANK DEPOSITS, CHECKS, ETC.
7.1 Fiscal Year. The fiscal year of the Corporation shall end on the
first Saturday following May 30 each year.
7.2 Bank Deposits, Checks, Etc. The funds of the Corporation shall
be deposited in the name of the Corporation or of any division thereof in such
banks or trust companies in the United States or elsewhere as may be designated
from time to time by the Board of Directors, or by such officer or officers as
the Board of Directors may authorize to make such designations.
All checks, drafts or other orders for the withdrawal of funds from
any bank account shall be signed by such person or persons as may be designated
from time to time by the Board of Directors. The signatures on checks, drafts
or other orders for the withdrawal of funds may be in facsimile if authorized in
the designation.
ARTICLE VIII
BOOKS AND RECORDS
8.1 Place of Keeping Books. The books and records of the Corporation
may be kept in or outside of the State of Georgia, as the Board of Directors may
from time to time determine.
8.2 Examination of Books. Except as may otherwise be provided by the
laws of the State of Georgia, the Articles of Incorporation or these Bylaws, the
Board of Directors shall have power to determine from time to time whether and
to what extent and at what times and places and under what conditions any of the
accounts, records and books of the Corporation are to be open to the inspection
of any stockholder. No stockholder shall have any right to inspect any account
or book or document of the Corporation except as prescribed by law or authorized
by express resolution of the stockholders or of the Board of Directors.
ARTICLE IX
NOTICES
9.1 Requirements of Notice. Whenever notice is required to be given
by statute, the Articles of Incorporation or these Bylaws, it shall not mean
personal notice unless so specified, but such notice may be given in writing by
depositing the same in a post office, letter box, or mail chute postage prepaid
and addressed to the person to whom such notice is directed at the address of
such person on the records of the Corporation, and such notice shall be deemed
given at the time when the same shall be thus mailed.
9.2 Waivers. Any stockholder, director or officer may, in writing
delivered via first class mail, hand-delivery or facsimile transmission or by
telegram or cable, at any time waive any notice
-11-
<PAGE>
or other formality required by statute, the Articles of Incorporation or these
Bylaws. Such waiver of notice, whether given before or after any meeting or
action, shall be deemed equivalent to notice. Presence of a stockholder either
in person or by proxy at any meeting of stockholders and presence of any
director at any meeting of the Board of Directors shall constitute a waiver of
such notice as may be required by any statute, the Articles of Incorporation or
these Bylaws.
ARTICLE X
SEAL
The corporate seal of the Corporation shall be in such form as the
Board of Directors shall determine from time to time and may consist of a
facsimile thereof or the words "Corporate Seal" or "Seal" enclosed in
parentheses.
In the absence of the Secretary, any other officer of the Corporation
may affix and attest the seal of the Corporation to any instrument requiring it,
unless otherwise provided by resolution of the Board of Directors.
ARTICLE XI
POWERS OF ATTORNEY
The Board of Directors may authorize one or more of the officers of
the Corporation to execute powers of attorney delegating to named
representatives or agents power to represent or act on behalf of the
Corporation, with or without power of substitution.
In the absence of any action by the Board of Directors, any officer of
the Corporation may execute for and on behalf of the Corporation waivers of
notice of meetings of stockholders and proxies for such meetings of any company
in which the Corporation may hold voting securities.
ARTICLE XII
INDEMNIFICATION OF DIRECTORS, OFFICERS,
AND OTHER PERSONS
12.1 Indemnified Actions. The Corporation shall indemnify any person
who was or is a party or is threatened to be made a party to any threatened,
pending or completed action, suit or proceeding, whether civil, criminal,
administrative, and whether external or internal to the Corporation (including a
judicial action or suit brought by or in the right of the Corporation), by
reason of the fact that he is or was a director or officer of the Corporation,
or is or was serving at the request of the Corporation as a director or officer
of another corporation, partnership, joint venture, trust or other enterprise
(all such persons being referred to hereafter as an "Agent"), against expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by him in connection with such action, suit or
proceeding, except that no indemnification shall be made in respect of any
claim, issue or matter as to which such person shall
-12-
<PAGE>
have been adjudged liable to the Corporation or subjected to injunctive relief
in favor of the Corporation: (a) for any appropriation, in violation of his
duties, of any business opportunity of the Corporation; (b) for acts or
omissions which involve intentional misconduct or a knowing violation of law;
(c) for unlawful distributions pursuant to Section 14-2-832 of the Georgia
Business Corporation Code; or (d) for any transaction from which he received an
improper personal benefit.
12.2 Indemnification Against Expenses of Successful Party.
Notwithstanding the other provisions of this Article XII, to the extent that an
Agent has been successful on the merits or otherwise in defense of any
proceeding or in defense of any claim, issue or matter therein, such Agent shall
be indemnified against all expenses incurred in connection therewith.
12.3 Advances of Expenses. Expenses incurred in defending or
investigating any action, suit, proceeding or investigation shall be paid by the
Corporation in advance of the final disposition of such matter, if the Agent
shall provide the Corporation with (i) a written affirmation of his good faith
belief that his conduct does not constitute behavior of the kind described in
any of the clauses (a) through (d) of Section 12.1, and (ii) a written
undertaking, executed personally or on his behalf, to repay any advances if it
is ultimately determined that he is not entitled to indemnification under
Section 12.1.
12.4 Right of Agent to Indemnification Upon Application; Procedure
Upon Application. Any indemnification under Sections 12.1 and 12.2 hereof or
advance under Section 12.3 hereof shall be made promptly and in any event within
forty-five (45) days after receipt of the written request of the Agent, unless
the Agent is not entitled to such indemnification or advance pursuant to the
terms of such sections. The right to indemnification or advances as granted by
this Article XIl shall be enforceable by the Agent in any court of competent
jurisdiction if the Corporation denies the claim, in whole or in part, or if no
disposition of such claim is made within forty-five (45) days of the Agent's
request. The Agent's expenses incurred in connection with successfully
establishing his right to indemnification, in whole or in part, in any such
proceeding shall also be indemnified by the Corporation.
12.5 Other Rights and Remedies. The indemnification provided by this
Article XII shall not be deemed exclusive of any other rights to which an Agent
seeking indemnification may be entitled under any agreement, vote of
stockholders or disinterested directors, court order or otherwise, both as to
action in his official capacity and as to action in another capacity while
holding such office. It is the policy of the Corporation that indemnification
of Agents shall be made to the fullest extent permitted by law. All rights to
indemnification under this Article XII shall be deemed to be provided by a
contract between the Corporation and the Agent who serves in such capacity at
any time while these Bylaws and other relevant provisions of the Georgia
Business Corporation Code and other applicable law, if any, are in effect. Any
repeal or modification thereof shall not affect any rights or obligations then
existing.
12.6 Insurance of Agents. To the extent permitted by Georgia law,
the Corporation may purchase and maintain insurance on behalf of any person who
is or was an Agent against any liability asserted against him and incurred by
him in any such capacity, or arising out of his status as such,
-13-
<PAGE>
whether or not the Corporation would have the power to indemnify him against
such liability under the provisions of this Article XII.
12.7 Certain Definitions. For purposes of this Article XII,
references to the "Corporation" shall include, in addition to the resulting or
surviving corporation, any constituent corporation (including any constituent of
a constituent) absorbed in a consolidation or merger which, if its separate
existence had continued, would have had power to indemnify its directors,
officers and employees or agents, so that any person who is or was a director,
officer, employee or agent of such constituent corporation, or is or was serving
at the request of such constituent corporation as a director, officer, employee
or agent of another corporation, partnership, joint venture, trust or other
enterprise, shall stand in the same position under this Article XII with respect
to the resulting or surviving corporation as he would have with respect to such
constituent corporation if its separate existence had continued; references to
"other enterprise" shall include employee benefit plans; references to "fines"
shall include any excise taxes assessed a person with respect to any employee
benefit plan; and references to "serving at the request of the Corporation"
shall include any service as a director or officer of the Corporation which
imposes duties on, or involves services by, such director or officer with
respect to any employee benefit plan, its participants, or beneficiaries.
12.8 Indemnification and Insurance of Other Persons. The provisions
of this Article XII shall not be deemed to preclude the Corporation from either
indemnifying or purchasing and maintaining insurance on behalf of, or both, any
person who is not an Agent but whom the Corporation has the power or obligation
to indemnify or insure under the provisions of the Georgia Business Corporation
Code or otherwise. The Corporation may, in its sole discretion, indemnify or
insure, or both, an employee, trustee or other agent as permitted by the Georgia
Business Corporation Code. The Corporation shall indemnify or insure any
employee, trustee or other agent where required by law.
12.9 Survival of Indemnification. The indemnification and
advancement of expenses provided by, or granted pursuant to, this Article XII
shall continue as to a person who has ceased to be an Agent and shall inure to
the benefit of the heirs, executors and administrators of such Agent.
12.10 Savings Clause. If this Article XII or any portion thereof
shall be invalidated on any ground by any court of competent jurisdiction, then
the Corporation shall nevertheless indemnify each Agent against expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
with respect to any action, suit or proceeding, whether civil, criminal,
administrative or investigative, and whether internal or external, including a
grand jury proceeding and an action or suit brought by or in the right of the
Corporation, to the full extent permitted by any applicable portion of this
Article XII that shall not have been invalidated or by any other applicable law.
-14-
<PAGE>
ARTICLE XIII
AMENDMENTS
Unless otherwise provided by law, the Articles of Incorporation or
another provision of these Bylaws, these Bylaws may be amended or repealed
either:
(a) at any meeting of stockholders at which a quorum is present by
vote of the holders of a majority of the number of shares of stock entitled
to vote present in person or by proxy at such meeting as provided in
Article II, Sections 2.4 and 2.5 of these Bylaws, or
(b) at any meeting of the Board of Directors by a majority vote of the
directors then in office;
provided the notice of such meeting of stockholders or directors or waiver of
notice thereof contains a statement of the substance of the proposed amendment
or repeal.
-15-
<PAGE>
EXHIBIT 4.1
================================================================================
- --------------- ----------------
NUMBER [LOGO OF RUBY TUESDAY APPEARS HERE] SHARES
RTI
- --------------- ----------------
COMMON STOCK THIS CERTIFICATE IS
TRANSFERABLE IN BIRMINGHAM, ALA.
PAR VALUE $.01 OR NEW YORK, N.Y.
SEE REVERSE FOR CERTAIN
DEFINITIONS AND RIGHTS LEGEND
INCORPORATED UNDER THE LAWS OF
THE STATE OF GEORGIA CUSIP 781182 10 0
RUBY TUESDAY, INC.
- --------------------------------------------------------------------------------
This certifies that
is the owner of
- --------------------------------------------------------------------------------
SHARES OF THE FULLY PAID AND NON-ASSESSABLE COMMON STOCK OF
Ruby Tuesday, Inc., of the par value of $.01 per share, transferable on the
books of the Corporation by the holder hereof in person or by duly authorized
attorney upon surrendor of this Certificate properly endorsed. The Certificate
is not valid unless and until countersigned and registered by the Transfer Agent
and Registrar.
Witness the facsimile seal of the Corporation and the facsimile signatures of
its duly authorized officers.
Dated:
CERTIFICATE OF STOCK
[SIGNATURE APPEARS HERE] [SIGNATURE APPEARS HERE]
SECRETARY CHAIRMAN OF THE BOARD
AND CHIEF EXECUTIVE OFFICER
[CORPORATE SEAL OF RUBY TUESDAY, INC. APPEARS HERE]
================================================================================
Countersigned and Registered:
AMSOUTH BANK OF ALABAMA
Transfer Agent
and Registrar,
By
Authorized Signature
<PAGE>
RUBY TUESDAY, INC.
THE CORPORATION WILL FURNISH WITHOUT CHARGE TO EACH STOCKHOLDER WHO
REQUESTS THE POWERS, DESIGNATIONS, PREFERENCES AND RELATIVE PARTICIPATING,
OPTIONAL OR OTHER SPECIAL RIGHTS OF EACH CLASS OF STOCK OR SERIES THEREOF OF THE
CORPORATION AND THE QUALIFICATIONS, LIMITATIONS OR RESTRICTIONS OF SUCH
PREFERENCES AND/OR RIGHTS. SUCH REQUEST MAY BE MADE TO THE CORPORATION OR THE
TRANSFER AGENT.
The following abbreviations, when used in the inscription on the face of
this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM -- as tenants in common
TEN ENT -- as tenants by the entireties
JT TEN -- as joint tenants with right of
survivorship and not as tenants
in common
UNIF GIFT MIN ACT -- __________Custodian___________
(Cust) (Minor)
under Uniform Gifts to Minors
ACT_________________
(State)
Additional abbreviations may also be used though not in the above list.
For value received,___________ hereby sell, assign and transfer unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
- ---------------------------------------
- ---------------------------------------
________________________________________________________________________________
PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS INCLUDING POSTAL ZIP CODE OF ASSIGNEE
________________________________________________________________________________
________________________________________________________________________________
__________________________________________________________________________Shares
of the capital stock represented by the within Certificate, and do hereby
irrevocably constitute and appoint_____________________________________________
________________________________________________________________________________
Attorney to transfer the said stock on the books of the within-named Corporation
with full power of substitution in the premises.
Dated,_______________________________
________________________________________________________
THE SIGNATURE TO THIS ASSIGNMENT MUST CORRESPOND WITH
NOTICE: THE NAME AS WRITTEN UPON THE FACE OF THE CERTIFICATE IN
EVERY PARTICULAR, WITHOUT ALTERATION OR ENLARGEMENT OR
ANY CHANGE WHATEVER.
SIGNATURE(S) GUARANTEED:________________________________________________________
THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE
GUARANTOR INSTITUTION (BANKS, STOCKBROKERS, SAVINGS AND
LOAN ASSOCIATIONS AND CREDIT UNIONS WITH MEMBERSHIP IN
AN APPROVED SIGNATURE GUARANTEE MEDALION PROGRAM),
PURSUANT TO S.E.C. RULE 17Ad-15.
KEEP THIS CERTIFICATE IN A SAFE PLACE. IF IT IS LOST, STOLEN, MUTILATED OR
DESTROYED, THE CORPORATION WILL REQUIRE A BOND OF INDEMNITY AS A CONDITION TO
THE ISSUANCE OF A REPLACEMENT OF CERTIFICATE.
This certificate also evidences and entitles the holder hereof to certain rights
as set forth in a Rights Agreement between Ruby Tuesday, Inc. and AmSouth Bank
of Alabama, dated as of March 30, 1987, (the "Rights Agreement"), the terms of
which are hereby incorporated herein by reference and a copy of which is on file
at the principal executive offices of Ruby Tuesday, Inc. Under certain
circumstances, as set forth in the Rights Agreement, such Rights will be
evidenced by separate certificates and will no longer be evidenced by this
certificate. Ruby Tuesday, Inc. will mail to the holder of this certificate a
copy of the Rights Agreement without charge after receipt of a written request
therefor. Under certain circumstances, Rights beneficially owned by Acquiring
Persons (as defined in the Rights Agreement) and any subsequent holder may
become null and void.
KEEP THIS CERTIFICATE IN A SAFE PLACE. IF IT IS LOST, STOLEN,
MUTILATED OR DESTROYED, THE CORPORATION WILL REQUIRE
A BOND OF INDEMNIFYING AS A CONDITION TO THE ISSUANCE
OF A REPLACEMENT CERTIFICATE.
<PAGE>
Exhibit 10.11
March 13, 1996
PYA/Monarch Inc.
Spec. Dist.
80 Int'l Drive
Suite 200
Greenville, SC 29615
Gentlemen:
PYA/Monarch, Inc. ("PYA") currently supplies produce, food stuff and other
supplies (collectively, "Products") to certain facilities of Morrison
Restaurants Inc. ("Morrison"), including to the Health Care Division, the Family
Dining Division and the Specialty Dining Division, pursuant to the terms of a
Supply Agreement dated July 8, 1988 between PYA and Morrison, as amended (the
"Supply Agreement"). Morrison has approved a Plan of Distribution pursuant to
which it has transferred all of its assets and liabilities related to the Health
Care Division to Morrison Health Care, Inc., a newly-created, wholly owned
subsidiary of Morrison and a Georgia corporation ("MHCI"), and transferred all
of its Family Dining Division assets and liabilities to Morrison Fresh Cooking,
Inc, a newly-created, wholly-owned subsidiary of Morrison and a Georgia
corporation ("MFCI"). On or about March 9, 1996, Morrison plans to distribute
all of the issued and outstanding stock in each of MHCI and MFCI to its
stockholders. Immediately thereafter, the Specialty Dining Division, which
remained with Morrison, will reincorporate by means of a merger in the state of
Georgia, and shall change its name to Ruby Tuesday, Inc. ("RTI")(the foregoing
transactions shall be referred to collectively as the "Reorganization").
Following the Reorganization, each of MHCI, MFCI and RTI (collectively, the
"Morrison Companies") desires to provide for the continuation of supplier
arrangements with PYA pursuant to the terms of the Supply Agreement.
This letter will confirm that PYA has agreed to continue to supply Products
to each of the Morrison Companies and the Morrison Companies have agreed to
continue to purchase Products from PYA following the Reorganization under the
terms of the Supply Agreement (assuming compliance with the Supply Agreement by
each of the Morrison Companies as if the Reorganization had not occurred). Each
of the Morrison Companies shall have such rights and obligations as if it were
the "Buyer" under the Supply Agreement, except as modified by this letter
agreement.
Section 2(b)(i) of the Supply Agreement, regarding the percentage of
Products to be purchased by each division of Morrison is hereby amended to
reflect the Reorganization such that RTI will be obligated to purchase 60% of
all of its Products from PYA, MFCI will be obligated to purchase 85% of all of
its Products from PYA, and MHCI will be obligated to purchase 35% of all of its
Products from PYA.
Section 2(b)(ii) of the Supply Agreement, regarding the annual aggregate
purchase requirement, which is currently $183,000,000 for Morrison, shall be
allocated among the Morrison Companies such that RTI shall have an annual
aggregate purchase requirement of $76,000,000, MHCI shall have an annual
aggregate purchase requirement of $31,000,000, and MFCI shall have an annual
aggregate purchase requirement of $76,000,000. Such amounts may be adjusted
from time to time as set forth in clause (ii) of Section 2(b).
<PAGE>
PYA/Monarch Inc.
March 13, 1996
Page 2
Each of the Morrison Companies will continue to place orders, and PYA will
continue to accept orders, deliver Products and bill in accordance with past
practices except as follows:
(i) PYA will assign new billing codes to each of the Morrison Companies
for placing orders with PYA;
(ii) PYA shall bill each of the Morrison Companies separately for their
respective purchases, providing each the benefit, however, of the aggregate
volume of purchases of all with respect to any volume discounts, rebates or
similar incentives offered by PYA under the Supply Agreement; and
(iii) PYA will supply Products to each of the Morrison Companies on the
same credit terms afforded to Morrison until such time as such company may
default in its obligations, at which time PYA may revise such company's credit
terms or otherwise exercise its rights with respect to that company consistent
with the terms of the Supply Agreement.
In the event of a default by one of the Morrison Companies of any of its
obligations under the Supply Agreement, PYA's rights or remedies with respect to
such a default will be enforceable only against the company in default and PYA's
obligations with respect to the non-defaulting companies will remain unaffected,
except to the extent that a decline in the aggregate level of purchases under
the Supply Agreement may affect pricing and rebates in accordance with the terms
of the Supply Agreement.
The Morrison Companies have organized a purchasing co-operative, MRT
Purchasing, LLC, ("Purchasing Co-op") for purposes of negotiating purchasing
arrangements mutually beneficial to the companies going forward. The Purchasing
Co-op has the exclusive authority to negotiate on behalf of the Morrison
Companies, but each of the companies upon its agreement shall be individually
bound in any contractual arrangements. PYA acknowledges that the Purchasing Co-
op will be responsible for oversight of the operation of PYA under the Supply
Agreement and the negotiation of all amendments to the Supply Agreement.
The Purchasing Co-op will also manage and monitor purchasing activities on
behalf of the Morrison Companies much in the same manner the Purchasing
Department is currently engaged on behalf of Morrison. In this regard, PYA
agrees to send to the Purchasing Co-op the same kinds of reports which are
currently sent to the Purchasing Department of Morrison. The Morrison Companies
may request that all rebates for purchases under the Supply Agreement be sent to
the Purchasing Co-op on their behalf, for distribution by the Purchasing Co-op
to the appropriate companies.
This Agreement shall become effective upon the effectiveness of the
Distribution, which is scheduled to occur on or about March 9, 1996 and shall
continue for the remainder of the term of the Supply Agreement.
<PAGE>
PYA/Monarch Inc.
March 13, 1996
Page 3
If this accurately reflects our agreement, please sign in the space
provided below.
Sincerely,
MORRISON RESTAURANTS INC.
By: /s/ J. Russell Mothershed
---------------------------------
Title: Senior Vice President
----------------------------
MORRISON HEALTH CARE, INC.
By: /s/ J. Russell Mothershed
---------------------------------
Title: Vice President
----------------------------
MORRISON FRESH COOKING, INC.
By: /s/ J. Russell Mothershed
---------------------------------
Title: Vice President
----------------------------
Accepted and agreed to this 7th day of March, 1996:
PYA/MONARCH, INC.
By: /s/ [Illegible]
---------------------------------
Title: President, Specialty
Distribution Division
of PYA/Monarch, Inc.
---------------------
<PAGE>
EXHIBIT 10.23
DISTRIBUTION AGREEMENT
by and among
MORRISON RESTAURANTS INC.
MORRISON FRESH COOKING, INC.
and
MORRISON HEALTH CARE, INC.
MARCH 2, 1996
<PAGE>
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
ARTICLE I. DEFINITIONS................................................ 1
SECTION 1.1. General........................................ 1
SECTION 1.2. References; Interpretation..................... 8
ARTICLE II. DISTRIBUTION AND OTHER TRANSACTIONS; CERTAIN
COVENANTS.................................................. 8
SECTION 2.1. The Distribution and Other Transactions........ 8
(a) Certain Transactions................................... 8
(b) Stock Dividends to MRI................................. 8
(c) Charters; Bylaws....................................... 8
(d) Directors; Officers.................................... 9
(e) Certain Licenses and Permits........................... 9
(f) Transfer of Agreements................................. 9
(g) Operating Agreement.................................... 10
(h) Reincorporation of MRI; Reverse Stock Split............ 10
(i) Delivery of Shares to Transfer Agent................... 10
(j) Other Transactions..................................... 11
SECTION 2.2. Certain Financial and Other Arrangements....... 11
(a) Intercompany Accounts.................................. 11
(b) Operations in Ordinary Course.......................... 11
SECTION 2.3. Certain Indebtedness; Balance Sheets........... 12
SECTION 2.4. Assumption and Satisfaction of Liabilities;
Management Responsibility for Shared
Liabilities; Rights and Assets Relating to
Shared Liabilities............................. 12
SECTION 2.5. Resignations................................... 13
SECTION 2.6. Further Assurances............................. 13
SECTION 2.7. No Representations or Warranties............... 13
SECTION 2.8. Guarantees..................................... 14
SECTION 2.9. Witness Services............................... 14
SECTION 2.10. Certain Post-Distribution Transactions......... 14
SECTION 2.11. Directors and Officers Liability Insurance..... 15
SECTION 2.12. Insurance...................................... 15
SECTION 2.13. Transfers Not Effected Prior to the
Distribution; Transfers Deemed Effective as
of the Distribution Date....................... 15
SECTION 2.14. Ancillary Agreements........................... 16
ARTICLE III. INDEMNIFICATION............................................ 16
SECTION 3.1. Indemnification by RTI......................... 16
SECTION 3.2. Indemnification by MFCI........................ 16
SECTION 3.3. Indemnification by MHCI........................ 16
SECTION 3.4. Limitations on Indemnification Obligations..... 16
SECTION 3.5. Procedures for Indemnification................. 17
(a) Third Party Claims (other than in respect of
Shared Liabilities).................................... 17
(b) Third Party Claims in Respect of Shared Liabilities.... 18
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C>
SECTION 3.6. Indemnification Payments...................... 20
SECTION 3.7. Other Adjustments............................. 20
SECTION 3.8. Survival of Indemnities....................... 21
ARTICLE IV. ACCESS TO INFORMATION..................................... 21
SECTION 4.1. Provision of Corporate Records................ 21
SECTION 4.2. Access to Information......................... 21
SECTION 4.3. Reimbursement; Other Matters.................. 22
SECTION 4.4. Confidentiality............................... 22
ARTICLE V. INSURANCE................................................. 23
SECTION 5.1. Policies and Rights Included Within Assets.... 23
SECTION 5.2. Post-Distribution Date Claims................. 23
SECTION 5.3. Administration; Other Matters................. 24
(a) Exceeding Policy Limits............................... 25
(b) Allocation of Insurance Proceeds...................... 25
SECTION 5.4. Agreement for Waiver of Conflict and Shared
Defense....................................... 26
SECTION 5.5. Cooperation................................... 26
ARTICLE VI. DISPUTE RESOLUTION........................................ 26
ARTICLE VII. MISCELLANEOUS............................................. 27
SECTION 7.1. Complete Agreement; Construction.............. 27
SECTION 7.2. Counterparts.................................. 27
SECTION 7.3. Survival of Agreements........................ 27
SECTION 7.4. Notices....................................... 27
SECTION 7.5. Waivers....................................... 28
SECTION 7.6. Amendments.................................... 28
SECTION 7.7. Assignment.................................... 28
SECTION 7.8. Successors and Assigns........................ 29
SECTION 7.9. Termination................................... 29
SECTION 7.10. Subsidiaries.................................. 29
SECTION 7.11. Third Party Beneficiaries..................... 29
SECTION 7.12. Attorney Fees................................. 29
SECTION 7.13. Title and Headings............................ 29
SECTION 7.14. Schedules..................................... 29
SECTION 7.15. Specific Performance.......................... 30
SECTION 7.16. GOVERNING LAW................................. 30
SECTION 7.17. Consent to Jurisdiction....................... 30
SECTION 7.18. Severability.................................. 30
</TABLE>
-ii-
<PAGE>
DISTRIBUTION AGREEMENT dated as of March 2, 1996, among MORRISON
RESTAURANTS INC., a Delaware corporation ("MRI"), MORRISON FRESH
COOKING, INC., a Georgia corporation ("MFCI"), and MORRISON HEALTH
CARE, INC., a Georgia corporation ("MHCI").
WHEREAS, the Board of Directors of MRI has determined that it is
appropriate and desirable to distribute to the holders of shares of common
stock, par value $0.01 per share, of MRI (the "MRI Common Stock") all the
outstanding shares of common stock of MFCI (the "MFCI Common Shares") and all
the outstanding shares of common stock of MHCI (the "MHCI Common Shares");
WHEREAS, the Board of Directors of MRI has determined that it is
appropriate and desirable to reincorporate MRI in Georgia by merging MRI into
Ruby Tuesday (Georgia), Inc., a wholly-owned subsidiary of MRI ("RTI-Georgia"),
and to merge Ruby Tuesday, Inc., a Delaware corporation ("RTI-Delaware") and
wholly-owned subsidiary of MRI, into RTI-Georgia substantially simultaneously,
with the surviving corporation to be a Georgia corporation known as Ruby
Tuesday, Inc. ("RTI");
WHEREAS, each of MRI, MFCI and MHCI has determined that it is necessary and
desirable to allocate and assign responsibility for those liabilities in respect
of the activities of the businesses of such entities on the Distribution Date
(as defined herein) and those liabilities in respect of other businesses and
activities of MRI and its former subsidiaries and other matters; and
WHEREAS, each of MRI, MFCI and MHCI has determined that it is necessary and
desirable to set forth the principal corporate transactions required to effect
such distribution and to set forth other agreements that will govern certain
other matters following the distributions;
NOW, THEREFORE, in consideration of the mutual agreements, provisions and
covenants contained in this Agreement, the parties hereby agree as follows:
ARTICLE I. DEFINITIONS
SECTION 1.1. General. As used in this Agreement, the following terms
-------
shall have the following meanings (such meanings to be equally applicable to
both the singular and plural forms of the terms defined):
"Action" shall mean any action, suit, arbitration, inquiry, proceeding or
investigation by or before any court, any governmental or other regulatory or
administrative agency, body or commission or any arbitration tribunal.
"Affiliate" shall mean, when used with respect to a specified person,
another person that directly, or indirectly through one or more intermediaries,
controls or is controlled by or is under common control with the person
specified.
<PAGE>
"Allocation Memorandum" shall mean that certain Memorandum from Russ
Mothershed and Frank Southall to the Chief Financial Officers of each of RTI,
MHCI and MFCI regarding the Allocation of Certain Liabilities Post-Spin-Off
dated March 2, 1996.
"Ancillary Agreements" shall mean all of the written agreements,
instruments, understandings, assignments or other arrangements (other than this
Agreement) entered into in connection with the transactions contemplated hereby,
including, without limitation, the Transfer and Assumption Instruments, the
Employee Benefits Matters Agreement, the Tax Allocation Agreement, the
Intellectual Property Agreements, the Purchasing Agreements and the Operating
Agreement.
"Claims Administration" shall mean the processing of claims made under the
Company Policies, including, without limitation, the reporting of claims to the
insurance carriers, management and defense of claims to the insurance carriers,
management and defense of claims and providing for appropriate releases upon
settlement of claims.
"Code" shall mean the Internal Revenue Code of 1986, as amended, and the
Treasury regulations promulgated thereunder, including any successor
legislation.
"Commission" shall mean the Securities and Exchange Commission.
"Company Policies" shall mean all Policies, current or past, which are or
at any time were maintained by or on behalf of or for the benefit or protection
of MRI, MFCI or MHCI or any of their respective predecessors or Subsidiaries
which relate to any Shared Liability, the MRI Business, the MFCI Business or the
MHCI Business, or current or past directors, officers, employees or agents of
any of the foregoing Businesses.
"Distribution" shall mean the distribution on the Distribution Date to
holders of record of shares of MRI Common Stock as of the Distribution Record
Date of (i) the MFCI Common Shares owned by MRI on the basis of one MFCI Common
Share for each four outstanding shares of MRI Common Stock and (ii) the MHCI
Common Shares owned by MRI on the basis of one MHCI Common Share for each three
outstanding shares of MRI Common Stock.
"Distribution Date" shall mean such date as may hereafter be determined by
MRI's Board of Directors as the date of which the Distribution shall be
effected.
"Distribution Record Date" shall mean such date as may hereafter be
determined by MRI's Board of Directors as the record date for the Distribution.
"E&Y" shall mean Ernst & Young, LLP.
"Effective Time" shall mean the effective time of the Distribution on the
Distribution Date, which time shall be simultaneous with the effective time of
the reincorporation of MRI in Georgia.
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<PAGE>
"Employee Benefits Matters Agreement" shall mean the Agreement Respecting
Employee Benefits Matters dated as of March 2, 1996, among MRI, MFCI and MHCI.
"Indemnifiable Losses" shall mean any and all losses, liabilities, claims,
damages, demands, costs or expenses (including, without limitation, attorneys'
fees and any and all out-of-pocket expenses) whatsoever reasonably incurred in
investigating, preparing for or defending against any Actions or potential
Actions.
"Indemnifying Party" shall have the meaning as defined in Section 3.4.
"Indemnitee" shall have the meaning as defined in Section 3.4.
"Insurance Administration" shall mean, with respect to each Company Policy,
the accounting for premiums, defense costs, indemnity payments, deductibles and
retentions, as appropriate, under the terms and conditions of each of the
Company Policies; and the report to excess insurance carriers of any losses or
claims which may cause the per-occurrence, per claim or aggregate limits of any
Company Policy to be exceeded, and the distribution of Insurance Proceeds as
contemplated by this Agreement.
"Insurance Proceeds" shall mean those monies (i) received by an insured
from an insurance carrier or (ii) paid by an insurance carrier on behalf of an
insured, in either case net of any applicable premium adjustment,
retrospectively-rated premium, deductible, retention, cost of reserve or similar
item paid or held by or for the benefit of such insured.
"Insured Claims" shall mean those Liabilities that, individually or in the
aggregate, are covered within the terms and conditions of any of the Company
Policies, whether or not subject to deductibles, co-insurance, uncollectability
or premium adjustments, but only to the extent that such Liabilities are within
applicable Company Policy limits, including aggregates.
"Intellectual Property Agreements" shall mean the License Agreement between
MFCI and MHCI and the License Agreement between RTI and MHCI, each dated as of
March 2, 1996.
"Liabilities" shall mean any and all debts, liabilities and obligations,
absolute or contingent, matured or unmatured, liquidated or unliquidated,
accrued or unaccrued, known or unknown, whenever arising, including, without
limitation, those debts, liabilities and obligations arising under any law,
rule, regulation, Action, threatened Action, order or consent decree of any
court, any governmental or other regulatory or administrative agency or
commission or any award of any arbitration tribunal, and those arising under any
contract, guarantee, commitment or undertaking.
"MFCI" shall mean Morrison Fresh Cooking, Inc., a Georgia corporation.
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<PAGE>
"MFCI Assets" shall mean, collectively, all the rights and assets of MRI
and its Subsidiaries relating to the MFCI Business, including, without
limitation, (i) the assets included on the balance sheet of MFCI (a wholly-owned
business of MRI) as of December 2, 1995, prepared by E&Y and not disposed of in
the ordinary course of business, (ii) any assets acquired by MRI, MFCI or any of
their respective Subsidiaries relating to the MFCI Business from December 3,
1995, to the Distribution Date and not disposed of in the ordinary course of
business, and (iii) rights to the Company Policies to the extent set forth in
Article V hereof.
"MFCI Business" shall mean the family dining restaurant business conducted
by MRI, MFCI and their respective Subsidiaries and successors.
"MFCI Common Stock" shall mean the common stock, $.01 par value per share,
of MFCI.
"MFCI Indemnitees" shall mean MFCI, each Affiliate of MFCI, each of their
respective directors, officers, employees and agents and each of the heirs,
executors, successors and assigns of any of the foregoing.
"MFCI Liabilities" shall mean, collectively, (i) Liabilities included on
the balance sheet of MFCI (a wholly-owned business of MRI) as of December 2,
1995, prepared by E&Y, and any Liabilities of the same kind or nature incurred
by MRI, MFCI or any of their respective Subsidiaries relating to the MFCI
Business from December 3, 1995, to the Effective Time, (ii) all the Liabilities
of MFCI and its Subsidiaries, if any, under this Agreement and any of the
Ancillary Agreements, (iii) all the Liabilities of the parties hereto or their
respective Subsidiaries (whenever arising whether prior to, at or following the
Effective Time) to the extent the Liabilities arise out of or in connection with
or otherwise relate to the management or conduct before or after the Effective
Time of the MFCI Business, and (iv) all those Liabilities allocated solely to
MFCI as set forth in the Allocation Memorandum (the Liabilities listed in
clauses (i) through (iv) above being collectively referred to as the "True MFCI
Liabilities") and (v) one-third (1/3) of the amount of all Shared Liabilities,
unless otherwise allocated in the Allocation Memorandum.
"MHCI" shall mean Morrison Health Care, Inc., a Georgia corporation.
"MHCI Assets" shall mean, collectively, all the rights and assets of MHCI
and its Subsidiaries relating to the MHCI Business, including, without
limitation, (i) the assets included on the balance sheet of MHCI (a wholly-owned
business of MRI) as of December 2, 1995, prepared by E&Y and not disposed of in
the ordinary course of business, (ii) any assets acquired by MRI, MHCI or any of
their respective Subsidiaries relating to the MHCI Business from December 3,
1995, to the Distribution Date and not disposed of in the ordinary course of
business, (iii) all the outstanding capital stock or other interests of MRI in
the Subsidiaries listed on Schedule 1.1(a) and (iv) rights to the Company
Policies to the extent set forth in Article V hereof.
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<PAGE>
"MHCI Business" shall mean the health care food and nutrition services
business conducted by MRI, MHCI and their respective Subsidiaries and
successors.
"MHCI Common Stock" shall mean the common stock, $.01 par value per share,
of MHCI.
"MHCI Indemnitees" shall mean MHCI, each Affiliate of MHCI, each of their
respective directors, officers, employees and agents and each of the heirs,
executors, successors and assigns of any of the foregoing.
"MHCI Liabilities" shall mean, collectively, (i) the Liabilities included
on the balance sheet of MHCI as of December 2, 1995, prepared by E&Y, and any
Liabilities of the same kind or nature incurred by MRI, MHCI or any of their
respective Subsidiaries relating to the MHCI Business from December 3, 1995, to
the Effective Time, (ii) all the Liabilities of MHCI and its Subsidiaries, if
any, under this Agreement and any of the Ancillary Agreements and (iii) all the
Liabilities of the parties hereto or their respective Subsidiaries (whenever
arising whether prior to, at or following the Effective Time) to the extent the
Liabilities arise out of or in connection with or otherwise relate to the
management or conduct before or after the Effective Time of the MHCI Business,
(iv) all those Liabilities allocated solely to MHCI as set forth in the
Allocation Memorandum, and (v) $27,098,000 principal amount of the indebtedness
outstanding at the Effective Time under the MRI Credit Facility (the Liabilities
listed in clauses (i) through (v) above being collectively referred to as the
"True MHCI Liabilities") and (vi) one-third (1/3) of the amount of all other
Shared Liabilities, unless otherwise allocated in the Allocation Memorandum.
"MRI" shall mean Morrison Restaurants Inc., a Delaware corporation.
"MRI Common Stock" shall mean the common stock, $.01 par value per share,
of MRI.
"MRI Credit Facility" shall mean that certain Credit Agreement dated as of
September 30, 1994 among MRI, SunTrust Bank, Atlanta (formerly known as Trust
Company Bank) as Agent and Administrative Agent and the lenders named therein.
"MRT Purchasing" shall mean MRT Purchasing, LLC, a Georgia limited
liability company, organized to act as purchasing agent for MRI and its
Subsidiaries.
"Operating Agreement" shall mean the Operating Agreement of MRT Purchasing
dated October 30, 1995, as amended March 2, 1996, by and among MRI, MFCI, MHCI
and RTI-Delaware.
"Person" shall mean any natural person, corporation, business trust, joint
venture, association, company, partnership or government, or any agency or
political subdivision thereof.
-5-
<PAGE>
"Policies" shall mean insurance policies and insurance contracts of any
kind (other than life and benefits policies or contracts), including, without
limitation, primary, excess and umbrella policies, comprehensive general
liability policies, fiduciary liability, automobile, aircraft, property and
casualty, workers' compensation and employee dishonesty insurance policies and
bonds and captive insurance company arrangements, together with the rights,
benefits and privileges thereunder.
"Proxy Statement" shall mean the Proxy Statement sent to the holders of
shares of MRI Common Stock in connection with the Distribution, including any
amendment or supplement thereto.
"Purchasing Agreements" shall mean those certain amendments to long-term
purchasing agreements between MRI and suppliers entered into in connection with
the transactions contemplated hereby in order to assign benefits and assume
liabilities thereunder among MRI, MFCI and MHCI.
"RTI" shall mean (i) Ruby Tuesday, Inc., a Georgia corporation and the
legal successor to MRI after the reincorporation of MRI in Georgia and its
merger with RTI-Delaware, or (ii) MRI, after giving effect to the transactions
contemplated by Section 2.1 hereof or as if such transactions had occurred, in
each case as the context requires.
"RTI Assets" shall mean, collectively, all the rights and assets of RTI and
its Subsidiaries other than the MHCI Assets and the MFCI Assets, including,
without limitation, (i) all the outstanding capital stock or other interests of
RTI in Subsidiaries of MRI listed on Schedule 1.1(b) and (ii) rights to the
Company Policies to the extent set forth in Article V hereof.
"RTI Common Stock" shall mean the common stock, $.01 par value per share,
of RTI.
"RTI Business" shall mean the specialty restaurant business conducted by
MRI, RTI-Delaware, RTI and their respective Subsidiaries and successors,
including, without limitation, the Ruby Tuesday, Tia's and Mozzarella's Cafe
restaurant business.
"RTI Indemnitees" shall mean RTI, each Affiliate of RTI, each of their
respective directors, officers, employees and agents and each of their heirs,
executors, successors and assigns of any of the foregoing.
"RTI Liabilities" shall mean collectively, (i) the Liabilities included on
the unaudited consolidated balance sheet of MRI as of December 2, 1995, prepared
by E&Y, and any Liabilities of the same kind or nature incurred by MRI or any of
its Subsidiaries relating to the RTI Business from December 3, 1995, to the
Effective Time, (ii) all the Liabilities of RTI and its Subsidiaries under this
Agreement and any of the Ancillary Agreements, (iii) all the Liabilities of the
parties hereto or their respective Subsidiaries (whenever arising whether prior
to, at or following the Effective Time) to the extent the Liabilities arise out
of or in connection with or
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<PAGE>
otherwise relate solely to the management or conduct before or after the
Effective Time of the RTI Business, (iv) all those Liabilities allocated solely
to RTI as set forth in the Allocation Memorandum, and (v) all the indebtedness
outstanding at the Effective Time under the (A) MRI Credit Facility less
$27,098,000 and (B) AmSouth Bank line of credit in favor of MRI (the Liabilities
listed in clauses (i) through (iv) above being collectively referred to as the
"True RTI Liabilities") and (vi) one-third (1/3) of the amount of all Shared
Liabilities, unless otherwise allocated in the Allocation Memorandum.
"Reverse Stock Split" shall mean the reverse stock split of shares of MRI
Common Stock held by holders of record as of the Distribution Record Date to be
effected in connection with the reincorporation of MRI in Georgia on the basis
of one RTI Common Share for each two outstanding shares of MRI Common Stock.
"Shared Liability" means any Liability of the parties hereto or their
respective Subsidiaries (whether arising prior to, at or following the Effective
Time) which arises out of or is in connection with or otherwise relates to the
management or conduct prior to the Effective Time of the businesses of MRI and
its Subsidiaries and (i) is not a True RTI Liability, True MFCI Liability or
True MHCI Liability or (ii) the responsibility for which is allocated among RTI,
MFCI and MHCI in the Allocation Memorandum. Shared Liability includes, without
limitation, Shared Liabilities listed on Schedule 1.1(c) hereto.
"Subsidiary" shall mean any corporation, partnership or other entity of
which another entity (i) owns, directly or indirectly, ownership interests
sufficient to elect a majority of the Board of Directors (or persons performing
similar functions) (irrespective of whether at the time any other class or
classes of ownership interests of such corporation, partnership or other entity
shall or might have such voting power upon the occurrence of any contingency) or
(ii) is a general partner or an entity performing similar functions (e.g., a
----
trustee).
"Tax" shall mean all Federal, state, local and foreign taxes and
assessments of any kind, including all interest, penalties and additions imposed
with respect to such amounts.
"Tax Allocation Agreement" shall mean the Amended and Restated Tax
Allocation and Indemnification Agreement dated as of March 2, 1996, among MRI,
MFCI, MHCI and the other Subsidiaries of MRI named therein.
"Third Party Claim" shall have the meaning as defined in Section 3.5.
"Transfer Agent" shall mean AmSouth Bank of Alabama.
"Transfer and Assumption Instruments" shall mean, collectively, the
Transfer and Assumption Agreement dated as of January 1, 1996 between MRI and
MFCI, the Transfer and Assumption Agreements dated as of January 1, 1996 between
MRI and MHCI and the various agreements, instruments and other documents to be
entered into between or among MRI, MFCI
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<PAGE>
and MHCI to effect the transfer of assets and the assumption of Liabilities in
the manner contemplated by this Agreement, including, without limitation, real
estate transfer documents and leases.
"True MFCI Liabilities" shall have the meaning as defined under "MFCI
Liabilities."
"True MHCI Liabilities" shall have the meaning as defined under "MHCI
Liabilities."
"True RTI Liabilities" shall have the meaning as defined under "RTI
Liabilities."
SECTION 1.2. References; Interpretation. References to a "Schedule" are,
--------------------------
unless otherwise specified, to one of the Schedules attached to this Agreement,
and references to a "Section" are, unless otherwise specified, to one of the
Sections of this Agreement.
ARTICLE II. DISTRIBUTION AND OTHER TRANSACTIONS; CERTAIN COVENANTS
SECTION 2.1. The Distribution and Other Transactions.
---------------------------------------
(a) Certain Transactions. On or prior to the Distribution Date:
--------------------
(i) MRI shall, on behalf of itself and its Subsidiaries, transfer
to MFCI all of MRI's and its Subsidiaries' right, title and interest in the MFCI
Assets.
(ii) MRI shall, on behalf of itself and its Subsidiaries, transfer
to MHCI all of MRI's and its Subsidiaries' right, title and interest in the MHCI
Assets.
(b) Stock Dividends to MRI. On or prior to the Distribution Date:
----------------------
(i) MFCI shall issue to MRI as a stock dividend a number of MFCI
Common Shares as required to effect the Distribution, as certified by the
Transfer Agent. In connection therewith MRI shall deliver to MFCI for
cancellation the share certificate currently held by it representing MFCI Common
Shares.
(ii) MHCI shall issue to MRI as a stock dividend a number of MHCI
Common Shares as required to effect the Distribution, as certified by the
Transfer Agent. In connection therewith MRI shall deliver to MHCI for
cancellation the share certificate currently held by it representing MHCI Common
Shares.
(c) Charters; Bylaws. On or prior to the Distribution Date:
----------------
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<PAGE>
(i) All necessary actions shall have been taken to provide for the
adoption of the form of Articles of Incorporation and Bylaws filed by MFCI with
the Commission.
(ii) All necessary actions shall have been taken to provide for
the adoption of the form of Articles of Incorporation and Bylaws filed by MHCI
with the Commission.
(iii) All necessary actions shall have been taken to provide for
the adoption of the form of Articles of Incorporation and Bylaws attached as
Annex B and Annex C, respectively, to the Proxy Statement filed by MRI with the
Commission.
(d) Directors; Officers. On or prior to the Distribution Date, MRI,
-------------------
as the sole shareholder of MFCI, MHCI and RTI, (i) shall have taken all
necessary action by written consent to elect to the Board of Directors of MFCI,
the Board of Directors of MHCI and the Board of Directors of RTI the individuals
identified in the Proxy Statement as directors of MFCI and MHCI and RTI,
respectively, effective upon the Distribution, and (ii) shall have caused the
directors of MFCI, MHCI and RTI to elect as officers of MFCI, MHCI and RTI the
individuals identified in the Proxy Statement as the officers of MFCI, MHCI and
RTI, respectively, effective upon the Distribution.
(e) Certain Licenses and Permits. On or prior to the Distribution
----------------------------
Date or as soon as reasonably practicable thereafter, all transferrable
licenses, permits and authorizations issued by governmental or regulatory
entities which relate to the MFCI Business or the MHCI Business but which are
held in the name of MRI or any of its Subsidiaries (other than MFCI or MHCI or
any of their respective Subsidiaries), or any of their respective employees,
officers, directors, stockholders, agents, or otherwise, on behalf of MFCI (or
its Subsidiaries) or MHCI (or its Subsidiaries), as applicable, shall be duly
and validly transferred by MRI to MFCI (or its Subsidiaries) or MHCI (or its
Subsidiaries), as applicable.
(f) Transfer of Agreements.
----------------------
(i) MRI hereby agrees that on or prior to the Distribution Date or
as soon as reasonably practicable thereafter, subject to the limitations set
forth in this Section 2.1(f), it will, and it will cause its Subsidiaries (other
than MFCI or MHCI or any of their respective Subsidiaries) to, assign, transfer
and convey to MFCI or MHCI, as applicable, all of MRI's or such Subsidiary's
respective right, title and interest in and to any and all agreements that
relate exclusively to the MFCI Business or MHCI Business, as applicable, to the
extent such agreements were not previously so transferred.
(ii) Subject to the provisions of this Section 2.1(f) and except
as any Ancillary Agreement may otherwise provide, any agreement to which any of
the parties hereto or any of their Subsidiaries is a party that inures to the
benefit of more than one of the RTI
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<PAGE>
Business, MFCI Business and MHCI Business shall be assigned in part so that each
party shall be entitled to the rights and benefits inuring to its business under
such agreement.
(iii) The assignee of any agreement assigned, in whole or in part,
hereunder (an "Assignee") shall assume and agree to pay, perform, and fully
discharge all obligations of the assignor under such agreement or, in the case
of a partial assignment under Section 2.1 and except as any Ancillary Agreement
may otherwise provide, such Assignee's related portion of such obligations as
determined in accordance with the terms of the relevant agreement, where
determinable on the face thereof, and otherwise as determined in accordance with
the practice of the parties (or other predecessors) prior to the Distribution.
(iv) Notwithstanding anything in this Agreement to the contrary,
this Agreement shall not constitute an agreement to assign any agreement, in
whole or in part, or any rights thereunder if the agreement to assign or attempt
to assign, without the consent of a third party, would constitute a breach
thereof or in any way adversely affect the rights of the Assignee thereof;
provided, however, that the provisions of Section 2.13 shall be applicable
thereto.
(g) Operating Agreement. On or before the Distribution Date, MFCI and
-------------------
MHCI will become members of MRT Purchasing and, in connection therewith, MRI,
MFCI and MHCI shall, and MRI shall cause RTI-Delaware to, enter into an amended
and restated operating agreement setting forth the terms upon which MRT
Purchasing shall act as the purchasing agent for MRI, MFCI and MHCI.
(h) Reincorporation of MRI; Reverse Stock Split.
-------------------------------------------
(i) MRI shall enter into an Agreement and Plan of Merger with RTI
pursuant to which MRI shall be reincorporated in Georgia effective as of the
Distribution Date.
(ii) MRI shall cause RTI and RTI-Delaware to enter into an
Agreement and Plan of Merger pursuant to which RTI-Delaware shall merge into RTI
effective as of the Distribution Date.
(iii) MRI shall take any other action necessary to effectuate the
Reverse Stock Split contemplated by the Proxy Statement.
(i) Delivery of Shares to Transfer Agent. MRI shall deliver to the
------------------------------------
Transfer Agent the share certificates representing the MFCI Common Shares and
the MHCI Common Shares issued to MRI by MFCI and MHCI, respectively, pursuant to
Section 2.1(b) as well as the RTI Common Shares and shall instruct the Transfer
Agent to distribute, on or as soon as practicable following the Distribution
Date, such Common Shares to holders of record of shares of MRI Common Stock on
the Distribution Record Date as further contemplated by the Proxy Statement and
herein. MFCI and MHCI shall provide all share certificates that the Transfer
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<PAGE>
Agent shall require in order to effect the Distribution and RTI shall provide
all share certificates that the Transfer Agent shall require in order to effect
the Reverse Stock Split.
(j) Other Transactions. On or prior to the Distribution Date, each of
------------------
MRI, MFCI and MHCI shall have consummated those other transactions in connection
with the Distribution that are contemplated by (i) the Proxy Statement, (ii) the
ruling request submission by MRI to the Internal Revenue Service dated October
18, 1995, as subsequently amended December 29, 1995 and February 10, 1996, and
(iii) the no action letter by MRI to the Commission dated November 3, 1995, and
which are not specifically referred to in subparagraphs (a)-(i) above.
SECTION 2.2. Certain Financial and Other Arrangements.
----------------------------------------
(a) Intercompany Accounts.
---------------------
(i) Without limiting the terms of Section 2.3, all intercompany
receivables, payables and loans (other than receivables, payables and loans
otherwise specifically provided for in any of the Ancillary Agreements or
hereunder), including, without limitation, in respect of any cash balances, any
cash balances representing deposited checks or drafts for which only a
provisional credit has been allowed or any cash held in any centralized cash
management system, between MFCI or any of its Subsidiaries, on the one hand, and
RTI or any of its Subsidiaries, on the other hand, shall, as of the Effective
Time, be settled, capitalized or converted into ordinary trade accounts, in each
case as may be agreed in writing by duly authorized representatives of RTI and
MFCI.
(ii) Without limiting the terms of Section 2.3, all intercompany
receivables, payables and loans (other than receivables, payables and loans
otherwise specifically provided for in any of the Ancillary Agreements or
hereunder), including, without limitation, in respect of any cash balances, any
cash balances representing deposited checks or drafts for which only a
provisional credit has been allowed or any cash held in any centralized cash
management system, between MHCI or any of its Subsidiaries on the one hand, and
RTI or any of its Subsidiaries, on the other hand, shall, as of the Effective
Time, be settled, or converted into ordinary trade accounts, in each case as may
be agreed in writing by duly authorized representatives of RTI and MHCI.
(b) Operations in Ordinary Course. Each of RTI, MFCI and MHCI
-----------------------------
covenants and agrees that, except as otherwise provided in any Ancillary
Agreement, during the period from the date of this Agreement through the
Distribution Date, it will, and will cause any entity that is a Subsidiary of
such party at any time during such period to, conduct its business in a manner
substantially consistent with current and past operating practices and in the
ordinary course, including, without limitation, with respect to the payment and
administration of accounts payable and the administration of accounts
receivable, the purchase of the capital assets and equipment and the management
of inventories.
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<PAGE>
SECTION 2.3. Certain Indebtedness; Balance Sheets.
------------------------------------
(a) MRI, MFCI and MHCI each agrees to use its commercially reasonable
efforts to achieve an allocation of consolidated indebtedness of MRI which is
consistent with that reflected in the capital structure of each of MRI (RTI
after the Distribution), MFCI and MHCI set forth in its historical financial
statements included with the Proxy Statement.
(b) As soon as practicable after the date hereof (and whether or not
after the Effective Time), MRI shall cause to be prepared and shall deliver to
the parties hereto balance sheets of each of RTI, MFCI and MHCI as of March 2,
1996, prepared consistent with generally accepted accounting principles, this
Agreement, and accounting practices of MRI, which balance sheets shall, absent
manifest error, constitute the balance sheets of such companies as of such date,
respectively.
SECTION 2.4. Assumption and Satisfaction of Liabilities; Management
------------------------------------------------------
Responsibility for Shared Liabilities; Rights and Assets Relating to Shared
- ---------------------------------------------------------------------------
Liabilities.
- -----------
(a) Except as otherwise specifically set forth in any Ancillary
Agreement, from and after the Effective Time, (i) RTI shall, and shall cause its
Subsidiaries to, assume, pay, perform and discharge all RTI Liabilities as and
when due, (ii) MFCI shall, and shall cause its Subsidiaries to, assume, pay,
perform and discharge all MFCI Liabilities as and when due, and (iii) MHCI
shall, and shall cause its Subsidiaries to, assume, pay, perform and discharge
all MHCI Liabilities as and when due.
(b) The parties acknowledge that various claims and administrative
matters may arise from time to time in respect of Shared Liabilities and that it
would be in the best interests of the parties hereto to designate responsibility
for managing and administering Shared Liabilities to one party, which party
shall be RTI, unless otherwise provided in an Ancillary Agreement. All out-of-
pocket costs and expenses (including, without limitation, reasonable attorneys'
fees and all expenses whatsoever reasonably incurred) incurred by or on behalf
of the party with such management and administrative responsibility shall be
shared among the parties in the same proportions in which the related Shared
Liability is shared.
(c) The parties hereto shall be entitled to share in any rights and
assets (including, without limitation, recoveries, claims, rights of subrogation
and proceeds of asset sales) that relate to Shared Liabilities in the same
proportion as the designated responsibility of the parties with respect to such
Shared Liabilities.
(d) (i) To the extent that for whatever reason RTI fails, refuses or
is unable to pay any RTI Liabilities and as result thereof MFCI or MHCI is
legally obligated or required to pay such RTI Liabilities, then such RTI
Liabilities shall be deemed Shared Liabilities hereunder as to MFCI and MHCI and
shared one-half each.
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<PAGE>
(ii) To the extent that for whatever reason MFCI fails, refuses or
is unable to pay any MFCI Liabilities and as result thereof RTI or MHCI is
legally obligated or required to pay such MFCI Liabilities, then such MFCI
Liabilities shall be deemed Shared Liabilities hereunder as to RTI and MHCI and
shared one-half each.
(iii) To the extent that for whatever reason MHCI fails, refuses
or is unable to pay any MFCI Liabilities and as result thereof RTI or MFCI is
legally obligated or required to pay such MHCI Liabilities, then such MHCI
Liabilities shall be deemed Shared Liabilities hereunder as to RTI and MFCI and
shared one-half each.
SECTION 2.5. Resignations.
------------
(a) RTI shall cause all its officers to resign, effective as of the
Effective Time, from all positions as directors or officers of MFCI or as
officers or directors of any Subsidiary of MFCI in which they serve. MFCI shall
cause all its officers to resign, effective as of the Effective Time, from all
positions as directors or officers of RTI or as officers or directors of any
Subsidiary of RTI in which they serve.
(b) RTI shall cause all its officers to resign, effective as of the
Effective Time, from all positions as directors or officers of MHCI or as
officers or directors of any Subsidiary of MHCI in which they serve. MHCI shall
cause all its officers to resign, effective as of the Effective Time, from all
positions as directors or officers of RTI or as directors or officers of any
Subsidiary of RTI in which they serve.
SECTION 2.6. Further Assurances. In case at any time after the Effective
------------------
Time any further action is reasonably necessary or desirable to carry out the
purposes of this Agreement and the Ancillary Agreements, the proper officers of
each party to this Agreement shall take all such necessary action. Without
limiting the foregoing, RTI, MFCI and MHCI shall use their commercially
reasonable efforts to obtain all required consents and approvals, to enter into
all amendatory agreements and to make all filings and applications that may be
required for the consummation of the transactions contemplated by this Agreement
and the Ancillary Agreements, including, without limitation, all applicable
governmental and regulatory filings.
SECTION 2.7. No Representations or Warranties. Each of the parties hereto
--------------------------------
understands and agrees that, except as otherwise expressly provided, no party
hereto is, in this Agreement or in any other agreement or document contemplated
by this Agreement or otherwise, making any representation or warranty
whatsoever, including, without limitation, as to title, value or legal
sufficiency. It is also agreed and understood that all assets either
transferred to or retained by the parties, as the case may be, shall be "as is,
where is" and that (subject to Section 2.6) the party to which such assets are
to be transferred hereunder shall bear economic and legal risk that any
conveyances of such assets shall prove to be insufficient or that such party's
or any Subsidiary's title to any such assets shall be other than good and
marketable and free from encumbrances. Similarly, each party hereto understands
and agrees that no party hereto in this
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<PAGE>
Agreement or in any other agreement or document contemplated by this Agreement
or otherwise, is representing or warranting in any way that the obtaining of any
amendatory agreements and the making of any filing or applications contemplated
by this Agreement will satisfy the provisions of any or all applicable
agreements or the requirements of any or all applicable laws or judgments, it
being agreed and understood that the party to which any assets are transferred
shall bear the economic and legal risk that any necessary consents or approvals
are not obtained or that any requirements or laws or judgments are not complied
with.
SECTION 2.8. Guarantees. Except as otherwise specified in any Ancillary
----------
Agreement and the guaranty by MHCI and MFCI of the MRI Credit Facility, each of
RTI, MFCI and MHCI shall use its commercially reasonable best efforts to have,
on or prior to the Distribution Date, or as soon as practicable thereafter, (i)
RTI and any of its Subsidiaries removed as guarantor of or obligor for any True
MFCI Liability or True MHCI Liability; (ii) MFCI removed as a guarantor of or
obligor for any True RTI Liability or True MHCI Liability or (iii) MHCI removed
as a guarantor of or obligor for any True RTI liability or True MFCI Liability,
in each case, without the requirement that it pay any additional consideration
in connection with obtaining the same.
SECTION 2.9. Witness Services. At all times from and after the
----------------
Distribution Date, each of RTI, MFCI and MHCI shall use their commercially
reasonable efforts to make available to the other, upon reasonable written
request, its and its Subsidiaries' officers, directors, employees and agents as
witnesses to the extent that (a) such persons may reasonable be required in
connection with the prosecution or defense of any Action in which the requesting
party may from time to time be involved and (b) there is no conflict in the
Action between the requesting party and RTI, MFCI or MHCI, as applicable. A
party providing witness services to the other party under this Section shall be
entitled to receive from the recipient of such services, upon the presentation
of invoices therefor, payments for such amounts, relating to supplies,
disbursements and other out-of-pocket expenses and direct and indirect costs of
employees who are witnesses, as may be reasonably incurred in providing such
witness services.
SECTION 2.10. Certain Post-Distribution Transactions.
--------------------------------------
(a)(i) RTI shall comply with and otherwise not take action
inconsistent with each representation, covenant and statement made, or to be
made, to the Internal Revenue Service in connection with the request by MRI for
a revenue ruling in respect of the Distribution or to MRI's tax counsel in
connection with such firm's rendering an opinion to MRI, MFCI and MHCI as to
certain tax aspects of the Distribution and (ii) until one year after the
Distribution Date, RTI will maintain its status as a company engaged in the
active conduct of a trade or business, as defined in Section 355(b) of the Code.
(b)(i) MFCI shall comply with and otherwise not take action
inconsistent with each representation, covenant and statement made, or to be
made, to the Internal Revenue Service in connection with the request by MRI for
a revenue ruling in respect of the Distribution
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<PAGE>
or to MRI's tax counsel in connection with such firm's rendering an opinion to
MRI, MFCI and MHCI as to certain tax aspects of the Distribution and (ii) until
one year after the Distribution Date, MFCI will maintain its status as a company
engaged in the active conduct of a trade or business, as defined in Section
355(b) of the Code.
(c)(i) MHCI shall comply with and otherwise not take action
inconsistent with each representation, covenant and statement made, or to be
made, to the Internal Revenue Service in connection with the request by MRI for
a revenue ruling in respect of the Distribution or to MRI's tax counsel in
connection with such firm's rendering an opinion to MRI, MFCI and MHCI as to
certain tax aspects of the Distribution and (ii) until one year after the
Distribution Date, MHCI will maintain its status as a company engaged in the
active conduct of a trade or business, as defined in Section 355(b) of the Code.
SECTION 2.11. Directors and Officers Liability Insurance. RTI agrees
------------------------------------------
that, from and after the Effective Time to the seventh anniversary of the
Distribution Date, it will maintain in full force and effect any Company
Policies providing directors and officers liability insurance ("D&O Insurance
Policies") (or, through the purchase of an alternative policy, the full benefits
and coverage of such D&O Insurance Policies) and shall not amend the terms of
such policies in a manner adverse to any persons covered by such insurance. The
cost of such insurance shall constitute a Shared Liability. The provisions of
this Section 2.11 are intended for the benefit of, and shall be enforced by,
each of the persons covered by the D&O Insurance Policies.
SECTION 2.12. Insurance. Except as contemplated by Article V and Section
---------
2.11 hereof, any and all coverage of MFCI, MHCI and their respective
Subsidiaries under Company Policies has terminated or will terminate (and will
not be replaced by MRI) no later than the Effective Time.
SECTION 2.13. Transfers Not Effected Prior to the Distribution; Transfers
-----------------------------------------------------------
Deemed Effective as of the Distribution Date. To the extent that any transfers
- --------------------------------------------
contemplated by this Article II shall not have been consummated on or prior to
the Distribution Date, the parties shall cooperate to effect such transfers as
promptly following the Distribution Date as shall be practicable. Nothing
herein shall be deemed to require the transfer of any assets or the assumption
of any Liabilities which by their terms or operation of law cannot be
transferred; provided, however, that the parties hereto and their respective
-------- -------
Subsidiaries shall cooperate to seek to obtain any necessary consents or
approvals for the transfer of all assets and Liabilities contemplated to be
transferred pursuant to this Article II. In the event that any such transfer of
assets or Liabilities has not been consummated, from and after the Distribution
Date the party retaining such asset or Liability shall hold such asset in trust
for the use and benefit of the party entitled thereto (at the expense of the
party entitled thereto) or retain such Liability for the account of the party by
whom such Liability is to be assumed pursuant hereto, as the case may be, and
take such other action as may be reasonably requested by the party to whom such
asset is to be transferred, or by whom such Liability is to be assumed, as the
case may be, in order to place such party, insofar as is reasonably possible, in
the same position as would have existed
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<PAGE>
had such asset or Liability been transferred as contemplated hereby. As and
when any such asset or Liability becomes transferable, such transfer shall be
effected forthwith. The parties agree that, as of the Distribution Date, each
party hereto shall be deemed to have acquired complete and sole beneficial
ownership over all of the assets held by it, together with all rights, powers
and privileges incident thereto, and shall be deemed to have assumed in
accordance with the terms of this Agreement all of the Liabilities, and all
duties, obligations and responsibilities incident thereto, which such party is
entitled to acquire or required to assume pursuant to the terms of this
Agreement.
SECTION 2.14. Ancillary Agreements. Prior to the Distribution Date, each
--------------------
of MRI, MFCI and MHCI shall enter into, and/or (where applicable) shall cause
their respective Subsidiaries to enter into, the Ancillary Agreements and any
other agreements in respect of the Distribution reasonably necessary or
appropriate in connection with the transactions contemplated hereby and thereby.
ARTICLE III. INDEMNIFICATION
SECTION 3.1. Indemnification by RTI. Except as otherwise specifically set
----------------------
forth in any provision of this Agreement or of any Ancillary Agreement, RTI
shall indemnify, defend and hold harmless the MFCI Indemnitees and the MHCI
Indemnitees from and against any and all Indemnifiable Losses of the MFCI
Indemnitees and the MHCI Indemnitees, respectively, arising out of, by reason of
or otherwise in connection with (i) the RTI Liabilities or (ii) the breach by
RTI of any provision of this Agreement or any Ancillary Agreement.
SECTION 3.2. Indemnification by MFCI. Except as otherwise specifically
-----------------------
set forth in any provision of this Agreement or of any Ancillary Agreement, MFCI
shall indemnify, defend and hold harmless the RTI Indemnitees and the MHCI
Indemnitees from and against any and all Indemnifiable Losses of the RTI
Indemnitees and the MHCI Indemnitees, respectively, arising out of, by reason of
or otherwise in connection with (i) the MFCI Liabilities or (ii) the breach by
MFCI of any provision of this Agreement or any Ancillary Agreement.
SECTION 3.3. Indemnification by MHCI. Except as otherwise specifically
-----------------------
set forth in any provision of this Agreement or of any Ancillary Agreement, MHCI
shall indemnify, defend and hold harmless the RTI Indemnitees and the MFCI
Indemnitees from and against any and all Indemnifiable Losses of the RTI
Indemnitees and the MFCI Indemnitees, respectively, arising out of, by reason of
or otherwise in connection with (i) the MHCI Liabilities or (ii) the breach by
MHCI of any provision of this Agreement or any Ancillary Agreement.
SECTION 3.4. Limitations on Indemnification Obligations. The amount that
------------------------------------------
any party (an "Indemnifying Party") is or may be required to pay to any other
person (an "Indemnitee") pursuant to Section 3.1, Section 3.2 or Section 3.3, as
applicable, shall be reduced (retroactively or prospectively) by any Insurance
Proceeds or other amounts actually recovered by or on behalf of such Indemnitee
in respect of the related Indemnifiable Loss. If an Indemnitee
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<PAGE>
shall have received the payment required by this Agreement from an Indemnifying
Party in respect of an Indemnifiable Loss and shall subsequently receive
Insurance Proceeds or other amounts in respect of such Indemnifiable Loss, then
such Indemnitee shall pay to such Indemnifying Party a sum equal to the amount
of such Insurance Proceeds or other amounts actually received, up to the
aggregate amount of any payments received from such Indemnifying Party pursuant
to this Agreement in respect of such Indemnifiable Loss.
SECTION 3.5. Procedures for Indemnification.
------------------------------
(a) Third Party Claims (other than in respect of Shared Liabilities).
----------------------------------------------------------------
If a claim or demand is made against an Indemnitee by any person who is not a
party to this Agreement (a "Third Party Claim") as to which such Indemnitee is
entitled to indemnification pursuant to this Agreement, such Indemnitee shall
notify the Indemnifying Party in writing, and in reasonable detail, of the Third
Party Claim promptly (and in any event within 20 business days) after receipt by
such Indemnitee of written notice of the Third Party Claim; provided, however,
-------- -------
that failure to give such notification shall not affect the indemnification
provided hereunder except to the extent the Indemnifying Party shall have been
actually prejudiced as a result of such failure (except that the Indemnifying
Party shall not be liable for any expenses incurred during the period in which
the Indemnitee failed to give such notice). Thereafter, the Indemnitee shall
deliver to the Indemnifying Party, promptly (and in any event within 20 business
days) after the Indemnitee's receipt thereof, copies of all notices and
documents (including court papers) received by the Indemnitee relating to the
Third Party Claim.
If a Third Party Claim is made against an Indemnitee, the Indemnifying
Party shall be entitled to participate in the defense thereof and, if it so
chooses and acknowledges in writing its obligation to indemnify the Indemnitee
therefor, to assume the defense thereof with counsel selected by the
Indemnifying Party; provided that such counsel is not reasonably objected to by
--------
the Indemnitee. Should the Indemnifying Party so elect to assume the defense of
a Third Party Claim, the Indemnifying Party shall not be liable to the
Indemnitee for legal or other expenses subsequently incurred by the Indemnitee
in connection with the defense thereof. If the Indemnifying Party assumes such
defense, the Indemnitee shall have the right to participate in the defense
thereof and to employ counsel, at its own expense, separate from the counsel
employed by the Indemnifying Party, it being understood that the Indemnifying
Party shall control such defense. The Indemnifying Party shall be liable for
the fees and expenses of counsel employed by the Indemnitee for any period
during which the Indemnifying Party has failed to assume the defense thereof
(other than during the period prior to the time the Indemnitee shall have given
notice of the Third Party Claim as provided above). If the Indemnifying Party
so elects to assume the defense of any Third Party Claim, all of the Indemnitees
shall cooperate with the Indemnifying Party in the defense or prosecution
thereof.
If the Indemnifying Party acknowledges in writing liability for
indemnification of a Third Party Claim, then in no event will the Indemnitee
admit any liability with respect to, or settle, compromise or discharge, any
Third Party Claim without the Indemnifying Party's prior written
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<PAGE>
consent; provided, however, that the Indemnitee shall have the right to settle,
-------- -------
compromise or discharge such Third Party Claim without the consent of the
Indemnifying Party if the Indemnitee releases the Indemnifying Party from its
indemnification obligation hereunder with respect to such Third Party Claim and
such settlement, compromise or discharge would not otherwise adversely affect
the Indemnifying Party. If the Indemnifying Party acknowledges in writing
liability for indemnification of a Third Party Claim, the Indemnitee will agree
to any settlement, compromise or discharge of a Third Party Claim that the
Indemnifying Party may recommend and that by its terms obligates the
Indemnifying Party to pay the full amount of the liability in connection with
such Third Party Claim and releases the Indemnitee completely in connection with
such Third Party Claim and that would not otherwise adversely affect the
Indemnitee; provided, however, that the Indemnitee may refuse to agree to any
-------- -------
such settlement, compromise or discharge if the Indemnitee agrees that the
Indemnifying Party's indemnification obligation with respect to such Third Party
Claim shall not exceed the amount that would have been required to be paid by or
on behalf of the Indemnifying Party in connection with such settlement,
compromise or discharge.
Notwithstanding the foregoing, the Indemnifying Party shall not be entitled
to assume the defense of any Third Party Claim (and shall be liable for the fees
and expenses of counsel incurred by the Indemnitee in defending such Third Party
Claim) if the Third Party Claim seeks an order, injunction or other equitable
relief or relief for other than money damages against the Indemnitee which the
Indemnitee reasonably determines, after conferring with its counsel, cannot be
separated from any related claim for money damages. If such equitable relief or
other relief portion of the Third Party Claim can be so separated from that for
money damages, the Indemnifying Party shall be entitled to assume the defense of
the portion relating to money damages.
This Section 3.5(a) shall govern all claims under this Article III for
indemnification against Third Party Claims except Third Party Claims in respect
of Shared Liabilities, as to which Section 3.5(b) shall govern.
(b) Third Party Claims in Respect of Shared Liabilities. If a Third
---------------------------------------------------
Party Claim in respect of a Shared Liability is made against an Indemnitee, such
Indemnitee shall notify the Indemnifying Parties in writing, and in reasonable
detail, of the Third Party Claim promptly (and in any event within 20 business
days) after receipt by such Indemnitee of written notice of the Third Party
Claim; provided, however, that failure to give such notification shall not
-------- -------
affect the indemnification provided hereunder except to the extent an
Indemnifying Party shall have been actually prejudiced as a result of such
failure (except that the Indemnifying Parties shall not be liable for any
expenses incurred during the period in which the Indemnitee failed to give such
notice). Thereafter, the Indemnitee shall deliver to the Indemnifying Parties,
promptly (and in any event within 20 business days) after the Indemnitee's
receipt thereof, copies of all notices and documents (including court papers)
received by the Indemnitee relating to the Third Party Claim.
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<PAGE>
Each Indemnifying Party shall be entitled to participate in the defense of
such Third Party Claim subject to the following provisions of this paragraph.
Without limiting the terms of Section 3.1, Section 3.2 or Section 3.3 hereof,
RTI (the "Managing Party") shall have management and administrative
responsibility in respect of the Third Party Claim against the Indemnitee unless
a different party is designated in an Ancillary Agreement to have management
responsibility for the Shared Liability (in which case the party so designated
shall be the "Managing Party"). Such management and administrative
responsibility shall entail the defense of such Third Party Claim, negotiation
with claimants and potential claimants (subject to the limitations in the
following paragraph) and other reasonably related activities. If the
Indemnifying Parties acknowledge in writing their respective obligations to
indemnify the Indemnitee for the Third Party Claim to the extent contemplated by
this Agreement, and an Indemnifying Party is the Managing Party, such
Indemnifying Party may assume the defense thereof with counsel selected by such
Indemnifying Party; provided that such counsel is not reasonably objected to by
--------
the Indemnitee or any other Indemnifying Party. The legal or other expenses in
respect of a Third Party Claim incurred by or on behalf of any person other than
the Managing Party shall not be Indemnifiable Losses for purposes of this
Agreement; provided, however, the Indemnifying Parties shall be liable for fees
-------- -------
and expenses of counsel employed by the Indemnitee for any period during which
an Indemnifying Party, in its capacity as Managing Party, has failed to assume
the defense thereof (other than during the period prior to the time the
Indemnitee shall have given notice of such Third Party Claim as provided above),
but only to the extent contemplated by the final paragraph of this Section
3.5(b). The Managing Party shall control the defense of such Third Party Claim,
although the Indemnitee (if not the Managing Party) shall have the right to
participate in such defense and to employ counsel, at its own expense, separate
from the counsel employed by the Managing Party. All of the Indemnitees and
each Indemnifying Party shall cooperate with the Managing Party and each other
in the defense or prosecution of such Third Party Claim.
If each of the Indemnifying Parties acknowledges in writing liability for
such Third Party Claim to the extent contemplated by this Agreement, then in no
event will any Indemnitee admit any liability with respect to, or settle,
compromise or discharge, any such Third Party Claim without each of the
Indemnifying Party's prior written consent; provided, however, that the
-------- -------
Indemnitee shall have the right to settle, compromise or discharge such Third
Party Claim without the consent of the Indemnifying Parties if the Indemnitee
releases each of the Indemnifying Parties from their respective indemnification
obligation hereunder with respect to such Third Party Claim and such settlement,
compromise or discharge would not otherwise adversely affect the Indemnifying
Parties. If the Indemnifying Parties acknowledge in writing liability for
indemnification of such Third Party Claim, an Indemnitee will agree to any
settlement, compromise or discharge of such Third Party Claim that the Managing
Party may recommend and that by its terms obligates the Indemnifying Parties to
pay the full amount of the liability in connection with such Third Party Claim
and releases the Indemnitee completely in connection with such Third Party Claim
(or portion thereof, as applicable) and that would not otherwise adversely
affect the Indemnitee; provided, however, that the Indemnitee may refuse to
-------- -------
agree to any such settlement, compromise or discharge if the Indemnitee agrees
that each of the
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<PAGE>
Indemnifying Party's indemnification obligations with respect to such Third
Party Claim shall not exceed the amount that would have been required to be paid
by or on behalf of such Indemnifying Party in connection with such settlement,
compromise or discharge.
Notwithstanding the foregoing, an Indemnifying Party shall not be entitled
to assume the defense of such Third Party Claim (and shall be liable for the
fees and expenses of counsel incurred by an Indemnitee in defending such Third
Party Claim to the extent contemplated by this Agreement) if the Third Party
Claim seeks an order, injunction or other equitable relief or relief for other
than money damages against the Indemnitee which the Indemnitee reasonably
determines, after conferring with its counsel, cannot be separated from any
related claim for money damages. If such equitable relief or other relief
portion of the Third Party Claim can be so separated from that for money
damages, an Indemnifying Party shall be entitled to assume the defense of the
portion relating to money damages as contemplated above.
Legal and other expenses incurred in connection with each such Third Party
Claim which are Indemnifiable Losses shall be shared by the parties in the same
proportions in which the related Shared Liability is shared.
SECTION 3.6. Indemnification Payments. Indemnification required by this
------------------------
Article III shall be made by periodic payments of the amount thereof during the
course of the investigation or defense, as and when bills are received or loss,
liability, claim, damage or expense is incurred.
SECTION 3.7. Other Adjustments.
-----------------
(a) The amount of any Indemnifiable Loss shall be (i) increased to
take into account any net Tax cost actually incurred by the Indemnitee arising
from any payments received from the Indemnifying Party (grossed up for such
increase) and (ii) reduced to take account of any net Tax benefit actually
realized by the Indemnitee arising from the incurrence or payment of any such
Indemnifiable Loss. In computing the amount of such Tax cost or Tax benefit,
the Indemnitee shall be deemed to recognize all other items of income, gain,
loss, deduction or credit before recognizing any item arising from the receipt
of any payment with respect to an Indemnifiable Loss or the incurrence or
payment of any Indemnifiable Loss.
(b) In addition to any adjustments required pursuant to Section 3.4
hereof or clause (a) of this Section 3.7, if the amount of any Indemnifiable
Loss shall, at any time subsequent to the payment required by this Agreement, be
reduced by recovery, settlement or otherwise, the amount of such reduction, less
any expenses incurred in connection therewith, shall promptly be repaid by the
Indemnitee to the Indemnifying Party, up to the aggregate amount of any payments
received from such Indemnifying Party pursuant to this Agreement in respect of
such Indemnifiable Loss.
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<PAGE>
SECTION 3.8. Survival of Indemnities. The obligations of RTI, MFCI and
-----------------------
MHCI under this Article III shall survive the sale or other transfer by any of
them of any assets or businesses or the assignment by any of them of any
Liabilities, with respect to any Indemnifiable Loss of any Indemnitee related to
such assets, businesses or Liabilities and shall be binding on the successors
and assigns of all, or substantially all, of their respective assets and
business.
ARTICLE IV. ACCESS TO INFORMATION
SECTION 4.1. Provision of Corporate Records.
------------------------------
(a) Unless otherwise specified in the procedures set forth in Schedule
4.3(b) hereto, after the Distribution Date, upon the prior written request by
MFCI or MHCI for specific and identified agreements, documents, books, records
or files (collectively, "Records") relating to or affecting MFCI or MHCI, as
applicable, RTI shall arrange, as soon as reasonably practicable following the
receipt of such request, for the provision of appropriate copies of such Records
(or the originals thereof if the party making the request has a reasonable need
for such originals) in the possession of RTI or any of its Subsidiaries, but
only to the extent such items are not already in the possession of the
requesting party.
(b) Unless otherwise specified in the procedures set forth in Schedule
4.3(b) hereto, after the Distribution Date, upon the prior written request by
RTI or MHCI for specific and identified Records relating to or affecting RTI or
MHCI, as applicable, MFCI shall arrange, as soon as reasonably practicable
following the receipt of such request, for the provision of appropriate copies
of such Records (or the originals thereof if the party making the request has a
reasonable need for such originals) in the possession of MFCI or any of its
Subsidiaries, but only to the extent such items are not already in the
possession of the requesting party.
(c) Unless otherwise specified in the procedures set forth in Schedule
4.3(b) hereto, after the Distribution Date, upon the prior written request by
RTI or MFCI for specific and identified Records relating to or affecting RTI or
MFCI, as applicable, MHCI shall arrange, as soon as reasonably practicable
following the receipt of such request, for the provision of appropriate copies
of such Records (or the originals thereof if the party making the request has a
reasonable need for such originals) in the possession of MHCI or any of its
Subsidiaries, but only to the extent such items are not already in the
possession of the requesting party.
SECTION 4.2. Access to Information.
---------------------
(a) Unless otherwise specified in the procedures set forth in Schedule
4.3(b) hereto, from and after the Distribution Date, each of RTI, MFCI and MHCI
shall afford to the other and its authorized accountants, counsel and other
designated representatives reasonable access during normal business hours,
subject to appropriate restrictions for classified, privileged or confidential
information, to the personnel, properties, books and records of such party and
its Subsidiaries insofar as such access is reasonably required by the other
party.
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<PAGE>
(b) For a period of five years following the Distribution Date, each
of RTI, MFCI and MHCI shall provide to the other, promptly upon request, all
documents that shall be filed by it and by any of its respective Subsidiaries
with the Commission pursuant to the periodic and interim reporting requirements
of the Securities Exchange Act of 1934, and the rules and regulations of the
Commission promulgated thereunder.
SECTION 4.3. Reimbursement; Other Matters.
----------------------------
(a) Except to the extent otherwise contemplated by any Ancillary
Agreement, a party providing Records or access to information to another party
under this Article IV shall be entitled to receive from the recipient, upon the
presentation of invoices therefor, payments for such amounts, relating to
supplies, disbursements and other out-of-pocket expenses, as may be reasonably
incurred in providing such Records or access to information.
(b) The parties hereto shall comply with those document retention
policies as shall be set forth in Schedule 4.3(b) hereto or established and
agreed to in writing by their respective authorized officers on or prior to the
Distribution Date in respect of Records and related matters.
SECTION 4.4. Confidentiality. Each of (a) RTI and its Subsidiaries, (b)
---------------
MFCI and its Subsidiaries and (c) MHCI and its Subsidiaries shall not use or
permit the use of (without the prior written consent of the others) and shall
hold, and shall cause its consultants and advisors to hold, in strict
confidence, all information concerning the other parties in its possession, its
custody or under its control (except to the extent that (i) such information has
been in the public domain through no fault of such party or (ii) such
information has been later lawfully acquired from other sources by such party or
(iii) this Agreement or any other Ancillary Agreement or any other agreement
entered into pursuant hereto permits the use or disclosure of such information)
to the extent such information (A) relates to the period up to the Effective
Time, (B) relates to any Ancillary Agreement or (C) is obtained in the course of
performing pursuant to any Ancillary Agreement, and each party shall not
(without the prior written consent of the other) otherwise release or disclose
such information to any other person, except such party's auditors and
attorneys, unless compelled to disclose such information by judicial or
administrative process or unless such disclosure is required by law and such
party has used commercially reasonable efforts to consult with the other
affected party or parties prior to such disclosure. To the extent that a party
hereto is compelled by judicial or administrative process to disclose such
information under circumstances in which any evidentiary privilege would be
available, such party agrees to assert such privilege in good faith prior to
making such disclosure. Each of the parties hereto agrees to consult with each
relevant other party in connection with any such judicial or administrative
process, including, without limitation, in determining whether any privilege is
available, and further agrees to allow each such relevant party and its counsel
to participate in any hearing or other proceeding (including, without
limitations, any appeal of an initial order to disclose) in respect of such
disclosure and assertion of privilege.
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ARTICLE V. INSURANCE
SECTION 5.1. Policies and Rights Included Within Assets.
------------------------------------------
(a) The MFCI Assets shall include any and all rights of an insured
party under each of the Company Policies, subject to the terms of such Company
Policies and any limitations or obligations of MFCI contemplated by this Article
V, specifically including rights of indemnity and the right to be defended by or
at the expense of the insurer, with respect to all claims, suits, actions,
proceedings, injuries, losses, liabilities, damages and expenses incurred or
claimed to have been incurred prior to the Distribution Date by any party in or
in connection with the conduct of the MFCI Business or, to the extent any claim
is made against MFCI or any of its Subsidiaries, the conduct of the RTI Business
or the MHCI Business, and which claims, suits, actions, proceedings, injuries,
losses, liabilities, damages and expenses may arise out of an insured or
insurable occurrence under one or more of such Company Policies; provided,
--------
however, that nothing in this clause shall be deemed to constitute (or to
- -------
reflect) an assignment of such Company Policies, or any of them, to MFCI.
(b) The MHCI Assets shall include any and all rights of an insured
party under each of the Company Policies, subject to the terms of such Company
Policies and any limitations or obligations of MHCI contemplated by this Article
V, specifically including rights of indemnity and the right to be defended by or
at the expense of the insurer, with respect to all claims, suits, actions,
proceedings, injuries, losses, liabilities, damages and expenses incurred or
claimed to have been incurred prior to the Distribution Date by any party in or
in connection with the conduct of the MHCI Business or, to the extent any claim
is made against MHCI or any of its Subsidiaries, the conduct of the RTI Business
or the MFCI Business, and which claims, suits, actions, proceedings, injuries,
losses, liabilities, damages and expenses may arise out of an insured or
insurable occurrence under such Company Policies; provided, however, that
-------- -------
nothing in this clause shall be deemed to constitute (or to reflect) an
assignment of such Company Policies, or any of them, to MHCI.
SECTION 5.2. Post-Distribution Date Claims.
-----------------------------
(a) If, subsequent to the Distribution Date, any person shall assert a
claim against MFCI or any of its Subsidiaries (including, without limitation,
where MFCI or its Subsidiaries are joint defendants with other persons) with
respect to any claim, suit, action, proceeding, injury, loss, liability, damage
or expense incurred or claimed to have been incurred prior to the Distribution
Date in or in connection with the conduct of the MFCI Business, and which claim,
suit, action, proceeding, injury, loss, liability, damage or expense may arise
out of an insured or insurable occurrence under one or more of the Company
Policies, RTI shall, at the time such claim is asserted, to the extent any such
Company Policy may require that Insurance Proceeds thereunder be collected
directly by the party against whom the Insured Claim is asserted, be deemed to
designate, without need of further documentation, MFCI as the agent and
attorney-in-fact to assert and to collect any related Insurance Proceeds under
such Company
-23-
<PAGE>
Policy, and shall further be deemed to assign, without need of further
documentation, to MFCI any and all rights of an insured party under such Company
Policy with respect to such asserted claim, specifically including rights of
indemnity and the right to be defended by or at the expense of the insurer and
the right to any applicable Insurance Proceeds thereunder; provided, however,
-------- -------
that nothing in this Section 5.2(a) shall be deemed to constitute (or to
reflect) an assignment of the Company Policies, or any of them, to MFCI.
(b) If, subsequent to the Distribution Date, any person shall assert a
claim against MHCI or any of its Subsidiaries (including, without limitation,
where MHCI or its Subsidiaries are joint defendants with other persons) with
respect to any claim, suit, action, proceeding, injury, loss, liability, damage
or expense incurred or claimed to have been incurred prior to the Distribution
Date in or in connection with the conduct of the MHCI Business, and which claim,
suit, action, proceeding, injury, loss, liability, damage or expense may arise
out of an insured or insurable occurrence under one or more of the Company
Policies, RTI shall, at the time such claim is asserted, to the extent such
Company Policy may require that Insurance Proceeds thereunder be collected
directly by the party against whom the Insured Claim is asserted, be deemed to
designate, without need of further documentation, MHCI as the agent and
attorney-in-fact to assert and to collect any related Insurance Proceeds under
such Company Policy, and shall further be deemed to assign, without need of
further documentation, to MHCI any and all rights of an insured party under such
Company Policy with respect to such asserted claim, specifically including
rights of indemnity and the right to be defended by or at the expense of the
insurer and the right to any applicable Insurance Proceeds thereunder; provided,
--------
however, that nothing in this Section 5.2(b) shall be deemed to constitute (or
- -------
to reflect) an assignment of such Company Policies, or any of them, to MHCI.
SECTION 5.3. Administration; Other Matters. Except as otherwise provided
-----------------------------
in Section 5.2 hereof, from and after the Distribution Date RTI shall be
responsible for (i) Insurance Administration of the Company Policies and (ii)
Claims Administration under such Company Policies with respect to RTI
Liabilities, MFCI Liabilities and MHCI Liabilities; provided that the retention
--------
of such responsibilities by RTI is in no way intended to limit, inhibit or
preclude any right to insurance coverage for any Insured Claim of a named
insured under such Policies as contemplated by the terms of this Agreement; and
provided further that RTI's retention of the administrative responsibilities for
- -------- -------
the Company Policies shall not relieve the party submitting any Insured Claim of
the primary responsibility for reporting such Insured Claim accurately,
completely and in a timely manner. RTI may discharge its administrative
responsibilities under this Section 5.3 by contracting for the provision of
services by independent parties. Subject to the indemnification provisions of
Article III, each of the parties hereto shall administer and pay any costs
relating to defending its respective Insured Claims under Company Policies to
the extent such defense costs are not covered under such Policies and shall be
responsible for obtaining or reviewing the appropriateness of releases upon
settlement of its respective Insured Claims under Company Policies.
-24-
<PAGE>
(a) Exceeding Policy Limits. Where MFCI Liabilities, MHCI Liabilities
-----------------------
or RTI Liabilities are specifically covered under the Company Policies for
periods prior to the Distribution Date, or under any such Company Policy
covering claims made after the Distribution Date with respect to an occurrence
prior to the Distribution Date, then from and after the Distribution Date MFCI,
MHCI and RTI-Delaware may claim coverage for Insured Claims under each such
applicable Company Policy as and to the extent that such insurance is available
up to the full extent of the applicable limits of liability, if any, of such
Company Policy (and may receive any Insurance Proceeds with respect thereto as
contemplated by Section 5.2 or Section 5.3(c) hereof), subject to the terms of
this Section 5.3(b). In the event that the total loss payables of Insured
Claims by MFCI, MHCI and RTI shall have exhausted the limits of liability, if
any, under a Company Policy which is not further covered by an umbrella or
excess umbrella policy, taking into account defense costs to the extent such
costs are applied against such limits of such Policy, then a party that has
utilized more than one-third of the limits of liability under such Company
Policy (a "benefitted party") shall indemnify the other parties which utilized
less than one-third of such limits of liability, if any, (a "nonexceeding
party") for any subsequent claim by a nonexceeding party (including, without
limitation, defense costs related to such claim) arising out of an insured or
insurable occurrence under such Company Policy which would have been an Insured
Claim but for the fact that the limits of such Company Policy were exceeded, up
to the difference between one-third of the limits of liability, if any, under
such Company Policy and the amount of such limits of liability, if any
(excluding defense costs to the extent such costs are not applied against the
fixed dollar coverage limits) actually utilized by the nonexceeding party (the
"maximum reimbursement amount"). Each of the parties agrees to use commercially
reasonable efforts to maximize available coverage under those Company Policies
applicable to it, and to take all commercially reasonable steps to recover from
all other responsible parties in respect of an Insured Claim to the extent it is
a benefitted party or would become a benefitted party as a result of an Insured
Claim. Each nonexceeding party shall submit to each benefitted party the same
information and documentation that it would have been required to submit to the
insurance carrier under the applicable Company Policy within the same time
frames provided for in such Company Policy, and each benefitted party shall,
within 30 days of receipt of documentation supporting such claim, either pay
such claim or give written notice denying the claim to the nonexceeding party.
(b) Allocation of Insurance Proceeds. Except as otherwise provided in
--------------------------------
Section 5.2, Insurance Proceeds received with respect to claims, costs and
expenses under the Company Policies shall be paid to RTI, which shall thereafter
administer the Company Policies by paying the Insurance Proceeds, as
appropriate, to RTI with respect to RTI Liabilities, to MFCI with respect to
MFCI Liabilities and to MHCI with respect to MHCI Liabilities. Payment of the
allocable portions of indemnity costs of Insurance Proceeds resulting from such
Policies will be made by RTI to the appropriate party upon receipt from the
insurance carrier. In the event that the aggregate limits on any Company
Policies are exceeded by the aggregate outstanding Insured Claims by two or more
of the relevant parties hereto, such parties shall agree on an equitable
allocation of Insurance Proceeds based upon their respective bona fide claims.
The parties agree to use commercially reasonable efforts to maximize available
coverage under
-25-
<PAGE>
those Company Policies applicable to it, and to take all commercially reasonable
steps to recover from all other responsible parties in respect of an Insured
Claim to the extent coverage limits under a Company Policy have been exceeded or
would be exceeded as a result of such Insured Claim.
SECTION 5.4. Agreement for Waiver of Conflict and Shared Defense. In the
---------------------------------------------------
event that Insured Claims of more than one of the parties hereto exist relating
to the same occurrence, the relevant parties shall jointly defend and waive any
conflict of interest necessary to the conduct of the joint defense. Nothing in
this Section 5.4 shall be construed to limit or otherwise alter in any way the
obligations of the parties to this Agreement, including those created by this
Agreement, by operation of law or otherwise.
SECTION 5.5. Cooperation. The parties agree to use their commercially
-----------
reasonable efforts to cooperate with respect to the various insurance matters
contemplated by this Agreement.
ARTICLE VI. DISPUTE RESOLUTION
In the event of a controversy, dispute or claim arising out of, in
connection with, or in relation to the interpretation, performance,
nonperformance, validity or breach of this Agreement or otherwise arising out
of, or in any way related to this Agreement, including, without limitation, any
claim based on contract, tort, statute or constitution (collectively, "Agreement
Disputes"), the party asserting the Agreement Dispute shall give written notice
to all other parties of the existence and nature of such Agreement Dispute.
Thereafter, the general counsels of the relevant parties shall negotiate in good
faith for a period no less than 60 days after the date of the notice in an
attempt to settle such Agreement Dispute. If after such reasonable period such
general counsels are unable to settle such Agreement Dispute (and in no event
before the 60 days have elapsed from the date of the notice), any party hereto
may commence arbitration by giving written notice to all other parties that such
Agreement Dispute has been referred to the American Arbitration Association for
arbitration in accordance with the provisions of this Article.
All Agreement Disputes shall be settled by arbitration in Atlanta, Georgia,
before a single arbitrator in accordance with the rules of the American
Arbitration Association (the "Rules"). The arbitrator shall be selected by the
mutual agreement of all parties, but if they do not so agree within twenty (20)
days after the date of the notice of arbitration referred to above, the
selection shall be made pursuant to the Rules from the panels of arbitrators
maintained by the American Arbitration Association. The arbitrator shall be an
individual with substantial professional experience with regard to resolving or
settling sophisticated commercial disputes.
Any award rendered by the arbitrator shall be conclusive and binding upon
the parties hereto; provided, however, that any such award shall be accompanied
by a written opinion of the arbitrator giving the reasons for the award. This
provision for arbitration shall be specifically enforceable by the parties and
the decision of the arbitrator in accordance herewith shall be final
-26-
<PAGE>
and binding and there shall be no right of appeal therefrom. The parties agree
to comply with any award made in any such arbitration proceedings that has
become final in accordance with the Rules, and agree to the entry of a judgment
in any jurisdiction upon any award rendered in such proceedings becoming final
under the Rules.
In his award the arbitrator shall allocate, in his discretion, among the
parties to the arbitration all costs of the arbitration, including, without
limitation, the fees and expenses of the arbitrator and reasonable attorneys'
fees, costs and expert witness expenses of the parties. Absent such an
allocation by the arbitrator, each party shall pay its own expenses of
arbitration, and the expenses of the arbitrator shall be equally shared.
Nothing contained in this Article shall prevent the parties from settling
any Agreement Dispute by mutual agreement at any time.
ARTICLE VII. MISCELLANEOUS
SECTION 7.1. Complete Agreement; Construction. This Agreement, including
--------------------------------
the Schedules and the Ancillary Agreements shall constitute the entire agreement
between the parties with respect to the subject matter hereof and shall
supersede all previous negotiations, commitments and writings with respect to
such subject matter. In the event of any inconsistency between this Agreement
and any Schedule hereto, the Schedule shall prevail. In the event and to the
extent that there shall be a conflict between the provisions of this Agreement
and the provisions of an Ancillary Agreement, such Ancillary Agreement shall
control; provided, however, that the provisions of this Agreement shall govern
in the event of and to the extent of any conflict between the provisions of this
Agreement and the provisions of that certain Transfer and Assumption Agreement
between MRI and MFCI, that certain Transfer and Assumption Agreement between MRI
and MHCI, each dated as of January 1, 1996, and the Tax Allocation Agreement.
SECTION 7.2. Counterparts. This Agreement may be executed in one or more
------------
counterparts, all of which shall be considered one and the same agreement, and
shall become effective when one or more such counterparts have been signed by
each of the parties and delivered to the other parties.
SECTION 7.3. Survival of Agreements. Except as otherwise contemplated by
----------------------
this Agreement, all covenants and agreements of the parties contained in this
Agreement shall survive the Distribution Date.
SECTION 7.4. Notices. All notices and other communications hereunder
-------
shall be in writing and hand delivered or mailed by registered or certified mail
(return receipt requested) or sent by any means of electronic message
transmission with delivery confirmed (by voice or otherwise) to the parties at
the following address (or at such other addresses for a party as shall
-27-
<PAGE>
be specified by like notice) and will be deemed given on the date on which such
notice is received:
To RTI:
Ruby Tuesday, Inc.
4721 Morrison Drive
Mobile, Alabama 36609
Attn: Senior Vice President, General Counsel and Secretary
To MFCI:
Morrison Fresh Cooking, Inc.
4893 Riverdale Road
Suite 260
Atlanta, Georgia 30337
Attn: Vice President, General Counsel and Secretary
To MHCI:
Morrison Health Care, Inc.
4893 Riverdale Road
Suite 260
Atlanta, Georgia 30337
Attn: Vice President, General Counsel and Secretary
SECTION 7.5. Waivers. The failure of either party to require strict
-------
performance by the other party of any provision in this Agreement will not waive
or diminish that party's right to demand strict performance thereafter of that
or any other provision hereof.
SECTION 7.6. Amendments. Subject to the terms of Section 7.9 hereof,
----------
this Agreement may not be modified or amended except by an agreement in writing
signed by the parties.
SECTION 7.7. Assignment. This Agreement shall be assignable in whole in
----------
connection with a merger or consolidation or the sale of all or substantially
all the assets of a party hereto. Otherwise this Agreement shall not be
assignable, in whole or in part, directly or indirectly, by any party hereto
without the prior written consent of the others, and any attempt to assign any
rights or obligations arising under this Agreement without such consent shall be
void.
-28-
<PAGE>
SECTION 7.8. Successors and Assigns. The provisions of this Agreement
----------------------
shall be binding upon, inure to the benefit of and be enforceable by the parties
and their respective successors and permitted assigns.
SECTION 7.9. Termination. This Agreement (including, without limitation,
-----------
Section 2.11 and Article III hereof) may be terminated and the Distribution may
be amended, modified or abandoned at any time prior to the Distribution by and
in the sole discretion of MRI without the approval of MFCI or MHCI or the
shareholders of MRI. In the event of such termination, no party shall have any
liability of any kind to any other party or any other person. After the
Distribution, this Agreement may not be terminated except by an agreement in
writing signed by the parties; provided, however, that Section 2.11 and Article
-------- -------
III shall not be terminated or amended after the Distribution in respect of the
third party beneficiaries thereto without the consent of such persons.
SECTION 7.10. Subsidiaries. Each of the parties hereto shall cause to be
------------
performed, and hereby guarantees the performance of, all actions, agreements and
obligations set forth herein to be performed by any Subsidiary of such party or
by any entity that is contemplated to be a Subsidiary of such party on and after
the Distribution Date.
SECTION 7.11. Third Party Beneficiaries. Except as provided in Section
-------------------------
2.11 relating to directors and officers liability insurance and in Article III
relating to Indemnitees, this Agreement is solely for the benefit of the parties
hereto and their respective Subsidiaries and Affiliates and should not be deemed
to confer upon third parties any remedy, claim, liability, reimbursement, claim
of action or other right in excess of those existing without reference to this
Agreement.
SECTION 7.12. Attorney Fees. Except as contemplated by an arbitrator's
-------------
decision pursuant to Article VI hereof, a party in breach of this Agreement
shall, on demand, indemnify and hold harmless the other parties hereto for and
against all out-of-pocket expenses, including, without limitation, reasonable
legal fees, incurred by such other party by reason of the enforcement and
protection of its rights under this Agreement. The payment of such expenses is
in addition to any other relief to which such other party may be entitled
hereunder or otherwise.
SECTION 7.13. Title and Headings. Titles and headings to sections herein
------------------
are inserted for the convenience of reference only and are not intended to be a
part of or to affect the meaning or interpretation of this Agreement.
SECTION 7.14. Schedules. The Schedules shall be construed with and as an
---------
integral part of this Agreement to the same extent as if the same had been set
forth verbatim herein.
-29-
<PAGE>
SECTION 7.15. Specific Performance. Each of the parties hereto
--------------------
acknowledges that there is no adequate remedy at law for failure by such parties
to comply with the provisions of this Agreement and that such failure would
cause immediate harm that would not be adequately compensable in damages, and
therefore agree that their agreements contained herein may be specifically
enforced without the requirement of posting a bond or other security, in
addition to all other remedies available to the parties hereto under this
Agreement.
SECTION 7.16. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
-------------
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF GEORGIA APPLICABLE TO
CONTRACTS EXECUTED IN AND TO BE PERFORMED IN THAT STATE.
SECTION 7.17. Consent to Jurisdiction. Without limiting the provisions of
-----------------------
Article VI hereof, each of the parties irrevocably submits to the exclusive
jurisdiction of (a) the Superior Court of Fulton County, Georgia, and (b) The
United States District Court for the Northern District of Georgia, for the
purposes of any suit, action or other proceeding arising out of this Agreement
or any transaction contemplated hereby. Each of the parties agrees to commence
any action, suit or proceeding relating hereto either in the United States
District Court for the Northern District of Georgia or if such suit, action or
other proceeding may not be brought in such court for jurisdictional reasons, in
the Superior Court of Fulton County. Each of the parties further agrees that
service of any process, summons, notice or document by U.S. registered mail to
such party's respective address set forth above shall be effective service of
process for any action, suit or proceeding in Georgia with respect to any
matters to which it has submitted to jurisdiction in this Section 7.17. Each of
the parties irrevocably and unconditionally waives any objection to the laying
of venue of any action, suit or proceeding arising out of this Agreement or the
transactions contemplated hereby in (i) the Superior Court of Fulton County,
Georgia, or (ii) the United States District Court for the Northern District of
Georgia, and hereby further irrevocably and unconditionally waives and agrees
not to plead or claim in any such court that any such action, suit or proceeding
brought in any such court has been brought in an inconvenient forum.
SECTION 7.18. Severability. In the event any one or more of the
------------
provisions contained in this Agreement should be held invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein and therein shall not in any way be
affected or impaired thereby. The parties shall endeavor in good-faith
negotiations to replace the invalid, illegal or unenforceable provisions with
valid provisions, the economic effect of which comes as close as possible to
that of the invalid, illegal or unenforceable provisions.
-30-
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed as of the day and year first above written.
MORRISON RESTAURANTS INC.
By: /s/ Pfilip G. Hunt
-------------------------------------
Name: Pfilip G. Hunt
--------------------------------
Title: Senior Vice President, General
Counsel and Secretary
-------------------------------
MORRISON FRESH COOKING, INC.
By: /s/ J. Russell Mothershed
-------------------------------------
Name: J. Russell Mothershed
--------------------------------
Title: Vice President
-------------------------------
MORRISON HEALTH CARE, INC.
By: J. Russell Mothershed
-------------------------------------
Name: J. Russell Mothershed
--------------------------------
Title: Vice President
-------------------------------
-31-
<PAGE>
Schedule 1.1(a)
MHCI Subsidiaries
Custom Management Corporation
Custom Management Corporation of Pennsylvania
Morrison Custom Management Corporation of Pennsylvania
John C. Metz & Associates, Inc.
Marcorp Diversified, Inc.
Morrison's Healthcare of Texas, Inc.
<PAGE>
Schedule 1.1(b)
RTI Subsidiaries
Ruby Tuesday, Inc. (a Delaware corporation)
Ruby Tuesday (Georgia), Inc. (a Georgia corporation)
Tias, Inc.
Morrison International, Inc.
Jezebel, Inc.
SRD of Wisconsin, Inc.
Jubilee, Inc.
Britz, Inc.
Orpah, Inc.
Morrison of New Jersey, Inc.
Ruby Tuesday of Columbia, Inc.
LW Beverage Co., Inc.
Ruby Tuesday of Salisbury, Inc.
Free Race Mall Rest., L.P.
Lamar Permit Co., Inc.
Tia's Club-Denton, Inc.
Tia's Club-Lewisville, Inc.
Tia's Club-Carrollton, Inc.
Tia's Club-Plano, Inc.
Tia's Club-Red Bird, Inc.
Tia's Club-Mesquite, Inc.
Tia's Club-Richardson, Inc.
<PAGE>
Schedule 1.1(c)
Shared Liabilities
Liabilities relating to:
1. Securities Matters; and
2. the Operation of Corporate Headquarters;
<PAGE>
Schedule 4.3(b)
Document Retention Policies
---------------------------
<TABLE>
<CAPTION>
Period of
Description of Record Retention (Years)*
--------------------- ------------------
<S> <C>
General Records:
- ---------------
Certificate of Incorporation Permanent
Charter Permanent
By-Laws (including all amendments) Permanent
Minutes of Board of Directors' Meetings Permanent
Minutes of Stockholder Meetings Permanent
Stock Certificate Books and Transfer Records Permanent
Deeds Permanent
Abstracts of Title Permanent
Title Insurance Policies Permanent
Contracts and Agreements - Terminated 5 Years
Dividend Checks 5 Years
Government Contracts and Subcontracts - Terminated 3 Years
Leases 6 Years (after expiration
or termination)
Patents and Trademarks Permanent
Mortgages - Settled 6 Years (after settlement)
Options - Expired 3 Years (after expiration)
Options - Exercised Permanent
Notes - Cancelled 6 Years
Audit Reports Permanent
Contracts with Employees - Terminated 6 Years
Contracts with Brokers and Distributors - Terminated 3 Years
Surety Bonds - Expired 3 Years
Fidelity Bonds of Employees 3 Years (after expiration)
Insurance policies - Terminated 3 Years
Miscellaneous Correspondence 3 Years
Federal and State Income Tax Returns Permanent
</TABLE>
* If there are pending examinations or cases, or extensions or waivers of the
statute of limitations with respect thereto, the recommended retention period
should be considered accordingly. The retention periods set forth herein are
subject in all respects to the policies for Record Maintenance under Federal Law
attached as Appendix A which the parties shall also comply with. In the event
of a conflict between the retention periods set forth in this schedule and in
Appendix A for any particular document, the longer shall be applicable.
<PAGE>
Document Retention Policies (Cont'd)
------------------------------------
<TABLE>
<CAPTION>
Period of
Description of Record Retention (Years)
--------------------- -----------------
<S> <C>
General Accounting:
- ------------------
General Ledger Permanent
Cash Receipts Journal Permanent
Cash Disbursements Journal Permanent
Fruit Purchases Journal Permanent
Growers' Ledger Permanent
Fruit Ledger Permanent
Voucher Register or Purchases Journal Permanent
Journal Vouchers Permanent
General Journal Permanent
Audit Reports Permanent
Auditors' adjusting entries Permanent
Supporting schedules and data for journal entries Permanent
Bank statements and reconciliations 6 Years
Cancelled voucher or general fund checks 6 Years
Cancelled payroll checks 6 Years
Cancelled fruit purchase checks 6 Years
Duplicate copies of checks 3 Years
Deposit books and slips 6 Years
Daily cash position reports 1 Year
Sales invoices 3 Years
Accounts receivable ledger cards:
Collected accounts 3 Years
Uncollected accounts 3 Years
Notes and contracts receivable:
Collected 3 Years
Uncollected 5 Years
Shipping bills of lading 2 Years
Freight bills and statements 3 Years
Shipping reports 3 Years
Export declarations 4 Years
Sales correspondence 3 Years
Sales jackets and documents 3 Years
Sales bulletins and price lists 3 Years
Sales subsidiary 3 Years
Claim files - Settled 3 Years
Contracts with customers - Terminated 3 Years
Vendor invoices and credits 3 Years
Receiving reports 3 Years
</TABLE>
-36-
<PAGE>
Document Retention Policies (Cont'd)
------------------------------------
<TABLE>
<CAPTION>
Period of
Description of Record Retention (Years)
--------------------- -----------------
<S> <C>
General Accounting: (Cont'd)
- ------------------
Purchase orders - Completed 3 Years
Contracts with vendors - Terminated 3 Years
Accounts payable ledger cards 3 Years
Advertising orders and contracts - Terminated 3 Years
Employee travel expense reports 6 Years
Fruit purchased and handled supplies statements 3 Years
Shop and maintenance department work orders and/or
expense distributions 3 Years
Cost production and job summary records 3 Years
Cost reports and statements 3 Years
Physical inventory records 6 Years
Fixed asset records - After asset disposal 3 Years
Security deposit receipts - After refunded 3 Years
Expense distributions 3 Years
Financial statements - Internal (including work papers) 6 Years
Payroll and Personnel:
- ---------------------
Payroll Register or Journal 6 Years
Individual employee earnings records 5 Years
Time cards, time sheets and piecework sheets 3 Years
Federal and State quarter and annual payroll reports 4 Years
W-4 Forms - Inactive 4 Years
Mailed and returned W-2 copies 3 Years
Payroll expense distributions 3 Years
Employee history records - Inactive 4 Years
Group insurance reports and records 6 Years
Accident reports 6 Years
Retirement and pension plan records Permanent
Manufacturing and Processing:
- ----------------------------
Fruit receipts and box records Permanent
Fruit receipt reports 3 Years
Fruit elimination reports 3 Years
Warehouse reports 3 Years
Production reports 3 Years
Internal reports for budgets, comparisons,
expense analysis, etc. 3 Years
</TABLE>
-37-
<PAGE>
EXHIBIT 10.24
AMENDED AND RESTATED
TAX ALLOCATION AND INDEMNIFICATION AGREEMENT
This Amended and Restated Tax Allocation and Indemnification Agreement
dated as of March 2, 1996, is entered into by and among Morrison Restaurants,
Inc., a Delaware corporation ("Morrison") and each of
Custom Management Corporation of Ruby Tuesday, Inc.
Pennsylvania
Ruby Tuesday (Georgia), Inc.,
Custom Management Corporation
Morrison Fresh Cooking, Inc.
John C. Metz & Associates, Inc.
Morrison Health Care, Inc.
Morrison International, Inc.
Tias, Inc.
Morrison Custom Management Corporation of Pennsylvania
(individually, a "Subsidiary" and, collectively, the "Subsidiaries").
WITNESSETH:
WHEREAS Morrison adopted a Plan of Distribution Agreement dated
September 26, 1995 (the "Plan of Distribution") by which it contemplated a
distribution to its shareholders of its Family Dining Restaurant Business and
Health Care Food Service Business;
WHEREAS, Morrison Fresh Cooking, Inc., a Georgia corporation ("MFCI")
and Morrison Health Care, Inc., a Georgia corporation ("MHCI") are newly-
created, wholly-owned subsidiaries of RTI that as of January 1, 1996 acquired
the assets and liabilities of Morrison's Family Dining Restaurant Business and
the Health Care Food Service Management Business, respectively;
WHEREAS, pursuant to the Plan of Distribution, Morrison will be merged
into Ruby Tuesday (Georgia), Inc., a Georgia corporation ("RTI"), and RTI will
be the successor and Ruby Tuesday, Inc., a Delaware corporation will be merged
into RTI, and RTI will be the successor;
WHEREAS, Morrison, as the common parent, and the Subsidiaries, other
than MFCI, MHCI and RTI, were members of an "affiliated group", as that term is
defined in Section 1504 of the Code, which filed consolidated federal income tax
returns and have entered into the Federal Tax Allocation Agreement dated January
1, 1995, under which the parties have agreed as to the allocation of any income
tax liability related to such consolidated federal income tax returns;
<PAGE>
WHEREAS, Morrison, pursuant to the Plan of Distribution, has agreed
to the distribution to the holders of its common stock of all of the outstanding
shares of the common stock of each of MHCI and MFCI (the "Distribution"), and
Morrison, MFCI, and MHCI have agreed to enter into certain agreements, including
a Distribution Agreement dated as of March 2, 1996 among Morrison, RTI, MHCI,
and MFCI (the "Distribution Agreement") and this Amended and Restated Tax
Allocation and Indemnification Agreement, setting forth their respective rights,
duties, and obligations with respect to liabilities of the parties, including
Tax liabilities, attributable to events that occurred in periods prior to the
Distribution;
WHEREAS, as a consequence of the Distribution, MFCI and MHCI will no
longer be subsidiaries of Morrison, or RTI after the merger and, thus, will no
longer be members of Morrison's or RTI's Affiliated Group;
WHEREAS, pursuant to Treas. Reg. Section 1.1502-6, Morrison, RTI, and
each Subsidiary will be severally liable for the consolidated federal income tax
liability of the Morrison Group or the RTI Group for any period during which the
Subsidiary was a member of the Morrison Group or the RTI Group during any part
of a consolidated return year; and
WHEREAS, RTI, as the successor by merger to Morrison, MFCI, or MHCI
might be liable for certain Taxes as a result of the transfer of assets and
liabilities to MFCI and MHCI, and the Distribution; and
WHEREAS, Morrison, RTI, MFCI, and MHCI desire to set forth their
rights and obligations with respect to foreign, federal, state and local taxes
due for periods both before and after the Distribution and with respect to
certain tax liabilities that may be asserted in connection with the
Distribution.
NOW THEREFORE, RTI, as successor by merger to Morrison, on behalf of
itself and Members of the RTI Affiliated Group (other than MFCI and MHCI, their
respective subsidiaries), and MFCI, on behalf of itself and members of the MFCI
Group, and MHCI, on behalf of itself and members of the MHCI Group, in
consideration of the mutual covenants contained herein, agree as follows:
ARTICLE I.
Definitions
-----------
For purposes of this Agreement, the following definitions shall apply:
1.1 "Affiliated Group" means an affiliated group of corporations
eligible to file a Consolidated Return within the meaning of Section 1504(a)
(determined without regard to the
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exceptions contained in Section 1504(b)) of the Code, or under any comparable
provision of foreign, state, or local law, for the taxable period in question.
1.2 "Business of MFCI" means the assets, including stock of
subsidiaries, liabilities, and business attributable to the Family Dining
Restaurant Business as described in the Distribution Agreement.
1.3 "Business of MHCI" means the assets, including stock of
subsidiaries, liabilities, and business attributable to the Health Care Food
Service Management Business as described in the Distribution Agreement.
1.4 "Code" means the Internal Revenue Code of 1986, as amended from
time to time.
1.5 "Consolidated Return" means a consolidated United States federal
income tax return of the Morrison Group for any consolidated return year
beginning before the Date of Distribution and any consolidated or combined
state, county, or local income tax return of any Members of the Morrison Group
for a taxable year beginning before the Date of Distribution.
1.6 "Date of Distribution" or "Distribution Date" means 12:00
midnight EST on March 9, 1996, at which time the Morrison Group ceases to own
80% of the vote and value of the stock of each of MFCI and MHCI within the
meaning of Section 1504 of the Code and thus the date on which both MFCI and
MHCI cease to be members of the Morrison Group, or the RTI Group as successor to
the Morrison Group.
1.7 "Expenses" means out-of-pocket expenses paid to third party
providers and shall not include any overhead or indirect costs.
1.8 "Final Determination" means the final resolution of liability for
any Tax for a taxable period (i) by IRS Form 870 or 870-AD (or any successor
forms thereto), on the date of acceptance by or on behalf of the IRS, or by a
comparable agreement form under the laws of other jurisdictions, except that a
Form 870 or 870-AD or comparable form that reserves the right of the taxpayer to
file a claim for refund and/or the right of the taxing authority to assert a
further deficiency shall not constitute a Final Determination; (ii) by a
decision, judgment, decree, or other order by a court of competent jurisdiction
which has become final and unappealable; (iii) by a closing agreement or offer
in compromise under Section 7121 or 7122 of the Code or any subsequently enacted
corresponding provisions of the Code, or comparable agreements under the laws of
other jurisdictions; (iv) by an allowance of a refund or credit in respect of an
overpayment of Tax, but only after the expiration of all periods during which
such refund may be recovered (including by way of offset) by the Tax imposing
jurisdiction; or (v) by any other final disposition by reason of the expiration
of the applicable statutes of limitations.
1.9 "IRS" means the Internal Revenue Service.
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1.10 "Letter Ruling" means that letter to be received from the IRS
pursuant to the request for ruling dated October 18, 1995 (as supplemented
thereafter), submitted by Morrison to the IRS with respect to the tax
consequences of the Distribution.
1.11 "Member" or "Members" means the Parties to this agreement that
join in the filing of a Consolidated Return for a particular period.
1.12 "MFCI Contribution" shall mean the transfer to MFCI by Morrison
of the Business of MFCI pursuant to the Distribution Agreement.
1.13 "MFCI Distribution" shall mean the distribution by Morrison of
the stock of MFCI to Morrison shareholders pursuant to the Distribution
Agreement.
1.14 "MFCI Group" means (i) with respect to periods prior to the Date
of Distribution, MFCI and/or any one or more of its directly or indirectly
wholly-owned subsidiaries and, (ii) with respect to periods after the Date of
Distribution, the Affiliated Group of which MFCI or any successor of MFCI is the
common parent.
1.15 "MFCI Tainting Act" means any breach of a representation or
covenant by any Member of the MFCI Group relating to the qualification of the
Distribution as a distribution described in Section 355 of the Code which is
given solely by MFCI in connection with the Tax Certificate dated March 8, 1996
or the Letter Ruling obtained by Morrison or RTI as the successor to Morrison,
unless either (a) RTI, as the successor to Morrison, consents in writing to such
transaction, or (b) RTI is provided (at MFCI's expense) with either an IRS
ruling or an opinion of tax counsel (acceptable to RTI) which is in substance
reasonably satisfactory to RTI that such transaction will not cause the
Distribution to fail to qualify as a distribution described in Section 355 of
the Code.
1.16 "MHCI Contribution" shall mean the transfer to MHCI by Morrison
of the Business of MHCI pursuant to the Distribution Agreement.
1.17 "MHCI Distribution" shall mean the distribution by Morrison of
the stock of MHCI to Morrison shareholders pursuant to the Distribution
Agreement.
1.18 "MHCI Group" means (i) with respect to periods prior to the Date
of Distribution, MHCI and/or any one or more of its directly or indirectly
wholly owned subsidiaries and, (ii) with respect to periods after the Date of
Distribution, the Affiliated Group of which MHCI or any successor of MHCI is the
common parent.
1.19 "MHCI Tainting Act" means any breach of a representation or
covenant by any Member of the MHCI Group relating to the qualification of the
Distribution as a distribution described in Section 355 of the Code which is
given solely by MHCI in connection with the Tax Certificate dated March 8, 1996,
or the Letter Ruling obtained by Morrison, or RTI as the
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successor to Morrison, unless either (a) RTI, as the successor to Morrison,
consents in writing to such transaction or (b) RTI is provided (at MHCI's
expense) with either an IRS ruling or an opinion of tax counsel (acceptable to
RTI), which is in substance reasonably satisfactory to RTI that such transaction
will not cause the Distribution to fail to qualify as a distribution described
in Section 355 of the Code.
1.20 "Morrison Group" means, for each taxable period, the Affiliated
Group of which Morrison is the common parent.
1.21 "Party" means any of the parties to this Agreement.
1.22 "Personal and Real Property Taxes" mean all Taxes which are
assessed upon the value of real or personal property owned, leased, rented or
used by any member of the Morrison Group, the RTI Group, the MFCI Group, or the
MHCI Group, including, but not limited to, real and personal property taxes, use
taxes, value added taxes or other ad valorem taxes.
1.23 "Restructuring Taxes" means any Taxes resulting from either the
transfer of the Business of MFCI or the transfer of the Business of MHCI, or
both, pursuant to the Distribution Agreement and the Distribution of either the
stock of MFCI or the stock of MHCI, or both, pursuant to the Distribution
Agreement, including, without limitation, any sales, use or other transfer Taxes
or any Tax imposed pursuant to or as a result of Section 311 of the Code.
1.24 "RTI Group" means, for each taxable period, the Affiliated Group
of which RTI or any successor of RTI is the common parent.
1.25 "RTI Tainting Act" means any breach of a representation or
covenant by any Member of the RTI Group or the Morrison Group (other than MFCI
or a Member of the MFCI Group and MHCI or a Member of the MHCI Group) relating
to the qualification of the Distribution as a distribution described in Section
355 of the Code which is given solely by Morrison or RTI in connection with the
IRS ruling obtained by Morrison, as the predecessor to RTI.
1.26 "Tax Benefit" means any Tax Item which decreases Taxes paid or
payable.
1.27 "Tax or Taxes" means all forms of taxation, whenever created or
imposed, whether domestic or foreign, and whether imposed by a nation, locality,
municipality, government, state, federation, or other body (a "Taxing
Authority"), and without limiting the generality of the foregoing, shall include
net income, alternative or add-on minimum tax, gross income, sales, use,
franchise, gross receipts, value added, ad valorem, profits, license, payroll,
withholding, social security, unemployment insurance, employment, property,
transfer, recording, excise, severance, stamp, occupation, premium, windfall
profit, custom duty, or other tax, governmental fee or other like assessment or
charge of any kind whatsoever, together with
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any related interest, penalties or other additions to tax, or additional amounts
imposed by any such Taxing Authority.
1.28 "Tax Controversy" means any audit, examination, dispute, suit,
action, litigation or other judicial or administrative proceeding by or against
the IRS or any other Taxing Authority.
1.29 "Tax Item" means any item of income, gain, loss, deduction,
credit, recapture of credit or any other item, including, but not limited to, an
adjustment under Code Section 481 resulting from a change in accounting method,
which increases or decreases Taxes paid or payable.
1.30 "Tax Returns" means all reports, estimates, declarations of
estimated tax, information statements, returns or other documents required to be
filed in connection with any Taxes, including but not limited to requests for
extensions of time, information statements and reports, claims for refund, and
amended returns.
ARTICLE II.
Representations and Covenants
-----------------------------
2.1 Morrison and RTI. In connection with that certain Tax
----------------
Certificate dated, March 8, 1996, Morrison and RTI make the following
representations and covenants:
(a) The Board of Directors of Morrison (RTI, after the Distribution)
will not take any steps in furtherance of a plan to sell the stock of
or liquidate Morrison (RTI, after the Distribution), to participate in
a merger with any other corporation, or to sell or otherwise dispose
of any of Morrison's (RTI's, after the Distribution) assets, following
the Distribution in a transaction that would be considered to be
evidence of a device as defined in Treas. Reg. Section 1.355-
2(d)(2)(iii).
(b) The Board of Directors of Morrison (RTI, after the Distribution)
will not take any steps in furtherance of a plan to sell the stock of
or liquidate Morrison (RTI, after the Distribution), to participate in
a merger with any other corporation, or to sell or otherwise dispose
of any of Morrison's (RTI's, after the Distribution) assets, following
the Distribution in a transaction that would result in those Morrison
(RTI, after the Distribution) shareholders who were shareholders as of
the Distribution Date to not continue to own more than 50% by value of
the stock of Morrison (RTI, after the Distribution) that was owned by
such shareholders immediately before the Distribution.
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2.2 MFCI and the MFCI Group. In connection with that certain Tax
-----------------------
Certificate dated, March 8, 1996, MFCI and the MFCI Group make the following
representations and covenants:
(a) Not later than three (3) months following the Distribution, MFCI
will be establish an employer stock ownership plan ("ESOP"), within
the meaning of Sections 409(l) and 4975 of the Internal Revenue Code
(the "Code"), which will be funded with the stock of MFCI. MFCI will
sell newly issued voting common stock that, when added to the shares
of MFCI stock transferred to the MFCI ESOP by the Morrison Restaurants
Inc. Salary Deferral Plan, represents not less than 3% of the then
outstanding MFCI common stock. The MFCI ESOP will issue a note to
MFCI in exchange for the newly issued MFCI common stock. The MFCI ESOP
note will be amortized over a period of not more than 10 years.
(b) MFCI also will be establish other compensatory stock ownership
programs for its management and employees which will provide MFCI's
work force with the opportunity to acquire additional MFCI stock
representing not less than 10% of the then outstanding MFCI common
stock.
(c) The Board of Directors of MFCI will not take any steps in
furtherance of a plan to sell the stock of or liquidate MFCI, to
participate in a merger with any other corporation, or to sell or
otherwise dispose of any of MFCI's assets, following the Distribution
in a transaction that would be considered to be evidence of a device
as defined in Treas. Reg. Section 1.355-2(d)(2)(iii).
(d) The Board of Directors of MFCI will not take any steps in
furtherance of a plan to sell the stock of or liquidate MFCI, to
participate in a merger with any other corporation, or to sell or
otherwise dispose of any of MFCI's assets, following the Distribution
in a transaction that would result in those MFCI shareholders who were
shareholders as of the Distribution Date to not continue to own more
than 80% by value of the stock of MFCI that was owned by such
shareholders immediately before the Distribution.
2.3 MHCI and the MHCI Group. In connection with that certain Tax
-----------------------
Certificate dated, March 8, 1996, MHCI and the MHCI Group make the following
representations and covenants:
(a) Not later than three (3) months following the Distribution, MHCI
will be establish an employer stock ownership plan ("ESOP"), within
the meaning of Sections 409(l) and 4975 of the Internal Revenue Code
(the "Code"), which will be funded with the stock of MHCI. MHCI will
sell newly issued voting common stock that, when added to the shares
of MHCI stock transferred to the MHCI ESOP by the Morrison Restaurants
Inc. Salary Deferral Plan, represents not less
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than 3% of the then outstanding MHCI common stock. The MHCI ESOP will
issue a note to MHCI in exchange for the newly issued MHCI common
stock. The MHCI ESOP note will be amortized over a period of not more
than 10 years.
(b) MHCI also will be establish other compensatory stock ownership
programs for its management and employees which will provide MHCI's
work force with the opportunity to acquire additional MHCI stock
representing not less than 10% of the then outstanding MHCI common
stock.
(c) The Board of Directors of MHCI will not take any steps in
furtherance of a plan to sell the stock of or liquidate MHCI, to
participate in a merger with any other corporation, or to sell or
otherwise dispose of any of MHCI's assets, following the Distribution
in a transaction that would be considered to be evidence of a device
as defined in Treas. Reg. Section 1.355-2(d)(2)(iii).
(d) The Board of Directors of MHCI will not take any steps in
furtherance of a plan to sell the stock of or liquidate MHCI, to
participate in a merger with any other corporation, or to sell or
otherwise dispose of any of MHCI's assets, following the Distribution
in a transaction that would result in those MHCI shareholders who were
shareholders as of the Distribution Date to not continue to own more
than 80% by value of the stock of MHCI that was owned by such
shareholders immediately before the Distribution.
2.4 Letter Ruling. Morrison, RTI, MFCI, and MHCI acknowledge that
-------------
Morrison has submitted a request for ruling to the IRS as to the tax
consequences of the Distribution and that, as of the date of this Agreement,
such request is still under consideration by the IRS. In connection with such
request, Morrison, RTI, MFCI, and/or MHCI will be called upon to make certain
representations and covenants, as a condition to the receipt of the Letter
Ruling, in addition to those set forth in this Article II. Morrison, RTI, MFCI,
and MHCI, acknowledge and agree that, notwithstanding the provisions of Section
9.2, the representations and covenants set forth in Sections 2.1, 2.2, and/or
2.3, as the case may be, shall be supplemented, and such supplement shall be
considered as if it were a part of this original Amended and Restated Tax
Allocation and Indemnification Agreement, by including those representations and
covenants required to be made in connection with the Letter Ruling.
ARTICLE III.
Consolidated Return Tax Liabilities
-----------------------------------
3.1 Agent. Morrison or RTI, as the successor to Morrison, shall be the
-----
agent for all Subsidiaries that are required or otherwise joining in the filing
of any Consolidated Return filed by the Morrison Group or the RTI Group, and
shall be duly authorized to act on behalf of the
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Subsidiaries in connection with the determination of that Affiliated Group's Tax
liability with respect to such Consolidated Return, such agency shall include,
but not be limited to, the preparation and filing of such Consolidated Return,
the payment of the Tax liability with respect to such Consolidated Return
(including the payment of estimated taxes relating to such liability), and,
subject to the provision of Article VI below, the negotiation, compromise,
settlement, and/or appeal or contesting of any Tax assessment relating to a
taxable year for which a Consolidated Return has been filed by the Affiliated
Group, but such agency shall not include any election, consent, or other
document relating to the filing of a Consolidated Return which is specifically
required by the Code or Treasury Regulations thereunder, or comparable provision
of foreign, state, or local law, to be executed by the individual Members.
3.2 Consents, Elections, Etc. Morrison, RTI, and each Subsidiary shall
------------------------
execute and file such consents, elections, and other documents that may be
required or appropriate for the proper filing of a Consolidated Return for
federal income tax purposes and may execute and file consents, elections, and
other documents that may be required or appropriate for the proper filing of a
Consolidated Return for foreign, state, or local Tax purposes (but only for
those foreign, state, or local Consolidated Returns for which Morrison or RTI
would be considered to be the common parent, or equivalent thereof, of the
Affiliated Group).
3.3 Allocation Method. In order to determine the portion of the Tax
-----------------
liability (other than Restructuring Taxes) due with respect to any Consolidated
Return filed by an Affiliated Group under this Agreement which is allocable to
an individual Member and/or to determine the amount to which a Member of such
Affiliated Group is entitled as compensation for the use of deductions, a net
operating loss, or tax credits that have been utilized in arriving at the
Consolidated Return Tax liability of such Affiliated Group, the Members agree to
determine and allocate the tax liability of the Affiliated Group among
themselves in the following manner:
(a) The separate return Tax liability or Tax Benefit of each Member
shall be computed by first determining the separate taxable income or
loss, tax credits, alternative minimum taxable income and such other
tax items of such Member that otherwise are taken into account in
determining the Consolidated Return Tax liability or Tax Benefit of
the Affiliated Group, except that, in determining such separate
taxable income, loss or other tax item of a Member, gains, losses,
deductions, tax credits, and all other items taken into account in the
determination of such Tax liability or Tax Benefit that are deferred,
limited, eliminated, or otherwise adjusted under any rule or
regulation relating to the filing of such Consolidated Return shall be
computed in accordance with such Consolidated Return rule or
regulation. Thus, for example, a net operating loss of a Member shall
not be carried forward and utilized in the calculation of separate
company taxable income or loss of the Member unless such net operating
loss has not been utilized in a prior Consolidated Return of the
Affiliated Group and is otherwise available for carryover to the
Consolidated Return of the Affiliated Group for which the Tax
liability is being allocated. Likewise, for example, depreciation
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for each of the Members shall be calculated using the conventions, if
any, adopted under or otherwise required by the Consolidated Return
rules or regulations.
(b) The separate return Tax liability or Tax Benefit of each Member
shall than be computed by multiplying the Member's separate return
taxable income or loss, alternative minimum taxable income or loss, or
such other item (determined in accordance with 2.3(a) above) by the
highest marginal tax rate applicable to the Affiliated Group's
Consolidated Return taxable income, Consolidated Return alternative
minimum taxable income, or such other determination, as the case may
be, and then subtracting or adding, as the case may be, such Member's
separate tax credits or other separate items (again, determined in
accordance with 2.3(a) above) which are taken into account in
determining the Affiliated Group's Consolidated Return Tax liability
or Tax Benefit.
(c) In the event that any item (whether gain, loss, income,
deduction, credit, or otherwise) used in the determination of the
Affiliated Group's Consolidated Return Tax liability or Tax Benefit is
limited and such limitation affects the computation of more than one
Member's separate return Tax liability or Tax Benefit, the limitation
shall be allocated among the affected Members based upon ratios of the
amount of each affected Member's item subject to limitation to the
total of all affected Members' items subject to limitation or, in the
event it is not possible to make an allocation in such manner, the
limitation shall be allocated among the affected Member's in an
equitable manner as determined by Morrison or RTI.
(d) In the event that, after making the computations in accordance
with 2.3(a)-(c) above, the Affiliated Group's Consolidated Return Tax
liability is greater than the total of all Members' separate return
Tax liabilities and Tax Benefits, then the excess of such Consolidated
Return Tax liability over the total of all Members' separate return
Tax liabilities and Tax Benefits shall be allocated to the Members
possessing separate return Tax liabilities based upon a ratio of such
separate return Tax liabilities.
(e) In the event that, after making the computations in accordance
with 2.3(a)-(c) above, the Affiliated Group's Consolidated Return Tax
liability is less than the total of all Members' separate return Tax
liabilities and Tax Benefits, then the excess of the total of all
Members' separate return Tax liabilities and Tax Benefits over such
Consolidated Return Tax liability shall be allocated (as a Tax
Benefit) to the Members possessing separate return Tax liabilities
based upon a ratio of such separate return Tax liabilities.
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(f) Morrison or RTI shall provide the Members with a computation
(and such other workpapers and documentation supporting such
computation) of the Affiliated Group's consolidated federal income tax
liability and each Member's allocable share of such liability no later
than 10 days after the filing of the consolidated federal income tax
return for such taxable year. A Member may object to such computation
or allocation by presenting Morrison with a written explanation of
such objection(s) (which contains specific explanation of the reasons
and support for their objections) within 5 days after receiving the
computation and allocation from Morrison. Morrison shall revise the
computation and allocation in response to an objection when
appropriate.
3.4 Tax Payments or Benefits. Each Member shall pay to Morrison or RTI
------------------------
its allocable share of the Affiliated Group's Consolidated Return Tax liability
determined in accordance with Section 3.3 of this Agreement. Morrison or RTI
shall pay to each Member who has been allocated a Tax Benefit under Section 3.3
the amount of such Tax Benefit. Payments under this Section 3.4 are to be made
no later than 10 days after Morrison or RTI has provided the Members with the
computation provided in Section 3.5 and all objections to such computation have
been resolved provided that in the event of objections, the undisputed portion
shall be paid within such ten day period. Payments due under this Section 3.4
shall be adjusted to take into account any estimated tax payments or benefits
made pursuant to Section 3.5 of this Agreement.
3.5 Estimated Tax Payments. Morrison or RTI shall have the right to
----------------------
assess Members their share of estimated tax payments to be made on the projected
Consolidated Return Tax liability for any year. Payment to Morrison shall be
made not later than 10 days after such assessment. Such Member will receive
credit for such prepayments in the year-end computation under Section 3.4 of
this Agreement.
3.6 Carrybacks and Carry Forwards. If part or all of an unused
-----------------------------
consolidated net operating loss or tax credit is allocated to a Member of an
Affiliated Group pursuant to Treasury Regulations Section 1.1502-79, (or
comparable provision under foreign, state, or local law) and is carried back or
forward to a year in which such Member filed a separate tax return or a
Consolidated Return with another affiliated group, any refund or reduction in
Tax liability arising from the carryback or carryover shall be retained by such
Member (if such refund or reduction goes to a Party other than the Member, then
such Party shall pay over such amount to the Member). Notwithstanding the
foregoing, Morrison or RTI shall determine whether an election shall be made not
to carryback any consolidated net operating loss arising in a Consolidated
Return year in accordance with Section 172(b)(3)(C) (or comparable provision
under foreign, state, or local law).
If a former Member of the Morrison Affiliated Group incurs a net operating
loss or has excess tax credits for a taxable year subsequent to the period in
which such former Member was a Member of the Morrison Affiliated Group, and such
net operating loss or tax credits may be
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carried back to a consolidated federal income tax return for a taxable year in
which such former Member was a Member of the Morrison Affiliated Group, then
such former Member may request that Morrison file a claim for refund relating to
such net operating loss or tax credit carryback. By Morrison agreeing to file a
claim for refund relating to such carryback, and as a condition to Morrison
agreeing to file such carryback claim, Morrison and the former Member agree that
any refund (including interest) received as a result of the carryback of such
net operating loss and/or tax credit shall be split equally by Morrison and such
former Member.
3.7 Recomputed Liability, Refunds. If the Consolidated Return Tax
-----------------------------
liability is adjusted for any taxable period, whether by means of an amended
return, claim for refund, or assessment by a taxing authority, the liability of
each Member shall be recomputed under Section 3.3 of this Agreement to give
effect to such adjustment. Payments of the Members allocable share of such
refund or additional Tax liability shall be made in accordance with Section 3.4
of this Agreement. If any interest is to be paid or received as a result of a
Consolidated Return Tax deficiency or Tax refund, such interest shall be
allocated to the Members in the ratio each Member's change in its share of
Consolidated Return Tax liability bears to the total change in such liability.
Any penalty shall be allocated in the same manner as the (and to the same Party
whose) Tax Item resulted in the imposition of such penalty, or upon such basis
as is reasonable and appropriate in view of all applicable circumstances.
3.8 Restructuring Taxes. Notwithstanding any other provision of this
-------------------
Agreement to the contrary, any liability with respect to Restructuring Taxes
shall be allocated as follows:
(a) Liability Resulting from a MFCI Tainting Act. In the event that
--------------------------------------------
Morrison or RTI is liable for Restructuring Taxes because the Distribution
failed to meet the requirements of Section 355 of the Code for nonrecognition of
gain or loss due solely to a MFCI Tainting Act, then MFCI shall be allocated all
liability for: (a) the Restructuring Taxes; (b) any claim against Morrison or
RTI for liability to its shareholders arising out of the determination that the
Distribution failed to meet the requirements of Section 355 of the Code for
nonrecognition of gain or loss; and (3) any and all other liability that arises
as a direct consequence of, or would not have otherwise arisen but for, the
determination that Morrison or RTI is liable for the Restructuring Taxes as a
result of the MFCI Tainting Act.
(b) Liability Resulting from a MHCI Tainting Act. In the event that
--------------------------------------------
Morrison or RTI is liable for Restructuring Taxes because the Distribution
failed to meet the requirements of Section 355 of the Code for nonrecognition of
gain or loss due solely to a MHCI Tainting Act, then MHCI shall be allocated all
liability for: (i) the Restructuring Taxes; (ii) any claim against Morrison or
RTI for liability to its shareholders arising out of the determination that the
Distribution failed to meet the requirements of Section 355 of the Code for
nonrecognition of gain or loss; and (iii) any and all other liability that
arises as a direct consequence of, or would not have otherwise arisen but for,
the determination that Morrison or RTI is liable for the Restructuring Taxes as
a result of the MHCI Tainting Act.
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(c) Liability Resulting from Both a MFCI Tainting Act and a MHCI Tainting
---------------------------------------------------------------------
Act. In the event that Morrison or RTI is liable for Restructuring Taxes
- ---
because the Distribution failed to meet the requirements of Section 355 of the
Code for nonrecognition of gain or loss due to both a MFCI Tainting Act and a
MHCI Tainting Act, but not a RTI Tainting Act, then MFCI and MHCI shall each be
allocated one-half of all liability for: (i) the Restructuring Taxes; (ii) any
claim against Morrison or RTI for liability to its shareholders arising out of
the determination that the Distribution failed to meet the requirements of
Section 355 of the Code for nonrecognition of gain or loss; and (iii) any and
all other liability that arises as a direct consequence of, or would not have
otherwise arisen, but for the determination that Morrison or RTI is liable for
the Restructuring Taxes.
(d) Multiple Tainting Acts or an Absence of Tainting Acts. In the event of
-----------------------------------------------------
a determination that the Distribution failed to meet the requirements of Section
355 of the Code for nonrecognition of gain or loss due to (1) any combination of
a MFCI Tainting Act, a MHCI Tainting Act, and a RTI Tainting Act, or (2) a
complete absence of a MFCI Tainting Act, a MHCI Tainting Act, and a RTI Tainting
Act, then all liability for: (i) the Restructuring Taxes; (ii) any claim against
Morrison or RTI for liability to its shareholders arising out of the
determination that the Distribution failed to meet the requirements of Section
355 of the Code for nonrecognition of gain or loss; and (iii) any and all other
liability that arises as a direct consequence of, or would not have otherwise
arisen, but for the determination that Morrison or RTI is liable for the
Restructuring Taxes; shall be borne one-third (1/3) by RTI, one-third (1/3) by
MFCI, and one-third (1/3) by MHCI, unless such liability is the result of a
combination of at least two, but not three, of a MFCI Tainting Act, a MHCI
Tainting Act, and a RTI Tainting Act, in which case such liability shall be
borne one-half (1/2) each by the two Parties committing such Tainting Acts.
3.9 Indemnification for Taxes. Each Party agrees to pay and to indemnify
-------------------------
and hold any other Party to this Agreement harmless from and against the amount
of Taxes, including (but not limited to) Restructuring Taxes, and all other
liabilities allocated to such Party under this Article III.
ARTICLE IV.
All Other Tax Liabilities
-------------------------
4.1 MFCI Property Taxes. Personal and Real Property Taxes for any period
-------------------
on property of the Business of MFCI shall be the liability of MFCI. MFCI shall
indemnify and hold harmless RTI and any member of the RTI Group from and against
all Personal and Real Property Taxes on property of the Business of MFCI.
4.2 MHCI Property Taxes. Personal and Real Property Taxes for any period
-------------------
on property of the Business of MHCI shall be the liability of MHCI. MHCI shall
indemnify and
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hold harmless RTI and any member of the RTI Group from and against all Personal
and Real Property Taxes on property of the Business of MFCI.
4.3 Other MFCI Taxes. Notwithstanding any other provision of this
----------------
Agreement to the contrary, MFCI shall pay, and shall indemnify and hold harmless
RTI and any Member of the RTI Group from and against:
(a) MFCI's allocable share of Tax liability attributable to any
Consolidated Return to the extent that such liability relates to a period prior
to the existence of MFCI, but is attributable to the Business of MFCI (such
allocable share shall be determined as if MFCI was in existence for and carried
on the Business of MFCI during such period).
(b) Any Tax liability with respect to separate returns for foreign, state
or local taxes on or measured by income of MFCI or a subsidiary of MFCI, or
franchise taxes of MFCI or a subsidiary of MFCI not measured by income, whether
filed by Morrison, RTI, MFCI or a subsidiary of MFCI;
(c) Any Tax liability with respect to separate returns for foreign, state
or local taxes on or measured by income filed by Morrison with respect to the
Business of MFCI to the extent it results in a Tax Benefit to the MFCI Group
(such as the disallowance of a deduction claimed by Morrison in a year beginning
before the date of Distribution that is available to MFCI or a subsidiary of
MFCI in a period after Distribution);
(d) any sales, use, property, transfer, valued added, recordation, excise
and similar Taxes with respect to the Business of MFCI which are not
Restructuring Taxes; and
(e) any payroll Taxes with respect to employees of MFCI or an MFCI
subsidiary or of the Business of MFCI.
4.4 Other MHCI Taxes. Notwithstanding any other provision of this
----------------
Agreement to the contrary, MHCI shall pay, and shall indemnify and hold harmless
RTI and any Member of the RTI Group from and against:
(a) MHCI's allocable share of Tax liability attributable to any
Consolidated Return to the extent that such liability relates to a period prior
to the existence of MHCI, but is attributable to the Business of MHCI (such
allocable share shall be determined as if MHCI was in existence for and carried
on the Business of MHCI during such period).
(b) Any Tax liability with respect to separate returns for foreign, state
or local taxes on or measured by income of MHCI or a subsidiary of MHCI, or
franchise taxes of MHCI or a subsidiary of MHCI not measured by income, whether
filed by Morrison, RTI, MHCI or a subsidiary of MHCI;
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<PAGE>
(c) Any Tax liability with respect to separate returns for foreign, state
or local taxes on or measured by income filed by Morrison with respect to the
Business of MHCI to the extent it results in a Tax Benefit to the MHCI Group
(such as the disallowance of a deduction claimed by Morrison in a year beginning
before the date of Distribution that is available to MHCI or a subsidiary of
MHCI in a period after Distribution);
(d) any sales, use, property, transfer, valued added, recordation, excise
and similar Taxes with respect to the Business of MHCI which are not
Restructuring Taxes; and
(e) any payroll Taxes with respect to employees of MHCI or an MHCI
subsidiary or of the Business of MHCI.
ARTICLE V.
Tax Return Preparation
----------------------
5.1 Consolidated Returns. (a) Morrison or RTI shall prepare and timely
--------------------
file all Consolidated Returns. The Consolidated Returns shall be prepared and
filed by Morrison or RTI in compliance with applicable tax laws and on a basis
that is consistent with any IRS ruling or opinion of tax counsel obtained by
Morrison or RTI and with prior Consolidated Returns (to the extent applicable).
(b) MFCI and MHCI shall each be responsible for preparing all information
relating to the MFCI Group or the MHCI Group (as the case may be) that is
necessary for Morrison or RTI to prepare and file any Consolidated Return of
which MFCI (or one of its subsidiaries) or MHCI (or one of its subsidiaries) is
a Member of the Affiliated Group filing such Consolidated Return. In the case
of information necessary to file the Consolidated Return for federal income tax
purposes for the period which includes the Distribution, such information shall
be provided to Morrison or RTI by June 15, 1996. Information with respect to
any other return shall be provided, at Morrison's or RTI's request, within 120
days after the end of the taxable period to which the return relates. Such
information shall be used as the basis for Morrison's or RTI's preparation of
the Consolidated Return and other Tax Return.
(c) MFCI and its Subsidiaries agree to cooperate with Morrison or RTI in
the preparation of any valuation studies or other reports which are appropriate
or necessary for the preparation of Morrison or RTI's Consolidated Returns.
(d) MHCI and its Subsidiaries agree to cooperate with Morrison or RTI in
the preparation of any valuation studies or other reports which are appropriate
or necessary for the preparation of Morrison or RTI's Consolidated Returns.
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<PAGE>
5.2 Pre-Distribution Separate Returns. All Tax Returns required to be
---------------------------------
filed for periods beginning before, or beginning and ending on the Distribution
Date, shall be filed by Morrison or RTI, except that any Tax Returns pertaining
exclusively to property or operations of the MFCI Group or the Business of MFCI,
or the MHCI Group or the Business of MHCI, shall be filed by MFCI or MHCI (as
the case may be) to the extent that MFCI or MHCI, respectively, has been
responsible for filing such Tax Returns for prior periods in accordance with
established practice.
5.3 Post-Distribution Returns. All Tax Returns of the MFCI Group for
-------------------------
periods beginning after the Distribution Date shall be filed by MFCI, all Tax
Returns of the MHCI Group for periods beginning after the Distribution Date
shall be filed by MHCI, and all Tax returns of the RTI Group for periods
beginning after the Distribution Date shall be filed by RTI. RTI shall be
responsible for filing all Forms 1099 due with respect to the receipt by
shareholders of any cash in lieu of fractional shares in the Distribution.
5.4 Cooperation Exchange of Information. Each Party shall be responsible
-----------------------------------
for the timely submission to the other Party of information of which it has
knowledge regarding any Tax Item which may properly be included in any Tax
Return to be filed by the other Party, and shall provide any and all other
information and documentation (including, but not by way of limitation, working
papers and schedules) reasonably requested the other Party for use in connection
with the preparation and filing of any Tax Returns.
5.5 Employer Stock Ownership Plan Data. With respect to each of the five
----------------------------------
years following the Date of Distribution, MFCI and MHCI shall provide RTI with a
calculation of the amount of employee wages contributed to MFCI's Stock
Ownership Plan and MHCI's Stock Ownership Plan, respectively, in order to
adequately advise RTI that MFCI and MHCI has each complied with its commitments
under the Letter Ruling.
ARTICLE VI.
Tax Audits
----------
6.1 Tax Controversies. (a) Except as otherwise provided in this Article
-----------------
VI, Morrison or RTI shall have full responsibility and discretion in handling,
settling, or contesting any Tax Controversy involving a Tax Return for which it
has filing responsibility, MFCI shall have full responsibility and discretion in
handling, settling, or contesting any Tax Controversy involving a Tax Return for
which it has filing responsibility, and MHCI shall have full responsibility and
discretion in handling, settling, or contesting any Tax Controversy involving a
Tax Return for which it has filing responsibility, and any costs incurred in
handling, settling or contesting any Tax Controversy shall be borne by the Party
having full responsibility and discretion therefor.
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<PAGE>
(b) The Party responsible for any Tax Controversy shall use all reasonable
efforts to resist any deficiency assertions by any Taxing Authority regardless
of which Party is ultimately responsible for any such Tax under this Agreement.
(c) Each Party shall give prompt notice to the other of any communication
(including, but not limited to, requests for information that might affect the
treatment of any Tax Item and notices of proposed adjustments affecting the
treatment of any Tax Item) with the IRS or other Taxing Authority which may
affect any Tax Item of the other Party. Such other Party shall have the right
to provide the Party having responsibility for the audit with information and
input as to the response to such communication as may be appropriate under the
circumstances. The Party having responsibility for the audit shall notify all
affected Parties promptly if any Taxing Authority proposes an assessment of
Taxes for which any other Party to this Agreement could be liable to indemnify
and hold another Party to this Agreement harmless from and against the amount of
such Taxes pursuant to this Agreement.
(d) MFCI and/or MHCI (as the case may be) shall have 30 days after receipt
of the notice required under Section 6.1(c) within which to object in writing to
the proposed adjustment. If MFCI and/or MHCI (as the case may be) does not
notify RTI within such 30 day period that it objects to the proposed adjustment,
then RTI shall have exclusive control over all stages of the Tax Controversy,
including full authority to determine whether and in what manner to contest or
compromise the issue.
(e) If MFCI and/or MHCI (as the case may be) notifies RTI that it objects
to the proposed adjustment, then RTI shall not consent to the adjustment or
compromise of the proposed adjustment without the consent of MFCI and/or MHCI
(as the case may be) which shall not be unreasonably withheld or delayed, but
shall cooperate with MFCI and/or MHCI (as the case may be) to resolve the issue
on a basis acceptable to MFCI and/or MHCI (as the case may be). Prior to the
issuance of a notice of proposed adjustment or similar stage in the proceedings,
RTI shall be responsible for the conduct of the audit, and shall notify MFCI
and/or MHCI (as the case may be) of any major developments in the audit
proceedings pertaining to an issue for which MFCI and/or MHCI may have
obligation under this Agreement with respect to any Taxes that may arise as a
result of an adverse determination with respect to such issue.
(f) Upon the issuance of a notice of proposed adjustment or similar stage
in the proceedings for which MFCI and/or MHCI (as the case may be) has provided
RTI with a notice of objection pursuant to Section 6.1(d), MFCI and/or MHCI (as
the case may be) shall assume the conduct of all further proceedings, with
counsel selected by it (with the reasonable approval of RTI), at its sole
expense, insofar as the expense relates to an issue that MFCI and/or MHCI (as
the case may be) is (are) contesting, and thereafter RTI, MFCI, and/or MHCI
shall jointly be responsible for conduct of proceedings to contest such
issue(s).
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<PAGE>
(g) In the event that RTI receives a notice of deficiency from the IRS, or
a similar notice from any other Taxing Authority, and such notice relates in
whole or in part to an issue that MFCI and/or MHCI (as the case may be) is (are)
contesting, then:
(i) Upon receiving a written request from MFCI and/or MHCI (as the
case may be), given no later than a date reasonably necessary to permit
preparation and timely filing of a petition in the United States Tax Court for
redetermination of the deficiency, or a court of similar jurisdiction with
respect to Taxes imposed by any other Taxing Authority, RTI shall timely file
such petition; provided, however, that notwithstanding such request, RTI shall
have the option to pay the amount of the deficiency and not seek or make any
claim under this Agreement for indemnification for such Taxes from MFCI and/or
MHCI (as the case may be); or
(ii) If (1) MFCI and/or MHCI (as the case may be) does not request RTI
to file a petition for redetermination of the deficiency pursuant to Section
6.01(g)(i) hereof, and (2) RTI does not, on its own initiative, timely file a
petition, and (3) MFCI and/or MHCI (as the case may be) requests that RTI file a
claim for refund, then RTI shall either pay the deficiency or use the proceeds
of a loan from MFCI and/or MHCI, in the amount described in Section 6.01(g)(i),
to pay the deficiency, file a claim for refund thereof, and, if the claim is
denied, bring an action in a court of competent jurisdiction seeking such
refund.
(iii) In the event that a judgment of the United States Tax Court or
other court of competent jurisdiction results in an adverse determination with
respect to the issue, and RTI notifies MFCI and/or MHCI (as the case may be)
that it does not intend to appeal such determination, then MFCI and/or MHCI (as
the case may be) shall have the right to cause RTI to appeal from such adverse
determination at MFCI's and/or MHCI's (as the case may be) expense.
(iv) MFCI and/or MHCI, and its (or their) representatives, (as the
case may be) at its (their) expense, shall be entitled to participate in (1) all
conferences, meetings, or proceedings with any Taxing Authority, the subject
matter of which is or includes an issue for which MFCI and/or MHCI (as the case
may be) may have obligation under this Agreement with respect to any Taxes that
may arise as a result of an adverse determination with respect to such issue,
and (2) all appearances before any court, the subject matter of which includes
such issue.
(h) The right to participate referred to in Section 6.01(g)(iv) hereof
shall include the submission and content of documentation, memoranda of fact and
law and briefs, the conduct of oral arguments or presentations, the selection of
witnesses, and the negotiation of stipulations of fact with respect to the
issue.
6.2 Cooperation. Morrison, RTI, MFCI, and MHCI agree to afford full
-----------
cooperation to one another and to their respective representatives, if any, in
any Tax Controversy involving:
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<PAGE>
a) any Tax Return filed or required to be filed by or for any member
of the Morrison Group, the RTI Group, the MFCI Group, or the MHCI
Group for any period, or
b) any item or issue affecting Morrison's, RTI's, MFCI's, or MHCI's
potential liability hereunder or to any governmental authority.
Such cooperation shall include, but not by way of limitation:
i) the timely filing of appropriate claims for any refund which may
be available to any member of the Morrison Group or the RTI
Group on account of an item of loss, deduction or credit of the
MFCI Group or the MHCI Group (as the case may be) which the MFCI
Group or the MHCI Group desires to carryback from a separate
return year (i.e., any taxable year of the MFCI Group or the
MHCI Group ending after the Date of Distribution) to a
Consolidated Return of the Morrison Group or the RTI Group which
includes MFCI or an MFCI subsidiary, or MHCI or an MHCI
Subsidiary, (as the case may be) in accordance with the
provisions of Section 3.6 hereof;
ii) preparing responses to information requests by any Taxing
Authority;
iii) making available books, records and other documentation
(including, but not by way of limitation, working papers and
schedules) relevant to such proceeding, and systems support for
documentation furnished in electronic form;
iv) making directors, officers or employees available to appear in
person for interview or for testimony;
v) making employees available on a mutually convenient basis to
provide additional information and explanation of materials
provided hereunder;
vi) executing powers of attorney, tax information authorizations and
any other necessary or appropriate authorizations; and
vii) executing agreements with the Taxing Authority reasonably
necessary or appropriate for the settlement or pursuit of the
contest of such issue.
6.3 Record Retention. The parties agree to retain all books, records,
----------------
returns, schedules, documents and all material papers or relevant items of
information for periods prior to the Date of Distribution for the later of (i)
seven (7) years or (ii) the full period of the applicable statute of
limitations, including any extensions thereof.
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<PAGE>
ARTICLE VII.
Payments
--------
7.1 Payments in General. Except as otherwise provided in this Agreement,
-------------------
any amount required to be paid by one Party pursuant to this Agreement shall be
paid in immediately available funds within thirty (30) days after written demand
therefor from the other Party given after a Final Determination of the amount
thereof.
7.2 Interest on Late Payments. Any amount payable under this Agreement by
-------------------------
one Party to another Party shall, if not paid within ten (10) business days
after the due date specified in this Agreement, bear interest from such due date
until the date paid at the applicable Federal short term rate as defined in
Section 6621 of the Code in effect on the due date.
7.3 Character and Effect of Payments. The parties agree that for income
--------------------------------
and other Tax purposes all amounts paid pursuant to this Agreement by one Party
to the other Party (other than interest payments pursuant to Section 6.2) shall
be treated by the Parties as made directly to the third parties to which such
payment is due. If, notwithstanding such treatment by the Parties, any payment
by either Party is determined to be taxable to the other Party by any Taxing
Authority, the payor shall also indemnify the other Party for fifty percent
(50%) of the amount of any Taxes and related Expenses payable by the other Party
by reason of the receipt of such payment. In addition, the amount of any
indemnity payment due under this Agreement shall be computed by properly taking
into account any Tax Benefit actually realized by the recipient from the payment
of the item at issue.
7.4 Notice. The Parties shall give each other prompt notice of any payment
------
that may be due under this Agreement.
ARTICLE VIII.
Administrative Provisions
-------------------------
8.1 Interest. Except as expressly provided herein, no obligation to pay or
--------
right to collect interest or other amounts shall arise by virtue of this
Agreement.
8.2 Expenses. Each party to this Agreement hereby agrees to be responsible
--------
for all of the expenses which it may incur in carrying out its duties hereunder.
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<PAGE>
ARTICLE IX.
Miscellaneous
-------------
9.1 Enforceability. In case any one or more of the provisions
--------------
contained in this Agreement should be invalid, illegal or unenforceable, the
enforceability of the remaining provisions contained herein shall not in any way
be affected or impaired thereby.
9.2 Modification of Agreement. Except as provided in Section 2.4, no
-------------------------
modification, amendment or waiver or any provision of this Agreement shall be
effective unless the same shall be in writing, and signed by each of the Parties
hereto and then such modification, amendment or waiver shall be effective only
in the specific instance and for the purpose for which given.
9.3 Successors and Assigns. Except as hereinafter provided, neither
----------------------
this Agreement nor any rights hereunder shall be assignable or transferable by
either Party hereto, without the prior written consent of the other Party
hereto, except by operation of law. Each Party hereby guarantees the performance
of all actions, agreements and obligations provided for under this Agreement of
each of its Subsidiaries. Each Party shall, upon the written request of the
other Party, cause any of its Subsidiaries formally to execute this Agreement.
This Agreement shall be binding upon, and shall inure to the benefit of, the
successors, assigns and persons controlling any of the corporations bound hereby
for so long as such successors, assigns or controlling persons are a Subsidiary
of a Party or its successors and assigns by operation of law.
9.4 Term. This Agreement shall commence on the date of execution
----
indicated below and shall continue in effect until otherwise agreed to in
writing by the Parties or their successors. Notwithstanding any other provision
in this Agreement, this Agreement shall remain in effect and its provisions
shall survive for the full period of all applicable statutes of limitation
(giving effect to any extension, waiver, or mitigation thereof).
9.5 Rights Confined to Parties. Nothing expressed or implied herein
--------------------------
is intended or shall be constructed to confer upon or to give to any person firm
or corporation (other than the Parties hereto, members of their Affiliated
Groups, and their successors and assigns) any right, remedy or claim under or by
reason of this Agreement or of any term, covenant or condition hereof. All
terms, covenants, conditions, promises and agreements contained herein shall be
for the sole and exclusive benefit of the Parties hereto, the members of their
Affiliated Groups, and their successors and assigns.
9.6 Notices. All demands, notices, and communications under this
-------
Agreement shall be in writing and shall be deemed to have been duly given on the
date on which such demand, notice, or communication is personally delivered or
sent by certified or registered United States Mail, postage prepaid, to:
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<PAGE>
a) in the case of Morrison and all Subsidiaries hereto except
MFCI, MHCI, RTI and their subsidiaries:
Ruby Tuesday, Inc.
c/o Pfilip G. Hunt, Esq.
4731 Morrison Drive
Mobile, Alabama 36625-0001
b) in the case of MFCI or one of its subsidiaries:
Morrison Fresh Cooking, Inc.
c/o Mitchell S. Block, Esq.
4893 Riverdale Road, Suite 260
Atlanta, Georgia 30337
c) in the case of MHCI or one of its subsidiaries:
Morrison Health Care, Inc.
c/o John E. Fountain, Esq.
4893 Riverdale Road, Suite 260
Atlanta, Georgia 30337
9.7 Effect of Headings. The paragraph headings herein are for convenience
------------------
only and shall not affect the construction hereof.
9.8 Governing Law. The provisions of this Agreement, and all rights and
-------------
obligations of the parties hereunder shall be governed by the laws of the State
of Georgia.
9.9 Counterparts. This Agreement may be executed in any number of
------------
counterparts, each of which shall, when so executed, be considered an original
and all of which, taken together, shall be considered one document.
IN WITNESS WHEREOF, the parties hereto have caused their names to be
subscribed and executed by their respective authorized officers on the dates
indicated, effective as of the day first written above.
MORRISON RESTAURANTS INC.
By: /s/ Pfilip G. Hunt Date: 3/2/96
------------------------------ ---------------------
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<PAGE>
RUBY TUESDAY (GEORGIA), INC.
By: /s/ J. Russell Mothershed Date: 3/2/96
------------------------------ ---------------------
RUBY TUESDAY, INC.
By: /s/ Pfilip G. Hunt Date: 3/2/96
------------------------------ ---------------------
MORRISON FRESH COOKING, INC.
By: /s/ J. Russell Mothershed Date: 3/2/96
------------------------------ ---------------------
MORRISON HEALTH CARE, INC.
By: /s/ J. Russell Mothershed Date: 3/2/96
------------------------------ ---------------------
CUSTOM MANAGEMENT CORPORATION
By: /s/ Pfilip G. Hunt Date: 3/2/96
------------------------------ ---------------------
CUSTOM MANAGEMENT CORPORATION OF PENNSYLVANIA
By: /s/ Pfilip G. Hunt Date: 3/2/96
------------------------------ ---------------------
MORRISON CUSTOM MANAGEMENT CORPORATION OF PENNSYLVANIA
By: /s/ Pfilip G. Hunt Date: 3/2/96
------------------------------ ---------------------
JOHN C. METZ & ASSOCIATES, INC.
By: /s/ Pfilip G. Hunt Date: 3/2/96
------------------------------ ---------------------
MORRISON INTERNATIONAL, INC.
By: /s/ Pfilip G. Hunt Date: 3/2/96
------------------------------ ---------------------
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<PAGE>
TIAS, INC.
By: /s/ Pfilip G. Hunt Date: 3/2/96
----------------------------- --------------------
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<PAGE>
EXHIBIT 10.25
AGREEMENT RESPECTING EMPLOYEE BENEFITS MATTERS
THIS AGREEMENT RESPECTING EMPLOYEE BENEFITS MATTERS is made as of the 2nd
day of March, 1996, by and among MORRISON RESTAURANTS INC., a Delaware
corporation ("MRI"), MORRISON FRESH COOKING, INC., a Georgia corporation
("MFCI"), and MORRISON HEALTH CARE, INC., a Georgia corporation ("MHCI").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, MFCI and MHCI are presently wholly-owned subsidiaries of MRI;
WHEREAS, the Board of Directors of MRI has determined that it is
appropriate and desirable to reincorporate MRI in Georgia by merging MRI into
Ruby Tuesday (Georgia), Inc., a wholly-owned subsidiary of MRI ("RTI-Georgia")
and to merge Ruby Tuesday, Inc., a Delaware corporation and wholly owned
subsidiary of MRI, into RTI-Georgia substantially simultaneously, with the
surviving corporation to be a Georgia corporation known as Ruby Tuesday, Inc.
("RTI");
WHEREAS, pursuant to that certain plan of distribution approved and adopted
by the Board of Directors of MRI, MRI contemplates the distribution to its
stockholders of all of the outstanding shares of common stock, respectively, of
MFCI and MHCI (the "Distributions"); and
WHEREAS, the parties now desire to enter into a separate agreement
describing their respective rights and obligations concerning certain employee
benefit and related matters relative to programs currently maintained by MRI for
the benefit of employees, former employees, directors and former directors of
MRI, MFCI and MHCI collectively;
NOW, THEREFORE, in consideration of the premises, covenants and agreements
set forth herein, the parties hereto do hereby agree as follows:
1. Tax-Qualified Retirement Plans. MRI currently maintains the Morrison
------------------------------
Restaurants Inc. Salary Deferral Plan (the "Salary Deferral Plan") and the
Morrison Restaurants Inc. Retirement Plan (the "Retirement Plan")(collectively,
the "Tax-Qualified Retirement Plans"). As soon as practicable, but no later
than the day before the effective date of the Distributions (the "Spinoff
Date"), MFCI and MHCI shall adopt both Tax-Qualified Retirement Plans. Prior to
the Spinoff Date, MRI shall amend the Tax-Qualified Retirement Plans, as
necessary, to clarify that the Distributions will not constitute a termination
of employment for benefit distribution or other related purposes under the Tax-
Qualified Retirement Plans so long as a participant remains continuously
employed by RTI, MFCI or MHCI from and after the Spinoff Date and, with respect
to the Salary Deferral Plan, to clarify further that no contributions shall be
made for periods of service after the Spinoff Date by or on behalf of those
participants who do not continue in the employ of RTI thereafter. Effective as
of the Spinoff Date, MFCI and MHCI shall withdraw from the Salary
<PAGE>
Deferral Plan. With respect to the maintenance and operation of the Tax-
Qualified Retirement Plans following the Spinoff Date, the parties agree as
follows:
a. Salary Deferral Plan. MFCI and MHCI shall each establish by, or
as soon as practicable after, the Spinoff Date a defined contribution
savings plan designed to qualify under Sections 401(a), 401(k) and
4975(e)(7) of the Internal Revenue Code of 1986, as amended (the "Code"),
and to preserve "protected benefits," within the meaning of Code Section
411(d)(6), accrued by participants under the Salary Deferral Plan as of the
Spinoff Date (each a "Replacement 401(k) Plan"). Those participants of the
Salary Deferral Plan who become employees of either MFCI or MHCI by the
Spinoff Date shall be eligible for immediate participation in the
applicable Replacement 401(k) Plan, with full credit for their service with
MRI prior to the Spinoff Date for purposes of determining the level of each
participant's matching contributions. As of the Spinoff Date, MFCI and
MHCI shall withdraw from the Salary Deferral Plan and, as soon as
practicable thereafter, MFCI and MHCI shall each request that RTI cause a
spin off and transfer from the Salary Deferral Plan trust to the applicable
Replacement 401(k) Plan an amount in kind equal to the aggregate account
balances, as of the date of any such transfer, of those Salary Deferral
Plan participants who, by the Spinoff Date, have become employees of the
requesting party. If either MFCI or MHCI, or both, request such a spin
off, then the transfer of assets shall occur as soon as practicable
following (a) the Spinoff Date, (b) the establishment and designation of
the applicable Replacement 401(k) Plan, (c) either (i) the receipt of a
favorable determination letter issued by the Internal Revenue Service with
respect to such plan or (ii) the filing of a favorable determination letter
application with the Internal Revenue Service and a written commitment from
MFCI or MHCI, as applicable, to exert its best efforts to obtain such a
favorable determination letter and (d) the expiration of 30 days after RTI
and the requesting party have filed Form 5310-A, if necessary, with the
Internal Revenue Service. As a condition to the receipt of such an asset
transfer by the Replacement 401(k) Plan trust, MFCI or MHCI, as the case
may be, shall cause such plan to assume and fully perform, pay and
discharge all obligations and liabilities of RTI (as successor to MRI) and
the Salary Deferral Plan for and with respect to those Salary Deferral Plan
participants whose account balances were so received.
MFCI and MHCI shall each cause the Replacement 401(k) Plan which it
establishes to hold at least three percent (3%) of the outstanding shares
of the common stock of that company as soon as practicable after the
Distributions, if necessary, by acquiring a sufficient number of shares of
such common stock directly from MFCI or MHCI, as the case may be, in
exchange for a promissory note to be repaid over a period of up to ten (10)
years.
b. Retirement Plan. Following the Spinoff Date, RTI, as successor to
MRI, shall continue as the Retirement Plan's "Primary Sponsor" (as defined
therein) and MFCI and MHCI shall continue as adopting affiliates until the
earlier of (a) the termination of the Retirement Plan, which termination
shall be initiated at the sole discretion of RTI and shall necessarily
result in cessation of the collective sponsorship of the Retirement Plan,
or (b), as to the individual sponsorship by RTI, MFCI or MHCI, until final
payment of all benefits
2
<PAGE>
accrued in favor of Retirement Plan participants allocated to that sponsor.
Retirement Plan participants shall be allocated among RTI, MFCI and MHCI
based upon the following rules: (i) active employees who are participants
shall be allocated on the basis of who their employer is on the Spinoff
Date, (ii) former employees (other than former corporate personnel) who are
participants (whether deferred vested or retirees) shall be allocated on
the basis of the line of business for whom they performed the majority of
their services at the time of their termination of employment and (iii)
corporate personnel who are participants and who are former employees, but
who were never allocated to a particular line of business, shall be
allocated to RTI. Each sponsor shall share future funding obligations
under the Retirement Plan in the same proportion that the accrued benefit
liabilities of the participants allocated to it bear to the total accrued
benefit liabilities of all participants, as determined by the Retirement
Plan actuary. RTI, MFCI and MHCI shall share the annual administrative
costs of maintaining the Retirement Plan for expenses incurred during the
period that each continues as a sponsor of the Retirement Plan in the same
ratio as future funding obligations are shared for the relevant plan year.
RTI, or its designee, shall serve as the Retirement Plan's "Plan
Administrator" (as defined therein) until the Retirement Plan is terminated
or, if earlier, should its individual sponsorship cease pursuant to Clause
1.b.(b) above. As Primary Sponsor, RTI shall have the authority to amend
the Retirement Plan to comply with applicable laws and the form and timing
of such amendments shall be determined by RTI in its sole discretion;
however, any amendment which would increase benefit accruals or would
expand the class of participants shall require the consent of all parties
who are then sponsoring the Retirement Plan. The parties agree to maintain
such records and provide such information as necessary to assist the
Retirement Plan's Plan Administrator in the discharge of its duties,
including the preparation and submission of necessary reports to government
agencies. If any sponsor of the Retirement Plan seeks to withdraw as a
sponsor prior to the events described in Clauses 1.b.(a) or 1.b.(b) above
in the event of a sale of that company, its liquidation or for any other
reason, that portion of the Retirement Plan consisting of the accrued
benefit liabilities attributable to participants allocable to the
withdrawing party, and a proportionate portion of the plan's assets, shall
be spun-off in accordance with Treasury Regulation Section 1.414(l)-1 to a
separate plan, which assumes such liabilities and accepts such assets, to
be maintained by the withdrawing party. If the conditions for such a
spinoff can not be satisfied, any sponsor's withdrawal shall be conditioned
upon its making arrangements satisfactory to the remaining sponsors
concerning the withdrawing sponsor's share of future funding obligations
under the Retirement Plan.
2. Non-Qualified Pension Plans. Prior to the Spinoff Date, MRI shall
---------------------------
amend the Morrison Restaurants Inc. Executive Supplemental Pension Plan (the
"ESP") and the Morrison Restaurants Inc. Management Pension Plan (the
"MRP")(collectively, the "Non-Qualified Pension Plans") to clarify that the
Distributions will not constitute a termination of employment for purposes of
determining the commencement of benefit payments under the Non-Qualified Pension
Plans so long as a participant remains continuously employed by RTI, MFCI or
MHCI from and after the Spinoff Date and to clarify further that benefit
accruals under the Non-Qualified Pension Plans shall cease as of the Spinoff
Date for those participants who do not continue in the employ of RTI
3
<PAGE>
thereafter. As soon as practicable, but no later than the day before the
Spinoff Date, MFCI and MHCI shall adopt both Non-Qualified Pension Plans.
Effective as of the Spinoff Date, MFCI and MHCI shall withdraw from each of
the Non-Qualified Pension Plans. As of the Spinoff Date, MFCI and MHCI each
shall establish by, or as soon as practicable after, such date retirement plans
and related grantor trusts (collectively, the "Replacement Plans") substantially
similar to the Non-Qualified Pension Plans and the related grantor trust
maintained with respect to the Non-Qualified Pension Plans. Those participants
of the Non-Qualified Pension Plans who become employees of either MFCI or MHCI
by the Spinoff Date shall participate in the Replacement Plans, with full credit
for benefit accrual purposes for their service with MRI prior to the Spinoff
Date, but subject to the condition that such a participant deliver within ninety
days after the Spinoff Date to RTI, as successor to MRI, an appropriate release,
in form satisfactory to RTI, releasing RTI and its affiliates (other than MFCI
or MHCI, as the case may be) from liability for the benefits accrued by that
participant as of the Spinoff Date under the Non-Qualified Pension Plans. With
respect to each such release delivered to RTI, RTI shall cause to be transferred
to a grantor trust established by MFCI or MHCI, as the case may be, a
proportionate share of the assets of the grantor trust which MRI currently
maintains in conjunction with the Non-Qualified Pension Plans. That portion of
the assets earmarked for the payment of benefits under the ESP or MRP, as the
case may be, to be delivered to each recipient grantor trust shall be in the
same proportion that the accrued benefit liabilities of those participants in
the corresponding Replacement Plan who have delivered acceptable releases to RTI
bear to the total accrued benefit liabilities of all participants in the ESP or
MRP, as applicable. Upon receipt of such an asset transfer by the grantor trust
maintained by MFCI or MHCI, as the case may be, the recipient company shall
assume and fully perform, pay and discharge all obligations and liabilities of
RTI (as successor to MRI) for and with respect to the accrued benefits under the
Non-Qualified Pension Plans of those participants who became employees of the
recipient company by the Spinoff Date.
3. Non-Qualified Deferred Compensation Plan for Employees. Prior to the
------------------------------------------------------
Spinoff Date, MRI shall amend the Morrison Restaurants Inc. Deferred
Compensation Plan (the "DCP") to clarify that the Distributions will not
constitute a termination of employment for purposes of determining the
commencement of benefit payments under the DCP so long as the participant
remains continuously employed by RTI, MFCI or MHCI from and after the Spinoff
Date and to clarify further that salary deferral and matching credits under the
DCP shall cease as of the Spinoff Date for those participants who do not
continue in the employ of RTI thereafter. As of the Spinoff Date, MFCI and MHCI
each shall establish by, or as soon as practicable after, such date a non-
qualified deferred compensation plan substantially similar to the DCP (a
"Replacement DCP") and related grantor trust. MFCI and MHCI employees who are
participants in the DCP shall be given the opportunity to continue participation
in the Replacement DCP, with full credit for years of service with MRI prior to
the Spinoff Date for purposes of determining their level of matching credit
under the Replacement DCP, but subject to the condition that any such
participant deliver within ninety days after the Spinoff Date to RTI, as
successor to MRI, an appropriate release, in form satisfactory to RTI, releasing
RTI and its affiliates (other than MFCI or MHCI, as the case may be) from any
liability for benefits under the DCP. With respect to each such release
delivered to RTI, RTI shall cause to be transferred to a grantor trust
established by MFCI or MHCI, as the case may
4
<PAGE>
be, a proportionate share of the assets of the grantor trust which MRI currently
maintains in conjunction with the DCP and MFCI or MHCI, as the case may be,
shall assume the corresponding liabilities. That portion of the assets
earmarked for the payment of benefits under the DCP to be delivered to each
recipient grantor trust shall be in the same proportion that the accrued benefit
liabilities of those participants in the corresponding Replacement DCP who have
delivered acceptable releases to RTI bear to the total accrued benefit
liabilities of all participants in the DCP.
4. Welfare Benefit Plans. MRI currently maintains various "employee
---------------------
welfare benefit plans," within the meaning of Section 3(1) of the Employee
Retirement Income Security Act of 1974, as amended, (collectively, the "MRI
Welfare Plans") for the benefit of its employees and the employees of its
affiliates. RTI or, where appropriate, the MRI Welfare Plans shall retain
liability for and shall pay when due all benefits attributable to claims
incurred prior to the Spinoff Date. RTI, or where appropriate, the MRI Welfare
Plans that are "group health plans" shall retain liability for and shall pay
when due all benefits attributable to "qualified beneficiaries" who became
entitled to "continuation coverage" (as those terms in quotations are defined in
Code Section 4980B) at any time immediately prior to the Spinoff Date. MFCI and
MHCI shall establish, as of the Spinoff Date, employee welfare benefit plans
substantially similar to the MRI Welfare Plans as then in effect. Employees of
MRI, MFCI or MHCI who retire prior to the Spinoff Date and are eligible for
retiree benefits under one or more MRI Welfare Plans shall continue to be
eligible for benefits under each such plan following the Spinoff Date pursuant
to the terms of the plan, as the same may be amended from time to time
thereafter and until such time as such plan may be terminated; provided,
however, that MFCI and MHCI, as the case may be, shall reimburse RTI annually
for the employer portion of the cost of retiree health coverage of each retiree
who performed the majority of his or her services for that respective line of
business during the calendar year in which the retiree retired prior to the
Spinoff Date.
The parties shall cause the funding status of the trust, or portion
thereof, which serves as the source of benefits under the MRI Welfare Plans
providing major medical coverage to participants to be determined as of the
Spinoff Date as soon as practicable after the Distributions and the parties
hereto shall effect an appropriate adjustment depending upon the results of such
determination in accordance with this paragraph. If the trust, or portion
thereof, is determined to be underfunded as of that date, MFCI and MHCI shall
each pay amounts directly to RTI equal to their proportionate share of the
underfunding. If the trust, or portion thereof, is determined to be overfunded
as of that date, RTI shall pay amounts directly to MFCI and MHCI equal to their
proportionate share of the overfunding. Any amounts determined to be due
pursuant to this paragraph shall be paid within thirty (30) days after such
determination. For purposes of this paragraph, a party's proportionate share of
any overfunding or underfunding shall be based upon that party's employer
contributions to the trust with respect to MRI Welfare Plans providing major
medical coverage for the third quarter of fiscal 1996 as compared to the
aggregate of all such contributions by each of the parties to such MRI Welfare
Plans for the same period.
5
<PAGE>
5. Equity-Based Compensation Plans. The parties agree to take the
-------------------------------
following actions on or before the Spinoff Date with respect to those equity-
based compensation plans currently maintained by MRI as well as those to be
adopted by MFCI and MHCI:
a. MRI Plans. MRI shall:
i. amend each of its equity-based compensation plans pursuant to
which equity-based rights remain outstanding as of the Spinoff Date to
clarify that such equity-based rights shall be adjusted on account of
the Distributions and to provide that the holder shall not be
considered as having experienced a termination of service so long as
the holder remains continuously in the service of RTI, MFCI or MHCI
from and after the Spinoff Date; and
ii. cause the committee administering each such plan to adjust
those outstanding equity-based rights in accordance with Exhibit A
attached hereto.
b. MFCI AND MHCI Plans. MFCI and MHCI shall each:
i. establish equity-based compensation plans pursuant to which
equity-based rights may be granted to, among others, persons holding
outstanding rights as of the Spinoff Date under any equity-based
compensation plan previously maintained by MRI ("MRI Optionees"); and
ii. cause the committee administering each such plan to grant to
MRI Optionees one or more options to acquire MFCI or MHCI stock, as
appropriate, in accordance with Exhibit A attached hereto and to
provide that any option issued under each such plan to an MRI Optionee
shall not expire on account of a termination of service so long as the
holder remains continuously in the service of RTI, MFCI or MHCI from
and after the Spinoff Date.
c. Individual Options. To the extent a present or former employee
holds option rights granted outside of any equity-based compensation plan,
the parties agree to provide such employee or former employee with the same
type of option rights accorded to MRI Optionees, as contemplated by the
foregoing provisions of this Section.
6. Non-Qualified Deferred Compensation Plan for Directors. Prior to the
------------------------------------------------------
Spinoff Date, MRI shall amend the Morrison Restaurants Inc. Stock Incentive and
Deferred Compensation Plan for Directors (the "SIDCP") to clarify that the
Distributions will not constitute a termination of service for purposes of
determining the commencement of benefit payments under the SIDCP or for purposes
of determining the vested status of restricted stock granted under the SIDCP so
long as the director continues to serve on the Board of Directors of RTI, MFCI
or MHCI from and after the Spinoff Date; to clarify that RTI stock, MFCI stock
and MHCI stock received in exchange for restricted MRI stock granted pursuant to
the SIDCP shall remain subject, to the same extent, to the same restrictions and
conditions; and to clarify that fee deferral credits under the
6
<PAGE>
SIDCP shall cease as of the Spinoff Date for those participants who do not
continue in the service of RTI after the Spinoff Date. As of the Spinoff Date,
MFCI and MHCI each shall establish a non-qualified deferred compensation plan
substantially similar to the SIDCP (a "Replacement SIDCP"). MFCI and MHCI
directors who are participants in the SIDCP, but who cease to serve upon the
Board of Directors of MRI as of the Spinoff Date, shall be given the opportunity
to transfer their account balances under the SIDCP to any Replacement SIDCP in
which they participate following the Spinoff Date, but subject to the condition
that the participant deliver to RTI, as successor to MRI, an appropriate
release, in form satisfactory to RTI, releasing RTI and its affiliates (other
than MFCI or MHCI, as the case may be) from any liability for benefits under the
SIDCP. Those participants of any Replacement SIDCP shall be given credit for
vesting purposes under the Replacement SIDCP for their years of service with MRI
prior to the Spinoff Date. With respect to each participant release delivered to
RTI, RTI shall transfer to MFCI or MHCI, as the case may be, assets equal in
value to the amount of any account balance so transferred and the recipient
company shall assume the corresponding liabilities. As to any director who
ceases to serve upon the Board of Directors of MRI as of the Spinoff Date but
continues to serve upon the Boards of Directors of both MFCI and MHCI
thereafter, such director may elect to have his or her account balance
transferred to either the Replacement SIDCP sponsored by MFCI or the Replacement
Plan sponsored by MHCI. A director of MRI immediately prior to the Spinoff Date
who ceases to serve upon the Board of Directors of RTI following the Spinoff
Date shall remain eligible to participate in the SIDCP through the later of (a)
the last day of the third quarter of MRI's fiscal year ending March 2, 1996 or
(b) the Spinoff Date.
7. Employee Stock Purchase Plan. As soon as practicable following the
----------------------------
Spinoff Date, MFCI and MHCI each shall establish employee stock purchase plans
substantially similar to the Morrison Restaurants Inc. Employee Stock Purchase
Plan (the "ESPP"). An employee who continues as an employee of either MFCI or
MHCI from and after the Spinoff Date shall remain eligible to participate in the
ESPP through the last payroll period ending immediately prior to the Spinoff
Date.
8. Executive Annual Bonus Program. MFCI and MHCI shall assume liability
------------------------------
for and shall pay any annual bonuses earned for fiscal 1996 by those executives
who continue in the employ of MFCI or MHCI, as the case may be, from and after
the Spinoff Date.
9. Management Stock Option Program ("MSOP"). Except as the parties may
----------------------------------------
otherwise agree, eligible employees of MFCI or MHCI (other than those occupying
the position of general manager and above) immediately prior to the Spinoff Date
who continues in the employ with that entity immediately following the
Distributions shall remain eligible to participate in the MSOP through fiscal
1996 although any options issued for either the third or fourth fiscal quarter
of fiscal 1996 shall be issued with respect to the stock of the entity employing
the eligible employee after the Spinoff Date.
7
<PAGE>
10. Change of Control Agreements. MFCI and MHCI shall each enter into
----------------------------
change of control agreements (the "Replacement Change of Control Agreements")
with those executives of MRI who become employees of MFCI or MHCI from and after
the Spinoff Date and who are party to existing change of control agreements with
MRI (the "Existing Change of Control Agreements"). The Replacement Change of
Control Agreements shall be substantially similar to the Existing Change of
Control Agreements.
11. Executive Life Insurance Plan. As soon as practicable following the
-----------------------------
Spinoff Date, MFCI and MHCI each shall establish executive life insurance plans
substantially similar to the Morrison Restaurants Inc. Executive Life Insurance
Plan (the "ELIP"). Those participants of the ELIP who become employees either
of MFCI or MHCI by the Spinoff Date shall cease participation in the ELIP as of
the Spinoff Date. Subject to the consent of each such participant, MRI shall
assign to MFCI or MHCI, as the case may be, the collateral assignments executed
in its favor by those participants.
12. Credit for Past Service with MRI. An employee of MFCI or MHCI
--------------------------------
immediately prior to the Spinoff Date who continues in the employ with that
entity immediately following the Distributions shall be given credit for all
years of service with MRI performed prior to the Spinoff Date with respect to
matters of employment generally, including participation in employee benefit
plans or fringe benefit arrangements, whether or not such service credit is
expressly provided for elsewhere in this Agreement as to any particular employee
benefit plan or fringe benefit arrangement.
13. Reimbursement of Employee Benefit Expenses. Except as otherwise
------------------------------------------
expressly provided for herein, MFCI and MHCI shall reimburse MRI for those
expenses attributable to the cost of contributions and expenses related to the
maintenance of employee benefits plans, for those employees of MFCI or MHCI, as
the case may be, incurred prior to the Spinoff Date.
14. Allocation of Certain Liability. From and after the Spinoff Date, RTI
-------------------------------
(as successor to MRI), MFCI and MHCI shall each be primarily liable for the
benefits accrued under the Non-Qualified Pension Plans or Replacement Plans
which it maintains and shall indemnify and hold harmless each of the other
parties hereto from and against any and all claims, liabilities, costs and
expenses, including, but not limited to, reasonable attorneys' fees, arising out
of or relating to any claim for benefits by any participant or beneficiary under
such plans. Notwithstanding the foregoing, in the event of the insolvency of
any party to this Agreement whereby all or a portion of the assets of the
grantor trust maintained by that party to provide a source for the payment of
benefits under the Non-Qualified Pension Plans or the corresponding Replacement
Plans (the "Affected Plans"), as the case may be, are paid to the party's
creditors, each other party hereto hereby agrees to pay directly to each
participant of an Affected Plan (the "Affected Participants") their
proportionate share of the accrued benefit that an Affected Participant had
earned under the Non-
8
<PAGE>
Qualified Pension Plan in which the Affected Participant was a participant as of
the Spinoff Date (or if the Affected Participant was then a participant in both
Non-Qualified Pension Plans, the Non-Qualified Pension Plan under which the
Affected Participant had the greater accrued benefit), with such proportionate
share to be payable at such time and in such manner as if the Affected
Participants were to be paid pursuant to the applicable Non-Qualified Pension
Plan pursuant to its terms as in effect on the Spinoff Date. The obligations
assumed by each of the indemnifying parties pursuant to this Section are to be
shared equally and, to the extent any one indemnifying party shall pay more than
its share of the obligations created pursuant to this Section, then that party
shall have a right of contribution against any other party obligated to make
payments to Affected Participants pursuant to this Section.
15. Amendment or Termination of Employee Benefit Plans. Except as
--------------------------------------------------
otherwise expressly provided herein, nothing in this Agreement is intended or
does in fact limit the ability of MRI, RTI, MFCI or MHCI, as applicable, in its
sole discretion, from amending or terminating any employee benefit plan or
fringe benefit arrangement which it now maintains or may hereafter establish at
any time or for any reason nor does anything herein empower any party hereto to
unilaterally reduce any vested benefits accrued by participants under such plans
or arrangements prior to any such amendment or termination.
16. Further Assurances. Each party covenants that it will execute such
------------------
additional instruments and take such actions as may be reasonably requested by
the other to confirm or perfect or otherwise carry out the intent and purposes
of this Agreement, including, but not limited to, sharing of participant
information as necessary to facilitate administration of employee benefit plans
and arrangements and the delivery to each other party of Forms S-8 prepared by a
party for its equity-based compensation plans.
17. No Waiver. No failure by either party to insist upon the strict
---------
performance of any term, covenant, condition or provision of this Agreement, or
to exercise any right or remedy consequent upon an event of default hereunder,
shall constitute a waiver of any such default or of such term, covenant,
condition or provision or a waiver or relinquishment for the future of the right
to insist upon and to enforce by any appropriate legal remedy a strict
compliance with all the terms, covenants, conditions and provision of this
Agreement, or of the right to exercise any such rights or remedies, if any
default by the other party be continued or repeated. No breach of this
Agreement shall be waived except as set forth in a written instrument executed
by the party waiving such breach. No waiver of any breach shall affect or alter
this Agreement but every term, covenant, condition and provision of this
Agreement shall continue in full force and effect with respect to any other
existing or subsequent breach hereof. Any failure on the part of any party
hereto to comply with any of its obligations hereunder may be waived by the
other party.
9
<PAGE>
18. Captions. The captions of the Sections of this Agreement have been
--------
inserted solely for convenience of reference and shall not constitute a part of
this Agreement, nor shall they affect its meaning, construction or effect.
19. Amendment of Agreement. This Agreement may be amended only by a
----------------------
written agreement duly executed by all of the parties hereto.
20. Applicable Law. This Agreement shall be construed and enforced in
--------------
accordance with the laws of the State of Georgia, to the extent not preempted by
federal law.
21. Multiple Counterparts. This Agreement may be executed in multiple
---------------------
counterparts, each of which shall be regarded for all purposes as an original
constituting but one and the same instrument.
22. Severability. If any one or more of the Sections, sentences or other
------------
portions of this Agreement shall be determined by a court of competent
jurisdiction to be invalid, the invalidity of any such Section, sentence, or
other portion of this Agreement shall in no way affect the validity or
effectiveness of the remainder of this Agreement, and this Agreement shall
continue in force to the fullest extent permitted by law.
23. Assignments. Except as otherwise provided herein, no party hereto
-----------
shall give, assign or pledge its rights under this Agreement without the consent
of the other parties.
24. Notices; Demands; Requests. All notices, demands and requests to be
--------------------------
given or made hereunder to or by any party shall be in writing and hand
delivered or mailed by registered or certified mail (return receipt requested)
or sent by any means of electronic message transmission with delivery confirmed
(by voice or otherwise) to the parties at the following addresses and will be
deemed given on the date on which such notice is received:
(a) As to MRI/RTI:
Morrison Restaurants Inc.
4721 Morrison Drive
Mobile, Alabama 36625-0001
Attention: Pfilip G. Hunt, Esq.
10
<PAGE>
(b) As to MFCI:
Morrison Fresh Cooking, Inc.
4893 Riverdale Road
Suite 260
Atlanta, GA 30337
Attention: Mitchell S. Block, Esq.
(c) As to MHCI:
Morrison Health Care, Inc.
4893 Riverdale Road
Suite 260
Atlanta, GA 30337
Attention: John E. Fountain, Esq.
Any of such addressees and addresses may be changed at any time upon
written notice given in accordance with this Section to the other party by the
party effecting the change. Any time periods commencing with notice prescribed
by the terms of this Agreement shall commence with the date of receipt of
written notice as provided under this Section.
25. Survival of Covenants. All covenants set forth herein shall survive
---------------------
the execution of this Agreement.
26. Entire Agreement. This Agreement contains the entire understanding of
----------------
the parties with respect to the transactions contemplated hereby and supersedes
all other prior and contemporaneous agreements, undertakings, negotiations,
discussions and representations, oral or written, between or among the parties.
27. Specific Performance. This Agreement and each and every provision
--------------------
hereof shall be specifically enforceable. Each party hereto upon the
introduction and presentation to the applicable court having jurisdiction over
the matter of evidence showing a material breach by the other party hereto shall
be entitled to injunctive relief mandating specific performance. In addition,
each party shall have all of the rights and remedies conferred in this Agreement
or now or hereafter conferred at law or in equity, which rights and remedies are
cumulative.
28. No Third Party Beneficiaries. Except as provided by Section 14, no
----------------------------
person or entity shall be deemed to be a third party beneficiary with respect to
the obligations of any party hereto.
11
<PAGE>
29. Binding Effect. This Agreement shall be binding upon and inure to the
--------------
benefit of the parties hereto and their respective legal representatives,
successors and assigns.
IN WITNESS WHEREOF, the parties to this Agreement have caused their
corporate names to be subscribed by officers duly authorized as of the date
first set forth above.
MORRISON RESTAURANTS INC.
By: /s/ Pfilip G. Hunt
-------------------------------
Title: Senior Vice President
-------------------------------
MORRISON FRESH COOKING, INC.
By: /s/ J. Russell Mothershed
-------------------------------
Title: Vice President
-------------------------------
MORRISON HEALTH CARE, INC.
By: /s/ J. Russell Mothershed
-------------------------------
Title: Vice President
-------------------------------
Agreed to and Acknowledged by:
RUBY TUESDAY, INC.
By: /s/ Pfilip G. Hunt
-------------------------------
Title: Senior Vice President
-------------------------------
12
<PAGE>
EXHIBIT 10.26
LICENSE AGREEMENT
THIS LICENSE AGREEMENT (the "Agreement"), dated as of March 2, 1996, by and
between Ruby Tuesday (Georgia), Inc., a Georgia corporation ("Ruby Tuesday
(Georgia)"), and Morrison Health Care, Inc., a Georgia corporation ("MHCI")
(collectively, the "Parties").
RECITALS
WHEREAS, in furtherance of the Plan of Distribution (as defined below), it
is desirable to license certain trademark rights between the Parties to provide
for the continued conduct of the Parties' respective businesses;
WHEREAS, the Parties desire that certain rights under the Mark (as defined
below) enjoyed by the Parties prior to the Distribution Date (as defined below)
should continue following the Distribution Date.
NOW, THEREFORE, in consideration of the mutual agreements, undertakings and
covenants herein, the Parties hereby agree as follows:
I. DEFINITIONS. As used in this Agreement, the following terms shall have the
following meanings:
"Fine Dining Services" shall mean the operation of the specialty
restaurant business as now operated by Ruby Tuesday (Georgia) and
hereafter operated by Ruby Tuesday (Georgia) during the term of this
Agreement, including, without limitation, the operation of Ruby
Tuesday, Mozarella's Cafe, Silver Spoon Cafe and Tia's restaurants.
"Distribution Date" shall mean the effective date of the distribution
of shares of common stock of Ruby Tuesday (Georgia) as contemplated by
the Plan of Distribution.
"Health Care Services" shall mean the health care food and nutrition
service business as now operated by MHCI and hereafter operated by
MHCI during the term of this Agreement.
"Mark" shall mean the trademark FIT N'TRIM, as used by Ruby Tuesday
(Georgia) and as evidenced by U.S. Reg. No. 1,805,467.
"Other Services" shall mean all services which are not within the
definition of Fine Dining Services or Health Care Services.
<PAGE>
"Plan of Distribution" shall mean the Plan of Distribution dated
September 26, 1995, adopted by the Board of Directors of Morrison
Restaurants Inc.
II. OWNERSHIP OF MARKS. The Parties acknowledge and agree that Ruby Tuesday
(Georgia) owns all right, title and interest in and to the Mark.
III. LICENSES.
3.1 Exclusive License. Ruby Tuesday (Georgia) hereby grants to MHCI,
-----------------
effective as of the Distribution Date, a royalty-free, worldwide, exclusive,
nonassignable (except as specified herein) license to utilize the Mark in
connection with Health Care Services. The exclusivity of this license applies
against Ruby Tuesday (Georgia), and Ruby Tuesday (Georgia) may not utilize the
Mark in connection with Health Care Services.
3.2 Nonexclusive License; Limitations on Ruby Tuesday (Georgia)'s Use of
--------------------------------------------------------------------
the Mark. Ruby Tuesday (Georgia) hereby grants to MHCI, effective as of the
- --------
Distribution Date, a royalty-free, worldwide, nonexclusive, nonassignable
(except as specified herein) license to utilize the Mark in connection with such
Other Services as are requested in writing by MHCI and consented to in writing
by Ruby Tuesday (Georgia) prior to the use of the Mark in connection therewith,
which consent shall not be unreasonably withheld by Ruby Tuesday (Georgia).
Ruby Tuesday (Georgia) agrees that it will not use the Mark in connection with
any Other Services without obtaining the prior written consent of MHCI, which
consent shall not be unreasonably withheld.
IV. USE OF MARK.
4.1 Use. MHCI agrees that it will use the Mark under the licenses granted
---
hereunder only in connection with goods and services meeting the standards,
specifications and qualities established (a) during the period prior to the
Distribution Date, or (b) by mutual agreement of the Parties following the
Distribution Date.
4.2 Monitoring. Ruby Tuesday (Georgia) shall have the right, at
----------
reasonable times, to inspect and monitor MHCI's use of the Mark to verify the
continued quality of MHCI's goods and services.
4.3 Respective Rights of the Parties. The requirement under Section 3.2
--------------------------------
that each Party obtain consent prior to using the Mark in connection with Other
Services is in consideration of the Parties' concurrent use of the Mark and the
parties' desire to continue the quality of goods and services provided in
connection with the Mark and to maintain the goodwill associated therewith.
2
<PAGE>
V. TERM AND TERMINATION.
5.1 Term. This Agreement and the licenses granted hereunder shall
----
continue for so long as Ruby Tuesday (Georgia) owns rights in the Mark or until
otherwise terminated as provided herein. In the event Ruby Tuesday (Georgia)
abandons or otherwise loses its rights in and to the Mark so as to prevent the
continued license of the Mark by MHCI, MHCI's rights in the Mark shall not
thereby be abandoned, and it shall be deemed to have established ownership
rights in the Mark by virtue of this Agreement and MHCI's use of the Mark.
5.2 Termination by MHCI. MHCI may, for its convenience, terminate this
-------------------
Agreement and the license hereunder upon written notice to Ruby Tuesday
(Georgia).
5.3 Termination by Ruby Tuesday (Georgia). Ruby Tuesday (Georgia) may
-------------------------------------
terminate this Agreement and the license granted to MHCI hereunder if MHCI
utilizes the Mark in connection with Fine Dining Services and fails to cease
such use within ninety (90) days following written notice from Ruby Tuesday
(Georgia) of its objection to such use.
5.4 Termination by Mutual Agreement. This Agreement may be terminated at
-------------------------------
any time upon mutual written agreement of the Parties.
VI. REMEDIES. The Parties hereby acknowledge that there is no adequate remedy
at law for failure to comply with the provisions of this Agreement and that such
failure would cause immediate harm that would not be adequately compensable in
damages, and therefore agree that the covenants herein may be enforced with
equitable remedies, including, without limitation, specific performance and
injunctive relief, without proof of money damages, in each case without limiting
any remedies available at law. Each Party expressly agrees that it will submit
to specific performance as a remedy in the event that it violates the
restrictions on its use of the Mark imposed by this Agreement.
VII. MISCELLANEOUS.
7.1 Assignment; Sublicensing. The licenses granted herein may be assigned
------------------------
or transferred to any party succeeding to all or any material part of the
business of MHCI, provided that the assignee or transferee shall assume the
obligations herein in writing and promptly notify Ruby Tuesday (Georgia) of the
same. The licenses shall not be otherwise assignable by MHCI without the
express written consent of Ruby Tuesday (Georgia), which consent shall not be
unreasonably withheld. Either Party may sublicense its rights hereunder to
third parties, provided, however, that the scope of any such sublicense shall be
in writing and shall be expressly limited to the scope of the sublicensing
Party's rights under this Agreement. The provisions of this Agreement,
including, without limitation, the licenses granted herein to MHCI, shall be
binding upon, inure to the benefit of and be enforceable by the Parties and
their respective successors, permitted assigns or sublicensees.
3
<PAGE>
7.2 Entire Agreement. This Agreement shall constitute the entire
----------------
agreement between the Parties with respect to the subject matter hereof and
shall supersede all previous negotiations, commitments and writings with respect
to such subject matter.
7.3 Notices. All notices and other communications hereunder shall be in
-------
writing and hand delivered or mailed by registered or certified mail (return
receipt requested) or sent by any means of electronic message transmission with
delivery confirmed (by voice or otherwise) to the Parties at the following
addresses (or such other addresses for a Party as shall be specified by like
notice) and will be deemed given on the date on which such notice is received:
To Ruby Tuesday, Inc.:
Ruby Tuesday, Inc.
4721 Morrison Drive
P.O. Box 160266
Mobile, Alabama 36625
Attn: General Counsel
To Morrison Health Care, Inc.:
Morrison Health Care, Inc.
4893 Riverdale Road
Suite 260
Atlanta, Georgia 30337
Attn: General Counsel
7.4 Waivers. The failure of any Party to require strict performance by
-------
the other of any provision in this Agreement will not waive or diminish the
first Party's right to demand strict performance thereafter of that or any other
provision hereof.
7.5 Amendments. This Agreement may not be modified or amended except by
----------
an agreement in writing signed by both Parties.
7.6 Governing Law. This Agreement shall be governed by and construed in
-------------
accordance with the laws of the State of Georgia.
7.7 Severability. In the event that one or more of the provisions
------------
contained in this Agreement should be held invalid, illegal or unenforceable in
any respect, the validity, legality and enforceability of the remaining
provisions contained herein shall not in any way be affected or impaired
thereby. The Parties shall endeavor in good faith to replace the invalid,
illegal or unenforceable provision with a valid provision which comes as close
as possible to the intent and effect of the invalid, illegal or unenforceable
provision.
4
<PAGE>
7.8 Counterparts. This Agreement may be executed in one or more
------------
counterparts, all of which shall be considered one and the same agreement.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as
of the day and year first above written.
RUBY TUESDAY (GEORGIA), INC.
By: /s/ J. Russell Mothershed
------------------------------
Name: J. Russell Mothershed
------------------------------
Title: Vice President
------------------------------
MORRISON HEALTH CARE, INC.
By: /s/ J. Russell Mothershed
------------------------------
Name: J. Russell Mothershed
------------------------------
Title: Vice President
------------------------------
5
<PAGE>
EXHIBIT 10.27
AMENDED AND RESTATED
OPERATING AGREEMENT
OF
MRT PURCHASING, LLC
<PAGE>
This Amended and Restated Operating Agreement (the "Agreement") is made as
of March 2, 1996 by and among the signatories hereto who are all the
Members (as defined herein) of the MRT Purchasing, LLC, a Georgia limited
liability company (the "Company"), organized under the provisions of the Georgia
Limited Liability Company Act (the "Act") O.C.G.A. Sections 14-11-100 et. seq.
-- ---
This Agreement amends and restates that certain Operating Agreement dated
October 30, 1995 among Morrison Restaurants Inc., a Delaware corporation
("Morrison"), and Ruby Tuesday, Inc., a Delaware corporation ("RTI"), and admits
Morrison Fresh Cooking, Inc., a Georgia corporation ("MFC") and Morrison Health
Care, Inc., a Georgia corporation ("MHC") as additional Members of the Company,
on the terms and conditions set forth herein.
ARTICLE 1
DEFINITIONS
-----------
When used herein, the following words shall have the meanings assigned to
them herein:
"Articles" means the Articles of Organization of the Company filed with the
Secretary of State of Georgia in accordance with Section 2.1 hereof.
"Asset Value" means
(i) the fair market value when contributed of any asset
contributed to the Company by any Member;
(ii) the fair market value on the date of distribution of any
asset distributed by the Company to any Member with respect to such
Member's interest in the Company; and
(iii) the fair market value of all Company Property at the
happening of any of the following events: (A) the admission of a
Member to, or the increase of an interest of an existing Member in,
the Company in exchange for a Capital Contribution; or (B) the
liquidation of the Company pursuant to Treas. Reg. (S) 1.704-
1(b)(2)(ii)(g).
"Board of Managers" means the Managers acting collectively pursuant to
Article 5 hereof.
"Capital Account" means the account established and maintained for each
Member in accordance with Section 10.2 of the Agreement.
"Capital Contributions" means the aggregate amount contributed to the
Company by any Member, (the amount in cash plus the Asset Value of any
property), with respect to such Member's Membership Interest in the Company (or
by the predecessor holder of the Membership Interest of such Member).
<PAGE>
"Change in Control" means with respect to any Member the occurrence of
either of the following: (i) any Person, together with its affiliates, shall
have become the owner of securities of the Member representing more than 20% of
the voting power of the Member's outstanding securities entitled to vote
generally in the election of directors; or (ii) a majority of the assets of the
Member are transferred to another Person not controlled by the Member, whether
by sale, merger, consolidation, contribution to capital or other similar
transaction.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time. All references herein to sections of the Code shall include any
corresponding provision or provisions of succeeding law.
"Company Profit" and "Company Loss" shall mean, for each Fiscal Year or
other period, an amount equal to the Company's taxable income or loss for such
year or period, determined in accordance with (S) 703(a) of the Code (for this
purpose, all items of income, gain, loss, or deduction required to be stated
separately shall be included in taxable income or loss); provided, however, that
(a) income exempt from federal income tax shall be treated as taxable income,
(b) expenditures described in (S) 705(a)(2)(B) of the Code or treated as such
expenditures under Treas. Reg. (S) 1.704-1(b)(2)(iv)(i) shall be subtracted from
taxable income, (c) the difference between the adjusted basis for federal income
tax purposes and Asset Value of Company Property shall be treated as gain or
loss upon the happening of an event described in clause (iii) of the definition
of "Asset Value" herein, (d) gain or loss resulting from the disposition of
Company Property with respect to which gain or loss is recognized for federal
income tax purposes shall be computed by reference to the Asset Value of such
Company Property, and (e) items specially allocated under Sections 10.3(b),
10.3(c) and 10.3(d) shall not be taken into account.
"Company Property" means all tangible and intangible property held by the
Company.
"Consent" means the consent of a Person, given as provided in Section 15.2,
to do the act or thing for which the consent is solicited, or the act of
granting such consent, as the context may require.
"Core Products" means those products set forth on Schedule I hereto.
"Fiscal Year" of the Company means the fiscal year ending on the first
Saturday following May 30 of each year.
"Majority" means, in connection with any action under this Agreement
requiring the vote or consent of the Members, an amount which is in excess of
50% calculated by dividing the number of Membership Units owned by Members who
have consented to the taking of such action divided by the total number of
Membership Units that have been issued and have not otherwise been retired by
the Company or abandoned by a Member, both as of the time the request for
consent of such action is being made.
"Manager" of the Company means anyone appointed to the Board of Managers of
the Company in accordance with the terms of this Agreement, and collectively,
the "Managers."
2
<PAGE>
"Member" means, initially, a Person who has executed this Agreement
originally and has become a party hereto, and, subsequently, any Person admitted
as a Member in accordance with Sections 12.3 and 12.4, collectively, the
"Members." The names and addresses of each Member as of the date of this
Agreement are set forth on Exhibit A attached hereto.
"Membership Interest" means the rights of a Member in distributions (either
liquidating or otherwise), and allocations of the Company's profits, losses,
gains, deductions, and credits. Each Member's Membership Interest shall be
equal to the percentage obtained by dividing such Member's Membership Units by
the total number of Membership Units that have been issued and have not
otherwise been retired by the Company or abandoned by a Member, both as of the
time of the determination of such Member's Membership Interest is being made.
The Membership Units and Membership Interests of each Member as of the date of
this Agreement shall be as set forth on Exhibit A attached hereto.
"Membership Unit" means the standard of measurement used to determine each
Member's Membership Interest in the Company, collectively, the "Membership
Units." The number of Membership Units held by each Member shall be set forth
in one or more certificates issued to each Member. The number of Membership
Units that may be issued by the Company, which are otherwise issued in
accordance with the terms and conditions set forth in this Agreement, is
unlimited.
"Officer" means one or more persons appointed by the Board of Managers
pursuant to Article 6 hereof.
"Person" means any individual, partnership, corporation, trust, or other
entity.
"Purchasing Term" means the period described in Article 7 during which the
Company shall act a purchasing agent for one or more Members pursuant to the
provisions of this Article.
"Regulations" means, except where the context indicates otherwise, the
permanent, temporary or proposed regulations of the Department of Treasury under
the Code.
"Taxing Jurisdiction" means any state, local, or foreign government that
collects tax, interest or penalties, however designated, on any Member's share
of the income or gain attributable to the Company.
"Termination Event" means any of the occurrences described below:
(a) the expiration or termination of the term of the Company as set
forth in Section 2.2 hereof;
(b) the sale, forfeiture, abandonment or other disposition of all or
substantially all of the Company Property;
(c) the written consent of all of the Members to the dissolution and
winding up of the Company;
3
<PAGE>
(d) the withdrawal, adjudication of insolvency, dissolution or removal
of a Member, the filing of a certificate of dissolution or its equivalent
or the revocation of the charter (and the expiration of ninety (90) days
after the date of notice to it of revocation without reinstatement of its
charter) of a Member, or the occurrence of any other event which causes a
Member to cease to be a member of the Company;
(e) the bankruptcy of a Member, which shall be deemed to occur upon
the happening of any of the following events:
(1) The performance by or against a Member of any of the
following:
(i) making of a general assignment for the benefit of
creditors;
(ii) filing of a voluntary petition in bankruptcy; or
(iii) the entry of an order of relief under the Federal
Bankruptcy Code; or
(2) The passage of one hundred twenty (120) days following
commencement of any proceedings against a Member seeking
reorganization, arrangement, composition, readjustment,
liquidation, dissolution or similar relief under any statute, law
or regulation, without such proceeding being dismissed; or the
passage of ninety (90) days after the appointment, without such
Member's consent or acquiescence, of a trustee, receiver or
liquidator of such Member or of all or any substantial part of
the Member's properties, unless the appointment is vacated or
stayed, or the passage of ninety (90) days following the
expiration of such a stay unless the appointment is vacated.
(f) the entry of a decree of judicial dissolution of the Company
pursuant to Section 14-11-603 of the Act.
"Termination Notice" means that notice from a Member to the Company in
accordance with Section 7.6(a) terminating the Company's authority to act as
purchasing agent for the Member.
"Treas. Reg." means the Regulations.
"Winding-Up" means the period during which the affairs of the Company are
terminated and the liquidation and sale of the assets of the Company is
accomplished, such process commencing when the Company is dissolved for any
reason.
4
<PAGE>
ARTICLE 2
FORMATION
---------
2.1 Formation. The parties do hereby agree to form an LLC to be
---------
known as MRT Purchasing, LLC, pursuant to the Act and, for that purpose, have
caused Articles of Organization of the Company to be executed and filed with the
Georgia Secretary of State in accordance with Section 14-11-206 of the Act.
Inasmuch as the Company will be managed by one or more managers, as defined
herein, the Articles expressly provide that the management of the Company is
vested in such managers as required by Section 14-11-301(b) of the Act.
2.2 Term. The term of the Company shall begin as of the date of
----
filing of the aforementioned Articles of Organization and shall continue until
December 31, 2050, unless sooner terminated pursuant to the terms of this
Agreement.
2.3 Agreement, Effect of Inconsistencies with Act. It is the
---------------------------------------------
express intention of the Members that this Agreement shall be the sole source of
agreement of the parties hereto, and, except to the extent a provision of this
Agreement expressly incorporates federal income tax rules by reference to
sections of the Code or Regulations or is expressly prohibited or ineffective
under the Act, this Agreement shall govern, even when inconsistent with, or
different than, the provisions of the Act or any other law or rule. To the
extent any provision of this Agreement is invalid or unenforceable under the
Act, the provisions of this Agreement shall be enforced to the maximum extent
permitted in order to make this Agreement effective under the Act, and all other
parts of this Agreement will remain in force.
2.4 Registered Agent and Office. The Company's registered agent for
---------------------------
the service of process and registered office shall be The Prentice-Hall
Corporation System, Inc. and 66 Luckie Street, Suite 604, Atlanta, Georgia
30303, respectively. The Company's Manager(s) may, from time to time, change
the registered agent or office through appropriate filings with the Secretary of
State of Georgia. Any registered agent so appointed must, in accordance with
Section 14-11-209 of the Act, be an individual resident of Georgia, a
corporation, or a foreign corporation having a certificate of authority to
transact business in Georgia.
2.5 Principal Office. The initial principal office of the Company
----------------
shall be 4721 Morrison Drive, Mobile, Alabama 36625. The Company's Manager(s)
may, from time to time, change the location of such principal office through
appropriate filings with the Secretary of State of Georgia.
5
<PAGE>
ARTICLE 3
NATURE OF BUSINESS
------------------
The general purpose for which the Company is formed is to purchase on
behalf of its Members, or to arrange for the purchase by its Members, of any and
all products and services and to sell, store, handle, ship, distribute, furnish,
supply and procure any and all products or services or to act for any of its
Members in connection with any such activities, including, without limitation,
to act as agent for the Members in the collection of remuneration. In
connection with this purpose, the Company shall be authorized and empowered to
engage in any other activities related or incidental thereto.
ARTICLE 4
MEETINGS OF MEMBERS
-------------------
4.1 Meetings. A meeting of Members shall be held annually, within
--------
four (4) months of the end of each Fiscal Year of the Company. The annual
meeting shall be held at such time and place and on such date as the Board of
Managers shall determine from time to time and as shall be specified in the
notice of the meeting. Special meetings of Members, for any purpose or
purposes, unless otherwise prescribed by statute, may be called by any Manager.
Special meetings of Members shall be held at such time and place and on such
date as shall be specified in the notice of the meeting. At all meetings of
Members a majority of the outstanding Membership Units held by Members
represented at the meeting, in person or by proxy, shall constitute a quorum for
the transaction of business.
4.2 Notice of Meetings. Written notice of annual or special meetings
------------------
of Members stating the place, day, and hour of the meeting shall be given not
less than five (5) nor more than thirty (30) days before the date of the
meeting. Notice of any special meeting of Members shall state the purpose or
purposes for which the meeting is called. Notice of a meeting may be waived by
an instrument in writing executed before or after the meeting. The waiver need
not specify the purpose of the meeting or the business transacted. Attendance
at such meeting in person or by proxy shall constitute a waiver of notice
thereof. Members may also meet by conference telephone call if all Members on
such call can hear one another and the requisite notice is given or waived.
4.3 Meeting of all Members. If all of the Members shall meet at any
----------------------
time and place, either within or outside of the State of Georgia, and no Member
shall object to the holding of a meeting at such time and place, such meeting
shall be valid without call or notice, and at such meeting any lawful action may
be taken.
4.4 Manner of Acting. If a quorum is present, the affirmative vote
----------------
of Members holding a Majority of Membership Units represented at the meeting, in
person or by proxy, and entitled to vote shall be the act of the Members, unless
the vote of a greater or lesser proportion or number is otherwise required by
the Georgia Act, by the Articles of Organization, or by this Agreement. At all
meetings of Members, a Member may vote in person or by proxy executed in
6
<PAGE>
writing by the Member or by a duly authorized attorney-in-fact. Such proxy
shall be filed with the Board of Managers of the Company before or at the time
of the meeting. No proxy shall be valid after eleven months from the date of
its execution, unless otherwise provided in the proxy.
4.5 Action by Members Without a Meeting. Action required or
-----------------------------------
permitted to be taken at a meeting of Members may be taken without a meeting if
the action is evidenced by one or more written consents describing the action
taken, signed by the Members holding a Majority of Membership Units held by
Members, or such greater number as may be required to approve such action and
delivered to the Board of Managers of the Company for inclusion in the minutes
or for filing with the Company records.
ARTICLE 5
RIGHTS AND DUTIES OF MANAGERS
-----------------------------
5.1 Management. The full and entire management of the business and
----------
affairs of the Company shall be vested in the Board of Managers which shall have
and may exercise all of the powers that may be exercised or performed by the
Company. Except for situations in which the approval of the Members is
expressly required by this Agreement or by nonwaivable provisions of applicable
law, the Board of Managers shall have full and complete authority, power, and
discretion to manage and control the business, affairs, and properties of the
Company, to make all decisions regarding those matters, and to perform any and
all other acts or activities customary or incident to the management of the
Company's business.
5.2 Number, Tenure and Qualifications. The Board of Managers shall
---------------------------------
consist of a number of Managers equal to the number of Members of the Company.
Each Member shall elect one Manager to the Board of Managers who shall serve at
the pleasure of the electing Member. Managers shall be elected at each annual
meeting of Members and shall hold office until the first to occur of the death,
resignation, or removal of such Manager, or until a successor to such Manager
shall have been elected. Managers need not be residents of the State of Georgia
or Members of the Company. Notwithstanding the foregoing, (i) Morrison and RTI
shall for purposes of this paragraph count as one Member and shall jointly elect
only one Manager; and (ii) in the event a Member delivers a Termination Notice
to the Company, (a) such Member shall not count for purposes of determining the
number of Managers, (b) such Member shall not have the right to elect any
Manager to the Board, and (c) the Manager who was elected by such Member shall
automatically be deemed to have resigned effective upon the giving of the
Termination Notice.
5.3 Manner of Action; Quorum. At any time when there is more than
------------------------
one Manager, the Board of Managers may not take any action permitted to be taken
by the Board of Managers unless the Board of Managers acts at any regular or
special meeting held in accordance with Section 5.5 hereof or by unanimous
written consent in accordance with Section 5.6 of this Agreement. A majority of
the Board of Managers shall constitute a quorum for the transaction of business.
Unless otherwise set forth herein, all resolutions adopted and all business
transacted by the Board of Managers shall require the affirmative vote of a
majority of the Managers.
7
<PAGE>
5.4 Vacancies. The position of any Manager which may become vacant
---------
prior to the expiration of his term shall be filled at the direction of the
Member having elected such Manager, such appointment to continue until the
expiration of the term of the Manager whose place has become vacant. Any new
Member shall fill the vacancy created by reason of a resultant increase in the
number of Managers, such appointment to continue for a term of office until the
next election of Managers by the Members and until the election of the
successor.
5.5 Meetings. The Board of Managers shall meet annually without
--------
notice following the annual meeting of Members. The Board of Managers may set
any number of regular meetings by resolution. No notice need be given for any
annual or regular meeting of the Board of Managers. Special meetings of the
Board of Managers may be called at any time by the President or by any one
Manager, on two (2) days' prior written notice to each Manager, which notice
shall specify the time and place of the meeting. Notice of any such meeting may
be waived by an instrument in writing executed before or after the meeting.
Attendance in person at such meeting shall constitute a waiver of notice
thereof. Managers may also meet by conference telephone call if all Managers on
such call can hear one another and the requisite notice is given or waived.
5.6 Chairperson. The Board of Managers may by majority vote appoint
-----------
a Chairperson of the Board of Managers. The Chairperson of the Board of
Managers shall preside at all meetings of the Managers, shall consult with and
provide advice to the Managers and perform such other duties as the Board of
Managers may prescribe from time to time; provided, that the Chairperson shall
not be a Manager and shall not have any voting rights with respect to any Board
action.
5.7 Action in Lieu of Meeting. Any action to be taken at a meeting
-------------------------
of the Board of Managers, or any action that may be taken at a meeting of the
Board of Managers, may be taken without a meeting if a consent in writing,
setting forth the action so taken, shall be signed by all of the Managers and
any further requirements of law pertaining to such consents have been complied
with.
5.8 Removal. Any Manager may be removed from office at any time,
-------
with or without cause, upon the written direction of the Member who elected such
Manager. At a meeting called expressly for that purpose, any Manager may be
removed at any time for Cause by the affirmative vote of a Majority of the
Members. "Cause" shall mean the Manager's gross negligence, willful misconduct
or fraud, or material breach of his, her or its obligations hereunder, in the
handling of the Company's business and affairs.
5.9 Certain Powers of the Board of Managers. The Board of Managers
---------------------------------------
shall have plenary power and authority to conduct the business of the Company.
Without limiting the generality of the preceding sentence or the powers
described in Section 5.1 hereof, the Board of Managers shall have full power and
authority to authorize the Company:
(a) To acquire property from any Person as the Board of Managers may
determine.
8
<PAGE>
(b) To borrower money for the Company from banks, other lending
institutions, one or more Managers, Members, or affiliates of a Manager or
Member on such terms as the Managers deem appropriate, and in connection
therewith, to hypothecate, encumber and grant security interest in the
assets of the Company to secure repayment of the borrowed sums.
(c) To invest any Company funds temporarily (by way of example but not
limitation) in time deposits, short-term governmental obligations,
commercial paper or other investments.
(d) Upon the affirmative vote of a Majority of the Members, to sell or
otherwise dispose of all or substantially all of the assets of the Company
as part of a single transaction or plan so long as such disposition is not
in violation of or a cause of a default under any other agreement to which
the Company may be bound. The affirmative vote of the Members shall not be
required with respect to any sale or disposition of the Company's assets
constituting less than all or substantially all of the Company's assets.
(e) To execute on behalf of the Company all instruments and documents,
including, without limitation, checks, drafts, notes and other negotiable
instruments; mortgages or deeds of trust; security agreements; financing
statements; documents providing for the acquisition, mortgage or
disposition of the Company's property; assignments; bills of sale; leases;
partnership agreements, operating agreements of other limited liability
companies; and any other instruments or documents necessary, in the opinion
of the Board of Managers, to the business of the Company.
(f) To employ accountants, legal counsel, managing agents, or other
experts to perform services for the Company and to compensate them from
Company funds.
(g) To enter into any and all other agreements on behalf of the
Company, with any other Person for any purpose, in such forms as the Board
of Managers may approve.
(h) To appoint Officers, who need not be Managers, and to delegate
executive responsibility to them, and to appoint individuals to serve as
such officers at the pleasure of the Board of Managers.
(i) To do and perform all other acts as may be necessary or
appropriate to the conduct of the Company's business.
(j) To issue Membership Units, for such consideration as the Board of
Managers deems appropriate.
(k) To open bank accounts in the name of the Company, and the Managers
shall be the sole signatories thereon, unless the Board of Managers
determine otherwise.
Unless authorized by the Board of Managers, no attorney-in-fact, employee,
or other agent of the Company shall have any power or authority to bind the
Company in any way, to pledge its credit, or to render it liable for any
purpose.
9
<PAGE>
5.10 Resignation. Any Manager of the Company may resign at any time by
-----------
giving written notice to the Members of the Company. The resignation of any
Manager shall take effect upon receipt of notice thereof or at such later time
as shall be specified in such notice; and, unless otherwise specified therein,
the acceptance of such resignation shall not be necessary to make it effective.
5.11 Manager's Compensation. Any salaries and other compensation of the
----------------------
Managers shall be fixed by the Board of Managers.
5.12 Records. The Managers shall cause to be maintained the following
-------
records at the Company's principal office:
(a) A current list of the full name and last known business address of
each Member and Manager and former Member and Manager;
(b) A copy of the Articles and all amendments thereto, together with
executed copies of any powers of attorney pursuant to which Articles have
been executed;
(c) A copy of the Agreement including all amendments thereto;
(d) Copies of the Company's federal, state, and local income tax
returns, if any, for the three most recent Fiscal Years; and
(e) Copies of the Company's financial statements, if any, for the
three most recent Fiscal Years.
ARTICLE 6
OFFICERS
--------
6.1 General Provisions. The Officers of the Company shall consist of a
------------------
President, an Executive Vice President and a Secretary, who shall be elected by
the Board of Managers, and such other officers as may be elected by the Board of
Managers or appointed as provided in this Agreement. Each Officer shall be
elected or appointed for a term of office running until the next annual meeting
of the Board of Managers or such other term as provided by resolution of the
Board of Managers or the appointment to office. Each Officer shall serve for
the term of office for which he or she is elected or appointed and until his or
her successor has been elected or appointed and has qualified or his or her
earlier resignation, removal from office, or death. Any two or more offices may
be held by the same person.
6.2 President. The President shall be the chief executive officer of the
---------
Company and shall have general and active management of the operation of the
Company subject to the authority of the Board of Managers. The President shall
be responsible for the administration of the Company, including general
supervision of the policies of the Company and general and active management of
the financial affairs of the Company and shall have the authority to execute
contracts in the name and on behalf of the Company. The President is hereby
designated an
10
<PAGE>
agent of the Company by the Board of Managers to the extent necessary to
accomplish the foregoing duties.
6.3 Executive Vice President. The Executive Vice President shall perform
------------------------
such duties and have such powers as may be delegated by the President or the
Board of Managers. The Executive Vice President shall, in the absence of the
President, execute the duties of and have the authority of the President.
6.4 Vice Presidents. The Company may have one or more additional Vice
---------------
Presidents, elected by the Board of Managers, who shall perform such duties and
have such powers as may be delegated by the President or the Board of Managers.
6.5 Secretary. The Secretary shall keep minutes of all meetings of the
---------
Members and the Board of Managers and have charge of the minute books and shall
perform such other duties and have such other powers as may from time to time be
delegated to him or her by the President or the Board of Managers.
6.6 Treasurer. The Company may have a Treasurer, elected by the Board of
---------
Managers, who shall perform such duties and have such powers as may from time to
time be delegated to him or her by the President or the Board of Managers.
6.7 Assistant Secretaries and Treasurers. Assistants to the Secretary and
------------------------------------
Treasurer may be appointed by the President or elected by the Board of Managers
and shall perform such duties and have such powers as shall be delegated to them
by the President or the Board of Managers.
ARTICLE 7
PURCHASING ARRANGEMENTS
-----------------------
7.1 Purchasing Arrangements.
-----------------------
(a) The Company will act as purchasing agent for the Members during
the period commencing the date hereof and ending March 1, 2001 ("Purchasing
Term") on the terms set forth below:
(i) Each Member hereby designates and appoints the Company as its
exclusive agent for the purchase of all Core Products. No Member
shall purchase any Core Products except as may have been arranged by
or through the Company. Notwithstanding the foregoing, in the event a
customer of a Member requires that Member to purchase a Core Product
from a supplier that the Company has not designated as the supplier
for such product, the Member may purchase such Core Product from the
customer's designated supplier ("Exempt Purchase"), provided, however,
that (A) in no event shall the total annual amount (in dollars) of any
Member's Exempt Purchases exceed 26% of such Member's total annual
amount of purchases of Core Products and (B) the Member notifies the
Company of such
11
<PAGE>
requirement in writing in advance of purchasing thereunder and gives
the Company a monthly accounting of such purchases.
(ii) Non-Core Products may be purchased by the Members at any
time independently of the Company. The Company shall, however, upon
and in accordance with a request by a Member, also arrange for
purchases of non-Core Products for such Member, and in such event, the
Member will make purchases of such non-Core Products for the duration
of and in accordance with the terms of any such arrangement.
(iii) The Company will select vendors and brands for Core
Products in its sole discretion. The Company will have complete
discretion to negotiate the terms of purchasing arrangements for the
Core Products on behalf of the Members; provided, however, that the
term of any long-term contract shall not extend beyond twelve (12)
months without the consent of the Members who are to be parties to and
bound by such contract. Notwithstanding the foregoing, the Company
shall consult with Members regarding any long-term contracts for
products or services with particular manufacturers.
(iv) The Company may in its discretion make forward purchases of
commodity items on behalf of its Members.
(v) Purchasing arrangements will provide for direct purchases by
Members from suppliers and direct payment by Members to suppliers;
provided, however, that rebates of any kind will be remitted to the
Company as agent for the Members and allocated by the Company to the
Members in accordance with this Agreement.
(vi) The Company will endeavor to arrange purchasing arrangements
under which each of the Members is liable only for purchases which it
makes; provided, however, that the Company may arrange for purchasing
arrangements pursuant to which the Members will be jointly and
severally liable if all the Members agree so to be bound.
(b) The Members will be bound by any purchasing arrangements arranged
by the Company for Core Products which are in accordance with the
provisions of subparagraph (a) above, and agree to execute, if necessary,
any contracts or other documentation reflecting such arrangements.
(c) The Members agree to be bound by the terms of those existing
agreements set forth on Exhibit C hereto for the respective current terms
thereof and to purchase, if applicable, the minimum amount of products or
services set forth on Exhibit C, which agreements will be administered
through the Company.
12
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(d) Each Member will be solely responsible for purchasing,
maintaining, and disposing of inventories of their respective proprietary
goods, i.e., goods whose purchases are unique to any Member.
(e) Each Member will be solely responsible for its dead inventory.
7.2 Allocation of Benefits and Obligations. Purchasing benefits (rebates,
--------------------------------------
allowances, etc.) and obligations (minimum purchase requirements, etc.) for each
purchasing arrangement shall be allocated among the Members as follows:
(a) with respect to existing arrangements, in accordance with Exhibit
C, and to the extent not set out thereon, in accordance with past practice
of the purchasing department of Morrison; and
(b) with respect to new arrangements, as may be agreed upon by the
Members to be bound by such arrangement.
7.3 Rebates. All rebates and other allowances (such as signing bonuses
-------
and one-time growth payments) ("Rebates") will be remitted to and collected by
the Company as agent for the Members or will be collected in such other manner
as the Members shall hereafter agree. The Company will distribute any Rebates
received during any calendar quarter to the Members on whose behalf such Rebates
were collected no later than 120 days after the end of such quarter, together
with a report thereon.
7.4 Operational Management. The Company will be operated by employees of
----------------------
Members loaned to the Company ("Operating Group") by Morrison or RTI. The
composition of the initial Operating Group will require the approval of the
Board of Managers. All compensation (including bonuses), benefits, stock
options and other employee expenses of the Operating Group will be considered
operating expenses of the Company for which each Member shall be allocated
responsibility in accordance with Section 7.5. Any changes to the composition
of the Operating Group or to the compensation or benefits paid to any individual
in the Operating Group will require the approval of the Board of Managers.
7.5 Operating Expenses.
------------------
(a) All expenses incurred during each fiscal year in operating the
Company will be shared among the Members pro rata based on the relative
number of man-hours spent by the Company on behalf of each of the Members
during the same Fiscal Year. The Company shall maintain an account on
behalf of each Member for such purpose. The Company's operating expenses
and the allocation percentages among the Members shall be calculated on a
quarterly basis by the Company and each Member's allocable share of
operating expenses shall be paid by the Member or, at the Company's option,
deducted from any Rebates to be distributed to such Member. Notice of the
quarterly calculations shall be delivered to each of the Members within 30
days after the end of each of the first three (3) fiscal quarters of the
Company, together with an accounting of any offsets against any Rebates
collected. The Company's annual operating expenses and allocation
percentages shall be calculated and delivered to the Members within 30 days
of
13
<PAGE>
the end of the fourth fiscal quarter and a final accounting made of each
Member's allocable share of the annual operating expenses, together with a
schedule of credits for payments made with respect to the three (3)
preceding quarters. Amounts due by any Member shall be paid monthly by the
Member or, at the Company's option, deducted from any Rebates to be
distributed to such Member and any overpayments shall be credited to such
Member's account.
(b) To the extent that any Member has paid expenses appropriately
incurred on behalf of the Company (for example, expenses of the Operating
Group), that Member will be credited or reimbursed by the other Members for
its pro rata share of such expenses. The Members agree to advance any
funds necessary for operating expenses to the Company during the first year
of the Purchasing Term, pro rata based on their respective Membership
Interests, subject to repayment on or before the end of such year.
7.6 Renewals.
--------
(a) The Purchasing Term will automatically renew for consecutive five
(5) year terms, subject, however, to each Member's right at any time to
terminate the Company's authority to act as purchasing agent for such
Member pursuant to Section 7.1(a) upon six (6) months prior written notice
to the Company and the other Members.
(b) A termination pursuant to a Termination Notice shall not affect
the terminating Member's (i) continuing obligations under existing long-
term contracts or commitments with third parties arranged by the Company in
accordance with Section 7.1(a), which shall be honored by the terminating
Member for the full term thereof, (ii) right to receive the rebates
attributable to purchases under such contracts or commitments pursuant to
Section 7.3, or (iii) continuing obligations to pay its pro rata share of
the Company's operating expenses pursuant to Section 7.5.
7.7 Defaults/Indemnification.
------------------------
(a) If any Member defaults under any of the purchasing arrangements or
other obligations described in this Article 7 (a "Default") (whether as a
result of bankruptcy or otherwise), the defaulting Member will have thirty
(30) days (or such lesser period as may be provided in any applicable
purchasing arrangement) to cure such default after notice of the Default is
given to the Member by the Company. In the event the defaulting Member
does not cure the Default within such period, the Managers representing the
other Members may at their option terminate the Company's obligation to act
as purchasing agent for such defaulting Member under this Article 7. Such
termination will require the unanimous consent of the Managers representing
the other Members and will be effective upon notice to the Member. This
termination shall not affect the defaulting Member's (i) continuing
obligations under existing long-term contracts or commitments with third
parties arranged by the Company in accordance with Section 7.1(a), which
shall be honored by the defaulting Member for the full term thereof, (ii)
right to receive the rebates attributable to purchases under such contracts
or commitments pursuant to Section 7.3, (iii) continuing obligations to pay
its pro rata share of the Company's
14
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operating expenses pursuant to Section 7.5, or (iv) continuing obligations
to indemnify the Company and the other Members pursuant to Section 7.7(b)
below.
(b) Each of the Members does hereby indemnify and hold harmless the
Company and each of the other Members from and against all demands, claims,
actions or causes of action, losses, damages, liabilities, costs and
expenses, including without limitation, interest, penalties and fines and
reasonable attorneys' fees and expenses, asserted against, imposed upon or
incurred by the Company or the other Members by reason of or resulting from
any breach of this Agreement by such Member, including, without limitation,
a Default.
ARTICLE 8
AUTHORITY AND LIABILITY
-----------------------
8.1 Limitation of Authority.
-----------------------
(a) No Member of the Company, acting solely in its capacity as a
Member, is an agent of the Company having any authority to act on behalf of
the Company, execute any instrument in connection with the carrying on of
the Company's business and affairs, or otherwise bind the Company in any
manner.
(b) Each Manager is an agent of the Company for the purpose of the
Company's business and affairs, and the act of any Manager, including, but
not limited to, the execution in the name of the Company of any instrument
for apparently carrying on in the usual way the business and affairs of the
Company, binds the Company, unless the Manager so acting has, in fact, no
authority to act for the Company in the particular matter.
(c) Any Member or Manager who takes any action or binds the Company in
violation of Section 8.1(a) and (b) shall be solely responsible for any
loss and expense incurred by the Company as a result of the unauthorized
action and shall indemnify and hold the Company harmless with respect to
the loss or expense.
8.2 Liability and Indemnification of Members and Managers.
-----------------------------------------------------
(a) A Person who is a Member of the Company shall have no duties or
obligations to the Company or other Members solely by reason of acting in
his or its capacity as a Member, other than those obligations set forth in
this Agreement. A Person who is a Manager shall act in a manner such
Manager believes in good faith to be in the best interests of the Company,
and with the care an ordinarily prudent Person in a like position would
exercise under similar circumstances in carrying on the business and
affairs of the Company; provided that no Manager shall have any personal
liability to the Company or its Members for any loss or damage sustained by
the Company or any Member for breach of a fiduciary or other duty in
connection with this Agreement as a Manager by reason of any act or
omission occurring subsequent to the date when this
15
<PAGE>
provision becomes effective, except that this provision shall not eliminate
or limit the liability of a Manager for (a) intentional misconduct or a
knowing violation of law, (b) any transaction for which the Manager derived
a personal benefit in violation or breach of this Agreement; or (c) an
intentional breach of this Agreement.
(b) The Company shall indemnify the Members and Managers to the full
extent authorized for limited liability companies pursuant to Section 14-
11-306 of the Act for any act performed by the Members or Managers within
the scope of the authority conferred on the Members and Managers by this
Agreement, except for an intentional breach of this Agreement. No Member,
Manager, agent, or employee shall be liable to any party by reason of being
a Member, Manager, agent, or employee of the Company under any judgement,
decree or order of any court or in any other manner for any debt,
obligations or liability pertaining to the Company or its business, whether
arising in tort, contract or otherwise or for the acts or omissions of any
other Member, Manager, agent or employee of the Company, however arising.
(c) The Managers shall be entitled to rely on information, opinions,
reports or statements, including, but not limited to, financial statements
or other financial data, prepared or presented by any Officer or by third
persons employed by an Officer.
ARTICLE 9
REPRESENTATIONS AND CONFLICTS
-----------------------------
9.1 Representations and Warranties. Each Member or person executing this
------------------------------
Agreement on behalf of a Member that is an organization, hereby represents and
warrants to the Company and each other Member that: (a) if the Member is an
organization, such organization is duly organized, validly existing, and in good
standing under the law of its state of organization and that it has full
organizational power to execute and agree to perform its obligations under this
Agreement; (b) that the Member is acquiring its interest in the Company for the
Member's own account as an investment and without an intent to distribute the
interest; and (c) the Member acknowledges that the interests have not been
registered under the Securities Act of 1933 or any state securities laws, and
may not be resold or transferred by the Member without appropriate registration
or the availability of an exemption from such requirements.
9.2 Conflicts of Interest.
---------------------
(a) Except as otherwise set forth in Article 7, a Member shall be
entitled to enter into transactions that may be considered to be
competitive with or a business opportunity that may be beneficial to the
Company, it being expressly understood that some of the Members may enter
into transactions that are similar to the transactions into which the
Company may enter.
(b) A Member does not violate a duty or obligation to the Company
merely because the Member's conduct furthers the Member's own interest.
16
<PAGE>
(c) Notwithstanding the provisions of this Section 9.2, any Member
that proposes to enter into a transaction not contemplated herein with the
Company must first receive the written consent of the remaining Members.
Any transaction described in this Section 9.2(c) that is not first approved
by such remaining Members shall be null and void.
ARTICLE 10
CONTRIBUTIONS, ALLOCATIONS, AND DISTRIBUTIONS
---------------------------------------------
10.1 Capital Contributions. The existing Members shall be required to make
---------------------
an initial Capital Contribution in cash in the amount set forth opposite their
names on Exhibit B. No existing Member shall be required to make any additional
Capital Contributions to the Company beyond the amounts set forth in Exhibit B.
10.2 Maintenance of Capital Accounts. A Capital Account shall be
-------------------------------
established for each Member and maintained in accordance with the provisions of
Treas. Reg. (S) 1.704-1(b) or, if such regulations are amended, replaced, or
superseded, in accordance with any applicable successor rules or regulations.
Each Member's Capital Account shall be increased by: (i) the amount of money and
---------
the Asset Value of property contributed to the Company by each Member; (ii)
allocations to the Member of Company Profit and amounts which are specially
allocated pursuant to Section 10.3(b), (c) and (d) hereof; and (iii) the amount
of any Company liabilities assumed by such Member or which are secured by any
Company Property or distributed to such Member. Each Member's Capital Account
shall be decreased by: (i) the amount of money distributed to the Member by the
---------
Company; (ii) the Asset Value of Company Property distributed to the Member;
(iii) allocations of Company Loss, items in the nature of expenses or losses
which are specially allocated pursuant to Sections 10.3(b), (c) and (d) hereof;
and (iv) the amount of any liabilities of such Member assumed by the Company or
which are secured by any Company Property contributed by such Member to the
Company. The foregoing provisions and the other provisions of this Agreement
relating to the maintenance of Capital Accounts are intended to comply with
Treas. Reg. (S) 1.704-1(b), and shall be interpreted and applied in a manner
consistent with such Regulations.
10.3 General Rules for Allocation. Except as otherwise provided in this
----------------------------
Article 10, for purposes of determining Members' Capital Accounts and Members'
distributive shares for federal income tax purposes, income, gain, loss and
deductions (and items of each of the foregoing including income exempt from
federal income taxation) shall be allocated as follows:
(a) Company Profit and Loss. After giving effect to the special
-----------------------
allocations in Sections 10.3(b), (c) and (d), with respect to each Fiscal
Year, Company Profit and Loss shall be allocated according to each Member's
respective Membership Interest, or in such other manner as reasonably
allocates Company Profit and Loss to the Members based on their respective
contributions to the Company Profit and Loss.
(b) Section 754 Adjustments. To the extent an adjustment to the
-----------------------
adjusted tax basis of any Company asset pursuant to Code (S) 734(b) or Code
(S) 743(b) is required
17
<PAGE>
pursuant to Treas. Reg. (S) 1.704-1(b)(2)(iv)(m) to be taken into account
in determining Capital Accounts, the amount of such adjustment to the
Capital Accounts shall be treated as an item of gain (if the adjustment
increases the basis of the asset) or loss (if the adjustment decreases such
basis), and such gain or loss shall be specially allocated to the Member in
a manner consistent with the manner in which their Capital Accounts are
required to be adjusted pursuant to such section of the Regulation.
(c) 704(c) of the Code. Notwithstanding the foregoing, (i) in the
------------------
event (S) 704(c) of the Code or (S) 704(c) principles applicable under
Treas. Regs. promulgated under (S) 704(b) of the Code, require allocations
of Company Profit or Company Loss in a manner different than set forth
above, the provisions of (S) 704(c) and the applicable Treas. Regs.
promulgated under (S) 704(c) of the Code shall control such allocations.
Allocations pursuant to (S) 704(c) shall be made for tax purposes only and
shall not affect any Member's Capital Account. The Managers shall select
any method for making allocations under Code (S) 704(c) as described in
Treas. Reg. (S) 1.704-3(b) or any successor regulatory provision thereto.
(d) Regulatory Allocations. It is the intention of the Company that
----------------------
the allocations hereunder comply with the provisions of Section 704(b) of
the Code and the Treasury Regulations promulgated from time to time
thereunder so that the allocations made hereunder will be deemed to have
"substantial economic effect" as provided therein. To the extent special
allocations of Company Profit or Loss are required to be made to comply
with the requirements thereof, and which are not otherwise provided for
herein, such special allocations shall be made in the manner set forth in
the Code and Regulations, as determined in good faith by the Managers. To
the extent any such special allocations are made, subsequent allocations of
Company Profit and Company Loss shall be made to offset any economic
distortion caused by such special allocations, as determined by the
Managers in good faith.
10.4 Distributions. The Company will make distributions to the Members, at
-------------
such time as the Managers, in their sole and absolute discretion deem
appropriate, in proportion to the Members' respective Membership Interests.
Notwithstanding the foregoing, no distribution shall be made pursuant to this
Section 10.4 if, in accordance with Section 14-11-407 of the Act, (a) the
Company would not be able, in the sole judgment of the Managers, to pay its
debts as they become due in the usual course of business; or (b) the Company's
total assets would be less than the sum of its total liabilities.
10.5 Return of Capital. No Member shall have the right to demand or
-----------------
receive the return of such Member's Capital Contributions nor receive interest
thereon.
ARTICLE 11
TAXES
-----
11.1 Elections. The Managers may make any tax elections for the Company
---------
allowed under the Code or the tax laws of any state or other jurisdiction having
Taxing Jurisdiction over
18
<PAGE>
the Company.
11.2 Taxes of Taxing Jurisdictions. To the extent that the laws of any
-----------------------------
Taxing Jurisdiction requires, each Member (or such Members as may be required by
the Taxing Jurisdiction) will submit an agreement indicating that the Member
will make timely income tax payments to the Taxing Jurisdiction and that such
Member accepts personal jurisdiction of the Taxing Jurisdiction with regard to
the collection of income taxes attributable to the Member's income, and
penalties and interest assessed on such income. If the Member fails to provide
such agreement, the Company may withhold and pay over to such Taxing
Jurisdiction the amount of tax, penalty, and interest determined under the laws
of the Taxing Jurisdiction with respect to such income. Any such payments with
respect to the income of a Member shall be treated as a distribution for
purposes of Article 10.
11.3 Tax Matters Partner. If required by the Code or regulations, one of
-------------------
the Managers shall be designated as the "Tax Matters Partner" of the Company
pursuant to Section 6231(a)(7) of the Code. The Manager designated as Tax
Matters Partner shall take such action as may be necessary to cause each other
Member to become a "Notice Partner" within the meaning of Section 6223 of the
Code. The Manager who is designated Tax Matters Partner may not take any action
contemplated by sections 6222 through 6232 of the Code without the consent of
the other Manager(s). The Manager who is designated the Tax Matters Partner will
be entitled to reimbursement from the Company for all reasonable costs and
expenses incurred by it in complying with and carrying out its responsibilities.
ARTICLE 12
DISPOSITION OF MEMBERSHIP INTERESTS
-----------------------------------
12.1 Limitation on Transfer of Member's Interest. No Member shall have the
-------------------------------------------
right to sell, transfer (whether by operation of law or otherwise), pledge,
assign, or otherwise dispose of its interest in the Company (including, without
limitation, its interest in Company profits, cash distributions, capital, and
liquidation proceeds) except with the prior written consent of all of the other
Members, and any such attempted assignment, transfer, sale, pledge, encumbrance
or disposition without such consent shall be void and of absolutely no force or
effect. The foregoing prohibition shall include, without limitation, any
disposition by sale, assignment, gift, and exchange, and disposition by judicial
order, legal process, execution, attachment, enforcement of a pledge, or sale
under any of them, it being the intent of the Members that the term "sale,
transfer, pledge, assign, or otherwise dispose" be given the broadest meaning
possible.
12.2 Special Limitations. No proposed sale, assignment or transfer of a
-------------------
Membership Interest, or any part thereof, will be permitted or effective:
(a) if such sale, assignment or transfer would cause the Company to be
treated as an association taxable as a corporation for Federal income tax
purposes or, when added to the total of all other sales or exchanges of
Membership Interests within the preceding
19
<PAGE>
12 months, would result in the Company being considered to have terminated
within the meaning of Section 708 of the Code; or
(b) if such transfer or assignment would violate any Federal or any
state, i.e., "blue sky" securities laws applicable to the Company or to the
Members of Interest to be transferred or assigned.
12.3 Admission of Additional Members. A Person may be admitted as an
-------------------------------
additional Member of the Company only with the prior written consent of all of
the then existing Members of the Company. The admission of any additional
Member pursuant to the Terms of this Section 12.3 shall result in a
proportionate decrease of the Membership Interests of the Members of the Company
at the time such new Member is admitted.
12.4 Additional Members and Transferees Bound. Notwithstanding anything to
----------------------------------------
the contrary herein, prior to the admission of a transferee or of an additional
Member pursuant Sections 12.1 or 12.3 hereof, any such transferee or additional
Member shall be required to join in and execute this Agreement, and become an
additional party hereto. A transferee shall acquire the rights and assume all
of the obligations hereunder of the transferring Member. No Person seeking
admission as an additional Member shall have any rights whatsoever as a Member
under the terms of this Agreement, including management rights or the right to
share in Company profits and distributions, until such time as such Person has
fulfilled all the terms and conditions relating to such Person's admission as a
Member and such Person has executed this Agreement and become a party hereto.
12.5 Withdrawal of Members. A Member may withdraw by giving a Termination
---------------------
Notice to the Company in accordance with Section 7.6, which notice shall
constitute an automatic notice of withdrawal from the Company effective as of
the thirtieth (30) day after all obligations under Article 7 have been satisfied
or expired.
12.6 Distributions and Allocations in Respect to Transferred Interests. If
-----------------------------------------------------------------
any Membership Interest is sold, assigned, or transferred during any accounting
period, Company Profit and Company Loss, and each item thereof, and all other
items attributable to the transferred interest for such period shall be divided
and allocated between the transferor and transferee by taking into account their
varying interests during the period in accordance with Code Section 706(d),
using any conventions permitted by law and selected by the Board of Managers.
All distributions on or before the date of such transfer shall be made to the
transferor, and all distributions thereafter shall be made to the transferee.
Solely for purposes of making such allocations and distributions, the Company
shall recognize such transfer not later than the end of the calendar month
during which it is given notice of such transfer, provided that if the Company
does not receive a notice stating the date such Membership Interest was
transferred and such other information as the Board of Managers may reasonably
require within thirty (30) days after the end of the accounting period during
which the transfer occurs, then all of such items shall be allocated, and all
distributions shall be made, to the Person who, according to the books and
records of the Company, on the last day of the accounting period during which
the transfer occurs, was the owner of the Membership Interest. Neither the
Company nor any Member shall incur any liability for making allocations and
distributions in accordance with the
20
<PAGE>
provisions of this Section 12.6 whether or not any Member or the Company has
knowledge of any transfer of ownership of any interest.
12.7 Merger. The Members acknowledge that Morrison and RTI intend to merge
------
("Merger") and agree (i) that the surviving corporation of the Merger shall be a
Member and shall succeed to the interests, rights and obligations, including the
Membership Interests and Membership Units, of both Morrison and RTI, and (ii)
that, notwithstanding anything to the contrary herein contained, the Merger
shall not be deemed a Termination Event hereunder.
ARTICLE 13
DISSOLUTION AND WINDING UP
--------------------------
13.1 Dissolution. The Company shall be dissolved upon the occurrence of a
-----------
Termination Event, unless the Members properly elect to carry on the business of
the Company as provided in Section 13.5, if applicable. Dissolution of the
Company shall be effective on the day on which the event occurs giving rise to
the dissolution, but the Company shall not terminate until the assets of the
Company have been distributed as provided in Section 13.3.
13.2 Final Accounting; Liquidating Agent. Upon the dissolution of the
-----------------------------------
Company, an accounting shall be made with respect to the accounts of the
Company, from the date of the last previous accounting to the date of such
dissolution. The Managers or, in the event the Managers fail to serve for any
reason, such Person as designated in writing by all of the Members, shall act as
liquidating agent (the "Liquidating Agent") and immediately proceed to wind up
and terminate the business and affairs of the Company.
13.3 Terminating Distributions. Upon dissolution of the Company, a proper
-------------------------
accounting shall be made of the Company's assets and liabilities and obligations
from the date of the last previous accounting to the date of such dissolution
and the Company's business and affairs shall be liquidated in an orderly manner
and such sales of properties of the Company as may be required for such purposes
shall be made by the Liquidating Agent including, without limitation, the sale
of any property which may not be susceptible to division upon distribution to
the Members. Notwithstanding the foregoing, in the event the Liquidating Agent
shall determine that an immediate sale of part or all of the Company's assets
could cause undue loss to the Members, the Liquidating Agent may, upon notice to
the Members, either defer liquidation (to the extent permitted by law) or
withhold from distribution for a reasonable time any assets of the Company or
distribute assets in kind to the Members. Pursuant to the liquidation of the
Company, payments shall be made of all expenses of liquidation (including
without limitation any legal and accounting expenses incurred in connection
therewith) and all debts of the Company first to third party creditors and then
to Members, or adequate provision shall be made for the payment thereof.
Following the payment of third party creditors and loans by Members, the
remaining assets and properties of the Company shall be distributed to the
Members, in cash or in kind, in proportion to and to the extent of the positive
balances in their Capital Accounts.
21
<PAGE>
13.4 Complete Distribution. Distribution of the Company Property to the
---------------------
Members in accordance with the provisions of Section 13.3 shall constitute a
complete return to the Members of their respective Capital Contributions. If
such distributions are insufficient to return to any Member the full amount of
its Capital Contribution, such Member shall have no recourse against the Company
or any other Member.
13.5 Election to Carry on Business. In the event of an occurrence of any
-----------------------------
Termination Event (other than the events set forth in clauses (b), (c) or (f) of
the definition of Termination Event) that, but for this Section 13.5 would
require a dissolution of the Company under Section 13.1 hereof, all of the
Members may, upon unanimous written consent, elect to carry on the business of
the Company. If the Termination Event is the result of the resignation,
withdrawal, or any other removal of a Member as described in clauses (d) or (e)
of the definition of Termination Event, then all of the remaining Members may,
within ninety (90) days following the occurrence of such Termination Event,
elect in writing to carry on the business of the Company.
ARTICLE 14
ARBITRATION
-----------
14.1 Arbitration. Notwithstanding anything to the contrary contained in
-----------
this Agreement, all claims, disputes and controversies between the parties
hereto (including, without limitation, any claims, disputes and controversies
between the Company and any one or more of the Members and any claims, disputes
and controversies between any one or more Members) arising out of or in
connection with this Agreement or the Company created hereby, relating to the
validity, construction, performance, breach, enforcement or termination thereof,
or otherwise, shall be resolved by binding arbitration in Atlanta, Georgia,
before a single arbitrator in accordance with the Rules of the American
Arbitration Association ("Rules").
14.2 Arbitration Procedure. Any arbitration called for by this Section
---------------------
14.2 shall be conducted in accordance with the following procedures:
(a) The Company or any Member (the "Requesting Party") may demand
arbitration pursuant to this Section 14.2 at any time by giving written
notice of such demand (the "Demand Notice") to all other Members and (if
the Requesting Party is not the Company) to the Company which Demand Notice
shall describe in reasonable detail the nature of the claim, dispute or
controversy.
(b) Within fifteen (15) days after the giving of a Demand Notice, the
Requesting Party, on the one hand, and the other Members and/or the Company
against whom the claim has been made or with respect to which a dispute has
arisen (collectively, the "Responding Party"), on the other hand, shall
mutually select and designate in writing one reputable, disinterested
individual (a "Qualified Individual") willing to act as an arbitrator of
the claim, dispute or controversy in question. In the event that the
Requesting Party and the Responding Party are unable to agree on an
arbitrator within the fifteen (15) day period referred to above, then, on
the application of either party, the
22
<PAGE>
American Arbitration Association shall promptly select the Qualified
Individual to act as the arbitrator pursuant to the Rules from the panel of
arbitrators maintained by the American Arbitration Association.
(c) The presentations of the parties hereto in the arbitration
proceeding shall be commenced and completed within sixty (60) days after
the selection of the arbitrator pursuant to subsection (b) above, and the
arbitrator shall render his decision in writing within thirty (30) days
after the completion of such presentations.
(d) If the arbitrator's decision supports in all material respects the
position of one or more parties, the arbitrator shall award to the
prevailing party(ies), if any, as determined by the arbitrator, all of the
fees and expenses of the arbitrator and the costs and expenses incurred by
the prevailing party(ies) in connection with the arbitration.
14.3 Final Judgment. Any decision rendered by the arbitrator pursuant to
--------------
this Article 14 shall be final and binding on the parties hereto, and judgment
thereon may be entered by any state or federal court of competent jurisdiction.
14.4 Sole Method. Arbitration shall be the exclusive method available for
-----------
the final resolution of all claims, disputes, and controversies described in
this Article 14, and the Company and its Members stipulate that the provisions
hereof shall be a complete defense to any suit, action, or proceeding in any
court or before any administrative or arbitration tribunal with respect to any
such claim, controversy or dispute. The provisions of this Article 14 shall
survive the dissolution of the Company.
14.5 Effect. Nothing contained herein shall be deemed to give the
------
arbitrator any authority, power or right to alter, change, amend, modify, add
to, or subtract from any of the provisions of this Agreement.
ARTICLE 15
GENERAL PROVISIONS
------------------
15.1 Amendments. This Agreement may be amended only with the consent of
----------
all of the Members.
15.2 Method of Giving Consent. Any consent required by this Agreement must
------------------------
be in writing and must be given by the consenting Member at or prior to the
doing of the act or thing for which the consent is solicited.
15.3 Scope. This Agreement among the Members constitutes the entire
-----
understanding and shall supersede all prior agreements of the Members with
respect to the Company.
15.4 Headings. The headings in this Agreement are inserted for convenience
--------
and identification only and are in no way intended to describe, interpret,
define or limit the scope, extent or intent of this Agreement or any provision
hereof.
23
<PAGE>
15.5 Waiver of Rights to Partition. Each Member hereby irrevocably waives
-----------------------------
during the term of the Company any right that it or he may have to maintain any
action for partition with respect to any Company property.
15.6 Waiver. The failure of any party to seek redress for violation of or
------
to insist upon the strict performance of any covenant or condition of this
Agreement shall not prevent a subsequent act, which would have originally
constituted a violation, from having the effect of an original violation. The
rights and remedies provided by this Agreement are cumulative and the use of any
one right or remedy by any party shall not preclude or waive its right to use
any or all other remedies. Said rights and remedies are given in addition to
any other rights the parties may have by law, statute, ordinance, or otherwise.
15.7 Counterpart. This Agreement may be executed in any number of
-----------
counterparts with the same effect as if all parties hereto had all signed the
same document. All counterparts shall be construed together and shall
constitute collectively one agreement.
15.8 Governing Law. This Agreement shall be governed by and construed and
-------------
enforced in accordance with the laws of the State of Georgia.
15.9 Successors and Assigns. This Agreement shall be binding upon and
----------------------
inure to the benefit of the Members and their respective permitted successors
and permitted assigns. This Agreement may not be assigned by any Member except
in accordance with the terms hereof.
15.10 Notices. All notices given or required hereunder shall be in
-------
writing, containing the information required by this Agreement to be
communicated to any Person, delivered by hand or sent by registered or certified
United States mail, return receipt requested, postage prepaid, or sent by
express courier or telecopier and confirmed by mail as aforesaid to such Person
at the last known address of such Person, the date of the mailing being deemed
the date of the receipt of Notice.
24
<PAGE>
IN WITNESS WHEREOF, we have hereunto set our hands and seals on the date
set forth beside our names.
MRT Purchasing, LLC Members:
Morrison Restaurants Inc.
By: /s/ Pfilip G. Hunt 3/2/96
----------------------------- -----------------------------
Title: Senior Vice President Date
-------------------------
Ruby Tuesday, Inc.
By: /s/ Pfilip G. Hunt 3/2/96
----------------------------- -----------------------------
Title: Senior Vice President Date
-------------------------
Morrison Fresh Cooking, Inc.
By: /s/ J. Russell Mothershed 3/2/96
----------------------------- -----------------------------
Title: Vice President Date
-------------------------
Morrison Health Care, Inc.
By: /s/ J. Russell Mothershed 3/2/96
----------------------------- -----------------------------
Title: Vice President Date
-------------------------
25
<PAGE>
EXHIBIT 10.28
MORRISON RESTAURANTS INC.
1996 STOCK INCENTIVE PLAN
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
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<S> <C> <C>
SECTION 1 DEFINITIONS.............................................. 1
1.1 Definitions......................................... 1
SECTION 2 THE STOCK INCENTIVE PLAN................................. 4
2.1 Purpose of the Plan................................. 4
2.2 Stock Subject to the Plan........................... 4
2.3 Administration of the Plan.......................... 4
2.4 Eligibility and Limits.............................. 5
SECTION 3 TERMS OF STOCK INCENTIVES................................ 5
3.1 Terms and Conditions of All Stock Incentives........ 5
3.2 Terms and Conditions of Options..................... 7
(a) Option Price................................... 7
(b) Option Term.................................... 7
(c) Payment........................................ 7
(d) Conditions to the Exercise of an Option........ 8
(e) Termination of Incentive Stock Option.......... 8
(f) Special Provisions for Certain Substitute
Options....................................... 8
3.3 Terms and Conditions of Stock Appreciation
Rights............................................. 8
(a) Payment........................................ 9
(b) Conditions to Exercise......................... 9
3.4 Terms and Conditions of Stock Awards................ 9
3.5 Terms and Conditions of Dividend Equivalent
Rights............................................. 9
(a) Payment........................................ 9
(b) Conditions to Payment............. ............ 10
3.6 Terms and Conditions of Performance Unit Awards..... 10
(a) Payment........................................ 10
(b) Conditions to Payment.......................... 10
3.7 Terms and Conditions of Phantom Shares.............. 10
(a) Payment........................................ 10
(b) Conditions to Payment.......................... 10
3.8 Treatment of Awards Upon Termination of Service..... 11
SECTION 4 RESTRICTIONS ON STOCK.................................... 11
4.1 Escrow of Shares.................................... 11
4.2 Forfeiture of Shares................................ 11
4.3 Restrictions on Transfer............................ 11
</TABLE>
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<TABLE>
<S> <C> <C>
SECTION 5 GENERAL PROVISIONS....................................... 12
5.1 Withholding........................................ 12
5.2 Changes in Capitalization; Merger; Liquidation..... 12
5.3 Cash Awards........................................ 13
5.4 Compliance with Code............................... 13
5.5 Right to Terminate Service......................... 13
5.6 Restrictions on Delivery and Sale of Shares;
Legends........................................... 13
5.7 Non-alienation of Benefits......................... 14
5.8 Termination and Amendment of the Plan.............. 14
5.9 Stockholder Approval............................... 14
5.10 Choice of Law...................................... 14
5.11 Effective Date of Plan............................. 14
</TABLE>
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MORRISON RESTAURANTS INC.
1996 STOCK INCENTIVE PLAN
The Morrison Restaurants Inc. 1996 Stock Incentive Plan constitutes an
amendment and restatement of the Morrison Restaurants Inc. Stock Incentive Plan.
If the Morrison Restaurants Inc. 1996 Stock Incentive Plan is not approved by
the stockholders of Morrison Restaurants Inc. within twelve (12) months from the
date of its adoption by the Board of Directors of Morrison Restaurants Inc., the
Morrison Restaurants Inc. Stock Incentive Plan shall remain in force and effect
pursuant to the terms in effect immediately prior to this amendment and
restatement.
SECTION 1 DEFINITIONS
1.1 Definitions. Whenever used herein, the masculine pronoun shall be
-----------
deemed to include the feminine, and the singular to include the plural, unless
the context clearly indicates otherwise, and the following capitalized words and
phrases are used herein with the meaning thereafter ascribed:
(a) "Board of Directors" means the board of directors of the Company.
------------------
(b) "Cause" has the same meaning as provided in the employment
-----
agreement between the Participant and the Company or, if applicable, any
affiliate of the Company on the date of Termination of Service, or if no such
definition or employment agreement exists, "Cause" means conduct amounting to
(1) fraud or dishonesty against the Company or its affiliates, (2) Participant's
willful misconduct, repeated refusal to follow the reasonable directions of the
board of directors of the Company or its affiliates, or knowing violation of law
in the course of performance of the duties of Participant's service with the
Company or its affiliates, (3) repeated absences from work without a reasonable
excuse, (4) repeated intoxication with alcohol or drugs while on the Company or
affiliates' premises during regular business hours, (5) a conviction or plea of
guilty or nolo contendere to a felony or a crime involving dishonesty, or (6) a
breach or violation of the terms of any agreement to which Participant and the
Company or its affiliates are party.
(c) "Change in Control" means any event that pursuant to the Company's
-----------------
Certificate of Incorporation, as amended from time to time, requires the
affirmative vote of the holders of not less than eighty percent (80%) of the
Voting Stock (as defined therein); provided, however, that no event shall
constitute a Change in Control if approved by the Board of Directors a majority
of whom are present directors and new directors. For purposes of the preceding
sentence, the term "present directors" means individuals who as of the date this
Plan is adopted were members of the Board of Directors and the term "new
directors" means any director whose election by the Board of Directors in the
event of vacancy or whose nomination for election was approved by a vote of at
least three-fourths of the directors then still in office who are present
directors and new
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directors; provided that any director elected to the Board of Directors solely
to avoid or settle a threatened or actual proxy contest shall in no event be
deemed to be a new director.
(d) "Code" means the Internal Revenue Code of 1986, as amended.
----
(e) "Committee" means the committee appointed by the Board of
---------
Directors to administer the Plan pursuant to Plan Section 2.3.
(f) "Company" means Morrison Restaurants Inc., a Delaware corporation,
-------
or its successor.
(g) "Disability" has the same meaning as provided in the long-term
----------
disability plan or policy maintained or, if applicable, most recently
maintained, by the Company or, if applicable, any affiliate of the Company for
the Participant. If no long-term disability plan or policy was ever maintained
on behalf of the Participant or, if the determination of Disability relates to
an Incentive Stock Option, Disability shall mean that condition described in
Code Section 22(e)(3), as amended from time to time. In the event of a dispute,
the determination of Disability shall be made by the Board of Directors and
shall be supported by advice of a physician competent in the area to which such
Disability relates.
(h) "Disposition" means any conveyance, sale, transfer, assignment,
-----------
pledge or hypothecation, whether outright or as security, inter vivos or
testamentary, with or without consideration, voluntary or involuntary.
(i) "Dividend Equivalent Rights" means certain rights to receive cash
--------------------------
payments as described in Plan Section 3.5.
(j) "Fair Market Value" with regard to a date means the closing price
-----------------
at which Stock shall have been sold on the last trading date prior to that date
as reported by a national securities exchange selected by the Committee on which
the shares of Stock are then actively traded and published in The Wall Street
Journal; provided that, for purposes of granting awards other than Incentive
Stock Options, Fair Market Value of the shares of Stock may be determined by the
Committee by reference to the average market value determined over a period
certain or as of specified dates, to a tender offer price for the shares of
Stock (if settlement of an award is triggered by such an event) or to any other
reasonable measure of fair market value.
(k) "Incentive Stock Option" means an incentive stock option, as
----------------------
defined in Code Section 422, described in Plan Section 3.2.
(l) "Non-Qualified Stock Option" means a stock option, other than an
--------------------------
option qualifying as an Incentive Stock Option, described in Plan Section 3.2.
(m) "Option" means a Non-Qualified Stock Option or an Incentive Stock
------
Option.
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<PAGE>
(n) "Over 10% Owner" means an individual who at the time an Incentive
--------------
Stock Option is granted owns Stock possessing more than 10% of the total
combined voting power of the Company or one of its Parents or Subsidiaries,
determined by applying the attribution rules of Code Section 424(d).
(o) "Parent" means any corporation (other than the Company) in an
------
unbroken chain of corporations ending with the Company if, with respect to
Incentive Stock Options, at the time of granting of the Option, each of the
corporations other than the Company owns stock possessing 50% or more of the
total combined voting power of all classes of stock in one of the other
corporations in the chain.
(p) "Participant" means an individual who receives a Stock Incentive
-----------
hereunder.
(q) "Performance Unit Award" refers to a performance unit award
----------------------
described in Plan Section 3.6.
(r) "Phantom Shares" refers to the rights described in Plan Section
--------------
3.7.
(s) "Plan" means the Morrison Restaurants Inc. 1996 Stock Incentive
----
Plan; provided, however, that in the event that the Company is replaced by a
successor in interest, the title of the Plan shall thereafter be the name of the
successor in interest followed by the phrase `1996 Stock Incentive Plan'."
(t) "Stock" means the Company's common stock, $.01 par value.
-----
(u) "Stock Appreciation Right" means a stock appreciation right
------------------------
described in Plan Section 3.3.
(v) "Stock Award" means a stock award described in Plan Section 3.4.
-----------
(w) "Stock Incentive Agreement" means an agreement between the Company
-------------------------
and a Participant or other documentation evidencing an award of a Stock
Incentive.
(x) "Stock Incentive Program" means a written program established by
-----------------------
the Committee pursuant to which Stock Incentives, other than Options or Stock
Appreciation Rights, are awarded under the Plan under uniform terms, conditions
and restrictions set forth in such written program and distributed among
eligible officers, employees and directors.
(y) "Stock Incentives" means, collectively, Dividend Equivalent
----------------
Rights, Incentive Stock Options, Non-Qualified Stock Options, Performance Unit
Awards, Phantom Shares, Stock Appreciation Rights and Stock Awards.
(z) "Subsidiary" means any corporation (other than the Company) in an
----------
unbroken chain of corporations beginning with the Company if, with respect to
Incentive Stock Options, at the time of the granting of the Option, each of the
corporations other than the last corporation in the
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<PAGE>
unbroken chain owns stock possessing 50% or more of the total combined voting
power of all classes of stock in one of the other corporations in the chain.
(aa) "Termination of Service" means the termination of either the
----------------------
employee-employer or director relationship, as the case may be, between a
Participant and the Company and its affiliates, regardless of the fact that
severance or similar payments are made to the Participant, for any reason,
including, but not by way of limitation, a termination by resignation,
discharge, death, Disability or retirement. The Committee shall, in its
absolute discretion, determine the effect of all matters and questions relating
to Termination of Service, including, but not by way of limitation, the question
of whether a leave of absence constitutes a Termination of Service, or whether a
Termination of Service is for Cause.
SECTION 2 THE STOCK INCENTIVE PLAN
2.1 Purpose of the Plan. The Plan is intended to (a) provide incentive to
-------------------
officers, employees and directors of the Company and its affiliates to stimulate
their efforts toward the continued success of the Company and to operate and
manage the business in a manner that will provide for the long-term growth and
profitability of the Company; (b) encourage stock ownership by officers,
employees and directors by providing them with a means to acquire a proprietary
interest in the Company by acquiring shares of Stock or to receive compensation
which is based upon appreciation in the value of Stock; and (c) provide a means
of obtaining and rewarding key personnel.
2.2 Stock Subject to the Plan. Subject to adjustment in accordance with
-------------------------
Section 5.2, 1,000,000 shares (as adjusted for all corporate events through and
including the effective date of the spin-offs described in Plan Section 3.8) of
Stock (the "Maximum Plan Shares") are hereby reserved exclusively for issuance
pursuant to Stock Incentives. At no time shall the Company have outstanding
Stock Incentives and shares of Stock issued in respect of Stock Incentives in
excess of the Maximum Plan Shares; for this purpose, the outstanding Stock
Incentives and shares of Stock issued in respect of Stock Incentives shall be
computed in accordance with Rule 16b-3(a)(1) as promulgated under the Securities
Exchange Act of 1934, as amended from time to time. To the extent permitted by
Rule 16b-3(a)(1) as promulgated under the Securities Exchange Act of 1934, the
shares of Stock attributable to the nonvested, unpaid, unexercised, unconverted
or otherwise unsettled portion of any Stock Incentive that is forfeited or
cancelled or expires or terminates for any reason without becoming vested, paid,
exercised, converted or otherwise settled in full shall again be available for
purposes of the Plan.
2.3 Administration of the Plan. The Plan shall be administered by the
--------------------------
Committee. The Committee shall have full authority in its discretion to
determine the officers, employees and directors of the Company or its affiliates
to whom Stock Incentives shall be granted and the terms and provisions of Stock
Incentives, subject to the Plan. Subject to the provisions of the Plan, the
Committee shall have full and conclusive authority to interpret the Plan; to
prescribe, amend and rescind rules and regulations relating to the Plan; to
determine the terms and provisions of the respective Stock Incentive Agreements
or Stock Incentive Programs and to make all other determinations necessary or
advisable for the proper administration of the Plan. The Committee's
-4-
<PAGE>
determinations under the Plan need not be uniform and may be made by it
selectively among persons who receive, or are eligible to receive, awards under
the Plan (whether or not such persons are similarly situated). The Committee's
decisions shall be final and binding on all Participants.
As to any matter involving a Participant who is not a "reporting person"
for purposes of Section 16 of the Securities Exchange Act of 1934, Committee may
delegate to any member of the Board of Directors or officer of the Company the
administrative authority to (a) interpret the provisions of the Participant's
Stock Incentive Agreement and (b) determine the treatment of Stock Incentives
upon a Termination of Service, as contemplated by Plan Section 3.8.
The Committee shall consist of at least two members of the Board of
Directors each of whom shall qualify as a "disinterested person," as defined in
Rule 16b-3 as promulgated under the Securities Exchange Act of 1934 and as an
"outside director," within the meaning of Code Section 162(m) and the
regulations promulgated thereunder. The Board of Directors may from time to
time remove members from or add members to the Committee. Vacancies on the
Committee shall be filled by the Board of Directors.
2.4 Eligibility and Limits. Stock Incentives may be granted only to
----------------------
officers, employees and directors of the Company or an affiliate; provided,
however, that directors who serve on the Committee shall not be eligible to
receive awards that are subject to Section 16 of the Securities Exchange Act of
1934 while they are members of the Committee and that an Incentive Stock Option
may only be granted to an employee of the Company or any Parent or Subsidiary.
In the case of Incentive Stock Options, the aggregate Fair Market Value
(determined as at the date an Incentive Stock Option is granted) of stock with
respect to which stock options intended to meet the requirements of Code Section
422 become exercisable for the first time by an individual during any calendar
year under all plans of the Company and its Parents and Subsidiaries shall not
exceed $100,000; provided further, that if the limitation is exceeded, the
Incentive Stock Option(s) which cause the limitation to be exceeded shall be
treated as Non-Qualified Stock Option(s). To the extent required under Code
Section 162(m) and regulations thereunder for compensation to be treated as
qualified performance-based compensation, the maximum number of shares Stock
with respect to which Options or Stock Appreciation Rights may be granted during
any single fiscal year of the Company to any Participant who is a "covered
employee," within the meaning of Code Section 162(m) and the regulations
promulgated thereunder (a "Covered Employee"), shall not exceed 100,000.
SECTION 3 TERMS OF STOCK INCENTIVES
3.1 Terms and Conditions of All Stock Incentives.
--------------------------------------------
(a) The number of shares of Stock as to which a Stock Incentive shall
be granted shall be determined by the Committee in its sole discretion, subject
to the provisions of Section 2.2 as to the total number of shares available for
grants under the Plan. If a Stock Incentive Agreement so provides, a
Participant may be granted a new Option to purchase a number of shares of Stock
equal to the number of previously owned shares of Stock tendered in payment of
the Exercise Price
-5-
<PAGE>
(as defined below) for each share of Stock purchased pursuant to the terms of
the Stock Incentive Agreement.
(b) Each Stock Incentive shall be evidenced either by a Stock
Incentive Agreement in such form and containing such terms, conditions and
restrictions as the Committee may determine is appropriate or be made subject to
the terms of a Stock Incentive Program, containing such terms, conditions and
restrictions as the Committee may determine is appropriate. Each Stock
Incentive Agreement or Stock Incentive Program shall be subject to the terms of
the Plan and any provision in a Stock Incentive Agreement or Stock Incentive
Program that is inconsistent with the Plan shall be null and void.
(c) The date a Stock Incentive is granted shall be the date on which
the Committee has approved the terms and conditions of the Stock Incentive
Agreement or Stock Incentive Program and has determined the recipient of the
Stock Incentive and the number of shares covered by the Stock Incentive and has
taken all such other action necessary to complete the grant of the Stock
Incentive.
(d) The Committee may provide in any Stock Incentive Agreement or
pursuant to any Stock Incentive Program (or subsequent to the award of a Stock
Incentive but prior to its expiration or cancellation, as the case may be) that,
in the event of a Change in Control, the Stock Incentive shall or may be cashed
out on the basis of any price not greater than the highest price paid for a
share of Stock in any transaction reported by any national securities exchange
selected by the Committee on which the shares of Stock are then actively traded
during a specified period immediately preceding or including the date of the
Change in Control or offered for a share of Stock in any tender offer occurring
during a specified period immediately preceding or including the date the tender
offer commences; provided that, in no case shall any such specified period
exceed one (1) year (the "Change in Control Price"). For purposes of this
Subsection, the cash-out of a Stock Incentive shall be determined as follows:
(i) Options shall be cashed out on the basis of the excess, if
any, of the Change in Control Price (but not more than the Fair Market Value of
the Stock on the date of the cash-out in the case of Incentive Stock Options)
over the Exercise Price with or without regard to whether the Option may
otherwise be exercisable only in part;
(ii) Stock Awards and Phantom Shares shall be cashed out in an
amount equal to the Change in Control Price with or without regard to any
conditions or restrictions otherwise applicable to any such Stock Incentive; and
(iii) Stock Appreciation Rights, Dividend Equivalent Rights and
Performance Unit Awards shall be cashed out with or without regard to any
conditions or restrictions otherwise applicable to any such Stock Incentive and
the amount of the cash out shall be determined by reference to the number of
shares of Stock that would be required to pay the Participant in kind for the
value of the Stock Incentive as of the date of the Change in Control multiplied
by the Change in Control Price.
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<PAGE>
(e) Any Stock Incentive may be granted in connection with all or any
portion of a previously or contemporaneously granted Stock Incentive. Exercise
or vesting of a Stock Incentive granted in connection with another Stock
Incentive may result in a pro rata surrender or cancellation of any related
Stock Incentive, as specified in the applicable Stock Incentive Agreement or
Stock Incentive Program.
(f) Stock Incentives shall not be transferable or assignable except by
will or by the laws of descent and distribution and shall be exercisable, during
the Participant's lifetime, only by the Participant; in the event of the
Disability of the Participant, by the legal representative of the Participant;
or in the event of the death of the participant, by the personal representative
of the Participant's estate or if no personal representative has been appointed,
by the successor in interest determined under the Participant's will.
3.2 Terms and Conditions of Options. Each Option granted under the Plan
-------------------------------
shall be evidenced by a Stock Incentive Agreement. At the time any Option is
granted, the Committee shall determine whether the Option is to be an Incentive
Stock Option or a Non-Qualified Stock Option, and the Option shall be clearly
identified as to its status as an Incentive Stock Option or a Non-Qualified
Stock Option. At the time any Incentive Stock Option is exercised, the Company
shall be entitled to place a legend on the certificates representing the shares
of Stock purchased pursuant to the Option to clearly identify them as shares of
Stock purchased upon exercise of an Incentive Stock Option. An Incentive Stock
Option may only be granted within ten (10) years from the earlier of the date
the Plan, as amended and restated, is adopted or approved by the Company's
stockholders.
(a) Option Price. Subject to adjustment in accordance with Section
------------
5.2 and the other provisions of this Section 3.2, the exercise price (the
"Exercise Price") per share of Stock purchasable under any Option shall be as
set forth in the applicable Stock Incentive Agreement. With respect to each
grant of an Incentive Stock Option to a Participant who is not an Over 10% Owner
or to each grant of any Option to a Participant who is then a Covered Employee,
the Exercise Price per share shall not be less than the Fair Market Value on the
date the Option is granted. With respect to each grant of an Incentive Stock
Option to a Participant who is an Over 10% Owner, the Exercise Price shall not
be less than 110% of the Fair Market Value on the date the Option is granted.
(b) Option Term. The term of an Option shall be as specified in the
-----------
applicable Stock Incentive Agreement; provided, however that any Incentive Stock
Option granted to a Participant who is not an Over 10% Owner shall not be
exercisable after the expiration of ten (10) years after the date the Option is
granted and any Incentive Stock Option granted to an Over 10% Owner shall not be
exercisable after the expiration of five (5) years after the date the Option is
granted.
(c) Payment. Payment for all shares of Stock purchased pursuant to
-------
exercise of an Option shall be made in any form or manner authorized by the
Committee in the Stock Incentive Agreement or by amendment thereto, including,
but not limited to, cash or, if the Stock Incentive Agreement provides, (i) by
delivery to the Company of a number of shares of Stock which have been
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owned by the holder for at least six (6) months prior to the date of exercise
having an aggregate Fair Market Value of not less than the product of the
Exercise Price multiplied by the number of shares the Participant intends to
purchase upon exercise of the Option on the date of delivery; (ii) in a cashless
exercise through a broker; or (iii) by having a number of shares of Stock
withheld, the Fair Market Value of which as of the date of exercise is
sufficient to satisfy the Exercise Price. In its discretion, the Committee
also may authorize (at the time an Option is granted or thereafter) Company
financing to assist the Participant as to payment of the Exercise Price on such
terms as may be offered by the Committee in its discretion. Payment shall be
made at the time that the Option or any part thereof is exercised, and no shares
shall be issued or delivered upon exercise of an option until full payment has
been made by the Participant. The holder of an Option, as such, shall have none
of the rights of a stockholder.
(d) Conditions to the Exercise of an Option. Each Option granted
---------------------------------------
under the Plan shall be exercisable by whom, at such time or times, or upon the
occurrence of such event or events, and in such amounts, as the Committee shall
specify in the Stock Incentive Agreement; provided, however, that subsequent to
the grant of an Option, the Committee, at any time before complete termination
of such Option, may accelerate the time or times at which such Option may be
exercised in whole or in part, including, without limitation, upon a Change in
Control and may permit the Participant or any other designated person to
exercise the Option, or any portion thereof, for all or part of the remaining
Option term notwithstanding any provision of the Stock Incentive Agreement to
the contrary.
(e) Termination of Incentive Stock Option. With respect to an
-------------------------------------
Incentive Stock Option, in the event of the Termination of Service of a
Participant, the Option or portion thereof held by the Participant which is
unexercised shall expire, terminate, and become unexercisable no later than the
expiration of three (3) months after the date of Termination of Service;
provided, however, that in the case of a holder whose Termination of Service is
due to death or Disability, one (1) year shall be substituted for such three (3)
month period. For purposes of this Subsection (e), Termination of Service of
the Participant shall not be deemed to have occurred if the Participant is
employed by another corporation (or a parent or subsidiary corporation of such
other corporation) which has assumed the Incentive Stock Option of the
Participant in a transaction to which Code Section 424(a) is applicable.
(f) Special Provisions for Certain Substitute Options.
-------------------------------------------------
Notwithstanding anything to the contrary in this Section 3.2, any Option issued
in substitution for an option previously issued by another entity, which
substitution occurs in connection with a transaction to which Code Section
424(a) is applicable, may provide for an exercise price computed in accordance
with such Code Section and the regulations thereunder and may contain such other
terms and conditions as the Committee may prescribe to cause such substitute
Option to contain as nearly as possible the same terms and conditions (including
the applicable vesting and termination provisions) as those contained in the
previously issued option being replaced thereby.
3.3 Terms and Conditions of Stock Appreciation Rights. Each Stock
-------------------------------------------------
Appreciation Right granted under the Plan shall be evidenced by a Stock
Incentive Agreement. A Stock Appreciation Right may be granted in connection
with all or any portion of a previously or contemporaneously
-8-
<PAGE>
granted Stock Incentive or not in connection with a Stock Incentive. A Stock
Appreciation Right shall entitle the Participant to receive the excess of (a)
the Fair Market Value of a specified or determinable number of shares of the
Stock at the time of payment or exercise over (b) a specified price (i) which,
in the case of a Stock Appreciation Right granted in connection with an Option,
shall be not less than the Exercise Price for that number of shares and (ii)
which, in the case of a Stock Appreciation Right that is granted to a
Participant who is then a Covered Employee, shall not be less than the Fair
Market Value of the Stock at the time of the award. A Stock Appreciation Right
granted in connection with a Stock Incentive may only be exercised to the extent
that the related Stock Incentive has not been exercised, paid or otherwise
settled. The exercise of a Stock Appreciation Right granted in connection with
a Stock Incentive shall result in a pro rata surrender or cancellation of any
related Stock Incentive to the extent the Stock Appreciation Right has been
exercised.
(a) Settlement. Upon settlement of a Stock Appreciation Right, the
----------
Company shall pay to the Participant the appreciation in cash or shares of Stock
(valued at the aggregate Fair Market Value on the date of payment or exercise)
as provided in the Stock Incentive Agreement or, in the absence of such
provision, as the Committee may determine.
(b) Conditions to Exercise. Each Stock Appreciation Right granted
----------------------
under the Plan shall be exercisable or payable at such time or times, or upon
the occurrence of such event or events, and in such amounts, as the Committee
shall specify in the Stock Incentive Agreement; provided, however, that
subsequent to the grant of a Stock Appreciation Right, the Committee, at any
time before complete termination of such Stock Appreciation Right, may
accelerate the time or times at which such Stock Appreciation Right may be
exercised or paid in whole or in part.
3.4 Terms and Conditions of Stock Awards. The number of shares of Stock
------------------------------------
subject to a Stock Award and restrictions or conditions on such shares, if any,
shall be as the Committee determines, and the certificate for such shares shall
bear evidence of any restrictions or conditions. Subsequent to the date of the
grant of the Stock Award, the Committee shall have the power to permit, in its
discretion, an acceleration of the expiration of an applicable restriction
period with respect to any part or all of the shares awarded to a Participant.
The Committee may require a cash payment from the Participant in an amount no
greater than the aggregate Fair Market Value of the shares of Stock awarded
determined at the date of grant in exchange for the grant of a Stock Award or
may grant a Stock Award without the requirement of a cash payment.
3.5 Terms and Conditions of Dividend Equivalent Rights. A Dividend
--------------------------------------------------
Equivalent Right shall entitle the Participant to receive payments from the
Company in an amount determined by reference to any cash dividends paid on a
specified number of shares of Stock to Company stockholders of record during the
period such rights are effective. The Committee may impose such restrictions
and conditions on any Dividend Equivalent Right as the Committee in its
discretion shall determine, including the date any such right shall terminate
and may reserve the right to terminate, amend or suspend any such right at any
time.
(a) Payment. Payment in respect of a Dividend Equivalent Right may be
-------
made by the Company in cash or shares of Stock (valued at Fair Market Value on
the date of payment) as provided in the Stock Incentive Agreement or, in the
absence of such provision, as the Committee may determine.
-9-
<PAGE>
(b) Conditions to Payment. Each Dividend Equivalent Right granted
---------------------
under the Plan shall be payable at such time or times, or upon the occurrence of
such event or events, and in such amounts, as the Committee shall specify in the
Stock Incentive Agreement or Stock Incentive Program; provided, however, that
subsequent to the grant of a Dividend Equivalent Right, the Committee, at any
time before complete termination of such Dividend Equivalent Right, may
accelerate the time or times at which such Dividend Equivalent Right may be paid
in whole or in part.
3.6 Terms and Conditions of Performance Unit Awards. A Performance Unit
-----------------------------------------------
Award shall entitle the Participant to receive, at a future date, payment of an
amount equal to all or a portion of the value of a number of units (stated in
terms of a designated dollar amount per unit) granted by the Committee, all as
the Committee shall specify in the Stock Incentive Agreement or Stock Incentive
Program. At the time of the grant, the Committee must determine the base value
of each unit, the number of units subject to a Performance Unit Award, the
performance factors applicable to the determination of the ultimate payment
value of the Performance Unit Award and the period over which Company
performance shall be measured. The Committee may provide for an alternate base
value for each unit under certain specified conditions.
(a) Payment. Payment in respect of Performance Unit Awards may be
-------
made by the Company in cash or shares of Stock (valued at Fair Market Value on
the date of payment) as provided in the Stock Incentive Agreement or Stock
Incentive Program or, in the absence of such provision, as the Committee may
determine.
(b) Conditions to Payment. Each Performance Unit Award granted under
---------------------
the Plan shall be payable at such time or times, or upon the occurrence of such
event or events, and in such amounts, as the Committee shall specify in the
Stock Incentive Agreement or Stock Incentive Program; provided, however, that
subsequent to the grant of a Performance Unit Award, the Committee, at any time
before complete termination of such Performance Unit Award, may accelerate the
time or times at which such Performance Unit Award may be paid in whole or in
part.
3.7 Terms and Conditions of Phantom Shares. Phantom Shares shall entitle
--------------------------------------
the Participant to receive, at a future date, payment of an amount equal to all
or a portion of the Fair Market Value of a number of shares of Stock at the end
of a certain period, all as the Committee shall specify in the Stock Incentive
Agreement or Stock Incentive Program. At the time of the grant, the Committee
shall determine the factors which will govern the portion of the rights so
payable, including, at the discretion of the Committee, any performance criteria
that must be satisfied as a condition to payment.
(a) Payment. Payment in respect of Phantom Shares may be made by the
-------
Company in cash or shares of Stock (valued at Fair Market Value on the date of
payment) as provided in the Stock Incentive Agreement or Stock Incentive Program
or, in the absence of such provision, as the Committee may determine.
(b) Conditions to Payment. Each Phantom Share granted under the Plan
---------------------
shall be payable at such time or times, or upon the occurrence of such event or
events, and in such amounts, as the Committee shall specify in the Stock
Incentive Agreement or Stock Incentive Program; provided, however, that
subsequent to the grant of a Phantom Share, the Committee, at any time
-10-
<PAGE>
before complete termination of such Phantom Share, may accelerate the time or
times at which such Phantom Share may be paid in whole or in part.
3.8 Treatment of Awards Upon Termination of Service. Except as otherwise
-----------------------------------------------
provided by Plan Section 3.2(e), any award under this Plan to a Participant who
suffers a Termination of Service may be cancelled, accelerated, paid or
continued, as provided in the Stock Incentive Agreement or Stock Incentive
Program or, in the absence of such provision, as the Committee may determine;
provided that, a Participant who continues in the service of Morrison Fresh
Cooking, Inc. or Morrison Health Care, Inc. immediately following a spin-off of
either such Subsidiary shall not be deemed to have incurred a Termination of
Service solely by reason of the spin-off. The portion of any award exercisable
in the event of continuation or the amount of any payment due under a continued
award may be adjusted by the Committee to reflect the Participant's period of
service from the date of grant through the date of the Participant's Termination
of Service or such other factors as the Committee determines are relevant to its
decision to continue the award.
SECTION 4 RESTRICTIONS ON STOCK
4.1 Escrow of Shares. Any certificates representing the shares of Stock
----------------
issued under the Plan shall be issued in the Participant's name, but, if the
Stock Incentive Agreement or Stock Incentive Program so provides, the shares of
Stock shall be held by a custodian designated by the Committee (the
"Custodian"). Each applicable Stock Incentive Agreement or Stock Incentive
Program providing for transfer of shares of Stock to the Custodian shall appoint
the Custodian as the attorney-in-fact for the Participant for the term specified
in the applicable Stock Incentive Agreement or Stock Incentive Program, with
full power and authority in the Participant's name, place and stead to transfer,
assign and convey to the Company any shares of Stock held by the Custodian for
such Participant, if the Participant forfeits the shares under the terms of the
applicable Stock Incentive Agreement or Stock Incentive Program. During the
period that the Custodian holds the shares subject to this Section, the
Participant shall be entitled to all rights, except as provided in the
applicable Stock Incentive Agreement or Stock Incentive Program, applicable to
shares of Stock not so held. Any dividends declared on shares of Stock held by
the Custodian shall, as the Committee may provide in the applicable Stock
Incentive Agreement or Stock Incentive Program, be paid directly to the
Participant or, in the alternative, be retained by the Custodian until the
expiration of the term specified in the applicable Stock Incentive Agreement or
Stock Incentive Program and shall then be delivered, together with any proceeds,
with the shares of Stock to the Participant or to the Company, as applicable.
4.2 Forfeiture of Shares. Notwithstanding any vesting schedule set forth
--------------------
in any Stock Incentive Agreement or Stock Incentive Program, in the event that
the Participant violates a noncompetition agreement as set forth in the Stock
Incentive Agreement or Stock Incentive Program, all Stock Incentives and shares
of Stock issued to the holder pursuant to the Plan shall be forfeited; provided,
however, that the Company shall return to the holder the lesser of any
consideration paid by the Participant in exchange for Stock issued to the
Participant pursuant to the Plan or the then Fair Market Value of the Stock
forfeited hereunder.
4.3 Restrictions on Transfer. The Participant shall not have the right to
------------------------
make or permit to exist any Disposition of the shares of Stock issued pursuant
to the Plan except as provided in the Plan or the applicable Stock Incentive
Agreement or Stock Incentive Program. Any Disposition of
-11-
<PAGE>
the shares of Stock issued under the Plan by the Participant not made in
accordance with the Plan or the applicable Stock Incentive Agreement or Stock
Incentive Program shall be void. The Company shall not recognize, or have the
duty to recognize, any Disposition not made in accordance with the Plan and the
applicable Stock Incentive Agreement or Stock Incentive Program, and the shares
so transferred shall continue to be bound by the Plan and the applicable Stock
Incentive Agreement or Stock Incentive Program.
SECTION 5 GENERAL PROVISIONS
5.1 Withholding. The Company shall deduct from all cash distributions
-----------
under the Plan any taxes required to be withheld by federal, state or local
government. Whenever the Company proposes or is required to issue or transfer
shares of Stock under the Plan or upon the vesting of any Stock Award, the
Company shall have the right to require the recipient to remit to the Company an
amount sufficient to satisfy any federal, state and local withholding tax
requirements prior to the delivery of any certificate or certificates for such
shares or the vesting of such Stock Award. A Participant may pay the
withholding tax in cash, or, if the applicable Stock Incentive Agreement or
Stock Incentive Program provides, a Participant may elect to have the number of
shares of Stock he is to receive reduced by, or with respect to a Stock Award,
tender back to the Company, the smallest number of whole shares of Stock which,
when multiplied by the Fair Market Value of the shares of Stock determined as of
the Tax Date (defined below), is sufficient to satisfy federal, state and local,
if any, withholding taxes arising from exercise or payment of a Stock Incentive
(a "Withholding Election"). A Participant may make a Withholding Election only
if both of the following conditions are met:
(a) The Withholding Election must be made on or prior to the date on
which the amount of tax required to be withheld is determined (the "Tax Date")
by executing and delivering to the Company a properly completed notice of
Withholding Election as prescribed by the Committee; and
(b) Any Withholding Election made will be irrevocable; however, the
Committee may in its sole discretion disapprove and give no effect to the
Withholding Election.
5.2 Changes in Capitalization; Merger; Liquidation.
----------------------------------------------
(a) The number of shares of Stock reserved for the grant of Options,
Dividend Equivalent Rights, Performance Unit Awards, Phantom Shares, Stock
Appreciation Rights and Stock Awards; the number of shares of Stock reserved for
issuance upon the exercise or payment, as applicable, of each outstanding
Option, Dividend Equivalent Right, Performance Unit Award, Phantom Share and
Stock Appreciation Right and upon vesting or grant, as applicable, of each Stock
Award; the Exercise Price of each outstanding Option and the specified number of
shares of Stock to which each outstanding Dividend Equivalent Right, Phantom
Share and Stock Appreciation Right pertains shall be proportionately adjusted
for any increase or decrease in the number of issued shares of Stock resulting
from a subdivision or combination of shares or the payment of an ordinary stock
dividend in shares of Stock to holders of outstanding shares of Stock or any
other increase or decrease in the number of shares of Stock outstanding effected
without receipt of consideration by the Company.
-12-
<PAGE>
(b) In the event of any merger, consolidation, extraordinary dividend
(including a spin-off), reorganization or other change in the corporate
structure of the Company or its Stock or tender offer for shares of Stock, the
Committee, in its sole discretion, may make such adjustments with respect to
awards and take such other action as it deems necessary or appropriate to
reflect or in anticipation of such merger, consolidation, extraordinary
dividend, reorganization, other change in corporate structure or tender offer,
including, without limitation, the substitution of new awards, the termination
or adjustment of outstanding awards, the acceleration of awards or the removal
of restrictions on outstanding awards. Any adjustment pursuant to this Section
5.2 may provide, in the Committee's discretion, for the elimination without
payment therefor of any fractional shares that might otherwise become subject to
any Stock Incentive.
(c) The existence of the Plan and the Stock Incentives granted
pursuant to the Plan shall not affect in any way the right or power of the
Company to make or authorize any adjustment, reclassification, reorganization or
other change in its capital or business structure, any merger or consolidation
of the Company, any issue of debt or equity securities having preferences or
priorities as to the Stock or the rights thereof, the dissolution or liquidation
of the Company, any sale or transfer of all or any part of its business or
assets, or any other corporate act or proceeding.
5.3 Cash Awards. The Committee may, at any time and in its discretion,
-----------
grant to any holder of a Stock Incentive the right to receive, at such times and
in such amounts as determined by the Committee in its discretion, a cash amount
which is intended to reimburse such person for all or a portion of the federal,
state and local income taxes imposed upon such person as a consequence of the
receipt of the Stock Incentive or the exercise of rights thereunder.
5.4 Compliance with Code. All Incentive Stock Options to be granted
--------------------
hereunder are intended to comply with Code Section 422, and all provisions of
the Plan and all Incentive Stock Options granted hereunder shall be construed in
such manner as to effectuate that intent.
5.5 Right to Terminate Service. Nothing in the Plan or in any Stock
--------------------------
Incentive Agreement or Stock Incentive Program shall confer upon any Participant
the right to continue as an employee, officer or director of the Company or any
of its affiliates or affect the right of the Company or any of its affiliates to
terminate the Participant's service at any time.
5.6 Restrictions on Delivery and Sale of Shares; Legends. Each Stock
----------------------------------------------------
Incentive is subject to the condition that if at any time the Committee, in its
discretion, shall determine that the listing, registration or qualification of
the shares covered by such Stock Incentive upon any securities exchange or under
any state or federal law is necessary or desirable as a condition of or in
connection with the granting of such Stock Incentive or the purchase or delivery
of shares thereunder, the delivery of any or all shares pursuant to such Stock
Incentive may be withheld unless and until such listing, registration or
qualification shall have been effected. If a registration statement is not in
effect under the Securities Act of 1933 or any applicable state securities laws
with respect to the shares of Stock purchasable or otherwise deliverable under
Stock Incentives then outstanding, the Committee may require, as a condition of
exercise of any Option or as a condition to any other delivery of Stock pursuant
to a Stock Incentive, that the Participant or other recipient of a Stock
Incentive represent, in writing, that the shares received pursuant to the Stock
Incentive are being acquired for investment and not with a view to distribution
and agree that the shares will not be disposed of except pursuant to an
effective registration statement, unless the Company shall
-13-
<PAGE>
have received an opinion of counsel that such disposition is exempt from such
requirement under the Securities Act of 1933 and any applicable state securities
laws. The Company may include on certificates representing shares delivered
pursuant to a Stock Incentive such legends referring to the foregoing
representations or restrictions or any other applicable restrictions on resale
as the Company, in its discretion, shall deem appropriate.
5.7 Non-alienation of Benefits. Other than as specifically provided with
--------------------------
regard to the death of a Participant, no benefit under the Plan shall be subject
in any manner to anticipation, alienation, sale, transfer, assignment, pledge,
encumbrance or charge; and any attempt to do so shall be void. No such benefit
shall, prior to receipt by the Participant, be in any manner liable for or
subject to the debts, contracts, liabilities, engagements or torts of the
Participant.
5.8 Termination and Amendment of the Plan. The Board of Directors at any
-------------------------------------
time may amend or terminate the Plan without stockholder approval; provided,
however, that the Board of Directors may condition any amendment on the approval
of stockholders of the Company if such approval is necessary or advisable with
respect to tax, securities or other applicable laws. No such termination or
amendment without the consent of the holder of a Stock Incentive shall adversely
affect the rights of the Participant under such Stock Incentive.
5.9 Stockholder Approval. The Plan, as amended and restated, shall be
--------------------
submitted to the stockholders of the Company for their approval within twelve
(12) months before or after its adoption by the Board of Directors. If such
approval is not obtained, any Stock Incentive granted under the Plan as amended
and restated shall be void.
5.10 Choice of Law. The laws of the State of Georgia shall govern the
-------------
Plan, to the extent not preempted by federal law.
5.11 Effective Date of Plan. The Plan, as amended and restated, shall
----------------------
become effective upon the date the Plan is approved by the stockholders of the
Company.
MORRISON RESTAURANTS INC.
By:______________________________________
Title:___________________________________
Attest:
______________________________
Secretary
[CORPORATE SEAL]
-14-
<PAGE>
EXHIBIT 10.29
SECOND AMENDMENT TO THE
MORRISON RESTAURANTS INC. STOCK INCENTIVE
AND DEFERRED COMPENSATION PLAN FOR DIRECTORS
THIS SECOND AMENDMENT is made this ____ day of March, 1996, by Morrison
Restaurants Inc., a corporation duly organized and existing under the laws of
the State of Delaware (the "Company").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Company maintains the Morrison Restaurants Inc. Stock
Incentive and Deferred Compensation Plan for Directors, which is currently
maintained under an amended and restated indenture which became effective as of
September 28, 1994 (the "Plan");
WHEREAS, pursuant to that certain plan of distribution approved and adopted
by the Board of Directors of the Company, the Company contemplates the
distribution to its stockholders of all of the outstanding shares of common
stock, respectively, of Morrison Fresh Cooking, Inc. and Morrison Health Care,
Inc. (the "Distributions");
WHEREAS, the Company desires to amend the Plan to clarify how the
Distributions will affect the payout of deferred compensation accounts
established under the Plan for eligible directors and the treatment of options
issued and outstanding under the Plan; and
WHEREAS, the Board of Directors of the Company has duly approved and
authorized this amendment to the Plan pursuant to the terms of that certain
Agreement respecting Employee Benefits Matters to which the Company, Morrison
Fresh Cooking, Inc. and Morrison Health Care, Inc. are parties;
NOW, THEREFORE, the Company does hereby amend the Plan, effective
immediately, as follows:
1. By deleting existing Section 1.1(f) in its entirety and by substituting
therefor the following:
"(f) `Company' means Morrison Restaurants Inc., a Delaware
-------
corporation, or its successor."
2. By deleting existing Section 1.1(r) in its entirety and by substituting
therefor the following:
"(r) `Plan' means the Morrison Restaurants Inc. Stock Incentive and
----
Deferred Compensation Plan for Directors; provided, however, in the event
Morrison Restaurants Inc. is replaced by a successor in interest, the title
of the Plan shall thereafter be the name of the
<PAGE>
successor in interest followed by the phrase `Stock Incentive and Deferred
Compensation Plan for Directors'."
3. By adding a new final sentence to Section 2.4 as follows:
"A Participant shall cease to be eligible for continued participation in
the Plan as of the date the Participant ceases to serve upon the Board of
Directors."
4. By adding a new final sentence to Section 3.2 as follows:
"For purposes of this Section 3.2, a Participant shall not suffer a
forfeiture of unvested shares and shall continue to vest in any such
unvested shares as if he or she remained on the Board of Directors for any
period of time following the effective date of the distributions of the
common stock of Morrison Fresh Cooking, Inc. (`MFCI') and of Morrison
Health Care, Inc. (`MHCI') to the stockholders of the Company (the
`Distribution') during which the Participant continuously serves as a
member of the board of directors of the Company, MFCI or MHCI."
5. By adding a new final sentence to Section 5.4 as follows:
"For purposes of this Section 5.4, a Participant shall not be considered to
have ceased to be a member of the Board of Directors for any period of time
following the effective date of the Distribution during which the
Participant continuously serves as a member of the board of directors of
the Company, MFCI or MHCI."
6. By deleting existing Section 7.1(a) in its entirety and by substituting
therefor the following:
"(a) The number of shares of Stock reserved with respect to Stock
Incentives, the number of shares of Stock reserved for issuance upon the
exercise of each outstanding Option and upon the vesting of each
outstanding Restricted Stock Award and the exercise price of each
outstanding Option shall be adjusted by the Committee for any increase or
decrease in the number of issued shares of Stock resulting from a
subdivision or combination of shares or for the payment of a stock dividend
(including, but not limited to, an extraordinary stock dividend such as a
spin-off) to holders of outstanding shares of Stock or for any other
increase or decrease in the number of shares of Stock outstanding effected
without receipt of consideration by the Company, with such adjustment to be
made in such manner as the Committee determines, in its sole discretion,
appropriately reflects the event."
7. By deleting existing Section 7.7 in its entirety and by substituting
therefor the following:
"7.7 `Choice of Law' The laws of the State of Georgia shall govern the
-------------
Plan, to the extent not preempted by federal law."
-2-
<PAGE>
This Second Amendment shall be submitted to the stockholders of the Company
for their approval and, if such approval is not obtained, the adoption of this
Second Amendment shall be deemed null and void and the Plan shall remain as in
effect immediately prior to this Second Amendment.
Except as specifically amended hereby, the Plan shall remain in full force
and effect as prior to this Second Amendment.
IN WITNESS WHEREOF, the Company has caused this Second Amendment to be
executed on the day and year first above written.
MORRISON RESTAURANTS INC.
By: ________________________________________
Title: _____________________________________
ATTEST:
By: ___________________________
Title:_________________________
[CORPORATE SEAL]
-3-
<PAGE>
EXHIBIT 10.30
-------------
FIRST AMENDMENT TO THE
MORRISON RESTAURANTS INC. 1993 NON-EXECUTIVE
STOCK INCENTIVE PLAN
THIS FIRST AMENDMENT is made this ____ day of March, 1996, by Morrison
Restaurants Inc., a corporation duly organized and existing under the laws of
the State of Delaware (the "Company").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Company maintains the Morrison Restaurants Inc. 1993 Non-
Executive Stock Incentive Plan, which is currently maintained under an indenture
which became effective as of July 1, 1993 (the "Plan");
WHEREAS, pursuant to that certain plan of distribution approved and
adopted by the Board of Directors of the Company, the Company contemplates the
distribution to its stockholders of all of the outstanding shares of common
stock, respectively, of Morrison Fresh Cooking, Inc. and Morrison Health Care,
Inc. (the "Distributions");
WHEREAS, the Company desires to rename the Plan and to amend the Plan
to clarify the treatment of options issued and outstanding under the Plan and
for other reasons; and
WHEREAS, the Board of Directors of the Company has duly approved and
authorized this amendment to the Plan pursuant to the terms of that certain
Agreement respecting Employee Benefits Matters to which the Company, Morrison
Fresh Cooking, Inc. and Morrison Health Care, Inc. are parties;
NOW, THEREFORE, the Company does hereby amend the Plan, effective
immediately, as follows:
1. By deleting existing Section 1.1(f) in its entirety and by substituting
therefor the following:
"(f) `Company' means Morrison Restaurants Inc., a Delaware
-------
corporation, or its successor in interest."
2. By deleting existing Section 1.1(s) in its entirety and by substituting
therefor the following:
"(s) `Plan' means the Morrison Restaurants Inc. 1996 Non-Executive
----
Stock Incentive Plan; provided, however, in the event the Company is
replaced by a successor in interest, the title of the Plan shall
thereafter be the name of the successor in interest followed by the
phrase `1996 Non-Executive Stock Incentive Plan'."
<PAGE>
3. By deleting the existing first sentence of Section 2.2 in its entirety
and by substituting therefor the following:
"Subject to adjustment in accordance with Section 5.2, 750,000 shares
(as adjusted for all corporate events through and including the
effective date of the spin-offs described by Plan Section 3.8) of Stock
(the `Maximum Plan Shares') are hereby reserved exclusively for issuance
pursuant to Stock Incentives."
4. By deleting the existing first sentence of Section 3.8 in its entirety
and by substituting therefor the following:
"Any award under this Plan to a Participant who suffers a
Termination of Employment may be cancelled, accelerated, paid or
continued, as provided in the Stock Incentive Agreement or Stock
Incentive Program or, in the absence of such provision, as the Committee
may determine; provided that, a Participant who continues in the service
of Morrison Fresh Cooking, Inc. or Morrison Health Care, Inc.
immediately following a spin-off of either such Subsidiary shall not be
deemed to have incurred a Termination of Service solely by reason of the
spin-off."
5. By adding the word "ordinary" immediately prior to the term "stock
dividend" in Section 5.2(a).
6. By deleting existing Section 5.2(b) in its entirety and by substituting
therefor the following:
"(b) In the event of any merger, consolidation, extraordinary
dividend (including a spin-off), reorganization or other change in the
corporate structure of the Company or its Stock or tender offer for
shares of Stock, the Committee, in its sole discretion, may make such
adjustments with respect to awards and take such other action as it
deems necessary or appropriate to reflect or in anticipation of such
merger, consolidation, extraordinary dividend, reorganization, other
change in corporate structure or tender offer, including, without
limitation, the substitution of new awards, the termination or
adjustment of outstanding awards, the acceleration of awards or the
removal of restrictions on outstanding awards. Any adjustment pursuant
to this Section 5.2. may provide, in the Committee's discretion, for the
elimination without payment therefor of any fractional shares that might
otherwise become subject to any Stock Incentive."
7. By deleting existing Section 5.8 in its entirety and by substituting
therefor the following:
"5.8 `Choice of Law' The laws of the State of Georgia shall
-------------
govern the Plan, to the extent not preempted by federal law."
Except as specifically amended hereby, the Plan shall remain in full
force and effect as prior to this First Amendment.
-2-
<PAGE>
IN WITNESS WHEREOF, the Company has caused this First Amendment to be
executed on the day and year first above written.
MORRISON RESTAURANTS INC.
By: _________________________________________
Title: ______________________________________
ATTEST:
By: ___________________________
Title: ________________________
[CORPORATE SEAL]
-3-
<PAGE>
EXHIBIT 10.31
THIRD AMENDMENT TO THE MORRISON RESTAURANTS INC.
EXECUTIVE SUPPLEMENTAL PENSION PLAN
THIS THIRD AMENDMENT is made on this ____ day of March, 1996, by MORRISON
RESTAURANTS INC. (the "Primary Sponsor"), a corporation organized and existing
under the laws of the State of Delaware.
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Primary Sponsor maintains the Morrison Restaurants Inc.
Executive Supplemental Pension Plan (the "Plan"), which was established by
indenture effective as of June 1, 1983 and which was last amended and restated
by indenture dated effective June 1, 1986;
WHEREAS, pursuant to that certain plan of distribution approved and adopted
by the Board of Directors of the Primary Sponsor, the Primary Sponsor
contemplates the distribution to its stockholders of all of the outstanding
shares of common stock, respectively, of Morrison Fresh Cooking, Inc. and
Morrison Health Care, Inc. (the "Distributions"); and
WHEREAS, the Primary Sponsor desires to amend the Plan primarily to revise
the enhanced early retirement provisions and to clarify how the Distributions
will affect participation by certain Plan participants;
NOW, THEREFORE, the Plan is hereby amended, effective immediately, as
follows:
1. By adding a new final sentence to Section 2.01(a) as follows:
"For purposes of this Section and notwithstanding any other provision of
the Plan to the contrary, Annual Base Salary shall not include any amounts
paid to a Participant or Eligible Employee by Morrison Fresh Cooking, Inc.
or Morrison Health Care, Inc. from and after the effective date of the
distributions of the common stock of Morrison Fresh Cooking, Inc. and of
the common stock of Morrison Health Care, Inc. to the stockholders of the
Company."
2. By deleting Section 2.01(e) in its entirety and by substituting therefor
the following:
"(e) The term `Company' refers to Morrison Restaurants Inc., a Delaware
corporation, or its successor in interest."
3. By adding a new final paragraph to Section 2.01(f) as follows:
"For purposes of this Section and notwithstanding any other provision of
the Plan to the contrary, Continuous Service shall not include any period
of employment by a Participant or Eligible Employee with Morrison Fresh
Cooking, Inc. or Morrison Health Care, Inc. from and after the effective
date of the distributions of the common stock of Morrison Fresh Cooking,
Inc. and of the common stock of Morrison Health Care, Inc. to the
stockholders of the Company."
<PAGE>
4. By deleting Section 2.01(l) in its entirety and by substituting therefor
the following:
"(l) The term `Plan' means the Morrison Restaurants Inc. Executive
Supplemental Pension Plan; provided, however, that in the event
Morrison Restaurants Inc. is replaced by a successor in interest, the
title of the Plan shall thereafter be the name of the successor in
interest followed by the phrase `Executive Supplemental Pension
Plan'."
5. By deleting Section 4.02 in its entirety and by substituting therefor the
following:
"4.02 Early Retirement.
----------------
(a) Actuarially Reduced Early Retirement Benefit. Before a Participant or
--------------------------------------------
Eligible Participant (as defined in Section 4.02(b) below) is eligible
for normal retirement pursuant to Section 4.01 above or for unreduced
early retirement pursuant to Section 4.02(b) below, the Participant or
Eligible Participant, as the case may be, may retire from service with
the Company or any of its subsidiaries prior thereto and commence
receiving benefits pursuant to this Section 4.02(a) if the Participant
has attained age 55 while in the service of the Company or any of its
subsidiaries. The Accrued Benefit determined under Section 3.01, but
payable pursuant to this Section 4.02(a), shall be reduced by
multiplying the Accrued Benefit amount by the applicable early
retirement reduction factor indicated in the table below and, in
determining the Accrued Benefit, the amount of any offset under
Section 3.01(C) shall be calculated as the retirement benefit payable
in the form of a single life annuity to the Participant under the
Morrison Restaurants Inc. Retirement Plan at the Participant's
Retirement Date (as defined therein):
<TABLE>
<CAPTION>
Number of Years until Eligible
for Unreduced Retirement Benefit Early Retirement Factor
-------------------------------- -----------------------
<S> <C>
1 .93
2 .86
3 .79
4 .72
5 .65
6 .62
7 .59
8 .56
9 .53
10 .50
</TABLE>
(b) Unreduced Early Retirement Benefit. A Participant identified in
----------------------------------
Appendix B to the Plan, as attached hereto, or subsequently added to
Appendix B by action of the Board (a Participant so identified on
Appendix B is referred to hereafter as
-2-
<PAGE>
an "Eligible Participant") may retire from service with the Company or
any of its subsidiaries prior to reaching his Normal Retirement Date
and commence receiving benefits from this Plan pursuant to Section
4.02(b) if:
(i) the Eligible Participant attains age 60 prior to termination
of employment from the Company or any of its subsidiaries;
or
(ii) at the time of retirement from service with the Company or
any of its subsidiaries, the Eligible Participant is at
least age 55 and the sum of that Eligible Participant's age
and years of Continuous Service equals or exceeds ninety
(90).
The Accrued Benefit, as determined in Section 3.01, but payable
pursuant to this Section 4.02(b), will not be subject to actuarial
reduction and, in determining the Accrued Benefit, the amount of any
offset under Section 3.01(C) shall be calculated as the retirement
benefit payable in the form of a single life annuity to the Eligible
Participant under the Morrison Restaurants Inc. Retirement Plan at the
Eligible Participant's Retirement Date (as defined therein).
A Participant with an accrued benefit under the Morrison Restaurants Inc.
Retirement Plan must commence receiving those benefits at the same time as
the participant commences receiving benefits under this Section 4.02."
6. By adding a new final paragraph to Section 5.02 as follows:
"For purposes of determining the timing of any benefit payments under the
Plan, notwithstanding any other provision of the Plan to the contrary, a
Participant shall not be deemed to have retired or otherwise terminated his
or her service with the Company or any of its subsidiaries for as long as
the Participant remains in the service of Morrison Fresh Cooking, Inc. or
Morrison Health Care, Inc. from and after the effective date of a
distribution of all of the outstanding shares of common stock of the
applicable subsidiary by the Company to its stockholders."
Except as specifically amended hereby, the Plan shall remain in full force
and effect as prior to this Third Amendment.
-3-
<PAGE>
IN WITNESS WHEREOF, the Primary Sponsor has caused this Third Amendment to
be executed as of the day and year first above written.
MORRISON RESTAURANTS INC.
By:_______________________________
Title: ___________________________
ATTEST:
___________________________
Title: ____________________
[CORPORATE SEAL]
-4-
<PAGE>
EXHIBIT 10.32
THIRD AMENDMENT TO THE
MORRISON RESTAURANTS INC.
MANAGEMENT RETIREMENT PLAN
THIS THIRD AMENDMENT is made on this ____ day of March, 1996, by MORRISON
RESTAURANTS INC. (the "Primary Sponsor"), a corporation organized and existing
under the laws of the State of Delaware.
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Primary Sponsor maintains the Morrison Restaurants Inc.
Management Retirement Plan (the "Plan"), which was established by indenture
effective as of June 1, 1989;
WHEREAS, pursuant to that certain plan of distribution approved and adopted
by the Board of Directors of the Primary Sponsor, the Primary Sponsor
contemplates the distribution to its stockholders of all of the outstanding
shares of common stock, respectively, of Morrison Fresh Cooking, Inc. and
Morrison Health Care, Inc. (the "Distributions"); and
WHEREAS, the Primary Sponsor desires to amend the Plan primarily to clarify
how the Distributions will affect participation by certain Plan participants;
NOW, THEREFORE, the Plan is hereby amended, effective immediately, as
follows:
1. By deleting the parenthetical phrase "(hereinafter referred to as the
`Company')" from the head language of page 1.
2. By adding a new final sentence to Section 1.03 as follows:
"The term `Affiliate' shall not include any former Affiliate of the Company
from and after the date of the event pursuant to which an Affiliate becomes
a former Affiliate."
3. By adding a new Section 1.06A as follows:
"1.06A `Company' means Morrison Restaurants Inc., a Delaware
-------
corporation, or its successor in interest."
4. By deleting the existing Section 1.09 in its entirety and by substituting
therefor the following:
"1.09 `Early Retirement Date' means the date on which a Participant
---------------------
attains age 55 while an employee of the Company or an Affiliate, completes
at least 15 Years of
<PAGE>
Credited Service, and submits in writing a request to retire on a date
prior to Normal Retirement Age."
5. By adding a new Section 1.18A as follows:
"1.18A `Plan' means the Morrison Restaurants Inc. Management
----
Retirement Plan; provided, however, that in the event Morrison Restaurants
Inc. is replaced by a successor in interest, the title of the Plan shall
thereafter be the name of the successor in interest followed by the phrase
`Management Retirement Plan'."
6. By deleting the first two sentences of Article V and by substituting
therefor the following:
"Upon the death of any married Participant on or after attaining age
fifty-five (55) but prior to retirement while an employee of the Company or
an Affiliate, the surviving spouse of such Participant shall be entitled to
receive a survivor annuity providing monthly benefits for the spouse's life
equal to fifty percent (50%) of the annuity which would have been payable
to the Participant and such surviving spouse under the Plan if the
Participant had retired on the day immediately prior to his death and
received a normal form of distribution pursuant to Section 7.02 hereof.
Upon the death of any married Participant prior to attaining age fifty-five
(55), the surviving spouse of such Participant shall be entitled to receive
a survivor annuity providing monthly benefits for the spouse's life equal
to fifty percent (50%) of the annuity which would have been payable had the
Participant elected to receive a normal form of distribution pursuant to
Section 7.02 hereof on the first day of the month following the date the
Participant would have attained age fifty-five (55)."
7. By adding a new final paragraph to Section 6.01 as follows:
"For purposes of determining the timing of the payment of a
Participant's Accrued Benefit pursuant to this Section, a Participant shall
not be deemed to have terminated employment with the Company or its
Affiliates for as long as the Participant remains in the service of
Morrison Fresh Cooking, Inc. or Morrison Health Care, Inc. from and after
the effective date of a distribution of all of the outstanding shares of
common stock of the applicable subsidiary by the Company to its
stockholders."
Except as specifically amended hereby, the Plan shall remain in full force
and effect as prior to this Third Amendment.
-2-
<PAGE>
IN WITNESS WHEREOF, the Primary Sponsor has caused this Third Amendment to
be executed as of the day and year first above written.
MORRISON RESTAURANTS INC.
By:_________________________________
Title:______________________________
ATTEST:
_____________________________
Title:
_______________________
-3-
<PAGE>
Exhibit 10.33
THIRD AMENDMENT TO THE
MORRISON RESTAURANTS INC.
SALARY DEFERRAL PLAN
THIS THIRD AMENDMENT is made on this ____ day of March, 1996, by MORRISON
RESTAURANTS INC. (the "Primary Sponsor"), a corporation organized and existing
under the laws of the State of Delaware.
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Primary Sponsor maintains the Morrison Restaurants Inc. Salary
Deferral Plan (the "Plan"), which was established by indenture dated June 1,
1968 and which was last amended and restated by indenture dated December 31,
1993;
WHEREAS, pursuant to that certain plan of distribution approved and adopted
by the Board of Directors of the Primary Sponsor, the Primary Sponsor
contemplates the distribution to its stockholders of all of the outstanding
shares of common stock, respectively, of Morrison Fresh Cooking, Inc. and
Morrison Health Care, Inc. (the "Distributions"); and
WHEREAS, the Primary Sponsor desires to amend the Plan primarily to clarify
how the Distributions will affect participation by certain Plan members;
NOW, THEREFORE, the Plan is hereby amended, effective immediately, as
follows:
1. By deleting from the head language of the cover page the parenthetical
phrase "(hereinafter called the `Primary Sponsor')."
2. By adding a new final sentence to Section 1.1(b) as follows:
"The investment of that portion of the Fund attributable to Company
Matching Accounts shall be determined by the Plan Administrator in its sole
discretion; provided, however, that the Plan Administrator may permit
investment direction by Members to the extent and subject to such
conditions as the Plan Administrator may prescribe."
3. By adding a new Section 1.35A as follows:
"1.35A `Primary Sponsor' means Morrison Restaurants Inc. or its
---------------
successor in interest."
4. By adding a new Section 3.6 as follows:
"3.6 No contributions shall be made by or on behalf of any Member
with respect to Annual Compensation otherwise payable to the Member by
either Morrison Fresh Cooking, Inc. or Morrison Health Care, Inc. following
the effective date of the
<PAGE>
distributions of the common stock of Morrison Fresh Cooking, Inc. and of
the common stock of Morrison Health Care, Inc. to the stockholders of the
Primary Sponsor."
5. By deleting Section 8.1 in its entirety and by substituting therefor the
following:
"8.1 Transfer of a Member from one Plan Sponsor to another Plan
Sponsor or to an Affiliate shall not be deemed for any purpose under the
Plan to be a termination of employment of the Member. For purposes of this
Section and Section 7, Morrison Fresh Cooking, Inc. and Morrison Health
Care, Inc. shall be deemed to be Affiliates of the Primary Sponsor from and
after the effective date of the distributions of the common stock of
Morrison Fresh Cooking, Inc. and of the common stock of Morrison Health
Care, Inc. to the stockholders of the Primary Sponsor."
6. By renaming the Plan, in the event the Primary Sponsor is replaced by a
successor in interest, using a title beginning with the name of the successor in
interest followed by the phrase "Salary Deferral Plan."
Except as specifically amended hereby, the Plan shall remain in full force
and effect as prior to this Third Amendment.
IN WITNESS WHEREOF, the Primary Sponsor has caused this Third Amendment to
be executed as of the day and year first above written.
MORRISON RESTAURANTS INC.
By:_______________________________________
Title:____________________________________
ATTEST:
________________________
Title:__________________
[CORPORATE SEAL APPEARS HERE]
-2-
<PAGE>
EXHIBIT 10.34
FIRST AMENDMENT TO THE
MORRISON RESTAURANTS INC.
DEFERRED COMPENSATION PLAN
THIS FIRST AMENDMENT is made on this ____ day of March, 1996, by MORRISON
RESTAURANTS INC. (the "Primary Sponsor"), a corporation organized and existing
under the laws of the State of Delaware.
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Primary Sponsor maintains the Morrison Restaurants Inc.
Deferred Compensation Plan (the "Plan"), which was established by indenture
dated December 18, 1989;
WHEREAS, pursuant to that certain plan of distribution approved and adopted
by the Board of Directors of the Primary Sponsor, the Primary Sponsor
contemplates the distribution to its stockholders of all of the outstanding
shares of common stock, respectively, of Morrison Fresh Cooking, Inc. and
Morrison Health Care, Inc. (the "Distributions"); and
WHEREAS, the Primary Sponsor desires to amend the Plan primarily to clarify
how the Distributions will affect participation by certain Plan members;
NOW, THEREFORE, the Plan is hereby amended, effective immediately, as
follows:
1. By deleting from the head language of the cover page the parenthetical
phrase "(hereinafter called the `Primary Sponsor')."
2. By adding a new Section 1.16A as follows:
"1.16A `Plan' means the Morrison Restaurants Inc. Deferred
----
Compensation Plan; provided, however, that in the event Morrison
Restaurants Inc. is replaced by a successor in interest, the title of the
Plan shall thereafter be the name of the successor in interest followed by
the phrase `Deferred Compensation Plan'."
3. By adding a new Section 1.19A as follows:
"1.19A `Primary Sponsor' means Morrison Restaurants Inc. or its
---------------
successor in interest."
<PAGE>
4. By deleting the existing Section 1.23 and substituting therefor the
following:
"1.23 `Valuation Date' means the last day of each month, any date
--------------
subsequent to a monthly Valuation Date for purposes of paying a Member's
Accrued Benefit or any other day which the Plan Administrator declares to
be a Valuation Date."
5. By adding a new Section 3.4 as follows:
"3.4 No deferral or matching credits shall be made by or on behalf of
any Member with respect to Annual Compensation otherwise payable to the
Member by either Morrison Fresh Cooking, Inc. or Morrison Health Care, Inc.
following the effective date of the distributions of the common stock of
Morrison Fresh Cooking, Inc. and of the common stock of Morrison Health
Care, Inc. to the stockholders of the Primary Sponsor."
6. By adding a new final clause to Section 4.3(a):
"; provided, however, that the Plan Administrator designate other rates of
return for all or portions of Company Matching Accounts or may permit
selection of other designated rates of return for all or portions of
Company Matching Accounts by Members to the extent and subject to such
conditions as the Plan Administrator may prescribe."
7. By deleting Section 7.1 in its entirety and by substituting therefor the
following:
"7.1 Upon the retirement of a Member while employed by a Plan Sponsor
or Affiliate or upon the death of a Member, the Accrued Benefit of the
Member shall be determined as of the Valuation Date coinciding with or
immediately preceding the Member's Retirement Date or death, increased by
Deferral Amounts and amounts credited pursuant to Plan Section 4.2
thereafter and adjusted for the appropriate designated rates of return and
any other amounts credited pursuant to Plan Section 4.3 through the
Valuation Date immediately preceding the date the Accrued Benefit is paid.
Payment of the Member's Accrued Benefit shall commence no later than sixty
(60) days after the Retirement Date or death of the Member."
8. By deleting Section 8.1 in its entirety and by substituting therefor the
following:
"8.1 A Member shall be considered to have terminated employment with
the Plan Sponsor or any Affiliate on the date determined by the Plan
Administrator. Transfer of a Member from one Plan Sponsor to another Plan
Sponsor or to an Affiliate shall not be deemed for any purpose under the
Plan to be a termination of employment of the Member. For purposes of this
Section and Section 7, Morrison Fresh Cooking,
-2-
<PAGE>
Inc. and Morrison Health Care, Inc. shall be deemed to be Affiliates of the
Primary Sponsor from and after the effective date of the distributions of
the common stock of Morrison Fresh Cooking, Inc. and of the common stock of
Morrison Health Care, Inc. to the stockholders of the Primary Sponsor."
Except as specifically amended hereby, the Plan shall remain in full force
and effect as prior to this First Amendment.
IN WITNESS WHEREOF, the Primary Sponsor has caused this First Amendment to
be executed as of the day and year first above written.
MORRISON RESTAURANTS INC.
By:______________________________________
Title:___________________________________
ATTEST:
___________________________
Title:
_____________________
[CORPORATE SEAL]
-3-
<PAGE>
Exhibit 10.35
SECOND AMENDMENT TO THE
MORRISON RESTAURANTS INC.
RETIREMENT PLAN
THIS SECOND AMENDMENT is made on this ____ day of March, 1996, by MORRISON
RESTAURANTS INC. (the "Primary Sponsor"), a corporation organized and existing
under the laws of the State of Delaware.
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Primary Sponsor maintains the Morrison Restaurants Inc.
Retirement Plan (the "Plan"), which was last amended and restated by indenture
dated October 21, 1994;
WHEREAS, pursuant to that certain plan of distribution approved and adopted
by the Board of Directors of the Primary Sponsor, the Primary Sponsor
contemplates the distribution to its stockholders of all of the outstanding
shares of common stock, respectively, of Morrison Fresh Cooking, Inc. and
Morrison Health Care, Inc. (the "Distributions"); and
WHEREAS, the Primary Sponsor desires to amend the Plan primarily to clarify
how the Distributions will affect participation by certain Plan participants;
NOW, THEREFORE, the Plan is hereby amended, effective immediately, as
follows:
1. By deleting from the head language of the cover page the parenthetical
phrase "(hereinafter called the `Primary Sponsor')."
2. By adding a new Section 1.36A as follows:
"1.36A `Plan' means the Morrison Restaurants Inc. Retirement Plan;
----
provided, however, that in the event Morrison Restaurants Inc. is replaced
by a successor in interest, the title of the Plan shall thereafter be the
name of the successor in interest followed by the phrase `Retirement
Plan'."
3. By adding a new Section 1.39A as follows:
"1.39A `Primary Sponsor' means Morrison Restaurants Inc. or its
---------------
successor in interest."
4. By deleting Section 7.1 in its entirety and by substituting therefor the
following:
"7.1 Transfer of a Participant from one Plan Sponsor to another Plan
Sponsor or to an Affiliate shall not be deemed for any purpose under the
Plan to be a termination of employment of the Participant. For purposes of
this Section only, Morrison Fresh Cooking, Inc. and Morrison Health Care,
Inc. shall be deemed to be Affiliates of the Primary Sponsor from and after
the effective date of the distributions of the common
<PAGE>
stock of Morrison Fresh Cooking, Inc. and of the common stock of Morrison
Health Care, Inc. to the stockholders of the Primary Sponsor."
Except as specifically amended hereby, the Plan shall remain in full force
and effect as prior to this Second Amendment.
IN WITNESS WHEREOF, the Primary Sponsor has caused this Second Amendment to
be executed as of the day and year first above written.
MORRISON RESTAURANTS INC.
By:________________________________
Title: ____________________________
ATTEST:
_________________________
Title: __________________
[CORPORATE SEAL]
-2-
<PAGE>
Exhibit 10.36
FOURTH AMENDMENT TO THE
MORRISON RESTAURANTS INC. 1987 STOCK BONUS
AND NON-QUALIFIED STOCK OPTION PLAN
THIS FOURTH AMENDMENT is made this ____ day of March, 1996, by
Morrison Restaurants Inc., a corporation duly organized and existing under the
laws of the State of Delaware (the "Company").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Company maintains the Morrison Restaurants Inc. 1987
Stock Bonus and Non-Qualified Stock Option Plan (the "Plan");
WHEREAS, pursuant to that certain plan of distribution approved and
adopted by the Board of Directors of the Company, the Company contemplates the
distribution to its stockholders of all of the outstanding shares of common
stock, respectively, of Morrison Fresh Cooking, Inc. and Morrison Health Care,
Inc. (the "Distributions");
WHEREAS, the Company desires to amend the Plan to clarify how the
Distributions will affect the treatment of options issued and outstanding under
the Plan; and
WHEREAS, the Board of Directors of the Company has duly approved and
authorized this amendment to the Plan pursuant to the terms of that certain
Agreement respecting Employee Benefits Matters to which the Company, Morrison
Fresh Cooking, Inc. and Morrison Health Care, Inc. are parties;
NOW, THEREFORE, the Company does hereby amend the Plan, effective
immediately, as follows:
1. By adding a new final sentence to Section 1 as follows:
"As used herein, the term `Company' shall include any successor in interest
to the Company."
2. By deleting the second paragraph of existing Section 4 in its entirety and
by substituting therefor the following:
"The total number of Shares reserved for issuance under this Plan and,
in the case of Shares subject to outstanding Options, the option price per
Share, shall be adjusted for any increase or decrease in the number of
outstanding shares resulting from the payment of a stock dividend
(including, but not limited to, an extraordinary stock dividend such as a
spin-off), from a subdivision or combination of Shares, from a
reclassification of the Shares or from any other increase or decrease in
the number of Shares outstanding effected without receipt of consideration
by the Company, with such adjustment to be made in such manner as the
Committee determines, in its sole discretion, appropriately reflects the
event."
<PAGE>
3. By adding a new final sentence to Section 6(j) as follows:
"For purposes of this Section 6, an Eligible Employee shall not be
considered to have suffered a termination of employment with the Company
for any period of time following the effective date of the distributions of
the common stock of Morrison Fresh Cooking, Inc. (`MFCI') and of Morrison
Health Care, Inc. (`MHCI') to the stockholders of the Company during which
the Eligible Employee continuously serves as an employee of the Company,
MFCI or MHCI."
4. By deleting existing Section 12 in its entirety and by substituting
therefor the following:
"12. Choice of Law.
-------------
This Plan shall be governed by the laws of the State of Georgia."
5. By deeming, in the event the Company is replaced by a successor in
interest, the title of the Plan to be thereafter the new name of the successor
in interest followed by the phrase "1987 Stock Bonus and Non-Qualified Stock
Option Plan."
This Fourth Amendment shall be submitted to the stockholders of the Company
for their approval and, if such approval is not obtained, the adoption of this
Fourth Amendment shall be deemed null and void and the Plan shall remain as in
effect immediately prior to this Fourth Amendment.
Except as specifically amended hereby, the Plan shall remain in full force
and effect as prior to this Fourth Amendment.
IN WITNESS WHEREOF, the Company has caused this Fourth Amendment to be
executed on the day and year first above written.
MORRISON RESTAURANTS INC.
By: _________________________________
Title: ______________________________
ATTEST:
By: ___________________________
Title: ________________________
[CORPORATE SEAL]
-2-
<PAGE>
Exhibit 10.37
SECOND AMENDMENT TO THE
MORRISON RESTAURANTS INC. 1984
LONG TERM INCENTIVE PLAN
THIS SECOND AMENDMENT is made this ____ day of March, 1996, by Morrison
Restaurants Inc., a corporation duly organized and existing under the laws of
the State of Delaware (the "Company").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Company maintains the Morrison Restaurants Inc. 1984 Long
Term Incentive Plan (the "Plan");
WHEREAS, pursuant to that certain plan of distribution approved and
adopted by the Board of Directors of the Company, the Company contemplates the
distribution to its stockholders of all of the outstanding shares of common
stock, respectively, of Morrison Fresh Cooking, Inc. and Morrison Health Care,
Inc. (the "Distributions");
WHEREAS, the Company desires to amend the Plan to clarify how the
Distributions will affect the treatment of options issued and outstanding under
the Plan; and
WHEREAS, the Board of Directors of the Company has duly approved and
authorized this amendment to the Plan pursuant to the terms of that certain
Agreement respecting Employee Benefits Matters to which the Company, Morrison
Fresh Cooking, Inc. and Morrison Health Care, Inc. are parties;
NOW, THEREFORE, the Company does hereby amend the Plan, effective
immediately, as follows:
1. By deleting the existing first sentence of Section 1 and by substituting
therefor the following:
"This Long Term Incentive Plan (the `Plan') is intended to serve as an
incentive and to encourage stock ownership by selected employees of
Morrison Restaurants Inc. and its affiliates (collectively, the
`Company') so that such selected employees may acquire or increase their
proprietary interest in the Company and share in the success of the
Company, and to encourage them to remain in the employ of the Company. As
used herein, the term `Company' shall also include any successor in
interest to Morrison Restaurants Inc."
2. By adding a new final paragraph to Section 12 as follows:
"For purposes of this Section 12, a participant shall not be considered
to have suffered a termination of employment with the Company for any
period of time following the effective date of the distributions of the
common stock of Morrison Fresh Cooking, Inc. (`MFCI') and of Morrison
Health Care, Inc. (`MHCI') to the stockholders of the Company during
which the Eligible Employee continuously serves as an employee of the
Company, MFCI or MHCI."
3. By deleting existing Section 18 in its entirety and by substituting
therefor the following:
"18. Change in Capitalization. In the event of reorganization,
------------------------
recapitalization, stock split, reverse stock split, stock dividend
(including, but not limited to, an extraordinary stock
<PAGE>
dividend such as a spin-off), combination of shares, merger,
consolidation or any change in the capital structure of the Company
(other than the creation of or an increase in authorized securities of
any class of the Company or the issuance of securities of any class of
the Company or of securities convertible into such securities), the
Committee shall make adjustments (a) in the number of shares of Common
Stock available for the granting of stock options under the Plan, (b) in
the number of shares of Common Stock as to which outstanding stock
options (or the portions thereof) then unexercised shall be exercisable,
(c) in the option price per share, (d) in the number of performance units
available for issuance under the Plan and (e) in the number of
performance units outstanding, all in such manner as the Committee
determines, in its sole discretion, appropriately reflects the event. The
adjustment in outstanding stock options shall be made without change in
the total price applicable to the unexercised portion of the stock
options but with an appropriate adjustment in the option price per
share."
4. By deleting the word "Alabama" each time the same appears in Section 23
and by substituting therefor the word "Georgia."
5. By deeming, in the event the Company's Certificate of Incorporation is
amended to change the name of the Company, the title of the Plan to be
thereafter the new name of the Company followed by the phrase "1984 Long Term
Incentive Plan."
This Second Amendment shall be submitted to the stockholders of the
Company for their approval and, if such approval is not obtained, the adoption
of this Second Amendment shall be deemed null and void and the Plan shall remain
as in effect immediately prior to this Second Amendment.
Except as specifically amended hereby, the Plan shall remain in full
force and effect as prior to this Second Amendment.
IN WITNESS WHEREOF, the Company has caused this Second Amendment to be
executed on the day and year first above written.
MORRISON RESTAURANTS INC.
By: _________________________________________
Title: ______________________________________
ATTEST:
By: ___________________________
Title: ________________________
[CORPORATE SEAL]
-2-
<PAGE>
EXHIBIT 10.38
INDEMNIFICATION AGREEMENT
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This INDEMNIFICATION AGREEMENT is made and entered into on
___________________, 19___, by and between RUBY TUESDAY, INC., a Georgia
corporation (the "Corporation"), and ________________________, an officer,
member of the Board of Directors or other employee or agent of the Corporation
("Indemnitee").
WHEREAS, Indemnitee is an Authorized Representative of the Corporation, as
"Authorized Representative" is defined in Section 1 hereof; and
WHEREAS, the Corporation desires that Indemnitee oppose and defend against
what Indemnitee may consider to be unjustified investigations, claims, actions,
suits and proceedings which have arisen or may arise in the future as a result
of Indemnitee's service to the Corporation notwithstanding that conditions in
the insurance markets may make directors' and officers' or other liability
insurance coverage unavailable or available only at premium levels which the
Corporation may deem inappropriate to pay; and
WHEREAS, the parties believe it appropriate to memorialize and reaffirm the
Corporation's indemnification obligation to Indemnitee and, in addition, set
forth the indemnification agreements contained herein;
NOW, THEREFORE, in consideration of the mutual agreements herein contained,
the parties agree as follows:
1. Authorized Representative. For the purposes of this Agreement, the
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term "Authorized Representative" shall mean a director or officer of the
Corporation; a person serving at the request of the Corporation as a director,
officer, employee, fiduciary or other representative of another corporation,
partnership, joint venture, trust, employee benefit plan or other entity; and
any other person denominated by the Board of Directors of the Corporation as
entitled to the benefit of the indemnification provisions of the Corporation's
Bylaws or of an indemnification agreement similar to this Agreement.
2. Indemnification.
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(a) Indemnitee shall be indemnified and held harmless by the Corporation to
the fullest extent permitted by its Articles of Incorporation and Bylaws and the
Georgia Business Corporation Code, as the same exists or may hereafter be
amended, against all expenses, liability and loss (including attorneys' fees,
judgments, fines, and amounts paid or to be paid in any settlement approved in
advance by the Corporation, such approval not to be unreasonably withheld)
(collectively, "Indemnifiable Expenses") actually and reasonably incurred or
suffered by Indemnitee in connection with any present or future threatened,
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pending or contemplated investigation, claim, action, suit or proceeding,
whether civil, criminal, administrative or investigative (collectively,
"Indemnifiable Litigation"):
(i) to which Indemnitee is or was a party or is threatened to be made
a party by reason of any action or inaction in Indemnitee's capacity as an
Authorized Representative, or
(ii) with respect to which Indemnitee is otherwise involved by reason
of the fact that Indemnitee is or was serving as an Authorized
Representative; provided, however, that no subsequent change in the
Corporation's Articles of Incorporation or Bylaws or the Georgia Business
Corporation Code shall have the effect of limiting or eliminating the
indemnification available under this Agreement as to any act, omission or
capacity for which the Agreement provides indemnification at the time of
act, omission or capacity. If any change after the date of this Agreement
in any applicable law, statute or rule expands the power of the Company to
indemnify an Authorized Representative, such change shall be within the
purview of Indemnitee's rights and the Company's obligations under this
Agreement. If any change in any applicable law, statute or rule narrows
the right of the Company to indemnify an Authorized Representative, such
change, to the extent otherwise required by law, statute or rule to be
applied to this Agreement, shall have no effect on this Agreement or the
parties' rights and obligations hereunder. Notwithstanding the foregoing,
unless the Board of Directors consents, Indemnitee shall not be indemnified
and held harmless in any Indemnifiable Litigation (a) initiated by
Indemnitee or (b) pending on or before the date first above written.
(b) In the event of payment under this Agreement, the Corporation shall be
subrogated to the extent of such payment to all of the rights of recovery of the
Indemnitee, who shall execute all papers required and shall do everything that
may be necessary to secure such rights, including the execution of such
documents necessary to enable the Corporation effectively to bring suit to
enforce such rights.
(c) The Corporation shall not be liable under this Agreement to make any
payment in connection with any claim made against the Indemnitee;
(i) for which payment is actually made to the Indemnitee under a valid
and collectible insurance policy, except in respect of any excess beyond
the amount of payment under such insurance;
(ii) for which the Indemnitee is entitled to indemnity and/or payment
by reason of having given notice of any circumstance which might give rise
to a claim under any
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policy of insurance, the terms of which have expired prior to the effective
date of this Agreement;
(iii) for which the Indemnitee is indemnified by the Corporation
otherwise than pursuant to this Agreement;
(iv) based upon or attributable to the Indemnitee gaining in fact any
personal profit or advantage to which he was not legally entitled;
(v) for an accounting of profits made from the purchase or sale by the
Indemnitee of securities of the Corporation within the meaning of Section
16(b) of the Securities Exchange Act of 1934, as amended, or similar
provisions of any state statutory law; or
(vi) brought about or contributed to by the dishonesty of the
Indemnitee seeking payment hereunder; however, notwithstanding the
foregoing, the Indemnitee shall be protected under this Agreement as to any
claims upon which suit may be brought against him by reason of any alleged
dishonesty on his part, unless a judgment or other final adjudication
thereof adverse to Indemnitee shall establish that he committed acts of
active and deliberate dishonesty with actual dishonest purpose and intent,
which acts were material to the cause of action so adjudicated.
3. Interim Expenses. The Corporation agrees to pay Indemnifiable
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Expenses incurred by Indemnitee in connection with any Indemnifiable Litigation
in advance of the final disposition thereof, provided that the Corporation has
received an undertaking from or on behalf of Indemnitee, substantially in the
form attached hereto as Annex I, to repay the amount so advanced to the extent
that it is ultimately determined that Indemnitee is not entitled to be
indemnified by the Corporation under this Agreement or otherwise.
4. Procedure for Making Demand.
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(a) Payments of Indemnifiable Expenses and advances provided for in
Sections 2 and 3 hereof shall be made no later than forty-five (45) days after
receipt of the written request of Indemnitee, and Indemnitee shall be deemed to
have met the applicable standard of conduct required for indemnification unless
a determination is made within said 45-day period by
(i) the Corporation's Board of Directors by a majority vote of a
quorum consisting of disinterested directors who are not parties to the
Indemnification Litigation giving rise to the demand,
(ii) if such a quorum of disinterested directors is not obtainable, or
even if obtainable, a quorum of disinterested directors so directs, by
independent legal counsel in a written opinion or
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(iii) by the Corporation's stockholders, that Indemnitee has not met the
relevant standard of conduct for indemnification set forth in Section 2
hereof. Indemnitee may contest the determination that Indemnitee has not
met the relevant standard of indemnification by petitioning a court to make
an independent determination with respect to the right of indemnification,
in accordance with the terms of Section 5 hereof.
(b) If a determination of entitlement to indemnification is to be made by
independent counsel under Section 4 of this Agreement, the independent counsel
shall be selected by the Board of Directors of the Corporation, and the
Corporation shall give written notice to Indemnitee advising Indemnitee of the
identity of the independent counsel so selected. The Corporation shall pay any
and all reasonable fees and expenses of independent counsel incurred by such
independent counsel in connection with acting pursuant to this Agreement. Upon
the commencement of any contest challenging a determination that Indemnitee has
not met the relative standard of indemnification under Section 4(a) above, the
independent counsel so retained shall be discharged and relieved of any further
responsibility in such capacity, subject to the applicable standards of
professional conduct then prevailing.
5. Failure to Indemnify.
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(a) If a claim under this Agreement, or any statute, or under any provision
of the Corporation's Articles of Incorporation or Bylaws providing for
indemnification, is not paid in full by the Corporation within forty-five (45)
days after a written request for payment thereof has been received by the
Corporation, Indemnitee may, but need not, at any time thereafter bring an
action against the Corporation to recover the unpaid amount of the claim and, if
successful in whole or in part, Indemnitee also shall be entitled to be paid for
the expense (including attorneys' fees) of bringing such action.
(b) It shall be a defense to any such action (other than an action brought
to enforce a claim for expenses incurred in connection with any action, suit or
proceeding in advance of its final disposition) that Indemnitee has not met the
standards of conduct which make it permissible under applicable law for the
Corporation to indemnify Indemnitee for the amount claimed, but the burden of
proving such defense shall be on the Corporation and Indemnitee shall be
entitled to receive interim payments of interim expenses pursuant to Section 3
hereof unless and until such defense may be finally adjudicated by court order
or judgment from which no further right of appeal exists. It is the parties'
intention that if the Corporation contests Indemnitee's right to
indemnification, the question of Indemnitee's right to indemnification shall be
for the court to decide, and neither the failure of the Corporation (including
its Board of Directors, any committee of the Board of Directors, independent
legal counsel, or its stockholders) to have made a determination that
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indemnification of Indemnitee is proper in the circumstances because Indemnitee
has met the applicable standard of conduct required by applicable law, nor an
actual determination by the Corporation (including its Board of Directors, any
committee of the Board of Directors, independent legal counsel, or its
stockholders) that Indemnitee has not met such applicable standard of conduct,
shall create a presumption that Indemnitee has or has not met the applicable
standard of conduct.
6. Successors. This Agreement establishes contract rights which shall be
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binding upon, and shall inure to the benefit of, the successors, assigns, heirs
and legal representatives of the parties hereto.
7. Contract Rights Not Exclusive. The contract rights conferred by this
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Agreement shall be in addition to, but not exclusive of, any other right which
Indemnitee may have or may hereafter acquire under any statute, provision of the
Corporation's Articles of Incorporation or Bylaws, agreement, vote of
stockholders or disinterested directors, or otherwise.
8. Indemnitee's Obligations. The Indemnitee shall promptly advise the
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Corporation in writing of the institution of any investigation, claim, action,
suit or proceeding which is or may be subject to this Agreement and keep the
Corporation generally informed of, and consult with the Corporation with respect
to, the status of any such investigation, claim, action, suit or proceeding.
Notices to the Corporation shall be directed to Ruby Tuesday, Inc., 4721
Morrison Drive, P. O. Box 160266, Mobile, Alabama 36625, Attention: Secretary
(or such other address as the Corporation shall designate in writing to
Indemnitee). Notice shall be deemed received three days after the date
postmarked if sent by certified or registered mail, properly addressed. In
addition, Indemnitee shall give the Corporation such information and cooperation
as it may reasonably require and as shall be within Indemnitee's power.
9. Severability. Should any provisions of this Agreement, or any clause
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hereof, be held to be invalid, illegal or unenforceable, in whole or in part,
the remaining provisions and clauses of this Agreement shall remain fully
enforceable and binding on the parties.
10. Modification and Waiver. No supplement, modification or amendment of
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this Agreement shall be binding unless executed in writing by both of the
parties hereto. No waiver of any of the provisions of this Agreement shall be
deemed or shall constitute a waiver of any other provisions hereof (whether or
not similar) nor shall such waiver constitute a continuing waiver.
11. Choice of Law. The validity, interpretation, performance and
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enforcement of this Agreement shall be governed by the laws of the State of
Georgia.
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12. Change in Position. This Agreement shall continue in full force and
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effect, and a new agreement between the parties hereto need not be executed and
delivered,
(a) if Indemnitee is an officer or member of the Board of Directors of the
Corporation as of the date of this Agreement, as long as Indemnitee continues to
serve as an officer or member of the Board of Directors of the Corporation,
notwithstanding any change in the position(s) shown below as held by the
Indemnitee with the Corporation; or
(b) if Indemnitee is neither an officer or member of the Board of Directors
of the Corporation, as long as Indemnitee continues to serve in the position
shown below or, if more than one position is shown below, in at least one of the
positions shown below.
13. Business Combination.
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(a) The Corporation agrees that if there is a Business Combination (as
defined below) of the Corporation, then with respect to all matters thereafter
arising concerning the rights of Indemnitee to Indemnifiable Expenses under this
Agreement or any other agreement or Corporation Bylaw now or hereafter in effect
relating to Indemnifiable Litigation, the Corporation shall seek legal advice
only from special, independent counsel selected by Indemnitee and approved by
the Corporation (which approval shall not be unreasonably withheld). Such
counsel, among other things, shall render its written opinion to the Corporation
and Indemnitee as to whether and to what extent the Indemnitee would be
permitted to be indemnified under applicable law. The Corporation agrees to pay
the reasonable fees of the special, independent counsel referred to above and
to fully indemnify such counsel against any and all expenses (including
attorneys' fees), claims, liabilities and damages arising out of or relating to
this Agreement or its engagement pursuant hereto.
(b) When it appears that a particular person may be an interested
Stockholder and that the provisions of this Section 13 must be applied or
interpreted, then a majority of the total number of those directors of the
Corporation who would qualify as Continuing Directors (assuming that such
particular person is in fact an Interested Stockholder) shall have the power and
the duty to interpret all of the terms and provisions of this Section 13, and to
determine on the basis of information known to them after reasonable inquiry all
facts necessary to ascertain compliance with this Section 13, including without
limitation:
(i) whether a person is an Interested Stockholder;
(ii) the number of shares of Capital Stock or other securities
beneficially owned by such person;
(iii) whether a person is an Affiliate or Associate of another; and
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(iv) whether the assets that are the subject of any Business Combination
have, or the consideration to be received for the issuance or transfer of
securities by the Corporation or any Subsidiary in any Business Combination
has, in the aggregate a Fair Market Value equal to or in excess of 25% of
the total assets of the Corporation as shown on the balance sheet of the
Corporation contained in the most recent annual report to stockholders of
the Corporation. Any such determination shall be made in good faith and
shall be binding and conclusive on all parties.
(c) Nothing contained in this Section 13 shall be construed to relieve any
Interested Stockholder from any fiduciary obligation imposed by law.
(d) For the purposes of this Section 13, the following terms shall have the
same meanings as are ascribed to them under Article X of the Corporation's
Articles of Incorporation as in effect on the date of this Agreement:
(1) "Affiliate"
(2) "Associate"
(3) "Business Combination"
(4) "Capital Stock"
(5) "Continuing Director"
(6) "Interested Stockholder"
14. Establishment of Trust.
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(a) In the event of a Potential Business Combination (as defined below),
the Corporation shall, upon written request of Indemnitee create a trust for the
benefit of Indemnitee, and from time to time upon written request of Indemnitee,
shall fund such trust in an amount sufficient to satisfy any and all
Indemnifiable Expenses actually and reasonably incurred or suffered by
Indemnitee in connection with any Indemnifiable Litigation, and any and all
Indemnifiable Expenses reasonably anticipated or proposed to be paid by
Indemnitee at the time of each such request to be incurred in connection with
investigating, preparing for and defending any Indemnifiable Litigation. The
amount or amounts to be deposited in the trust pursuant to the foregoing funding
obligation shall be determined by Independent Counsel in any case in which the
special, independent counsel referred to above is involved. The terms of the
trust shall provide that upon a Business Combination
(i) the trust shall not be revoked or the principal thereof invaded,
without the written consent of the Indemnitee,
(ii) the trustee shall advance, within two business days of a request
by Indemnitee, any and all Indemnifiable Expenses to the Indemnitee (and
the Indemnitee hereby agrees to reimburse the trust under the circumstances
under which
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the Indemnitee would be required to reimburse the Corporation under the
Undertaking Agreement attached hereto as Annex I),
(iii) the trust shall continue to be funded by the Corporation in
accordance with the funding obligations set forth above,
(iv) the trustee shall promptly pay to the Indemnitee all amounts for
which the Indemnitee may be entitled to indemnification pursuant to this
Agreement or otherwise, and
(v) all unexpended funds in such trust shall revert to the
Corporation upon the final determination by the Independent Counsel or a
court of competent jurisdiction, as the case may be, that Indemnitee has
been fully indemnified under the terms of this Agreement with respect to
the Indemnifiable Expenses and Indemnifiable Litigation for which such
unexpended funds were deposited.
The trustee shall be chosen by the Indemnitee, and all reasonable
expenses, fees and other disbursements of the trustee in connection with
the establishment and administration of such trust shall be paid by the
Corporation. Nothing in this Section 14 shall relieve the Corporation of
any of its obligations under this Agreement.
(b) For the purposes of this Section 14,
(i) the following terms shall have the same meaning as ascribed to
them under Article X of the Corporation's Articles of Incorporation as in
effect on the date of this Agreement:
(A) "Beneficial Owner"
(B) "Continuing Director"
(C) "Voting Stock"
(D) "Business Combination"
(ii) a "Potential Business Combination" shall be deemed to have
occurred if:
(A) the Corporation enters into an agreement, the consummation of
which would result in the occurrence of a Business Combination;
(B) any person (including the Corporation) publicly announces an
intention to take or to consider taking actions which, if consummated,
would constitute a Business Combination;
(C) any person, other than a trustee or other fiduciary holding
securities under an employee benefit plan of the Corporation or a
corporation owned,
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directly or indirectly, by the stockholders of the Corporation in
substantially the same proportion as their ownership of stock of the
Corporation, who is or becomes the beneficial owner, directly or
indirectly, of securities of the Corporation representing 9.5% or more
of the combined voting power of the Corporation's then outstanding
Voting Stock, increases his beneficial ownership of such stock by five
percentage points (5%) or more over the percentage so owned by such
person; or
(D) The Board of Directors of the Corporation adopts a resolution
to the effect that, for purposes of this Agreement, a Potential
Business Combination has occurred.
(iii) "Independent Counsel" means a law firm, or a member of a law
firm, that is experienced in matters of corporation law and neither
presently is, nor in the past five years has been, retained to represent
(i) the Company or Indemnitee in any matter material to either party or
(ii) any other party to the Proceeding giving rise to a claim for
indemnification hereunder. The term "Independent Counsel" shall not
include any person who, under the applicable standards of professional
conduct then prevailing, would have a conflict of interest in representing
either the Company or Indemnitee in an action to determine Indemnitee's
rights under this Agreement.
15. Entire Agreement. This Agreement constitutes the entire, full and
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complete agreement between the Corporation and the Indemnitee concerning the
subject matter hereof and shall supersede, and makes null and void, all prior
related agreements between Morrison Restaurants Inc. (and any predecessor
corporation) and the Indemnitee.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first written above.
INDEMNITEE: RUBY TUESDAY, INC.
By By
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Name: Name: S. E. Beall, III
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Position(s) Held With The Title: Chairman of the Board and
Corporation: Chief Executive Officer
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ANNEX I
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UNDERTAKING AGREEMENT
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This Agreement is made on ___________________, 19___, between RUBY TUESDAY,
INC., a Georgia corporation (the "Corporation"), and ____________
____________________, an officer, member of the Board of Directors or other
employee or agent of the Corporation ("Indemnitee"),
WHEREAS, Indemnitee has become involved in investigations, claims, actions,
suits or proceedings which have arisen as a result of Indemnitee's service to
the Corporation; and
WHEREAS, Indemnitee believes in good faith that he is entitled to
indemnification from the Corporation; and
WHEREAS, Indemnitee desires that the Corporation pay any and all expenses
(including, but not limited to, attorneys' fees and court costs) actually and
reasonably incurred by Indemnitee or on Indemnitee's behalf in defending or
investigating any such suits or claims and that such payment be made in advance
of the final disposition of such investigations, claims, actions, suits or
proceedings to the extent that Indemnitee has not been previously reimbursed by
insurance; and
WHEREAS, the Corporation is willing to make such payments, but in
accordance with Article XII, Section 12.3 of the Bylaws of the Corporation and
Section 14-2-853 of the Georgia Business Corporation Code, the Corporation may
make such payments only if it receives an undertaking to repay from Indemnitee;
and
WHEREAS, Indemnitee is willing to give such an undertaking.
NOW, THEREFORE, in consideration of the mutual promises contained herein,
the parties hereto agree as follows:
1. Indemnitee hereby affirms that he acted in a manner he believed in
good faith to be in or not opposed to the best interests of the Corporation and,
in the case of a criminal proceeding, he had no reasonable cause to believe his
conduct was unlawful.
2. In regard to any payments made by the Corporation to Indemnitee
pursuant to the terms of the Indemnification Agreement dated
_____________________, 19___, between the Corporation and Indemnitee, Indemnitee
hereby undertakes and agrees to repay to the Corporation any and all amounts so
paid promptly and in any event within thirty (30) days after the disposition,
including any appeals, of any litigation or threatened litigation on account of
which payments were made; provided, however, that Indemnitee shall not be
required to repay the amount as to which he is determined to be entitled to be
indemnified by the Corporation under Article XII of the Bylaws of the
Corporation
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and Section 14-2-853 of the Georgia Business Corporation Code or other
applicable law.
3. This Agreement shall not affect in any manner the rights which
Indemnitee may have against the Corporation, any insurer or any other person to
seek indemnification for or reimbursement of any expenses referred to herein or
any judgment which may be rendered in any litigation or proceeding.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed on the date first above written.
INDEMNITEE RUBY TUESDAY, INC.
By By
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Name: Name: S. E. BEALL, III
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Position(s) Held With the Title: Chairman of the Board and
Corporation: Chief Executive Officer
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EXHIBIT 10.39
CHANGE OF CONTROL AGREEMENT
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AGREEMENT by and between RUBY TUESDAY, INC., a Georgia corporation (the
"Company"), and _____________________________ (the "Executive"), dated as of the
______ day of ______________, 19___.
The Board of Directors of the Company (the "Board"), has determined that it
is in the best interest of the Company and its shareholders to assure that the
Company will have the continued dedication of the Executive, notwithstanding the
possibility, threat or occurrence of a Change of Control (as defined below) of
the Company. The Board believes it is imperative to diminish the inevitable
distraction of the Executive by virtue of the personal uncertainties and risks
created by a pending or threatened Change of Control and to encourage the
Executive's full attention and dedication to the Company currently and in the
event of any threatened or pending Change of Control, and to provide the
Executive with compensation and benefits arrangements upon a Change of Control
which ensure that the compensation and benefits expectations of the Executive
will be satisfied and which are competitive with those of other corporations.
Therefore, in order to accomplish these objectives, the Board has caused the
Company to enter into this Agreement.
NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:
1. Certain Definitions.
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(a) The "Effective Date" shall mean the first date during the Change of
Control Period (as defined in Section 1(b)) on which a Change of Control (as
defined in Section 2) occurs. Anything in this Agreement to the contrary
notwithstanding, if a Change of Control occurs and if the Executive's employment
with the Company is terminated prior to the date on which the Change of Control
occurs, and if it is reasonably demonstrated by the Executive that such
termination of employment (i) was at the request of a third party who has taken
steps reasonably calculated to effect the Change of Control or (ii) otherwise
arose in connection with or in anticipation of the Change of Control, then for
all purposes of this Agreement the "Effective Date" shall mean the date
immediately prior to the date of such termination of employment.
(b) The "Change of Control Period" shall mean the period commencing on the
date hereof and ending on the third anniversary of such date; provided, however,
that commencing on the date one year after the date hereof, and on each annual
anniversary of such date (such date and each annual anniversary thereof shall be
hereinafter referred to as the "Renewal Date"), the Change of Control Period
shall be automatically extended so as to terminate three years from such Renewal
Date, unless at least sixty (60) days prior to the Renewal Date the Company
shall give notice to
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the Executive that the Change of Control Period shall not be so extended.
(c) A "Business Combination" shall mean: (i) any merger or consolidation
of the Company or any Subsidiary (as hereinafter defined) with (A) any
Interested Stockholder, or (B) any Person (whether or not itself an Interested
Stockholder) that is, or after such merger or consolidation would be, an
Affiliate or Associate of an Interested Stockholder; (ii) any sale, lease,
exchange, mortgage, pledge, transfer or other disposition (in one transaction or
a series of transactions) with any Interested Stockholder or any Affiliate or
Associate of an Interested Stockholder involving any assets or securities of the
Company, any Subsidiary or any Interested Stockholder or any Affiliate or
Associate of an Interested Stockholder, having an aggregate Fair Market Value
equal to or in excess of 25% of the total assets of the Company as shown on the
balance sheet of the Company contained in the most recent annual report to
stockholders of the Company.
(d) An "Interested Stockholder" shall mean any Person (other than the
Company, any Subsidiary, or any profit-sharing, employee stock ownership or
other employee benefit plan established by the Company, by any Subsidiary, or by
any trustee of or fiduciary with respect to any such plan when acting in such
capacity) who: (i) is the beneficial owner of Voting Stock representing 10% or
more of the votes entitled to be cast by the holders of all then outstanding
shares of Voting Stock; (ii) is an Affiliate or Associate of the company and
that at any time within the two-year period immediately prior to the date in
question was the beneficial owner of Voting Stock representing 10% or more of
the votes entitled to be cast by the holders of all then outstanding shares of
Voting Stock; or (iii) is an assignee of or has otherwise succeeded to any
shares of Capital Stock that were at any time within the two-year period
immediately prior to the date in question beneficially owned by any other
Interested Stockholder if such assignment or succession shall have occurred in
the course of a transaction or series of transactions not involving a public
offering within the meaning of the Securities Act of 1933, as amended.
(e) A "Continuing Director" is an individual who meets either of the
following sets of criteria:
(i) Is a member of the Board
(A) who was a member of the Board as of the date of this Agreement,
and
(B) who, at the time of determination of Continuing Director status,
is not an Affiliate, Associate or representative of an Interested
Stockholder; or
(ii) Is a member of the Board
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(A) who, first became a member of the Board subsequent to the date of
this Agreement, and
(B) who, at the time of determination of Continuing Director status,
is not an Affiliate, Associate, or representative of an
Interested Stockholder, and
(C) whose initial election or appointment to the Board was approved
by at least a majority of the members of the Board of Directors
who, at the time of that approval, were themselves Continuing
Directors, and
(D) who initially assumed office as a member of the Board other than
as a result of (x) an actual election contest to which Rule 14A-
11 of Regulation 14A promulgated under the Exchange Act was
applicable, (y) a threatened election contest to which Rule 14A-
11 would have been applicable, or (z) any other actual or
threatened election contest or solicitation of votes, proxies or
consents; provided, however, that this requirement (D) shall not
apply to any individual who, in connection with his or her most
recent election to the Board, was designated to be a Continuing
Director by at least a majority of the members of the Board of
Directors who, at the time of that designation, were themselves
Continuing Directors.
(f) The "Voting Stock" shall mean all Capital Stock which by its terms may
be voted on the particular matter submitted to the stockholders of the Company.
(g) An "Affiliate" and "Associate" shall have the meaning ascribed to those
terms in Rule 12(b-2) promulgated under the Exchange Act as in existence on the
date that Article X of the Company's Amended and Restated Articles of
Incorporation was approved by the stockholders of the Company.
2. Change of Control. For the purposes of this Agreement, a "Change of
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Control" shall mean:
(a) A Business Combination in which the affirmative vote of the holders of
less than 80% of the Voting Stock voting together as a single class, is cast for
the Business Combination; provided, however, that the following shall not
constitute a Change of Control: (i) either a Business Combination which shall
have been approved by 80% of the Continuing Directors or where all of the price
and procedural conditions set forth in Article X of the Company's Amended and
Restated Articles of Incorporation shall have been met, (ii) any acquisition by
the Company or any of its subsidiaries, (iii) any acquisition by any employee
benefit plan sponsored or maintained by the Company or any of its subsidiaries;
or by any trustee of or fiduciary of such plan; or
3
<PAGE>
(b) A development whereby more than 20% of the members of the Board are not
Continuing Directors.
3. Employment Period. The Company hereby agrees to continue the
-----------------
Executive in its employ, and the Executive hereby agrees to remain in the employ
of the Company, for the period commencing on the Effective Date and ending on
the third anniversary of such date (the "Employment Period").
4. Terms of Employment.
-------------------
(a) Position and Duties.
-------------------
(i) During the Employment Period, (A) the Executive's position
(including status, offices, titles, and reporting requirements), authority,
duties and responsibilities shall be at least commensurate in all material
respects with the most significant of those held, exercised and assigned at
any time during the 90-day period immediately preceding the Effective Date
and (B) the Executive's services shall be performed at the location where
the Executive was employed immediately preceding the Effective Date or any
office or location less than 35 miles from such location.
(ii) During the Employment Period, and excluding any periods of
vacation and sick leave to which the Executive is entitled, the Executive
agrees to devote reasonable attention and time during normal business hours
to the business and affairs of the Company and, to the extent necessary to
discharge the responsibilities assigned to the Executive hereunder, to use
the Executive's reasonable best efforts to perform faithfully and
efficiently such responsibilities. During the Employment Period it shall
not be a violation of this Agreement for the Executive to (A) serve on
corporate, civic or charitable boards or committees, (B) deliver lectures,
fulfill speaking engagements or teach at educational institutions, and (C)
manage personal investments, so long as such activities do not
significantly interfere with the performance of the Executive's
responsibilities as an employee of the Company in accordance with this
Agreement. It is expressly understood and agreed that to the extent that
any such activities have been conducted by the Executive prior to the
Effective Date, the continued conduct of such activities (or the conduct of
activities similar in nature and scope thereto) subsequent to the Effective
Date shall not thereafter be deemed to interfere with the performance of
the Executive's responsibilities to the Company.
(b) Compensation.
------------
(i) Base Salary. During the Employment Period, the Executive shall
-----------
receive an annual base salary, payable to the Executive in approximately
equal bi-monthly installments, at least equal to twenty-six (26) times the
4
<PAGE>
highest bi-weekly base salary paid or payable to the Executive by the
Company and its affiliated companies during the twelve-month period
immediately preceding the month in which the Effective Date occurs ("Annual
Base Salary"). During the Employment Period, the Annual Base Salary shall
be reviewed at least annually and shall be increased at any time and from
time to time as shall be substantially consistent with increases in base
salary generally awarded in the ordinary course of business to other peer
executives of the Company and its affiliated companies. Any increase in
Annual Base Salary shall not serve to limit or reduce any other obligation
to the Executive under this Agreement. Annual Base Salary shall not be
reduced after any such increase and the term Annual Base Salary as utilized
in this Agreement shall refer to Annual Base Salary as so increased. As
used in this Agreement, the term "affiliated companies" shall include any
company controlled by, controlling or under common control with, the
Company.
(ii) Annual Bonus. In addition to Annual Base Salary, the Executive
------------
shall be awarded, for each fiscal year ending during the Employment Period,
an annual bonus (the "Annual Bonus") in cash at least equal to the average
annual bonus paid or payable to the Executive by the Company and its
affiliated companies in respect of the three fiscal years (annualized for
any fiscal year consisting of less than twelve full months or with respect
to which the Executive has been employed by the Company for less than
twelve full months) during which the Executive was awarded an annual bonus
by the Company immediately preceding the fiscal year in which the Effective
Date occurs (the "Recent Average Bonus"). Each such Annual Bonus shall be
paid no later than the end of the third month of the fiscal year next
following the fiscal year for which the Annual Bonus is awarded, unless the
Executive shall elect to defer the receipt of such Annual Bonus.
(iii) Incentive, Savings and Retirement Plans. During the Employment
---------------------------------------
Period, the Executive shall be entitled to participate in all incentive,
savings and retirement plans, practices, policies and programs applicable
generally to other peer executives of the Company and its affiliated
companies, but in no event shall such plans, practices, policies and
programs provide the Executive with incentive opportunities (measured with
respect to both regular and special incentive opportunities, to the extent,
if any, that such distinction is applicable), savings opportunities and
retirement benefit opportunities, in each case, less favorable, in the
aggregate, than the most favorable of those provided by the Company and its
affiliated companies for the Executive under such plans, practices,
policies and programs as in effect at any time during the 90-day period
immediately preceding the Effective Date or if more favorable to the
Executive, those provided
5
<PAGE>
generally to other peer executives of the Company and its affiliated
companies at any time after the Effective Date.
(iv) Welfare Benefit Plans. During the Employment Period, the
---------------------
Executive and/or the Executive's family, as the case may be, shall be
eligible for participation in and shall receive all benefits under welfare
benefit plans, practices, policies, and programs provided by the Company
and its affiliated companies (including, without limitation, medical,
prescription, dental, disability, salary continuance, employee life, group
life, accidental death and travel accident insurance plans and programs) to
the extent applicable generally to other peer executives of the Company and
its affiliated companies, but in no event shall such plans, practices,
policies and programs provide the Executive with benefits which are less
favorable, in the aggregate, than the most favorable of such plans,
practices, policies and programs in effect for the Executive at any time
during the 90-day period immediately preceding the Effective Date or, if
more favorable to the Executive, those provided generally to other peer
executives of the Company and its affiliated companies at any time after
the Effective Date.
(v) Expenses. During the Employment Period, the Executive shall be
--------
entitled to receive prompt reimbursement for all reasonable expenses
incurred by the Executive in accordance with the most favorable policies,
practices and procedures of the Company and its affiliated companies in
effect for the Executive at any time during the 90-day period immediately
preceding the Effective Date or, if more favorable to the Executive, as in
effect generally with respect to other peer executives of the Company and
its affiliated companies at any time thereafter.
(vi) Fringe Benefits. During the Employment Period, the Executive
---------------
shall be entitled to fringe benefits in accordance with the most favorable
plans, practices, programs and policies of the Company and its affiliated
companies in effect for the Executive at any time during the 90-day period
immediately preceding the Effective Date or, if more favorable to the
Executive, as in effect generally with respect to other peer executives of
the Company and its affiliated companies at any time thereafter.
(vii) Office and Support Staff. During the Employment Period, the
------------------------
Executive shall be entitled to an office or offices of a size and with
furnishings and other appointments, and to secretarial and other
assistance, at least equal to the most favorable of the foregoing provided
to the Executive by the Company and its affiliated companies at any time
during the 90-day period immediately preceding the Effective Date or, if
more favorable to the Executive, as provided generally with respect to
other peer executives
6
<PAGE>
of the Company and its affiliated companies at any time thereafter.
(viii) Vacation. During the Employment Period, the Executive shall
--------
be entitled to paid vacation in accordance with the most favorable plans,
policies, programs and practices of the Company and its affiliated
companies as in effect for the Executive at any time during the 90-day
period immediately preceding the Effective Date or, if more favorable to
the Executive, as in effect generally with respect to other peer executives
of the Company and its affiliated companies at any time thereafter.
5. Termination of Employment.
-------------------------
(a) Death or Disability. The Executive's employment shall terminate
-------------------
automatically upon the Executive's death during the Employment Period. If the
Company determines in good faith that the Disability of the Executive has
occurred during the Employment Period (pursuant to the definition of Disability
set forth below), it may give to the Executive written notice in accordance with
Section 12(b) of this Agreement of its intention to terminate the Executive's
employment. In such event, the Executive's employment with the Company shall
terminate effective on the 30th day after receipt of such notice by the
Executive (the "Disability Effective Date"), provided that, within the 30 days
after such receipt, the Executive shall not have returned to full-time
performance of the Executive's duties. For purposes of this Agreement,
"Disability" shall mean the absence of the Executive from the Executive's duties
with the Company on a full-time basis for 180 consecutive business days as a
result of incapacity as defined by the Company's disability insurance policy,
due to mental or physical illness which is determined to be total and permanent
by a physician selected by the Company or its insurers and acceptable to the
Executive or the Executive's legal representatives (such agreement as to
acceptability not to be withheld unreasonably).
(b) Cause. The Company may terminate the Executive's employment during the
-----
Employment Period for Cause. For purposes of this Agreement, "Cause" shall mean
(i) repeated violations by the Executive of the Executive's obligations under
Section 4(a) of this Agreement (other than as a result of incapacity due to
physical or mental illness) which are demonstrably willful and deliberate on the
Executive's part, which are committed in bad faith or without reasonable belief
that such violations are in the best interest of the Company and which are not
remedied in a reasonable period of time after receipt of written notice from the
Company specifying such violations or (ii) the conviction of the Executive of a
felony involving moral turpitude.
(c) Good Reason; Window Period. The Executive's employment may be
--------------------------
terminated (i) during the Employment Period by the Executive for Good Reason or
(ii) during the Window Period by the Executive without any reason. For purposes
of this Agreement,
7
<PAGE>
the "Window Period" shall mean the 30-day period immediately following the first
anniversary of the Effective Date. For purposes of this Agreement, "Good
Reason" shall mean:
(i) the assignment to the Executive of any duties inconsistent in any
respect with the Executive's position (including status, offices, titles,
and reporting requirements), authority, duties or responsibilities as
contemplated by Section 4(a) of this Agreement, or any other action by the
Company which results in a diminution in such position, authority, duties
or responsibilities, excluding for this purpose an isolated, insubstantial
or inadvertent action not taken in bad faith and which is remedied by the
Company promptly after receipt of notice thereof given by the Executive;
(ii) any failure by the Company to comply with any of the provisions
of Section 4(b) of this Agreement, other than an isolated, insubstantial
and inadvertent failure not occurring in bad faith and which is remedied
by the Company promptly after receipt of notice thereof given by the
Executive;
(iii) the Company's requiring the Executive to be based at any office
or location other than that described in Section 4(a)(i)(B) hereof;
(iv) any purported termination by the Company of the Executive's
employment otherwise than as expressly permitted by this Agreement; or
(v) any failure by the Company to comply with and satisfy Section
11(c) of this Agreement, provided that such successor has received at least
ten days prior written notice from the Company or the Executive of the
requirements of Section 11(c) of this Agreement.
For purposes of this Section 5(c), any good faith determination of "Good Reason"
made by the Executive shall be conclusive.
(d) Notice of Termination. Any termination by the Company for Cause, or by
---------------------
the Executive without any reason during the Window Period or for Good Reason,
shall be communicated by Notice of Termination to the other party hereto given
in accordance with Section 12(b) of this Agreement. For purposes of this
Agreement, a "Notice of Termination" means a written notice which (i) indicates
the specific termination provision in this Agreement relied upon, (ii) to the
extent applicable, sets forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination of the Executive's employment under
the provision so indicated, and (iii) if the Date of Termination (as defined
below) is other than the date of receipt of such notice, specifies the
termination date (which date shall not be more than fifteen days after the
giving of such notice). The failure by the Executive or by the Company to set
forth in the Notice of
8
<PAGE>
Termination any fact or circumstance which contributes to a showing of Good
Reason or Cause shall not waive any right of the Executive or the Company
hereunder or preclude the Executive or the Company from asserting any fact or
circumstance in enforcing the Executive's or the Company's rights hereunder.
(e) Date of Termination. "Date of Termination" means (i) if the
-------------------
Executive's employment is terminated by the Company for Cause, or by the
Executive during the Window Period or for Good Reason, the date of receipt of
the Notice of Termination or any later date specified therein, as the case may
be, (ii) if the Executive's employment is terminated by the Company other than
for Cause or Disability, the Date of Termination shall be the date on which the
Company notifies the Executive of such termination and (iii) if the Executive's
employment is terminated by reason of death or Disability, the Date of
Termination shall be the date of death of the Executive or the Disability
Effective Date, as the case may be.
6. Obligations of the Company upon Termination.
-------------------------------------------
(a) Good Reason or during the Window Period; Other Than for Cause. Death
---------------------------------------------------------------------
or Disability. If, during the Employment Period, the Company shall terminate
- -------------
the Executive's employment other than for Cause or Disability or the Executive
shall terminate employment either for Good Reason or without any reason during
the Window Period:
(i) the Company shall pay to the Executive in a lump sum in cash
within 30 days after the Date of Termination the aggregate of the following
amounts (such aggregate shall be hereinafter referred to as the "Special
Termination Amount"):
(A) the sum of (1) the Executive's Annual Base Salary through the
Date of Termination to the extent not theretofore paid, (2) the
product of (x) the highest annual bonus paid or payable to the
Executive by the Company and its affiliated companies in respect of
the immediately preceding three fiscal years prior to the Date of
Termination during which the Executive was awarded an annual bonus
(the "Highest Annual Bonus"), and (y) a fraction, the numerator of
which is the number of days in the current fiscal year through the
Date of Termination, and the denominator of which is 365, and (3) any
compensation previously deferred by the Executive (together with any
accrued interest or earnings thereon) and any accrued vacation pay, in
each case to the extent not theretofore paid (the sum of the amounts
described in clauses (1), (2) and (3) shall be hereinafter referred to
as the "Accrued Obligations"); and
(B) the amount equal to the product of ____________ times the sum
of (x) the Executive's
9
<PAGE>
Annual Base Salary and (y) the Highest Annual Bonus; provided,
however, that such amount shall be paid in lieu of, and the Executive
hereby waives the right to receive, any other amount of severance
related to salary or bonus continuation to be received by the
Executive upon such termination of employment under any severance
plan, policy or arrangement of the Company; and
(ii) for the remainder of the Employment Period and thereafter upon
payment by the Executive and/or the Executive's spouse of the required
premiums, the Company shall continue welfare and other health benefits, to
the Executive and/or the Executives family at least equal to those which
would have been provided to them in accordance with the plans, programs,
practices and policies described in Section 4(b)(iv) of this Agreement if
the Executive's employment had not been terminated in accordance with the
most favorable plans, practices, programs or policies of the Company and
its affiliated companies applicable generally to other peer executives and
their families during the 90-day period immediately preceding the Effective
Date or, if more favorable to the Executive, as in effect generally with
respect to other peer executives of the Company and its affiliated
companies and their families at any time thereafter, provided, however,
that if the Executive becomes reemployed with another employer and is
eligible to receive medical or other welfare benefits under another
employer provided plan, the medical and welfare benefits described herein
shall be secondary to those provided under such other plan during such
applicable period of eligibility. For purposes of determining eligibility
of the Executive for retiree benefits pursuant to such plans, practices,
programs and policies, the Executive shall be considered to have remained
employed until the end of the Employment Period and to have retired on the
last day of such period; and
(iii)
(A) In calculating the Executive's pension benefits, the Company
shall give the Executive credit for that age and service which he
would have accrued had he worked until age sixty-five (65), and it
shall be assumed that his Annual Base Salary increased by six percent
(6%) each year until the Executive reached age sixty-five. If the
Executive is a participant in the Company's Executive Supplemental
Pension Plan, he may, at his sole election, retire upon his Date of
Termination and begin receiving pension benefits at or after attaining
age 55 from the Company's Executive Supplemental Pension Plan or from
the most favorable non-qualified retirement plan of a similar nature
of the Company and its affiliated companies (other than the Company's
Executive Supplemental Pension Plan) applicable generally to other
peer executives during
10
<PAGE>
the ninety-day period immediately preceding the Effective Date or, if
more favorable to such Executive, as in effect generally with respect
to other peer executives of the Company and its affiliated companies
at any time thereafter. Such pension benefits shall be an amount
equal to what the Executive would have received at age 65 under such
plans. Such pension benefits shall be paid in accordance with the
same alternative methods of payment as are available under the
Executive Supplemental Pension Plan of the Company, or, if applicable,
under the most favorable of any such other non-qualified retirement
plan other than the Company's Executive Supplemental Pension Plan.
(B) If the Executive is not then a participant in the Company's
Executive Supplemental Pension Plan, the Company shall also give such
Executive credit for that age and service which he would have accrued
had he worked until age 65, and it shall be assumed that his Annual
Base Salary increased by six percent each year until the Executive
reached age 65. The Executive may, at his sole option, retire upon
his Date of Termination and begin receiving pension benefits at or
after attaining age 55 from whatever non-qualified retirement plan in
which he is then a participant, or from the most favorable non-
qualified retirement plan of a similar nature of the Company and its
affiliated companies (other than the Company's Executive Supplemental
Pension Plan) applicable generally to other peer executive during the
90-day period immediately preceding the Effective Date or, if more
favorable to the Executive, as in effect generally with respect to
other peer executives of the Company and its affiliated companies at
any time thereafter. Such pension benefits shall be an amount equal
to what the Executive would have received at age 65 under such plans.
Such pension benefits shall be paid in accordance with the same
alternative methods of payment as are available under the most
favorable of any such non-qualified retirement plan.
(C) In no event shall the amounts, methods of payment or
commencement of any payment of any pension benefits described in (A)
and (B) above be less favorable to the Executive than the amounts,
methods of payment or commencement of payment as were available under
the terms of the Company's Executive Supplemental Pension Plan if he
was a participant therein immediately before his Date of Termination
or such other non-qualified retirement plan of a similar nature of the
Company and its affiliated companies in which he was a participant
immediately before his Date of Termination.
11
<PAGE>
(D) Notwithstanding any other provision in this Agreement to the
contrary, the Executive, upon his Date of Termination, shall
immediately receive in a lump sum cash payment all of his frozen
accrued benefit from the Company's Retirement Plan.
(iv) the Executive shall be entitled to receive all amounts from the
Company's Salary Deferral Plan and the Company's Deferred Compensation Plan
credited to the Executive under such Plans, and to receive from the Company
the present value of the additional amounts which would have accrued on
behalf of the Executive under both such Plans if he had been a participant
therein until age 65 and had continued to defer, on a pretax basis, until
age 65 that percentage of his Annual Base Salary which he had been
deferring under such Plans immediately before his Date of Termination and
if the Company had continued to make the same matching contribution to such
Plans as it had been making immediately preceding his Date of Termination,
and that the Executive's contributions and Company contributions earned a
compounded annual rate of return of eight percent (8%). Payments from both
such Plans will be at the time and the manner specified under the terms of
such Plans, and payments from the Company shall be in the form of a lump
sum cash payment within thirty days following the Executive's Date of
Termination.
(v) in the event the Executive is a member of any of the Company's
stock bonus and non-qualified stock option plans or otherwise has been
granted stock options, the Executive shall be paid, in a lump sum cash
payment, the difference between the then fair market value of such Company
stock and the option price for any unexercised options, or, at his
election, shall be entitled either to any other alternative which is
available to him under the terms of his existing options or to maintain his
options under the same terms and conditions as granted to the Executive
pursuant to such plans or otherwise.
(vi) to the extent not theretofore paid or provided, the Company shall
timely pay or provide to the Executive any other amounts or benefits
required to be paid or provided or which the Executive is eligible to
receive pursuant to this Agreement and any plan, program, policy or
practice or contract or agreement of the Company and its affiliated
companies (such other amounts and benefits shall be hereinafter referred to
as the "Other Benefits").
(b) Death. If the Executive's employment is terminated by reason of the
-----
Executive's death during the Employment Period, this Agreement shall terminate
without further obligations to the Executive's legal representatives under this
Agreement, other than for payment of Accrued Obligations and the timely payment
of provision of Other Benefits. All Accrued Obligations shall be paid to the
Executive's estate or beneficiary, as applicable, in
12
<PAGE>
a lump sum in cash within 30 days of the Date of Termination. Anything in this
Agreement to the contrary notwithstanding, the Executive's family shall be
entitled to receive benefits at least equal to the most favorable benefits
provided by the Company and any of its affiliated companies to surviving
families of peer executives of the Company and such affiliated companies under
such plans, programs, practices and policies relating to family death benefits,
if any, as in effect with respect to other peer executives and their families at
any time during the 90-day period immediately preceding the Effective Date or,
if more favorable to the Executive and/or the Executive's family, as in effect
on the date of the Executive's death with respect to other peer executives of
the Company and its affiliated companies and their families.
(c) Disability. If the Executive's agreement is terminated by reason of
----------
the Executive's Disability during the Employment Period, this Agreement shall
terminate without further obligations to the Executive, other than for payment
of Accrued Obligations and the timely payment or provision of Other Benefits.
All Accrued Obligations shall be paid to the Executive in a lump sum in cash
within 30 days of the Date of Termination. Anything in this Agreement to the
contrary notwithstanding, the Executive shall be entitled after the Disability
Effective Date to receive disability and other benefits at least equal to the
most favorable of those generally provided by the Company and its affiliated
companies to disabled executives and/or their families in accordance with such
plans, programs, practices and policies relating to disability, if any, as in
effect generally with respect to other peer executives and their families at any
time during the 90-day period immediately preceding the Effective Date or, if
more favorable to the Executive and/or the Executive's family, as in effect at
any time thereafter generally with respect to other peer executives of the
Company and its affiliated companies and their families.
(d) Cause; Other than for Good Reason. If the Executive's employment shall
---------------------------------
be terminated for Cause during the Employment Period, this Agreement shall
terminate without further obligations to the Executive other than the obligation
to pay to the Executive Annual Base Salary through the Date of Termination plus
the amount of any compensation previously deferred by the Executive, in each
case to the extent theretofore unpaid, and the timely payment or provision of
Other Benefits. If the Executive terminates employment during the Employment
Period, excluding a termination either for Good Reason or without any reason
during the Window Period, this Agreement shall terminate without further
obligations to the Executive, other than for Accrued Obligations and the timely
payment or provision of Other Benefits; in such case, all Accrued Obligations
shall be paid to the Executive in a lump sum in cash within 30 days of the Date
of Termination.
7. Non-Exclusivity of Rights. Except as provided in Sections 6(a)(i)(B)
-------------------------
and 6(a)(ii) of this Agreement, nothing in this Agreement shall prevent or limit
the Executive's continuing
13
<PAGE>
or future participation in any plan, program, policy or practice provided by the
Company or any of its affiliated companies and for which the Executive may
qualify, nor shall anything herein limit or otherwise affect such rights as the
Executive may have under any contract or agreement with the Company or any of
its affiliated companies. Amounts which are vested benefits or which the
Executive is otherwise entitled to receive under any plan, policy, practice or
program of or any contract or agreement with the Company or any of its
affiliated companies at or subsequent to the Date of Termination shall be
payable in accordance with such plan, policy, practice or program or contract or
agreement except as explicitly modified by this Agreement.
8. Full Settlement. The Company's obligation to make the payments
---------------
provided for in this Agreement and otherwise to perform its obligations
hereunder shall not be affected by any set-off, counterclaim, recoupment,
defense or other claim, right or action which the Company may have against the
Executive or others. In no event shall the Executive be obligated to seek other
employment or take any other action by way of mitigation of the amounts payable
to the Executive under any of the provisions of this Agreement and, except as
provided in Section 6(a)(ii) of this Agreement, such amounts shall not be
reduced whether or not the Executive obtains other employment. The Company
agrees to pay, to the full extent permitted by law, all legal fees and expenses
which the Executive may reasonably incur as a result of any contest (regardless
of the outcome thereof) by the Company, the Executive or others of the validity
or enforceability of, or liability under, any provisions of this Agreement or
any guarantee of performance thereof (including as a result of any contest by
the Executive about the amount of any payment pursuant to this Agreement), plus
in each case interest on any delayed payment at the applicable Federal rate
provided for in Section 7872(f)(2)(A) of the Internal Revenue Code of 1986, as
amended (the "Code").
9. Certain Additional Payments by the Company.
------------------------------------------
(a) Anything in this Agreement to the contrary notwithstanding, in the
event it shall be determined that any payment or distribution by the Company to
or for the benefit of the Executive, whether paid or payable or distributed or
distributable pursuant to the terms of this Agreement (a "Payment"), would be
subject to the excise tax imposed by Section 4999 of the Code or any successor
or other comparable federal, state or local tax law, the Company shall pay the
Executive such additional compensation as is necessary (a "Gross-Up Payment"),
after taking into account all federal, state and local income taxes payable by
the Executive as a result of the receipt of such additional compensation, to
place the Executive in the same after-tax position (including federal, state and
local taxes) he would have been in had no such excise tax or any related
interest or penalties been payable by the Executive.
14
<PAGE>
(b) Subject to the provisions of 9(c), all determinations required to be
made under this Section 9, including whether and when a Gross-Up Payment is
required and the amount of such Gross-Up Payment and the assumptions to be
utilized arriving at such determination, shall be made by __________________
(the "Accounting Firm") which shall provide detailed supporting calculations
both to the Company and the Executive within 15 business days of the receipt of
notice from the Executive that there has been a Payment, or such earlier time as
is requested by the Company. In the event that the Accounting Firm is serving
as accountant or auditor for the individual, entity or group effecting the
Change of Control, the Executive and the Company shall mutually appoint another
accounting firm to make the determinations required hereunder. All fees and
expenses of the Accounting Firm shall be borne solely by the Company. Any
Gross-Up Payment, as determined pursuant to this Section 9, shall be paid by the
Company to the Executive within five days of the receipt of the Accounting
Firm's determination. If the Accounting Firm determines that no Excise Tax is
payable by the Executive, it shall furnish the Executive with a written opinion
that failure to report the Excise Tax on the Executive's applicable federal
income tax return would not result in the imposition of a negligence or similar
penalty. Any determination of the Accounting Firm shall be binding upon the
Company and the Executive. As a result of the uncertainty in the application of
Section 4999 of the Code at the time of the initial determination by the
Accounting Firm hereunder, it is possible that the Gross-Up Payments which will
not have been made by the Company should have been made ("Underpayment"),
consistent with the calculations required to be made hereunder. In the event
that the Company exhausts its remedies pursuant to Section 9(c) and the
Executive thereafter is required to make a payment of any Excise Tax, the
Accounting Firm shall determine the amount of the Underpayment that has occurred
and any such Underpayment shall be promptly paid by the Company to and for the
benefit of the Executive.
(c) The Executive shall notify the Company in writing of any claim by the
Internal Revenue Service that, if successful, would require the payment by the
Company of the Gross-Up Payment. Such notification shall be given as soon as
practicable but no later than ten business days after the Executive is informed
in writing of such claim and shall apprise the Company of the nature of such
claim and the date on which such claim is requested to be paid. The Executive
shall not pay such claim prior to the expiration of the 30-day period following
the date on which it gives such notice to the Company (or such shorter period
ending on the date that any payment of taxes with respect to such claim is due).
If the Company notifies the Executive in writing prior to the expiration of such
period that it desires to contest such claim, the Executive shall:
(i) give the Company any information reasonably requested by the
Company relating to such claim,
15
<PAGE>
(ii) take such action in connection with contesting such claim as the
Company shall reasonably request in writing from time to time, including,
without limitation, accepting legal representation with respect to such
claim by an attorney reasonably selected by the Company,
(iii) cooperate with the Company in good faith in order effectively
to contest such claim, and
(iv) permit the Company to participate in any proceedings relating to
such claim;
provided, however, that the Company shall bear and pay directly all costs and
expenses (including additional interest and penalties) incurred in connection
with such contest and shall indemnify and hold the Executive harmless, on an
after-tax basis, for any Excise Tax or income tax (including interest and
penalties with respect thereto) imposed as a result of such representation and
payment of costs and expenses. Without limitation on the foregoing provisions
of this Section 9(c), the Company shall control all proceedings taken in
connection with such contest and, at its sole option, may pursue or forego any
and all administrative appeals, proceedings, hearings and conferences with the
taxing authority in respect of such claim and may, at its sole option, either
direct the Executive to pay the tax claimed and sue for a refund or contest the
claim in any permissible manner, and the Executive agrees to prosecute such
contest to a determination before any administrative tribunal, in a court of
initial jurisdiction and in one or more appellate courts, as the Company shall
determine; provided, however, that if the Company directs the Executive to pay
such claim and sue for a refund, the Company shall advance the amount of such
payment to the Executive, on an interest-free basis and shall indemnify and hold
the Executive harmless, on an after-tax basis, from any Excise Tax or income tax
(including any interest or penalties with respect thereto) imposed with respect
to such advance or with respect to any imputed income with respect to such
advance; and further provided that any extension of the statute of limitations
relating to payment of taxes for the taxable year of the Executive with respect
to which such contested amount is claimed to be due is limited solely to such
contested amount. Furthermore, the Company's control of the contest shall be
limited to issues with respect to which a Gross-Up Payment would be payable
hereunder and the Executive shall be entitled to settle or contest, as the case
may be, any other issue raised by the Internal Revenue Service or any other
taxing authority.
(d) If, after the receipt by the Executive of an amount advanced by the
Company pursuant to Section 9(c), the Executive becomes entitled to receive any
refund with respect to such claim, the Executive shall (subject to the Company's
complying with the requirements of Section 9(c)) promptly pay to the Company the
amount of such refund (together with any interest paid or credited thereon after
taxes applicable thereto). If,
16
<PAGE>
after the receipt by the Executive of an amount advanced by the Company pursuant
to Section 9(c), a determination is made that the Executive shall not be
entitled to any refund with respect to such claim and the Company does not
notify the Executive in writing of its intent to contest such denial of refund
prior to the expiration of 30 days after such determination, then such advance
shall be forgiven and shall not be required to be repaid and the amount of such
advance shall offset, to the extent thereof, the amount of the Gross-Up Payment
required to be paid.
10. Confidential Information. The Executive shall hold in a fiduciary
------------------------
capacity for the benefit of the Company all secret or confidential information,
knowledge or data relating to the Company or any of its affiliated companies,
and their respective businesses, which shall have been obtained by the Executive
during the Executive's employment by the Company or any of its affiliated
companies and which shall not be or become public knowledge (other than by acts
by the Executive or representatives of the Executive in violation of this
Agreement). After termination of the Executive's employment with the Company,
the Executive shall not, without the prior written consent of the Company or as
may otherwise be required by law or legal process, communicate or divulge any
such information, knowledge or data to anyone other than the Company and those
designated by it. In no event shall an asserted violation of the provisions of
this Section 10 constitute a basis for deferring or withholding any amounts
otherwise payable to the Executive under this Agreement.
11. Successors.
----------
(a) This Agreement is personal to the Executive and without the prior
written consent of the Company shall not be assignable by the Executive
otherwise than by will or the laws of descent and distribution. This Agreement
shall inure to the benefit of and be enforceable by the Executive's legal
representative.
(b) This Agreement shall inure to the benefit of and be binding upon the
Company and its successors and assigns.
(c) The Company will require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all of the
business and/or assets of the Company to assume expressly and agree to perform
this Agreement in the same manner and to the same extent that the Company would
be required to perform it if no such succession had taken place. As used in
this Agreement, "Company" shall mean the Company as hereinbefore defined and any
successor to its business and/or assets as aforesaid which assumes or agrees to
perform this Agreement by operation of law, or otherwise.
12. Entire Agreement. This Agreement constitutes the entire, full and
----------------
complete agreement between the Company and the Executive concerning the subject
matter hereof and shall supersede, and makes null and void, all prior related
agreements
17
<PAGE>
between Morrison Restaurants Inc. (and any predecessor corporation) and the
Executive.
13. Miscellaneous.
-------------
(a) This Agreement shall be governed by and construed in accordance with
the laws of the State of Georgia without reference to principles of conflict of
laws. The captions of this Agreement are not part of the provisions hereof and
shall have no force or effect. This Agreement may not be amended or modified
otherwise than by a written agreement executed by the parties hereto or their
respective successors and legal representatives.
(b) All notices and other communications hereunder shall be in writing and
shall be given by hand delivery to the other party or by registered or certified
mail, return receipt requested, postage prepaid, addressed as follows:
If to the Executive:
-------------------
At the home address reflected in
the Company's personnel records.
If to the Company:
-----------------
Ruby Tuesday, Inc.
4721 Morrison Drive
Post Office Box 160266
Mobile, Alabama 36625
Attention: President
or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notice and communications shall be effective
when actually received by the addressee.
(c) The invalidity and unenforceability of any provision of this Agreement
shall not affect the validity or enforceability of any other provision of this
Agreement.
(d) The Company may withhold from any amounts payable under this Agreement
such federal, state or local taxes as shall be required to be withheld pursuant
to any applicable law or regulation.
(e) The Executive's or the Company's failure to insist upon strict
compliance with any provision hereof or any other provision of this Agreement or
the failure to assert any right the Executive or the Company may have hereunder,
including, without limitation, the right of the Executive to terminate
employment for Good Reason pursuant to Section 5(c)(i)-(v) of this Agreement,
shall not be deemed to be a waiver of such provision or right or any other
provision or right of this Agreement.
18
<PAGE>
(f) The Executive and the Company acknowledge that, except as may otherwise
be provided under any other written agreement between the Executive and the
Company, the employment of the Executive by the Company is "at will" and, prior
to the Effective Date, may be terminated by either the Executive or the Company
at any time. Moreover, if prior to the Effective Date the Executive's
employment with the Company terminates, then the Executive shall have no further
rights under this Agreement.
IN WITNESS WHEREOF, the Executive has hereunto set the Executive's hand
and, pursuant to the authorization from its Board of Directors, the Company has
caused these presents to be executed in its name on its behalf, all as of the
day and year first above written.
----------------------------------a
[Executive]
RUBY TUESDAY, INC.
By:
-------------------------------
19
<PAGE>
EXHIBIT 10.40
================================================================================
CREDIT AGREEMENT
dated as of March 6, 1996
among
RUBY TUESDAY (GEORGIA), INC.,
THE LENDERS LISTED HEREIN,
and
SUNTRUST BANK, ATLANTA,
as Agent and
as Administrative Agent
================================================================================
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE I. DEFINITIONS; CONSTRUCTION............................ 2
Section 1.01. Definitions.......................................... 2
Section 1.02. Accounting Terms and Determination................... 18
Section 1.03. Other Definitional Terms............................. 18
Section 1.04. Exhibits and Schedules............................... 18
ARTICLE II. REVOLVING LOANS AND MONEY MARKET LOANS............... 18
Section 2.01. Revolving Loan Commitments; Use of
Proceeds........................................... 18
Section 2.02. Notes; Repayment of Principal........................ 20
Section 2.03. Voluntary Reduction of Commitments................... 20
Section 2.04. Money Market Loans................................... 20
ARTICLE III. TERM LOANS........................................... 23
Section 3.01. Amount of Term Loans; Use of Proceeds................ 23
Section 3.02. Notes; Repayment of Principal........................ 24
ARTICLE IV. GENERAL LOAN TERMS................................... 24
Section 4.01. Funding Notices...................................... 24
Section 4.02. Disbursement of Funds................................ 26
Section 4.03. Interest............................................. 27
Section 4.04. Interest Periods..................................... 29
Section 4.05. Fees................................................. 29
Section 4.06. Voluntary Prepayments of Borrowings.................. 30
Section 4.07. Payments, etc........................................ 31
Section 4.08. Interest Rate Not Ascertainable, etc................. 33
Section 4.09. Illegality........................................... 34
Section 4.10. Increased Costs...................................... 34
Section 4.11. Lending Offices...................................... 36
Section 4.12. Funding Losses....................................... 37
Section 4.13. Assumptions Concerning Funding of Euro-
dollar Advances.................................... 37
-i-
<PAGE>
Section 4.14. Apportionment of Payments; Deemed
Utilization of Revolving Loan
Commitments by Money Market Loans.................. 37
Section 4.15. Sharing of Payments, Etc............................. 38
Section 4.16. Capital Adequacy..................................... 39
ARTICLE V. CONDITIONS TO BORROWINGS............................. 39
Section 5.01. Conditions Precedent to Initial Loans................ 39
Section 5.02. Conditions to Each Loan.............................. 42
ARTICLE VI. REPRESENTATIONS AND WARRANTIES....................... 43
Section 6.01. Corporate Existence; Compliance
with Law........................................... 43
Section 6.02. Corporate Power; Authorization....................... 43
Section 6.03. Enforceable Obligations.............................. 43
Section 6.04. No Legal Bar......................................... 44
Section 6.05. No Material Litigation............................... 44
Section 6.06. Investment Company Act, Etc.......................... 44
Section 6.07. Margin Regulations................................... 44
Section 6.08. Compliance with Environmental Laws................... 44
Section 6.09. Insurance............................................ 45
Section 6.10. No Default........................................... 46
Section 6.11. No Burdensome Restrictions........................... 46
Section 6.12. Taxes................................................ 46
Section 6.13. Subsidiaries......................................... 46
Section 6.14. Financial Statements................................. 46
Section 6.15. ERISA................................................ 47
Section 6.16. Patents, Trademarks, Licenses, Etc................... 49
Section 6.17. Ownership of Property................................ 49
Section 6.18. Indebtedness......................................... 49
Section 6.19. Financial Condition.................................. 50
Section 6.20. Labor Matters........................................ 50
Section 6.21. Payment or Dividend Restrictions..................... 51
Section 6.22. Transaction.......................................... 51
Section 6.23. Sharing Agreements................................... 51
Section 6.24. Disclosure........................................... 51
ARTICLE VII. AFFIRMATIVE COVENANTS................................ 51
Section 7.01. Corporate Existence, Etc............................. 51
Section 7.02. Compliance with Laws, Etc............................ 52
Section 7.03. Payment of Taxes and Claims, Etc..................... 52
Section 7.04. Keeping of Books..................................... 52
Section 7.05. Visitation, Inspection, Etc.......................... 52
Section 7.06. Insurance; Maintenance of Properties................. 52
-ii-
<PAGE>
Section 7.07. Reporting Covenants.................................. 53
Section 7.08. Financial Covenants.................................. 57
Section 7.09. Notices Under Certain Other Indebtedness............. 58
Section 7.10. Additional Credit Parties and Collateral............. 58
ARTICLE VIII. NEGATIVE COVENANTS................................... 58
Section 8.01. Indebtedness......................................... 58
Section 8.02. Liens................................................ 59
Section 8.03. Mergers, Sales, Etc.................................. 61
Section 8.04. Investments, Loans, Etc.............................. 61
Section 8.05 Letters of Credit.................................... 63
Section 8.06. Sale and Leaseback Transactions...................... 63
Section 8.07. Transactions with Affiliates......................... 63
Section 8.08. Changes in Business.................................. 64
Section 8.09. ERISA................................................ 64
Section 8.10. Limitation on Payment Restrictions
Affecting Consolidated Companies................... 64
Section 8.11. Actions Under Certain Documents...................... 64
Section 8.12. Changes in Fiscal Year............................... 65
Section 8.13. Issuance of Stock by Subsidiaries.................... 65
ARTICLE IX. EVENTS OF DEFAULT.................................... 65
Section 9.01. Payments............................................. 65
Section 9.02. Covenants Without Notice............................. 65
Section 9.03. Other Covenants...................................... 65
Section 9.04. Representations...................................... 65
Section 9.05. Non-Payments of Other Indebtedness................... 66
Section 9.06. Defaults Under Other Agreements;
Change in Control Provisions....................... 66
Section 9.07. Bankruptcy........................................... 66
Section 9.08. ERISA................................................ 67
Section 9.09. Judgments............................................ 67
Section 9.10. Ownership of Credit Parties.......................... 68
Section 9.11. Change in Control of Borrower........................ 68
Section 9.12. Default Under Other Credit
Documents; Sharing Agreements...................... 68
ARTICLE X. THE AGENT AND THE ADMINISTRATIVE AGENT............... 69
Section 10.01 Appointment of Agent................................. 69
Section 10.02 Authorization of Agent with Respect
to the Security Documents.......................... 69
Section 10.03 Nature of Duties of Agent............................ 70
Section 10.04 Lack of Reliance on the Agent........................ 70
Section 10.05 Certain Rights of the Agent.......................... 71
Section 10.06 Reliance by Agent.................................... 71
-iii-
<PAGE>
Section 10.07. Indemnification of Agent............................ 71
Section 10.08. The Agent in its Individual
Capacity.......................................... 72
Section 10.09. Holders of Notes.................................... 72
Section 10.10. Successor Agent..................................... 72
Section 10.11. Replacement of Administrative Agent
with the Borrower................................. 73
ARTICLE XI. MISCELLANEOUS....................................... 73
Section 11.01. Notices............................................. 73
Section 11.02. Amendments, Etc..................................... 74
Section 11.03. No Waiver; Remedies Cumulative...................... 74
Section 11.04. Payment of Expenses, Etc............................ 75
Section 11.05. Right of Setoff..................................... 76
Section 11.06. Benefit of Agreement; Assignments;
Participations.................................... 77
Section 11.07. Governing Law; Submission to
Jurisdiction...................................... 80
Section 11.08. Independent Nature of Lenders' Rights............... 81
Section 11.09. Counterparts........................................ 81
Section 11.10. Effectiveness; Termination of
Commitments; Survival............................. 81
Section 11.11. Severability........................................ 81
Section 11.12. Independence of Covenants........................... 82
Section 11.13. Change in Accounting Principles,
Fiscal Year or Tax Laws........................... 82
Section 11.14. Headings Descriptive; Entire Agreement.............. 82
SCHEDULES
---------
Schedule 1.01 Commitments
Schedule 6.01 Organization and Ownership of
Subsidiaries
Schedule 6.05 Certain Pending and Threatened
Litigation
Schedule 6.08(a) Environmental Compliance
Schedule 6.08(b) Environmental Notices
Schedule 6.08(c) Environmental Permits
Schedule 6.10 No Defaults
Schedule 6.11 Burdensome Restrictions
Schedule 6.12 Tax Filings and Payments
Schedule 6.13 Material Subsidiaries
Schedule 6.15 Employee Benefit Matters
Schedule 6.16 Patent, Trademark, License, and
Other Intellectual Property
Matters
Schedule 6.17 Ownership of Properties
-iv-
<PAGE>
Schedule 6.20 Labor and Employment Matters
Schedule 6.21 Dividend Restrictions
Schedule 8.01 Existing Indebtedness
Schedule 8.02 Existing Liens
EXHIBITS
--------
Exhibit A - Form of Revolving Credit Note
Exhibit B - Form of Term Note
Exhibit C - Form of Money Market Note
Exhibit D - Form of Guaranty Agreement
Exhibit E - Form of Money Market Bid Request
Exhibit F - Form of Invitation to Bid
Exhibit G - Form of Money Market Bid
Exhibit H - Form of Money Market Bid Accept/Reject
Letter
Exhibit I - Form of Closing Certificate
Exhibit J-1 - Form of Opinion of Corporate Counsel
Exhibit J-2 - Form of Opinion of Powell, Goldstein,
Frazer & Murphy
Exhibit K - Form of Assignment and Acceptance
-v-
<PAGE>
CREDIT AGREEMENT
----------------
THIS CREDIT AGREEMENT made and entered into as of March 6, 1996, by
and among RUBY TUESDAY (GEORGIA), INC., a Georgia corporation, to be known
following the Effective Date (as such term is defined below) as Ruby Tuesday,
Inc. (the "Borrower"), SUNTRUST BANK, ATLANTA, a banking corporation organized
--------
under the laws of the State of Georgia ("SunTrust"), the other banks and lending
--------
institutions listed on the signature pages hereof, and any assignees of SunTrust
or such other banks and lending institutions which become "Lenders" as provided
herein (SunTrust, and such other banks, lending institutions, and assignees
referred to collectively herein as the "Lenders"), SUNTRUST BANK, ATLANTA, in
-------
its capacity as agent for the Lenders and each successor agent for such Lenders
as may be appointed from time to time pursuant to Article X hereof (the
"Agent") and SUNTRUST BANK, ATLANTA in its capacity as administrative agent for
-----
the Lenders and each successor administrative agent for such Lenders as may be
appointed from time to time pursuant to Article X hereof (the "Administrative
--------------
Agent");
- -----
W I T N E S S E T H:
--------------------
WHEREAS, Morrison Restaurants Inc., a Delaware corporation
("Morrison") has proposed, with shareholder approval, to divide Morrison into
--------
three separate businesses: (i) casual dining; (ii) family dining; and (iii)
health care food and nutrition services;
WHEREAS, in order to accomplish this division, Morrison proposes to
distribute to its shareholders all of the shares of the common stock of Morrison
Fresh Cooking, Inc. ("MFCI"), a wholly-owned subsidiary of Morrison, and all of
----
the shares of Morrison Health Care, Inc. ("MHCI"), also a wholly-owned
----
subsidiary of Morrison (collectively, the "Distribution");
------------
WHEREAS, in connection with the Distribution, Morrison proposes to
reincorporate in Georgia by merging into Ruby Tuesday (Georgia), Inc. (the
"Merger") and simultaneously therewith, to effect a one-for-two reverse stock
- -------
split (the "Reverse Stock Split");
-------------------
WHEREAS, immediately thereafter, Ruby Tuesday, Inc. (a current
Subsidiary of Morrison) will merge into Ruby Tuesday (Georgia), Inc. and Ruby
Tuesday (Georgia), Inc. will change its name to Ruby Tuesday, Inc.;
<PAGE>
WHEREAS, upon the consummation of the Distribution, the Merger and the
Reverse Stock Split (collectively, the "Transaction") on March 9, 1996 (the
-----------
"Transaction Date"), Morrison will be divided into three publicly-owned
- -----------------
companies: (i) MFCI, which will continue the cafeteria business of Morrison,
(ii) MHCI, which will continue the health care food and nutrition services
business of Morrison, and (iii) the Borrower, which will continue the casual
dining business of Morrison;
WHEREAS, in connection with the Transaction, the outstanding credit
facilities of Morrison will be repaid and terminated and the Borrower wishes to
establish a credit facility upon the terms set forth herein;
WHEREAS, at the request of the Borrower, the Lenders have agreed,
effective as of the Effective Date (as such term is defined below), to provide
certain credit facilities to the Borrower on the terms and subject to the
conditions set forth herein;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, Borrower, the Lenders and the Agent agree, upon the
terms and subject to the conditions set forth herein as follows:
ARTICLE I.
DEFINITIONS; CONSTRUCTION
-------------------------
Section 1.01. 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):
"Adjusted LIBO Rate" shall mean, with respect to each Interest Period
------------------
for a Eurodollar Advance, the rate per annum (rounded upwards, if necessary, to
the nearest 1/100 of 1%) determined pursuant to the following formula:
Adjusted LIBO Rate = LIBOR
------------------------------
1.00 - LIBOR Reserve Percentage
As used herein, LIBOR Reserve Percentage shall mean, for any Interest Period for
a Eurodollar Advance, the reserve percentage (expressed as a decimal) equal to
the then stated maximum rate 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
-2-
<PAGE>
against any successor category of liabilities as defined in Regulation D).
"Administrative Agent" shall mean SunTrust, a Georgia banking
--------------------
corporation, and any successor administrative agent appointed pursuant to
Section 10.10 hereof or, at the election of the Borrower exercised in accordance
with Section 10.11 hereof, the Borrower.
"Advance" shall mean any principal amount advanced and remaining
-------
outstanding at any time as (i) the Revolving Loans, which Advances shall be made
or outstanding as Base Rate Advances or Eurodollar Advances, as the case may be,
(ii) a Money Market Loan, which Advances shall be made or outstanding as Money
Market Rate Advances, or (iii) the Term Loans, which Advances shall be made or
outstanding as Base Rate Advances or Eurodollar Advances, as the case may be.
"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.
"Agent" shall mean SunTrust, a Georgia banking corporation, and any
-----
successor agent appointed pursuant to Section 10.10 hereto.
"Agreement" shall mean this Credit Agreement, as hereafter amended,
---------
restated, supplemented or otherwise modified from time to time.
"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 K.
---------
"Bankruptcy Code" shall mean The Bankruptcy Code of 1978, as amended
---------------
and in effect from time to time (11 U.S.C. (S)101 et seq.).
-- ---
"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 Agent publicly announces from time to time as its
prime lending rate, as in effect from time to time, and (ii) the Federal Funds
Rate, as in
-3-
<PAGE>
effect from time to time, plus one-half of one percent (0.50%) per annum. The
----
Agent's prime lending rate is a reference rate and does not necessarily
represent the lowest or best rate actually charged to customers; the Agent may
make commercial loans or other loans at rates of interest at, above or below the
Agent's prime lending rate.
"Base Rate Advance" shall mean an Advance made or outstanding as a
-----------------
Revolving Loan or a Term Loan, bearing interest based on the Base Rate.
"Base Rate Borrowing" shall mean a Borrowing made up of Base Rate
-------------------
Advances.
"Borrower" shall mean Ruby Tuesday, (Georgia) Inc., a Georgia
--------
corporation, to be known as of the Effective Date as Ruby Tuesday, Inc. and 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 Atlanta, Georgia
and, if the applicable Business Day relates to Eurodollar Advances, any day on
- ---
which trading is not carried on by and between banks in deposits of the
applicable currency in the applicable interbank Eurocurrency market.
"Capital Lease" shall mean, as applied to any Person, any lease of any
-------------
property (whether real, personal or mixed) 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, other than, in the case of
Borrower or any of its Subsidiaries, any such lease under which Borrower or a
wholly-owned Subsidiary of Borrower is the lessor.
"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 bal ance sheet of such lessee in respect of
such Capital Lease.
"Change in Control Provision" shall mean any term or provision
---------------------------
contained in any indenture, debenture, note, or other agreement or document
evidencing or governing Indebtedness of Borrower evidencing debt or a commitment
to extend loans in excess of
-4-
<PAGE>
$2,000,000 which requires, or permits the holder(s) of such Indebtedness of
Borrower to require that such Indebtedness of Borrower be redeemed, repurchased,
defeased, prepaid or repaid, either in whole or in part, or the maturity of such
Indebtedness of Borrower to be accelerated in any respect, as a result of a
change in ownership of the capital stock of Borrower or voting rights with
respect thereto.
"Closing Date" shall mean March 6, 1996.
------------
"Commitment" shall mean, for any Lender at any time, the sum of its
----------
Revolving Loan Commitment and its Term Loan Commitment.
"Commitment Fee" shall have the meaning ascribed to it in Section
--------------
4.05(a).
"Consolidated Companies" shall mean, collectively, Borrower and all of
----------------------
its Subsidiaries.
"Consolidated Funded Debt" shall mean, as of any date of
------------------------
determination, the Funded Debt of the Consolidated Companies.
"Consolidated Interest Expense" shall mean, for any period, total
-----------------------------
interest expense of the Consolidated Companies (including without limitation,
interest expense attributable to Capital Leases, all capitalized interest, all
commissions, discounts and other fees and charges owed with respect to bankers
acceptance financing, net costs (i.e., costs minus benefits) under Interest Rate
----
Contracts, and total interest expense (whether shown as interest expense or as
loss and expenses on sales of receivables) under a receivables purchase
facility) determined on a consolidated basis in accordance with GAAP.
"Consolidated Net Income (Loss)" shall mean, with reference to any
------------------------------
period, the net income (or deficit) of the Consolidated Companies for such
period (taken as a cumulative whole), after deducting all operating expenses,
provisions for all taxes and reserves (including reserves for deferred income
taxes) and all other proper deductions, all determined in accordance with GAAP
on a consolidated basis, after eliminating all intercompany transactions and
after deducting portions of income properly attributable to minority interests,
if any, in the stock and surplus of the Subsidiaries of the Borrower.
"Consolidated Net Worth" shall mean the shareholders' equity of the
----------------------
Borrower calculated in accordance with GAAP, less treasury stock.
-5-
<PAGE>
"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 Guaranty Agreement and all other instruments, documents,
certificates, agreements and writings executed in connection herewith.
"Credit Parties" shall mean, collectively, each of the Borrower and
--------------
the Guarantors.
"Default" shall mean any condition or event which, with notice or
-------
lapse of time or both, would constitute an Event of Default.
"Dollar" and "U.S. Dollar" and the sign "$" shall mean lawful money of
------ ----------- -
the United States of America.
"EBITR" shall mean for any period, the Consolidated Net Income (Loss)
-----
of the Consolidated Companies, plus, to the extent deducted therefrom in
----
determining Consolidated Net Income (Loss), the sum of (i) Consolidated Interest
Expense, (ii) provision for income taxes (whether paid or deferred), (iii)
Rental Obligations for such period, and (iv) Restructuring Charges, and without
giving effect to any extraordinary gains or losses, any other non-cash charges
or gains or losses from sales of assets other than inventory sold in the
ordinary course of business.
"Effective Date" shall mean the first Business Day following the
--------------
Transaction Date or such later date on which the conditions to the initial Loans
set forth in Section 5.01 and 5.02 are satisfied.
"Eligible Assignee" shall mean (i) a commercial bank organized under
-----------------
the laws of the United States or any state thereof having total assets in excess
of $1,000,000,000.00 or any com mercial finance or asset-based lending Affiliate
of any such commercial bank and (ii) 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
-6-
<PAGE>
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 air, 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 (a) the Clean Air Act (42 U.S.C. (S) 7401 et seq.),
-- ---
(b) the Clean Water Act (33 U.S.C. (S) 1251 et seq.), (c) the Resource
-- ---
Conservation and Recovery Act (42 U.S.C. (S) 6901 et seq.), (d) the Toxic
-- ---
Substances Control Act (15 U.S.C. (S) 2601 et seq.), (e) the Comprehensive
-- ---
Environmental Response Compensation and Liability Act, as amended by the
Superfund Amendments and Reauthorization Act (42 U.S.C. (S) 9601 et seq.), and
-- ---
(f) all applicable national and local laws or regulations with respect to
environmental control.
"ERISA" shall mean the Employee Retirement Income Security Act of
-----
1974, as amended and in effect from time to time.
"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.
"Eurodollar Advance" shall mean an Advance made or outstanding as a
------------------
Revolving Loan or a Term Loan, bearing interest based on the Adjusted LIBO Rate.
"Eurodollar Borrowing" shall mean a Borrowing made up of Eurodollar
--------------------
Advances.
"Event of Default" shall have the meaning provided in Article IX.
----------------
"Executive Officer" shall mean with respect to any Person, the
-----------------
President, Vice Presidents, Chief Financial Officer, Treasurer, Secretary and
any Person holding comparable offices or duties.
"Facility" or "Facilities" shall mean the Revolving Loan Commitments,
-------- ----------
the Term Loans or the Money Market Loan option, as the context may indicate.
-7-
<PAGE>
"Federal Funds Rate" shall mean for any period, a fluctuating interest
------------------
rate per annum equal for each day during such period 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 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 Agent from three Federal funds brokers of
recognized standing selected by the Agent.
"Fiscal Year" shall mean any period of 52 (or, if applicable 53)
-----------
consecutive weeks ending on the first Saturday occurring after May 30 of any
year; references to a Fiscal Year with a number corresponding to any calendar
year (e.g., "Fiscal Year 1996") refer to the Fiscal Year ending on the first
Saturday occurring after May 30 of that year.
"Fiscal Year End" shall mean the last day of any Fiscal Year.
---------------
"Fixed Charge Coverage Ratio" shall mean, for any period, the ratio of
---------------------------
(i) EBITR to (ii) Fixed Charges for such period.
"Fixed Charges" shall mean, with reference to any period, determined
-------------
in accordance with GAAP on a consolidated basis, the sum of the following for
the Consolidated Companies, after eliminating all intercompany items:
(a) Consolidated Interest Expense for such period; and
(b) all Rental Obligations payable as lessee under any operating lease
properly charged or chargeable to income during such period in
accordance with GAAP;
provided that any interest charges or rentals paid or accrued by any Person
- --------
acquired by the Borrower or any of its Subsidiaries during such period, through
purchase, merger, consolidation or otherwise, shall be included in "Fixed
Charges" only to the extent that the earnings of such Person are taken into
account in determining EBITR for such period.
"Funded Debt" shall mean, as applied to any Person, all Indebtedness
-----------
of such Person which by its terms or by the terms of any instrument or agreement
relating thereto matures, or which is otherwise payable or unpaid, one year or
more from, or is directly or indirectly renewable or extendable at the option of
the debtor
-8-
<PAGE>
to a date one year or more (including an option of the debtor under
a revolving credit or similar agreement obligating the lender or lenders to
extend credit over a period of one year or more) from, the date of the creation
thereof, provided that Funded Debt shall include, as at any date of
-------- ----
determination, any portion of such Indebtedness outstanding on such date which
matures on demand or within one year from such date (whether by sinking fund,
other required prepayment, or final payment at maturity) and shall also include
all Indebtedness of such Person for borrowed money under a line of credit,
guidance line, revolving credit, bankers acceptance facility or similar
arrangement for borrowed money, including, without limitation, all unpaid
drawings under letters of credit and unreimbursed amounts pursuant to letter of
credit reimbursement agreements, regardless of the maturity date thereof. In
addition, there shall also be included in Funded Debt the present value of all
minimum lease commitments to make payments with respect to operating leases of
such Person, determined based upon a discount rate of 10% in accordance with
discounted present value analytical methodology.
"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, if no such
statements are promulgated, then such other statements by such other entity as
may be approved by a significant segment of the accounting profession, which are
applicable to the circum stances as of the date of determination.
"Guarantors" shall mean, (i) Tias, Inc., a Texas corporation and (ii)
----------
all other Material Subsidiaries of the Borrower, and their respective successors
and permitted assigns.
"Guaranty" shall mean any contractual obligation, contingent or
--------
otherwise (other than letters of credit), 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
-9-
<PAGE>
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.
"Guaranty Agreement" shall mean the Guaranty Agreement executed by
------------------
each of the Material Subsidiaries of the Borrower in favor of the Lenders and
the Agent, substantially in the form of Exhibit D as the same may be amended,
---------
restated or supplemented from time to time.
"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.
"Hostile Acquisition" shall mean any Investment resulting in control
-------------------
of a Person involving a tender offer or proxy contest that has not been
recommended or approved by the board of directors of the Person that is the
subject of the Investment prior to the first public announcement or disclosure
relating to such Investment.
"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; (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, 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 except to the extent that such obligations (x) have been defeased
in accordance with the terms of the applicable instruments governing such
obligations and (y) the accounts or other assets dedicated to such defeasance
are not included as assets on the balance sheet of such Person.
"Interest Period" shall mean (i) as to any Eurodollar Advances, the
---------------
interest period selected by the Borrower pursuant to Section 4.04(a) hereof, and
(ii) as to any Money Market Rate Advances, the interest period requested by the
Borrower and agreed
-10-
<PAGE>
to by the participating Lenders pursuant to Section 4.04(b) 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.
"Investment" shall mean, when used with respect to any Person, any
----------
direct or indirect advance, loan or other extension of credit (other than the
creation of receivables in the ordinary course of business) or capital
contribution by such Person (by means of transfers of property to others or
payments for property or services for the account or use of others, or
otherwise) to any Person, or any direct or indirect purchase or other
acquisition by such Person of, or of a beneficial interest in, capital stock,
partnership interests, bonds, notes, debentures or other securities issued by
any other Person.
"Lender" or "Lenders" shall mean SunTrust, the other banks and lending
------ -------
institutions listed on the signature pages hereof, and each assignee thereof, if
any, pursuant to Section 11.06(c).
"Lending Office" shall mean for each Lender, the office such Lender
--------------
may designate in writing from time to time to Borrower and the Agent with
respect to each Type of Loan.
"LIBOR" 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 and in an amount comparable to the Agent's
portion of such Advances, appearing on the Reuters Screen LIBO Page as of 11:00
A.M. (London, England time) on the day that is two London Business Days prior to
the first day of the Interest Period. If two or more of such rates appear on
the Reuters Screen LIBO Page, the rate for that Interest Period shall be the
arithmetic mean of such rates. If the foregoing rate is unavailable from the
Reuters Screen for any reason, then such rate shall be determined by the Agent
from Telerate Page 3750 or, if such rate is also unavailable on such service,
then on any other interest rate reporting service of recognized standing
designated in writing by the Agent to Borrower and the other Lenders; in any
such case rounded, if necessary, to the next higher 1/16 of 1.0%, if the rate is
not such a multiple.
-11-
<PAGE>
"Lien" shall mean any mortgage, pledge, security interest, lien,
----
charge, hypothecation, assignment, deposit arrangement, title retention,
preferential property right, trust or other ar rangement having the practical
effect of the foregoing and shall include the interest of a vendor or lessor
under any conditional sale agreement, capitalized lease or other title retention
agreement.
"Loans" shall mean, collectively, the Revolving Loans, the Term Loans
-----
and the Money Market 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.
"Material Subsidiary" shall mean (i) each Credit Party other than the
-------------------
Borrower, and (ii) each other Subsidiary of the Borrower, now existing or
hereafter established or acquired, that at any time prior to the Maturity Date,
has or acquires total assets in excess of $5,000,000, or that accounted for or
produced more than 5% of the Consolidated Net Income (Loss) of the Borrower on a
consolidated basis during any of the three most recently completed Fiscal Years
of the Borrower, or that is otherwise material to the operations or business of
the Borrower or another Material Subsidiary.
"Materially Adverse Effect" shall mean any materially adverse change
-------------------------
in (i) the business, results of operations, financial condition, assets or
prospects 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 other Credit Parties (taken as a whole) to perform their respective
obligations under the Credit Documents.
"Maturity Date" shall mean the earlier of (i) March 11, 2001, and (ii)
-------------
the date on which all amounts outstanding under this Agreement have been
declared or have automatically be come due and payable pursuant to the
provisions of Article IX.
"Moody's" shall mean Moody's Investors Service, Inc.
-------
"Money Market Bid" shall mean an offer by a Lender to make a Money
----------------
Market Loan pursuant to Section 2.04.
"Money Market Bid Accept/Reject Letter" shall mean a notification made
-------------------------------------
by the Borrower pursuant to Section 2.04 substantially in the form of Exhibit H.
---------
-12-
<PAGE>
"Money Market Bid Request" shall mean a request made pursuant to
------------------------
Section 2.04 substantially in the form of Exhibit E.
---------
"Money Market Loan" shall mean a Loan made up of Advances by all of
-----------------
those Lenders whose Money Market Bids have been accepted by the Borrower
pursuant to the same Money Market Bid Request under the bidding procedure
described in Section 2.04 for the same Interest Period and interest rate (with
the understanding that two Money Market Loans may be made pursuant to a single
Money Market Bid Request).
"Money Market Note" shall mean a promissory note of the Borrower
-----------------
payable to the order of any Lender, in substantially the form of Exhibit C
---------
hereto, evidencing the maximum aggregate principal indebtedness of the Borrower
to such Lender with respect to outstanding Money Market Rate Advances made by
such Lender pursuant to this Agreement, either as originally executed or as it
may be from time to time supplemented, modified, amended, renewed or extended.
"Money Market Rate" shall mean, as to any Money Market Bid made by a
-----------------
Lender pursuant to Section 2.04, the fixed rate of interest per annum offered by
the Lender making the Money Market Bid for the relevant Interest Period.
"Money Market Rate Advance" shall mean an Advance made by a Lender to
-------------------------
the Borrower pursuant to the bidding procedure described in Section 2.04.
"Multiemployer Plan" shall have the meaning set forth in Section
------------------
4001(a)(3) of ERISA.
"Net Proceeds" shall mean, with respect to any equity offering or
------------
issuance of Subordinated Debt, (i) all cash received with respect thereto,
whether by way of deferred payment pursuant to a promissory note, a receivable
or otherwise (and interest paid thereon), plus (ii) the higher of the book value
or the fair market value of any assets (including any stock) received with
respect thereto, in each case, net of reasonable and customary sale expenses,
fees and commissions incurred and taxes paid or expected to be payable within
the next twelve months in connection therewith.
"Notes" shall mean, collectively, the Revolving Credit Notes, the Term
-----
Notes and the Money Market Notes.
"Notice of Borrowing" shall have the meaning provided in Section
-------------------
3.01(a)(i).
-13-
<PAGE>
"Notice of Conversion/Continuation" shall have the meaning provided in
---------------------------------
Section 3.01(b)(i).
"Obligations" shall mean all amounts owing to the Agent, the
-----------
Administrative Agent (unless the Borrower has assumed such role pursuant to
Section 10.11 hereof) 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 Credit Parties, direct or indirect, absolute or contingent,
liquidated or unliquidated, now existing or hereafter arising, together with all
renewals, extensions, modifications or refinancings thereof.
"Payment Office" shall mean with respect to payments of principal,
--------------
interest, fees or other amounts relating to the Revolving Loans, the Money
Market Loans, and all other Obligations, the office specified as the "Payment
Office" for the Agent on the signature page of the Agent, or such other location
as to which the Agent shall have given written notice to the Borrower.
"PBGC" shall mean the Pension Benefit Guaranty Corporation, or any
----
successor thereto.
"Permitted Liens" shall mean those Liens expressly permitted by
---------------
Section 8.02.
"Person" shall mean any individual, partnership, firm, corporation,
------
association, joint venture, trust 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.
"Pro Rata Share" shall mean, with respect to each of the Commitments
--------------
of each Lender, each Revolving Loan or Term Loan to be made by, and each payment
(including, without limitation, any payment of principal, interest or fees) to
be made to each Lender with respect to the Revolving Loans or Term Loans, the
percentage designated as such Lender's Pro Rata Share of such Commitments, such
Loans or such payments, as applicable, set forth under the name of such Lender
on the respective signature page for such
-14-
<PAGE>
Lender, in each case as such Pro Rata Share may change from time to time as a
result of assignments or amendments made pursuant to this Agreement, and shall
mean, with respect to each of the Money Market Loans (including, without
limitation, any payment of principal, interest or fees), the percentage of each
of the Lenders participating in such Loan determined by dividing the amount of
such Lender's Money Market Advance relating thereto by the total amount of such
Money Market Loan.
"Proxy Statement" shall mean that certain Proxy Statement dated
---------------
February 6, 1996 filed by Morrison on Schedule 14A with the Securities Exchange
Commission on February 6, 1996.
"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.
"Rental Obligations" shall mean, with reference to any period, the
------------------
aggregate amount of all rental obligations for which the Consolidated Companies
are directly or indirectly liable (as lessee or as guarantor or other surety but
without duplication) under all leases in effect at any time during such period
(other than operating leases for motor vehicles, computers, office equipment and
other similar items used in the ordinary course of business of the Consolidated
Companies), including all such amounts for which any Person was liable during
the period immediately prior to the date such Person became a Subsidiary of the
Borrower or was merged into or consolidated with the Borrower or a Subsidiary of
the Borrower, as determined in accordance with GAAP.
"Required Lenders" shall mean at any time, the Lenders holding at
----------------
least 66 2/3% of the sum of (x) committed funds under the Commitments, whether
or not advanced, plus (y) the Term Loans, 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 the articles or
------------------
certificate of incorporation and bylaws or other organizational or governing
documents of such Person, and 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.
"Reuters Screen" shall mean, when used in connection with any
--------------
designated page and LIBOR, the display page so designated on the Reuters Monitor
Money Rates Service (or such other page as
-15-
<PAGE>
may replace that page on that service for the purpose of displaying rates
comparable to LIBOR).
"Restructuring Charges" shall mean the charges to be incurred by
---------------------
Borrower (whether by directly or by allocation), in an amount not to exceed
$31,000,000.00, in connection with the restructuring of the business of Morrison
pursuant to the Transaction.
"Restructured Indebtedness" shall mean the Indebtedness of Morrison
-------------------------
restructured in accordance with the Transaction, as more particularly described
on Schedule 8.01 hereto.
-------------
"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 Loan Commitment" shall mean, at any time for any Lender,
-------------------------
the amount of such commitment set forth below such Lender's name on Schedule
--------
1.01 attached hereto, as the same may be increased or decreased from time to
- ----
time as a result of any reduction thereof pursuant to Section 2.03, any
assignment thereof pursuant to Section 11.06, or any amendment thereof pursu ant
to Section 11.02, and as further limited by the deemed utilization of the
Revolving Loan Commitment by Money Market Loans as set forth in Section 4.14.
"Revolving Loans" shall mean, collectively, the revolving loans made
---------------
to the Borrower by the Lenders pursuant to Section 2.01.
"Security Documents" shall mean, collectively, the Guaranty Agreement
------------------
and each other guaranty agreement, mortgage, deed of trust, security agreement,
pledge agreement, or other security or collateral document guaranteeing or
securing the Obligations, now or hereafter executed, as the same may be amended,
restated, supplemented or otherwise modified from time to time.
"Sharing Agreements" shall mean, collectively, (i) that certain
------------------
Distribution Agreement, dated as of March 2, 1996 by and among Morrison, MFCI
and MHCI, (ii) that certain License Agreement, dated as of March 2, 1996, by and
between MFCI and MHCI, (iii) that certain License Agreement, dated as of March
2, 1996, by and between Borrower and MHCI, (iv) that certain Amended and
Restated Tax Allocation and Indemnification Agreement, dated as of March 2,
1996, by and among Morrison, MHCI, MFCI and certain other subsidiaries of
Morrison, and (v) that certain Agreement Respecting Employee Benefit Matters,
dated as of March 2, 1996, by and among Morrison, MFCI and MHCI.
-16-
<PAGE>
"Subordinated Debt" shall mean all Indebtedness of Borrower
-----------------
subordinated to all obligations of Borrower or any other Credit Party arising
under this Agreement, the Notes, and the Guaranty Agreement, created, incurred
or assumed on terms and conditions satisfactory in all respects to the Agent
and the Required Lenders, including without limitation, with respect to interest
rates, payment terms, maturities, amortization schedules, covenants, defaults,
remedies, and subordination provisions, as evidenced by the written approval of
the Agent and Required Lenders.
"Subsidiary" shall mean, with respect to any Person, any corporation
----------
or other entity (including, without limitation, partnerships, joint ventures,
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.
"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" shall mean, when used in connection with any designated
--------
page and LIBOR, the display page so designated on the Dow Jones Telerate Service
(or such other page as may replace that page on that service for the purpose of
displaying rates comparable to LIBOR).
"Term Loan Commitment" shall mean, at any time for any Lender, the
--------------------
amount of such commitment set forth opposite such Lender's name on Schedule 1.01
-------------
attached hereto, as the same may be increased or decreased from time to time as
a result of any repayment of the Term Loans, any assignment thereof pursuant to
Section 11.06 or any amendment thereof pursuant to Section 11.02.
"Term Loans" shall mean, collectively, the term loans made to the
----------
Borrower by the Lenders pursuant to Section 3.01.
-17-
<PAGE>
"Term Notes" shall mean the promissory note or notes evidencing the
----------
Term Loans, substantially in the form of Exhibit B, either as originally
---------
executed or as hereafter amended, modified or restated.
"Total Capitalization" shall mean, as of any date of determination,
--------------------
the sum of (i) Consolidated Funded Debt, plus (ii) Consolidated Net Worth.
----
"Transaction" shall have the meaning set forth in the recitals hereof.
-----------
"Transaction Date" shall have the meaning set forth in the recitals
----------------
hereof.
"Type" of Borrowing shall mean a Borrowing consisting of Base Rate
----
Advances, Eurodollar Advances or Money Market Rate Advances.
"Voting Stock" shall mean securities of any class or classes, the
------------
holders of which are entitled to elect all of the corporate directors (or
Persons performing similar functions).
Section 1.02. 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.
Section 1.03. 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 1.04. Exhibits and Schedules. All Exhibits and Schedules
----------------------
attached hereto are by reference made a part hereof.
ARTICLE II.
REVOLVING LOANS AND MONEY MARKET LOANS
--------------------------------------
Section 2.01. Revolving Loan Commitments; Use of Proceeds.
-------------------------------------------
(a) Revolving Loan Commitments. Subject to and upon the terms and
--------------------------
conditions herein set forth, each Lender severally
-18-
<PAGE>
establishes in favor of the Borrower, from on and after the Effective Date, but
prior to the Maturity Date, its Revolving Loan Commitment. The Lenders, subject
to and upon the terms and conditions set forth herein, from time to time, agree
to make to the Borrower Revolving Loans in an aggregate principal amount
outstanding at any time not to exceed such Lender's Revolving Loan Commitment.
Borrower shall be entitled to repay and reborrow Revolving Loans in accordance
with the provisions hereof. In addition to Revolving Loans, the Borrower may
request, from on and after the Effective Date but prior to the Maturity Date,
that the Lenders extend to the Borrower Money Market Loans subject to and upon
the terms and conditions herein set forth. Notwithstanding any provision of this
Agreement to the contrary, (i) the sum of (x) the aggregate principal amount of
the Revolving Loans, plus (y) the aggregate principal amount of the Money Market
----
Loans, at any one time outstanding shall not exceed the aggregate Revolving Loan
Commitments, (ii) the aggregate principal amount of all Base Rate Advances and
Eurodollar Advances of each Lender outstanding pursuant to this Article II shall
not at any time exceed the Revolving Loan Commitment of such Lender, (iii) no
Lender shall be obligated hereunder to extend Money Market Rate Advances or to
participate in the bid process or to make quotes for such Advances, (iv) a
Lender may elect, in its discretion, to extend Money Market Rate Advances which,
either alone or together with the other outstanding Advances of such Lender,
would exceed the Revolving Loan Commitment of such Lender, and (v) Money Market
Loans shall be allocated amongst the Revolving Loan Commitments of the Lenders
as set forth in Section 4.14 for purposes of determining the available Revolving
Loan Commitments.
(b) Amount and Terms of Loans. 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. Each Money Market Loan shall consist of Money Market Advances made by
one or more of the Lenders in accordance with the procedure described in Section
2.04. Each Eurodollar Borrowing and each Money Market Loan shall be in a
principal amount of not less than $5,000,000 or a greater integral multiple of
$1,000,000, and each Base Rate Borrowing shall be in a principal amount of not
less than $1,000,000 or a greater integral multiple of $100,000. At no time
shall the aggregate number of Eurodollar Borrowings and Money Market Loans
outstanding under this Article II exceed six.
(c) Use of Proceeds. The proceeds of Revolving Loans and the Money
---------------
Market Loans shall be used solely to refinance the Borrower's allocated portion
of Restructured Indebtedness of Morrison on the Effective Date, to acquire and
construct additional restaurants, to make other acquisitions permitted by
-19-
<PAGE>
the terms of this Agreement, to fund working capital needs of the Borrower and
for other general corporate purposes of the Borrower.
Section 2.02. 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
Agent and such Lender and by the Revolving Credit Note payable to such Lender
(or the assignor of such Lender) in the amount of such Lender's Revolving Loan
Commitment completed in conformity with this Agreement.
(b) The Borrower's obligations to pay the principal of, and interest
on, the Money Market Loans to each Lender shall be evidenced by the records of
the Agent and such Lender and by the Money Market Note payable to such Lender
(or the assignor of such Lender) completed in conformity with this Agreement.
(c) All outstanding Borrowings outstanding under the Notes shall be
due and payable in full on the Maturity Date.
Section 2.03. Voluntary Reduction of Commitments. Upon at least
----------------------------------
three (3) Business Days' prior telephonic notice (promptly confirmed in writing)
to the Agent, Borrower shall have the right, without premium or penalty, to
terminate the unutilized Revolving Loan Commitments, in part or in whole,
provided that (i) any such termination shall apply to proportionately and
permanently reduce the Revolving Loan Commitments of each of the Lenders, and
(ii) any partial termination pursuant to this Section 2.03 shall be in an amount
of at least $5,000,000 and integral multiples of $1,000,000.
Section 2.04. Money Market Loans. (a) In order to request Money
------------------
Market Bids, the Borrower shall telecopy to the Administrative Agent a duly
completed Money Market Bid Request in the form of Exhibit E attached hereto
---------
(which may request not more than two Money Market Bids), to be received by the
Administrative Agent not later than 10:00 a.m. (local time for the
Administrative Agent), one (1) Business Day prior to the proposed Money Market
Rate Loan or Loans. A Money Market Bid Request that does not conform
substantially to the format of Exhibit E may be rejected in the Administrative
---------
Agent's sole discretion, and the Administrative Agent shall notify the Borrower
of such rejection by telecopy not later than 12:00 noon (Atlanta, Georgia time)
on the date of receipt. Such request shall in each case refer to this Agreement
and specify (i) the date of such Borrowing or Borrowings (which shall be a
Business Day) and (ii) the aggregate principal amount thereof which shall be in
a minimum principal amount of $5,000,000 and in an integral multiple of
$1,000,000, and (iii) the Interest Period with respect thereto. Promptly
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<PAGE>
after its receipt of a Money Market Bid Request that is not rejected as
aforesaid, the Administrative Agent shall invite by telecopy (substantially in
the form set forth in Exhibit F attached hereto) the Lenders to bid, on the
---------
terms and conditions of this Agreement, to make Money Market Rate Advances
pursuant to the Money Market Bid Request. Notwithstanding the foregoing, in the
event that the Borrower assumes the obligations of the Administrative Agent
pursuant to Section 10.11 hereof, the Borrower shall deliver the Money Market
Bid Request to each Lender by the time noted above and each Lender shall have
the right to reject a nonconforming bid in accordance with the foregoing.
(b) Each Lender may, in its sole discretion, make one or more Money
Market Bids (but not more than two) to the Borrower responsive to a Money Market
Bid Request. Each Money Market Bid by a Lender must be received by the
Administrative Agent via telecopy, substantially in the form of Exhibit G
---------
attached hereto, not later than 10:30 a.m. (local time for the Administrative
Agent) on the Business Day of the proposed Money Market Loan. Multiple bids
(not to exceed two per Lender) will be accepted by the Administrative Agent.
Money Market Bids that do not conform substantially to the format of Exhibit G
---------
may be rejected by the Administrative Agent acting in consultation with the
Borrower, and the Administrative Agent shall notify the Lender making such
nonconforming bid of such rejection as soon as practicable. Each Money Market
Bid shall refer to this Agreement and specify (i) the principal amount (which
shall be in a minimum principal amount of $1,000,000 and in an integral multiple
of $500,000 and which may equal the entire principal amount of the Money Market
Loan requested by the Borrower) of the Money Market Rate Advance or Advances
that the Lender is willing to make to the Borrower, (ii) the Money Market Rate
or Rates at which the Lender is prepared to make the Money Market Rate Advance
or Advances, and (iii) the Interest Period and the last day thereof. If any
Lender shall elect not to make a Money Market Bid, such Lender shall so notify
the Administrative Agent via telecopy by the time specified above for submitting
a Money Market Bid; provided, however, that failure by any Lender to give such
-------- -------
notice shall not cause such Lender to be obligated to make any Money Market Rate
Advance as part of such Money Market Loan. A Money Market Bid submitted by a
Lender pursuant to this paragraph (b) shall be irrevocable (absent manifest
error).
(c) The Administrative Agent shall promptly notify the Borrower by
telecopy of all the Money Market Bids made, the Money Market Rate and the
principal amount of each Money Market Rate Advance in respect of which a Money
Market Bid was made and the identity of the Lender that made each bid. The
Administrative Agent shall send a copy of all Money Market Bids to the Borrower
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for its records as soon as practicable after completion of the bidding process
set forth in this Section 2.04.
(d) The Borrower may, in its sole and absolute discretion, subject
only to the provisions of this paragraph (d), accept or reject any Money Market
Bid referred to in paragraph (c) above. The Borrower shall notify the
Administrative Agent by telephone, confirmed by telecopy in the form of a Money
Market Bid Accept/Reject Letter, whether and to what extent it has decided to
accept or reject any of or all the bids referred to in paragraph (c) above not
later than 12:30 p.m. (local time for the Administrative Agent) on the Business
Day of the proposed Money Market Loan; provided, however, that (i) the failure
-------- -------
by the Borrower to give such notice shall be deemed to be a rejection of all the
bids referred to in paragraph (c) above, (ii) the Borrower shall not accept a
bid made at a particular Money Market Rate if the Borrower has decided to reject
a bid made at a lower Money Market Rate except for the sole purpose of
minimizing the aggregate Commitment Fees payable to the Lenders hereunder (i.e.,
the Borrower, in analyzing the bids, may take into account the total commitment
fees which may be payable to a Lender submitting a higher Money Market Bid in
determining the "all-in" rate to the Borrower of the various Money Market Bids),
(iii) the aggregate amount of the Money Market Bids accepted by the Borrower
shall not exceed the principal amount specified in the Money Market Bid Request,
(iv) if the Borrower shall accept a bid or bids made at a particular Money
Market Rate but the amount of such bid or bids shall cause the total amount of
bids to be accepted by the Borrower to exceed the amount specified in the Money
Market Bid Request, then the Borrower shall accept a portion of such bid or bids
in an amount equal to the amount specified in the Money Market Bid Request less
the amount of all other Money Market Bids accepted with respect to such Money
Market Bid Request, which acceptance, in the case of multiple bids at the same
Money Market Rate, shall be made pro rata in accordance with the amount of each
such bid at such Money Market Rate, and (v) except pursuant to clause (iv)
above, no bid shall be accepted for a Money Market Loan unless such Money Market
Loan is in a minimum principal amount of $5,000,000 and an integral multiple of
$1,000,000; provided further, however, that if a Money Market Loan must be in an
-------- ------- -------
amount less than $5,000,000 because of the provisions of clause (iv) above, such
Money Market Loan may be for a minimum of $1,000,000 or any integral multiple
thereof, and in calculating the pro rata allocation of acceptances of portions
of multiple bids at a particular Money Market Rate pursuant to clause (iv) the
amounts shall be rounded to integral multiples of $1,000,000 in a manner which
shall be in the discretion of the Borrower. A notice given by the Borrower
pursuant to this paragraph (d) shall be irrevocable. In the event that the
Borrower has assumed the obligations of the Administrative Agent pursuant to
Section 10.11
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hereof, the Borrower shall continue to be bound by this subsection (d) but shall
accept or reject bids by giving notice directly to the Lenders.
(e) The Administrative Agent shall promptly notify each bidding
Lender whether or not its Money Market Bid has been accepted (and if so, in what
amount and at what Money Market Rate) by telecopy sent by the Administrative
Agent, and each successful bidder will thereupon become bound, subject to the
other applicable conditions hereof, to make the Money Market Loan
in respect of which its bid has been accepted.
(f) A Money Market Bid Request shall not be made within five (5)
Business Days after the date of any previous Money Market Bid Request.
(g) If the Administrative Agent shall elect to submit a Money Market
Bid in its capacity as a Lender, it shall submit such bid directly to the
Borrower one half of an hour earlier than the earliest time at which the other
Lenders are required to submit their bids to the Administrative Agent pursuant
to paragraph (b) above.
(h) Each Lender participating in any Money Market Loan shall make its
Money Market Rate Advance available to the Administrative Agent on the date
specified in the Bid Request at the time and in the manner and subject to the
provisions specified in Section 4.02.
ARTICLE III.
TERM LOANS
----------
Section 3.01. Amount of Term Loans; Use of Proceeds.
-------------------------------------
(a) Subject to and upon the terms and conditions herein set forth,
each Term Lender severally agrees to make to the Borrower on the Effective Date
a Term Loan in an amount equal to its Term Loan Commitment, such Term Loan to be
repaid as set forth in Section 3.02. The Borrower shall not be entitled to
reborrow any amounts repaid with respect to the Term Loans.
(b) Each Term Loan shall, at the option of the 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 Term Loans consisting of Eurodollar
Advances shall be in a principal amount of not less than $5,000,000 or a greater
integral multiple of $1,000,000, and each Borrowing of
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Term Loans consisting of Base Rate Advances shall be in a principal amount of
not less than $1,000,000 or a greater integral multiple of $100,000. At no time
shall more than one Borrowing be outstanding under this Article III.
(c) The Borrower shall use the proceeds of the Term Loans solely for
the purpose of repaying the Restructured Indebtedness of Morrison on the
Effective Date in the amount allocated to the Borrower.
Section 3.02. Notes; Repayment of Principal.
-----------------------------
(a) The Borrower's obligations to pay the principal of, and interest
on, the Term Loans to each Lender shall be evidenced by the records of the 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) All Term Loans, if not sooner paid, shall be due and payable in
full on the Maturity Date.
ARTICLE IV.
GENERAL LOAN TERMS
------------------
Section 4.01. Funding Notices.
---------------
(a) (i) Whenever Borrower desires to make a Borrowing with respect
to the Term Loans or the Revolving Loan Commitments (other than one resulting
from a conversion or continuation pursuant to Section 4.01(b)(i)), it shall give
the 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 prior to 11:00 A.M. (local time for the Agent) at the Payment Office
of the Agent (x) one Business Day prior to the requested date of such Borrowing
in the case of Base Rate Advances, and (y) three Business Days prior to the
requested date of such Borrowing in the case of Eurodollar Advances. Notices
received after 11:00 A.M. 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 Money Market Bid, it shall
notify the Administrative Agent in accordance with the procedure set forth in
Section 2.04 hereof.
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<PAGE>
(b) (i) Whenever Borrower desires to convert all or a portion of an
outstanding Borrowing under the Revolving Loan Commitments or constituting a
portion of the Term Loans 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
Agent at least three Business Days' prior written notice (or telephonic notice
promptly confirmed in writing) of each such Borrowing to be converted into or
continued as Eurodollar Ad vances. Such notice (a "Notice of
---------
Conversion/Continuation") shall be given prior to 11:00 A.M. (local time for the
- -----------------------
Agent) on the date specified at the Payment Office of the 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 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, in the case of the Term Loans,
a Borrowing consisting of Eurodollar Advances for an Interest Period of three
months and, in the case of the Revolving Loans, 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 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.
(ii) Upon the expiration of the applicable Interest Period with
respect to any Money Market Loan, the Borrower shall repay such Money Market
Loan to the Agent for the ratable benefit of the Lenders participating in such
Money Market Loan.
(c) Without in any way limiting Borrower's obligation to confirm in
writing any telephonic notice, the Agent and the Administrative Agent may act
without liability upon the basis of telephonic notice believed by the Agent or
the Administrative Agent in good faith to be from Borrower prior to receipt of
written confirmation. In each such case, Borrower hereby waives the right to
dispute the Agent's or the Administrative Agent's record of the terms of such
telephonic notice.
(d) The Agent and the Administrative Agent shall promptly 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 Agent
and the
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<PAGE>
Administrative Agent pursuant to this Section 4.01 with respect to the
Term Loans, the Money Market Loans and the Revolving Loan Commitments. At such
time as the Borrower may assume the duties of the Administrative Agent pursuant
to Section 10.11 hereof, the Borrower shall give the Agent and each Lender
immediate notice by telephone (confirmed in writing) of the matters covered by
notices to the Administrative Agent hereunder and all references to the "Payment
Office" of the Administrative Agent shall be deemed to mean the Lending Office
of each Lender.
Section 4.02. Disbursement of Funds.
---------------------
(a) No later than 12:00 noon (local time for the Agent) on the date of
each Borrowing pursuant to the Term Loans or the Revolving Loan Commitments
(other than one resulting from a conversion or continuation pursuant to Section
4.01(b)(i)), each Lender will make available its Pro Rata Share of the amount of
such Borrowing in immediately available funds at the Payment Office of the
Agent. The Agent will make available to Borrower the aggregate of the amounts
(if any) so made available by the Lenders to the Agent in a timely manner by
crediting such amounts to Borrower's demand deposit account maintained with the
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 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 2:30 p.m. (local time for the Agent) on the date of
each Money Market Loan, each Lender participating in such Money Market Loan will
make available its pro rata share of the amount of such Money Market Loan in
immediately available funds at the Payment Office of the Agent. The Agent will
make available to Borrower the aggregate of the amounts (if any) so made
available by the Lenders to the Agent in a timely manner by crediting such
amount to Borrower's demand deposit account maintained with the Agent or at the
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 Lenders do not make such amounts available to the Agent by the
time prescribed above but such amount is received later that day, such amount
may be credited to the 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).
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<PAGE>
(c) Unless the 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 Agent such Lender's portion of the Borrowing to be made on such date, the
Agent may assume that such Lender has made such amount available to the Agent on
such date and the Agent may make available to Borrower a cor responding amount.
If such corresponding amount is not in fact made available to the Agent by such
Lender on the date of Borrowing, the 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 Agent's demand therefor, the Agent shall promptly notify
Borrower, and Borrower shall immediately pay such corresponding amount to the
Agent together with interest at the rate specified for the Borrowing which
includes such amount paid and any amounts due under Section 4.12 hereof. Nothing
in this subsection shall be deemed to relieve any Lender from its obligation to
fund its Commitments or its Money Market Advances hereunder or to prejudice any
rights which Borrower may have against any Lender as a result of any default by
such Lender hereunder.
(d) All Borrowings under the Commitments (other than Money Market
Loans) shall be loaned by the Lenders on the basis of their Pro Rata Share of
the Commitments. 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 Commitments or its Money Market Advances hereunder.
Section 4.03. Interest.
--------
(a) Borrower agrees to pay interest in respect of all unpaid principal
amounts of the Revolving Loans and the Term 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
----
seven sixteenths of one percent (.4375%) per annum.
(b) Borrower agrees to pay interest in respect of all unpaid principal
amounts of the Money Market Loans made to Borrower from the respective dates
such principal amounts were advanced to maturity (whether by acceleration,
notice of prepayment
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<PAGE>
or otherwise) at the Money Market Rate agreed to by the Borrower and the
Lender(s) participating therein for each such Money Market Loan.
(c) Overdue principal and, to the extent not prohibited by applicable
law, overdue interest, in respect of the 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 and all Money Market Loans, at
the greater of (A) the rate otherwise applicable for the then current
Interest Period plus an additional two percent (2.0%) per annum or (B) the
----
rate in effect for Base Rate Advances plus an additional two percent
----
(2.0%) per annum; and
(ii) in the case of overdue principal and interest with respect to all
other Loans outstanding as Base Rate Advances and all other Obligations
hereunder (other than Loans), at a rate equal to the applicable Base Rate
plus an additional two percent (2.0%) per annum.
----
(d) 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 the last day of each calendar quarter, commencing on March 31,
1996. Interest on all outstanding Eurodollar Advances and Money Market Advances
shall be payable on the last day of each Interest Period applicable thereto,
and, in the case of Eurodollar Advances and Money Market Advances having an
Interest Period in excess of three months, on each three month anniversary of
the initial date of such Interest Period. Interest on all Loans shall be payable
on any conversion of any Advances comprising such Loans into Advances of another
Type, prepayment (on the amount prepaid), at maturity (whether by acceleration,
notice of prepayment or otherwise) and, after maturity, on demand.
(e) The Agent, upon determining the Adjusted LIBO Rate for any
Interest Period, shall promptly notify by telephone (confirmed in writing) or in
writing Borrower and the other Lenders. Any such determination shall, absent
manifest error, be final, conclusive and binding for all purposes.
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<PAGE>
Section 4.04. Interest Periods.
----------------
(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.
(b) In connection with the making or continuation of each Money
Market Loan, Borrower shall request an Interest Period to be applicable to such
Money Market Loan for a period equal to a minimum of seven (7) days and a
maximum of one hundred eighty (180) days which request may be accepted by any
Lender or Lenders as provided herein.
(c) Notwithstanding paragraphs (a) and (b) of this Section 4.04:
(i) The initial Interest Period for any Borrowing of Eurodollar
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 Maturity Date.
Section 4.05. Fees.
----
(a) Commitment Fee. Borrower shall pay to the Agent, for the ratable
--------------
benefit of each Lender, a commitment fee (the
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"Commitment Fee") for the period commencing on the Effective Date to and
--------------
including the Maturity Date, payable quarterly in arrears on the last day of
each calendar quarter, commencing on March 31, 1996, and on the Maturity Date,
equal to three-sixteenths of one percent (.1875%) per annum multiplied by the
average daily unused portion of the Revolving Loan Commitment of each Lender.
For the purposes of computing the Revolving Loan Commitment Fee, in addition to
utilization by Revolving Loans, the Revolving Loan Commitment of each Lender
shall be deemed to be utilized by the amount of Money Market Rate Advances
extended by such Lender but in no event shall the computation of any other
Lender's Commitment Fee be affected by the Money Market Advances extended by
such Lender.
(b) Administrative Fees. The Borrower shall pay to the Agent and the
-------------------
Administrative Agent an administrative fee in the amount and on the dates
previously agreed in writing by Borrower with the Agent and the Administrative
Agent.
Section 4.06. 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 $1,000,000 or any greater integral multiple of $100,000, by paying
the principal amount to be prepaid together with interest accrued and unpaid
thereon to the date of prepayment. Borrowings consisting of Eurodollar Advances
or Money Market Advances may be prepaid, at Borrower's option, 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, and all
compensation payments pursuant to Section 4.12 if such prepayment is made on a
date other than the last day of an Interest Period applicable thereto. Each
such optional prepayment shall be applied in accordance with Section 4.06(c)
below.
(b) Borrower shall give written notice (or telephonic notice
confirmed in writing) to the Agent of any intended prepayment of the Revolving
Loans or the Term Loans (i) not less than one Business Day prior to any
prepayment of Base Rate Advances and (ii) not less than three Business Days
prior to any prepayment of Eurodollar Advances. Borrower shall give written
notice (or telephonic notice confirmed in writing) to the Administrative Agent
of any intended prepayment of the Money Market Loans not less than one (1)
Business Day prior to such prepayment of Money Market Rate Advances. Such
notice, once given, shall be irrevocable. Upon receipt of such notice of
prepayment pursuant to the first sentence of this paragraph (b), the Agent shall
promptly notify each Lender of the contents of such notice and of
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<PAGE>
such Lender's Pro Rata Share of such prepayment. Upon receipt of any notice of
prepayment pursuant to the second sentence of this paragraph (b), the
Administrative Agent shall promptly notify each Lender participating in such
Money Market Loan of the contents of such notice and of such Lender's Pro Rata
Share of such prepayment.
(c) Borrower, when providing notice of prepayment pursuant to Section
4.06(b), may designate the Types of Advances and the specific Borrowing or
Borrowings which are to be prepaid, provided that (i) if any prepayment of
Eurodollar Advances made pursuant to a single Borrowing of the Revolving Loans
or Term Loans shall reduce the outstanding Advances made pursuant to such
Borrowing to an amount less than $5,000,000, such Borrowing shall immediately be
converted into Base Rate Advances; and (ii) each prepayment made pursuant to a
single Borrowing shall be applied pro rata among the Advances comprising such
Borrowing. In the absence of a designation by Borrower, the Agent shall, subject
to the foregoing, make such designation in its discretion but using reasonable
efforts to avoid funding losses to the Lenders pursuant to Section 4.12. All
voluntary prepayments shall be applied to the payment of interest before
application to principal.
Section 4.07. Payments, etc.
--------------
(a) Except as otherwise specifically provided herein, all payments
under this Agreement and the other Credit Documents shall be made without
defense, set-off or counterclaim to the Agent not later than 11:00 A.M. (local
time for the Agent) on the date when due and shall be made in Dollars in
immediately available funds at its 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, any Taxes imposed on the overall net income of the
Lenders pursuant to the laws of the jurisdiction in which the principal
executive office or appropriate Lending Office of such Lender is located). If
any 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 4.07), 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
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<PAGE>
law. Borrower will furnish to the Agent, 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 Agent, the
Administrative Agent and each Lender and reimburse the Agent, the Administrative
Agent and each Lender upon written request for the amount of any Taxes so levied
or imposed and paid by the Agent, the Administrative Agent or such 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, the
Agent or the Administrative Agent, absent manifest error, shall be final,
conclusive and binding for all purposes provided that the Agent, the
Administrative Agent and each Lender shall use reasonable efforts to furnish
Borrower notice of the imposition of any Taxes 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 the
Agent, the Administrative Agent or such Lender pursuant to Section 4.07(b) or
otherwise result in any liability of the Agent or such Lender; provided that
-------- ----
such notice is provided to the Borrower within forty-five (45) days of such
Lender obtaining knowledge of the application of such Taxes to payments under
this Agreement.
(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, the Agent 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 or reduced rate of U.S. Federal
withholding tax on interest paid by Borrower hereunder) and to provide to
Borrower, the Agent 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 or a reduced
rate of withholding under applicable law.
(iii) Borrower shall also reimburse each Lender, upon written
request, for any Taxes imposed (including, without limitation, Taxes imposed on
the overall net income of such 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 such Lender is located) as such
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<PAGE>
Lender shall determine are payable by such Lender in respect of amounts paid by
or on behalf of Borrower to or on behalf of such Lender pursuant to paragraph
(i) hereof.
(c) Subject to Section 4.04(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 and Money Market Rate 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 Agent or 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; provided that, in the event that the Borrower assumes the duties
-------- ----
of the Administrative Agent hereunder, the determinations of the Lenders rather
than the Administrative Agent with respect to the foregoing shall, if determined
in good faith and without manifest error, shall be final, conclusive and binding
for all purposes.
(e) Payment by the Borrower to the Agent in accordance with the terms
of this Agreement shall, as to the Borrower, constitute payment to the Lenders
under this Agreement.
Section 4.08. Interest Rate Not Ascertainable, etc. In the event
-------------------------------------
that the 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 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 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 Agent notifies
Borrower that the circumstances giving rise to
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<PAGE>
the suspension described herein no longer exist, the obligations of the Lenders
to make or permit portions of the Revolving Loans or Term Loans 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 4.09. 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 Agent of such determination and a summary of the basis for such
determination (which notice the 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 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 permitted by applicable law, no later than the date permitted thereby,
upon at least one Business Day's written notice to the 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 4.09(b).
Section 4.10. 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 made after the date
hereof (whether or not having the force of law):
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<PAGE>
(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 Eurodollar 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 4.07(b)), upon written notice from and demand by such Lender on Borrower
(with a copy of such notice and demand to the Agent), pay to the Agent for the
account of such Lender within five 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 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 Agent that at any time, because of
the circumstances described in clauses (x) or (y) in Section 4.10(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 deter mined by
the Agent will not adequately and fairly reflect the cost
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<PAGE>
to such Lender of funding its Eurodollar Advances, then, and in any such event:
(i) the 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) such Lender shall make a Loan as part of the requested Borrowing
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 4.11. 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 affected by the matters or circumstances described in Sections 4.07(b),
4.08, 4.09 or 4.10 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 4.11
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 4.07(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 4.07(b) or otherwise result in any liability of such
Lender; provided that such notice is provided to the Borrower within forty-five
-------- ----
(45) days of such Lender obtaining knowledge of the application of such Taxes to
payments under this Agreement.
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<PAGE>
Section 4.12. Funding Losses. 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 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 or Money Market
Rate Advances, in either case to the extent not recovered by such Lender in
connection with the re-employment of such funds and including 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 or a borrowing of Money Market
Rate Advances does not occur on the date specified therefor in a Notice of
Borrowing, a Notice of Conversion/Continuation or a Money Market Bid Acceptance
(whether or not withdrawn), (ii) if any repayment (including mandatory
prepayments and any conversions pursuant to Section 4.09(b)) of any Eurodollar
Advances or Money Market 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 or Money
Market Rate Advances when required by the terms of this Agreement.
Section 4.13. Assumptions Concerning Funding of Eurodollar Advances.
-----------------------------------------------------
Calculation of all amounts payable to a Lender under this Article IV 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 IV.
Section 4.14. Apportionment of Payments; Deemed Utilization of
------------------------------------------------
Revolving Loan Commitments by Money Market Loans. Aggregate principal and
- ------------------------------------------------
interest payments in respect of Revolving Loans, Term Loans and Commitment Fees
shall be apportioned among all outstanding Revolving Loan Commitments, Term
Loans and Revolving Loans to which such payments relate, proportionately to the
Lenders' respective Pro Rata Share of such Revolving Loan Commitments and
outstanding Revolving Loans and Term Loans. Each payment of principal of any
Money Market Loan shall be allocated pro rata among the Lenders participating in
such Loan in
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<PAGE>
accordance with the respective principal amounts of their outstanding Money
Market Rate Advances comprising such Money Market Loan. Each payment of interest
on any Money Market Loan shall be allocated pro rata among the Lenders
participating in such Money Market Loan in accordance with the respective
amounts of accrued and unpaid interest on their outstanding Money Market Rate
Advances comprising such Money Market Loan. For purposes of determining the
available Revolving Loan Commitments of the Lenders at any time (but not for
purposes of calculating the Commitment Fees payable to each Lender), each
outstanding Money Market Loan shall be deemed to have utilized the Revolving
Loan Commitments of the Lenders (including those Lenders which shall not have
made Advances as part of such Money Market Loan) pro rata in accordance with
each Lender's Pro Rata Share of the Revolving Loan Commitments. The Agent shall
promptly distribute to each Lender at its payment office set forth beside its
name on the appropriate signature page hereof or such other address as any
Lender may request its share of all such payments received by the Agent.
Section 4.15. 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 Pro Rata Share of
payments or reductions on account of such obligations obtained by all the
Lenders (other than payments of principal, interest and fees with respect to the
Money Market Loans which are payable solely to the Lenders participating
therein), such Lender shall forthwith (i) notify each of the other Lenders and
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 4.15 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.
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<PAGE>
Section 4.16. 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, 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 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 du
plication 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 4.16 (which cer tificate 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.
ARTICLE V.
CONDITIONS TO BORROWINGS
------------------------
The obligations of each Lender to make Advances to Borrower hereunder
is subject to the satisfaction of the following conditions:
Section 5.01. Conditions Precedent to Initial Loans. At the time of
-------------------------------------
the making of the initial Loans hereunder on the Effective Date, all obligations
of Borrower hereunder incurred prior to the initial Loans (including, without
limitation, Borrower's obligations to reimburse fees and expenses payable to the
Administrative Agent and the Agent as previously agreed with Borrower), shall
have been paid in full, and the Agent shall have received the following, in form
and substance reasonably satisfactory in all respects to the Agent:
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<PAGE>
(a) the duly executed counterparts of this Agreement;
(b) the duly completed Revolving Credit Notes evidencing the Revolving Loan
Commitments, the duly executed Term Notes evidencing the Term Loan Commitments
and the duly executed Money Market Notes;
(c) the duly executed Guaranty Agreement;
(d) certificates of the Secretaries or Assistant Secretaries of the Credit
Parties attaching and certifying copies of the resolutions of the boards of
directors of the Credit Parties, authorizing the execution, delivery and
performance of the Credit Documents to which each Credit Party is a party;
(e) certificates of the Secretaries or an Assistant Secretaries of the
Credit Parties certifying (i) the name, title and true signature of each officer
of the Credit Parties executing the Credit Documents to which each Credit Party
is a party, and (ii) the bylaws of such entities;
(f) certified copies of the certificate or articles of incorporation of the
Credit Parties certified by the Secretaries of State and by the Secretaries or
Assistant Secretaries of the Credit Parties, together with certificates of good
standing or existence, as may be avail able from the Secretaries of State of the
jurisdiction of incorporation or organization of the Credit Parties and each
other jurisdiction where the Credit Parties' ownership of property or the
conduct of their respective businesses require it to be qualified, except where
a failure to be so qualified would not have a Materially Adverse Effect;
(g) certificate of Borrower in substantially the form of Exhibit I attached
---------
hereto and appropriately completed;
(h) acknowledgments from Prentice Hall Corporation as to its appointment as
agent for service of process for the Credit Parties;
(i) the favorable opinion of (a) Pfilip G. Hunt, Esquire, general counsel
to the Credit Parties as to certain corporate matters, and (b) Powell,
Goldstein, Frazer & Murphy, counsel to the Credit Parties as to certain other
matters, in the form of Exhibits J-1 and J-2, respectively, in each case
------------ ---
addressed to the Agent and each of the Lenders;
(j) certified copies of the Sharing Agreements;
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<PAGE>
(k) copies of all documents and instruments, including all consents,
authorizations and filings, required or advisable under any Requirement of Law
or by any material Contrac tual Obligation of the Credit Parties, 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 and all applicable waiting periods shall have expired;
(l) certificates, reports and other information as the Agent may reasonably
request from any Consolidated Company in order to satisfy the Lenders as to the
absence of any material liabilities or obligations arising from matters relating
to employees of the Consolidated Companies, including employee relations,
collective bargaining agreements, Plans and other compensation and employee
benefit plans;
(m) certificates, reports and other information as the Agent may reasonably
request from the Borrower in order to satisfy the Lenders that the Transaction
has been consummated in accordance with the Proxy Statement and all Requirements
of Law, including without limitation, a copy of the Certificate of Merger filed
with the State of Delaware and the State of Georgia evidencing that Morrison and
its subsidiary, Ruby Tuesday, Inc. have been merged into the Borrower;
(n) Either (i) a certified copy of a favorable ruling from the Internal
Revenue Service that the Distribution qualifies as a tax-free spin-off under the
provisions of Sections 355 and 368(a)(1)(D) of the Internal Revenue Code, or
(ii) an opinion to such effect from Powell, Goldstein, Frazer & Murphy together
with a reliance letter addressed to the Agent and the Lenders stating that the
Agent and the Lenders may rely upon such opinion;
(o) all Restructured Indebtedness identified on Schedule 8.01 hereof,
-------------
together with all interest, prepayment premiums and other amounts due and
payable with respect thereto shall have been paid in full (including with the
proceeds of the Term Loans and the initial Borrowing pursuant to the Revolving
Loan Commitments) and all commitments thereunder shall have been terminated as
evidenced by written notice from Morrison to such Lenders;
(p) a certified copy of the projections described in Section 6.14(c);
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<PAGE>
(q) certificates, reports and other information as the Agent may reasonably
request from any Consolidated Company in order to satisfy the Lenders as to the
absence of any material liabilities or obligations arising from litigation
(including without limitation, products liability and patent infringement
claims) pending or threatened against the Consolidated Companies; and
(r) evidence assuring the Agent and the Lenders that all corporate
proceedings and all other legal matters in connection with the authorization,
legality, validity and en forceability of the Credit Documents and the
Transaction are in form and substance satisfactory to the Lenders.
Section 5.02. Conditions to Each Loan. At the time of the making of
-----------------------
each Loan (but not including the continuation or conversion of any Revolving
Loan or Term Loan in the same principal amount), including the initial Loans
hereunder, (before as well as immediately after giving effect to such Loans and
to the proposed use of the proceeds thereof), 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;
(c) the Loans to be made and the use of proceeds thereof shall not
contravene, violate or conflict with, or involve the 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 Borrower;
and
(d) the Agent shall have received such other documents or legal opinions
as the Agent or any Lender may reasonably request, all in form and substance
reasonably sat isfactory to the Agent.
Each request for a Borrowing or a Money Market Bid 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 5.01 and 5.02 have been
satisfied.
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<PAGE>
ARTICLE VI.
REPRESENTATIONS AND WARRANTIES
------------------------------
Borrower (as to itself and all other Consolidated Companies)
represents and warrants as follows (with the understanding that the matters
described in the Schedules hereto assume the consummation of the Transaction):
Section 6.01. 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, and each
of the Credit Parties has the corporate power and authority and the legal right
to own and operate its property and to conduct its business. 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 (a) the failure to have such power, authority and legal right as set
forth in clause (i), (b) the failure to be so qualified or in good standing as
set forth in clause (ii), or (c) the failure to comply with Requirements of Law
as set forth in clause (iii), would reasonably be expected, in the aggregate, 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 6.01.
- -------------
Section 6.02. Corporate Power; Authorization. Each of the Credit
------------------------------
Parties 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 any Credit Party, or
the validity or enforceability against any Credit Party, of the Credit
Documents, other than such consents, authorizations or filings which have been
made or obtained.
Section 6.03. Enforceable Obligations. This Agreement has been duly
-----------------------
executed and delivered, and each other Credit Document will be duly executed and
delivered, by the respective Credit Parties, and this Agreement constitutes, and
each other Credit Document when executed and delivered will constitute, legal,
valid
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<PAGE>
and binding obligations of the Credit Parties, respectively, en forceable
against the Credit Parties in accordance with their respective terms, except as
may be limited by applicable bankruptcy, insolvency, reorganization, moratorium,
or similar laws affecting the enforcement of creditors' rights generally and by
general principles of equity.
Section 6.04. No Legal Bar. The execution, delivery and performance
------------
by the Credit Parties of the Credit Documents will not violate any Requirement
of Law or cause a breach or default under any of their respective material
Contractual Obligations.
Section 6.05. No Material Litigation. Except as set forth on
----------------------
Schedule 6.05 or in any notice furnished to the Lenders pursuant to Section
- -------------
7.07(e) at or prior to the respective times the representations and warranties
set forth in this Section 6.05 are made or deemed to be made hereunder, no
litigation, investigations or proceedings of or before any courts, tribunals,
arbitrators or governmental authorities are pending or, to the knowledge of
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) seeking money damages in excess of $2,500,000, either singly
or in the aggregate or which, if adversely determined, would otherwise
reasonably be expected to have a Materially Adverse Effect.
Section 6.06. Investment Company Act, Etc. None of the Credit
---------------------------
Parties 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 Credit Parties 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 6.07. 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 6.08. 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,
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<PAGE>
regulations, rules, ordinances, laws or licenses, would reasonably be expected
to result in penalties, fines, claims or other liabilities to the Consolidated
Companies in amounts in excess of $500,000, either individually or in the
aggregate (including any such penalties, fines, claims, or liabilities relating
to the matters set forth on Schedule 6.08(a)), except as set forth on Schedule
---------------- --------
6.08(a) or in any notice furnished to the Lenders pursuant to Section 7.07(f) at
- -------
or prior to the respective times the representations and warranties set forth in
this Section 6.08(a) are made or deemed to be made hereunder.
(b) Except as set forth on Schedule 6.08(b) or in any notice furnished
----------------
to the Lenders pursuant to Section 7.07(f) at or prior to the respective times
the representations and warranties set forth in this Section 6.08(b) are made or
deemed to be made hereunder, 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 contamination on any
properties owned by any Consolidated Company, where any such violation, spill,
leak, release or contamination would reasonably be expected to result in
penalties, fines, claims or other liabilities to the Consolidated Companies in
amounts in excess of $500,000, either individually or in the aggregate.
(c) Except as set forth on Schedule 6.08(c), the Consolidated
----------------
Companies have obtained all necessary governmental permits, licenses and
approvals which are material to 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.
Section 6.09. 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
-45-
<PAGE>
such insurance policies and coverages, and such policies and coverages are in
full force and effect.
Section 6.10. No Default. Except as set forth on Schedule 6.10, none
---------- -------------
of the Consolidated Companies is in default under or with respect to any
Contractual Obligation in any respect which default or defaults would be
reasonably expected in the aggregate to have a Materially Adverse Effect.
Section 6.11. No Burdensome Restrictions. Except as set forth on
--------------------------
Schedule 6.11 or in any notice furnished to the Lenders pursuant to Section
- -------------
7.07(k) at or prior to the respective times the representations and warranties
set forth in this Section 6.11 are made or deemed to be made hereunder, none of
the Consolidated Companies is a party to or bound by any Contractual Obligation
or Requirement of Law which has had or would reasonably be expected to have a
Materially Adverse Effect.
Section 6.12. Taxes. Except as set forth on Schedule 6.12, each of
----- -------------
the Consolidated Companies have filed or caused to be filed all declarations,
reports and tax returns which are required to have been filed, and has paid all
taxes, custom duties, levies, charges and similar contributions ("taxes" in this
Section 6.12) shown to be due and payable on said returns or on any assessments
made against it or its properties, and all other taxes, fees or other charges
imposed on it or any of its properties by any governmental authority (other than
those the amount or validity of which is currently being contested in good faith
by appropriate proceedings and with respect to which reserves in conformity with
GAAP have been provided in its books); and no tax liens have been filed and, to
the knowledge of Borrower, no claims are being asserted with respect to any such
taxes, fees or other charges.
Section 6.13. Subsidiaries. Except as disclosed on Schedule 6.01, on
------------ -------------
the date of this Agreement, Borrower has no Subsidiaries and neither Borrower
nor any Subsidiary is a joint ven ture partner or general partner in any
partnership. Except as disclosed on Schedule 6.13 or in any notice furnished to
-------------
the Lenders pursuant to Section 7.07(l) at or prior to the respective times the
representations and warranties set forth in this Section 6.13 are made or deemed
to be made hereunder, Borrower has no Material Subsidiaries.
Section 6.14. Financial Statements. Borrower has furnished to the
--------------------
Agent and the Lenders:
(a) Audited Reports. The audited consolidated balance sheet as of
---------------
June 5, 1993, June 4, 1994 and June 3, 1995 of
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<PAGE>
Morrison and the related consolidated statements of income, share holders'
equity and cash flows for the Fiscal Years then ended, including in each case
the related schedules and notes, setting forth in each case in comparative form
the figures for Morrison's previous Fiscal Year. The foregoing financial
statements fairly present in all material respects the consolidated financial
condition of Morrison as at the dates thereof and results of operations for such
periods in conformity with GAAP consistently applied;
(b) Pro Forma Reports. The unaudited pro forma consolidated balance
-----------------
sheet of the Borrower dated as of December 2, 1995, and the related consolidated
pro forma statements of income set forth in the Proxy fairly presents, on a pro
forma consolidated basis, in conformity with GAAP applied on a basis consistent
with the financial statements referred to in Section 6.14(a), the consolidated
---------------
financial position of the Borrower after giving effect to the Distribution. The
Borrower, did not, as of the date thereof, have any material contingent
obligation, contingent liability or liability for taxes, long-term lease or
unusual forward or long-term commitment, which is not reflected in the financial
statements or notes thereto for such date referred to above;
(c) The Projections. The projections, dated as of January 18, 1996,
---------------
prepared for the Borrower and its Subsidiaries on a consolidated basis with
respect to Fiscal Year 1996, Fiscal Year 1997, Fiscal Year 1998 and Fiscal Year
1999, on an annual basis, copies of which have been furnished to each Lender,
have been prepared on the basis of the assumptions set forth therein, which are
believed by the Borrower to be reasonable and fair in the light of current
conditions and the past history of Morrison and its Subsidiaries and to reflect
a reasonable estimate of the projected balance sheets, results of operations,
cash flows and other information presented therein; and
(d) No Material Adverse Change. Since the date of the preparation of
--------------------------
the pro forma financial statements set forth above, there have been no changes
with respect to the Consolidated Companies which has had or would reasonably be
expected to have a Materially Adverse Effect.
Section 6.15. ERISA. Except as disclosed on Schedule 6.15 or in any
----- -------------
notice to the Lenders furnished pursuant to Section 7.07(g) at or prior to the
respective times the representations and warranties set forth in this Section
6.15 are made or deemed to be made hereunder:
(1) Identification of Plans. None of the Consolidated Companies nor
-----------------------
any of their respective ERISA Affiliates maintains
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<PAGE>
or contributes to, or has during the past seven years maintained or contributed
to, any Plan that is subject to Title IV of ERISA;
(2) Compliance. Each Plan maintained by the Consolidated Companies
----------
have 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
6.15 (taken as a whole), would in the aggregate have a Materially Adverse
Effect;
(3) 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
6.15 (taken as a whole), would in the aggregate have a Materially Adverse
Effect;
(4) 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 (other than a Multiemployer Plan) 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 6.15 (taken as a whole), would have a
Materially Adverse Effect if such amount were then due and payable. None of the
Consolidated Companies would be subject to withdrawal liability with respect to
any Multiemployer Plan, determined as if the event resulting in such withdrawal
liability occurred on any date on which this representation is made or deemed to
be made based on the most recent actuarial valuation data made available to
employers participating in the Multiemployer Plan, in any amount which,
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<PAGE>
together with all other liabilities referred to in this Section 6.15 (taken as a
whole), would have a Materially Adverse Effect if such amounts 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 6.15 (taken as a whole), would
have a Materially Adverse Effect if such amounts were then due and payable.
Section 6.16. Patents, Trademarks, Licenses, Etc. Except as set
-----------------------------------
forth on Schedule 6.16, (i) the Consolidated Companies have obtained and hold in
-------------
full force and effect all material patents, trademarks, service marks, trade
names, copyrights, licenses and other such rights, free from material 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, 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 6.17. Ownership of Property. Except as set forth on Schedule
--------------------- --------
6.17, 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, or a
valid leasehold interest in, all of its other property, as such properties are
reflected in the pro forma consolidated balance sheet of the Consolidated
Companies as of December 2, 1995 referred to in Section 6.14, 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 Permitted Liens. The Consolidated Companies enjoy
peaceful and undisturbed possession under all of their respective material
leases.
Section 6.18. Indebtedness. As of the Closing Date and the Effective
------------
Date, except for the Indebtedness set forth on Schedule 8.01 and the
-------------
Restructured Indebtedness to be repaid with the proceeds of the Term Loans on
the Effective Date, none of the Consolidated Companies is an obligor in respect
of any Indebtedness for borrowed money, or any commitment to create or incur any
Indebtedness for borrowed money, in an amount greater than $1,000,000 in any
single case, and such Indebtedness and
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<PAGE>
commitments for amounts less than $1,000,000 do not exceed $2,500,000 in the
aggregate for all such Indebtedness and commitments of the Consolidated
Companies.
Section 6.19. Financial Condition. On the Closing Date and on the
-------------------
Effective Date, and on the date of each Loan hereunder and after giving effect
to the Transaction and the other transactions contemplated by this Agreement and
the other Credit Documents, including without limitation, the use of the
proceeds of the Loans as provided in Sections 2.01 and 3.01, (i) the assets of
each Credit Party at fair valuation and based on their present fair saleable
value (including, without limitation, the fair and realistic value of any
contribution or subrogation rights in respect of any Guaranty Agreement given by
such Credit Party) will exceed such Credit Party's debts, including contingent
liabilities (as such liabilities may be limited under the express terms of any
Guaranty Agreement of such Credit Party), (ii) the remaining capital of such
Credit Party will not be unreasonably small to conduct the Credit Party's
business, and (iii) such Credit Party will not have incurred debts, or have
intended to incur debts, beyond the Credit Party's ability to pay such debts as
they mature. For purposes of this Section 6.19, "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 6.20. Labor Matters. Except as set forth in Schedule 6.20 or
------------- -------------
in any notice furnished to the Lenders pursuant to Section 7.07(k) at or prior
to the respective times the repre sentations and warranties set forth in this
Section 6.20 are made or deemed to be made hereunder, the Consolidated Companies
have experienced no strikes, labor disputes, slow downs or work stop pages due
to labor disagreements which have had, or would reasonably be expected to have,
a Materially Adverse Effect, and, to the best knowledge of Borrower, there are
no such strikes, disputes, slow downs or work stoppages threatened against any
Consolidated Company. 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.
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 where
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<PAGE>
the failure to pay or accrue such liabilities would reasonably be expected to
have a Materially Adverse Effect.
Section 6.21. Payment or Dividend Restrictions. Except as described
--------------------------------
on Schedule 6.21, 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 6.22. Transaction. As of the Effective Date, the Transaction
-----------
has been consummated substantially in accordance with the terms of the Proxy
Statement and all applicable law. The Distribution qualifies as a tax-free
spin-off under the provisions of Sections 355 and 368(a)(1)(D) of the Internal
Revenue Code.
Section 6.23. Sharing Agreements. Each of the Sharing Agreements is
------------------
in full force and effect and no material default exists thereunder.
Section 6.24. Disclosure. No representation or warranty contained in
----------
this Agreement (including the Schedules attached hereto) or in any other
document furnished from time to time pursuant to the terms of this Agreement,
contains or will contain any untrue statement of a material fact or omits or
will omit to state any material fact necessary to make the statements herein or
therein not misleading in any material respect as of the date made or deemed to
be made. Except as may be set forth herein (including the Schedules attached
hereto), there is no fact known to Borrower which has had, or is reasonably
expected to have, a Materially Adverse Effect.
ARTICLE VII.
AFFIRMATIVE COVENANTS
---------------------
So long as any Commitment remains in effect hereunder or any Note
shall remain unpaid, Borrower will:
Section 7.01. Corporate Existence, Etc. Preserve and maintain, and
-------------------------
cause each of its Material Subsidiaries to preserve and maintain, its corporate
existence, its material rights, franchises, and licenses, and its material
patents and copyrights (for the scheduled duration thereof), trademarks, trade
names, and service marks, 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 would reasonably
be expected to have a Materially Adverse Effect.
-51-
<PAGE>
Section 7.02. Compliance with Laws, Etc. Comply, and cause each of
--------------------------
its Subsidiaries to comply with all Requirements of Law (including, without
limitation, the Environmental Laws subject to the exception set forth in Section
6.08 where the penalties, claims, fines, and other liabilities resulting from
noncompliance with such Environmental Laws do not involve amounts in excess of
$2,500,000 in the aggregate) and Contractual Obligations applicable to or
binding on any of them where the failure to comply with such Requirements of Law
and Contractual Obligations would reasonably be expected to have a Materially
Adverse Effect.
Section 7.03. Payment of Taxes and Claims, Etc. Pay, and cause each
---------------------------------
of its Subsidiaries to pay, (i) all taxes, assessments and governmental charges
imposed upon it or upon its property, and (ii) all claims (including, without
limitation, claims for labor, materials, supplies or services) which might, if
unpaid, become a Lien upon its property, unless, in each case, the validity or
amount thereof is being contested in good faith by appropriate proceedings and
adequate reserves are maintained with respect thereto.
Section 7.04. Keeping of Books. Keep, and cause each of its
----------------
Subsidiaries to keep, proper books of record and account, containing complete
and accurate entries of all their respective financial and business
transactions.
Section 7.05. Visitation, Inspection, Etc. Permit, and cause each of
----------------------------
its Subsidiaries to permit, any representative of the Agent or any Lender 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
Agent or such Lender may reasonably request.
Section 7.06. 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 its Subsidiaries, 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 as is cus-
tomary for such companies under similar circumstances; 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.
-52-
<PAGE>
(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 will cause to be made all necessary repairs, renewals,
replacements, settlements and improvements thereof, all as in the judgment of
Borrower may be necessary so that the business carried on in connection
therewith may be properly and advantageously conducted at all times.
Section 7.07. Reporting Covenants. Furnish to each Lender:
-------------------
(a) Annual Financial Statements. As soon as available and in any event
---------------------------
within 90 days after the end of each Fiscal Year of Borrower, balance
sheets of the Consolidated Companies as at the end of such year, presented
on a consolidated basis, and the related statements of income,
shareholders' equity, and cash flows of the Consolidated Companies for
such Fiscal Year, presented on a consolidated basis, setting forth in each
case in comparative form the figures for the previous Fiscal Year, all in
reasonable detail and accompanied by a report thereon of Ernst & Young or
other independent public accountants of comparable recognized national
standing, which such report shall be unqualified as to going concern and
scope of audit and shall state that such financial statements present
fairly in all material respects the financial condition as at the end of
such Fiscal Year on a consolidated basis, and the results of operations
and statements of cash flows of the Consolidated Companies for such Fiscal
Year in accordance with GAAP and that the examination by such accountants
in connection with such consolidated financial statements has been made in
accordance with generally accepted auditing standards;
(b) Quarterly Financial Statements. As soon as available and in any
------------------------------
event within 45 days after the end of each fiscal quarter of Borrower
(other than the fourth fiscal quarter), balance sheets of the Consolidated
Companies as at the end of such quarter presented on a consolidated basis
and the related statements of income, shareholders' equity, and cash flows
of the Consolidated Companies for such fiscal quarter and for the portion
of Borrower's Fiscal Year ended at the end of such quarter, presented on a
consolidated basis setting forth in each case in comparative form the
figures for the corresponding quarter and the corresponding portion of
Borrower's previous Fiscal Year, all in reasonable detail and certified by
the chief financial officer or principal accounting officer of Borrower
that such financial statements
-53-
<PAGE>
fairly present in all material respects the financial condition of the
Consolidated Companies as at the end of such fiscal quarter on a
consolidated basis, and the results of operations and statements of cash
flows of the Consolidated Companies for such fiscal quarter and such
portion of Borrower's Fiscal Year, in accordance with GAAP consistently
applied (subject to normal year-end audit adjustments and the absence of
certain footnotes);
(c) No Default/Compliance Certificate. Together with the financial
---------------------------------
statements required pursuant to subsections (a) and (b) above, a
certificate of the treasurer or chief financial officer of Borrower (i)
to the effect that, based upon a review of the activities of the
Consolidated Companies and such financial statements during the period
covered thereby, there exists no Event of Default and no Default under
this Agreement, or if there exists an Event of Default or a Default
hereunder, specifying the nature thereof and the proposed response
thereto, and (ii) demonstrating in reasonable detail compliance as at the
end of such Fiscal Year or such fiscal quarter with Section 7.08 and
Sections 8.01 through 8.05;
(d) Notice of Default. Promptly after any Executive Officer of
-----------------
Borrower has notice or knowledge of the occurrence of an Event of Default
or a Default, a certificate of the chief financial officer or principal
accounting officer of Borrower specifying the nature thereof and the
proposed response thereto;
(e) Litigation. Promptly after (i) the occurrence thereof, notice of
----------
the institution of or any material adverse development in any material
action, suit or proceeding or any governmental investigation or any
arbitration, before any court or arbitrator or any governmental or
administrative body, agency or official, against any Consolidated Company,
or any material property of any thereof seeking money damages in excess of
$2,500,000 or which, if adversely determined, would otherwise reasonably
be expected to have a Materially Adverse Effect, or (ii) actual knowledge
thereof, notice of the threat of any such action, suit, proceeding,
investigation or arbitration;
(f) Environmental Notices. Promptly after receipt thereof, notice of
---------------------
any actual or alleged violation, or notice of any action, claim or request
for information, either judicial or administrative, from any governmental
authority relating to any actual or alleged claim, notice of potential
responsibility under or violation of any Environmental Law,
-54-
<PAGE>
or any actual or alleged spill, leak, disposal or other release of any
waste, petroleum product, or hazardous waste or Hazardous Substance by any
Consolidated Company which could result in penalties, fines, claims or
other liabilities to any Consolidated Company in amounts in excess of
$500,000;
(g) ERISA. (i) Promptly after the occurrence thereof with respect to
-----
any Plan of any Consolidated Company or any ERISA Affiliate thereof, or
any trust established thereunder, notice of (A) a "reportable event"
described in Section 4043 of ERISA and the regulations issued from time to
time thereunder (other than a "reportable event" not subject to the
provisions for 30-day notice to the PBGC under such regulations), or (B)
any other event which could subject any Consolidated Company to any tax,
penalty or liability under Title I or Title IV of ERISA or 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 any such taxes,
penalties or liabilities exceed or could exceed $500,000 in the aggregate;
(ii) Promptly after such notice must be provided to the PBGC, or to
a Plan participant, beneficiary or alternative payee, any notice required
under Section 101(d), 302(f)(4), 303, 307, 4041(b)(1)(A) or 4041(c)(1)(A)
of ERISA or under Section 401(a)(29) or 412 of the Tax Code with respect
to any Plan of any Consolidated Company or any ERISA Affiliate thereof;
(iii) Promptly after receipt, any notice received by any Consolidated
Company or any ERISA Affiliate thereof concerning the intent of the PBGC
or any other governmental authority to terminate a Plan of such Company or
ERISA Affiliate thereof which is subject to Title IV of ERISA, to impose
any liability on such Company or ERISA Affiliate under Title IV of ERISA
or Chapter 43 of the Tax Code;
(iv) Upon the request of the Agent, promptly upon the filing thereof
with the Internal Revenue Service ("IRS") or the Department of Labor
("DOL"), a copy of IRS Form 5500 or annual report for each Plan of any
Consolidated Company or ERISA Affiliate thereof which is subject to Title
IV of ERISA;
(v) Upon the request of the Agent, (A) true and complete copies of
any and all documents, government reports and IRS determination or opinion
letters or rulings for any Plan of any Consolidated Company from the IRS,
PBGC or DOL, (B) any reports filed with the IRS, PBGC or DOL with respect
-55-
<PAGE>
to a Plan of the Consolidated Companies or any ERISA Affiliate thereof, or
(C) a current statement of withdrawal liability for each Multiemployer
Plan of any Consolidated Company or any ERISA Affiliate thereof;
(h) Liens. Promptly upon any Consolidated Company becoming aware
-----
thereof, notice of the filing of any federal statutory Lien, tax or other
state or local government Lien or any other Lien affecting their
respective properties, other than Permitted Liens;
(i) Public Filings, Etc. Promptly upon the filing thereof or otherwise
-------------------
becoming available, copies of all financial statements, annual, quarterly
and special 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, 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;
(j) Accountants' Reports. Promptly upon receipt thereof, copies of all
--------------------
financial statements of, and all reports submitted by, independent public
accountants to Borrower in connection with each annual, interim, or
special audit of Borrower's financial statements, including without
limitation, the comment letter submitted by such accountants to management
in connection with their annual audit;
(k) Burdensome Restrictions, Etc. Promptly upon the existence or
----------------------------
occurrence thereof, notice of the existence or occurrence of (i) any
Contractual Obligation or Requirement of Law described in Section 6.11,
(ii) failure of any Consolidated Company to hold in full force and effect
those material trademarks, service marks, patents, trade names,
copyrights, licenses and similar rights necessary in the normal conduct of
its business, and (iii) any strike, labor dispute, slow down or work
stoppage as described in Section 6.20;
(l) New Material Subsidiaries. Within 30 days after the formation or
-------------------------
acquisition of any Material Subsidiary, or any other event resulting in
the creation of a new Material Subsidiary, notice of the formation or
acquisition of such Material Subsidiary or such occurrence, including a
description of the assets of such entity, the activities in which it will
be engaged, and such other information as the Agent and any of the Lenders
may request;
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<PAGE>
(m) Intercompany Asset Transfers. Promptly upon the occurrence
----------------------------
thereof, notice of the transfer of any assets from any Credit Party to any
other Consolidated Company that is not a Credit Party in any transaction
or series of related transactions where either the book value or the fair
market value of such assets is greater than $2,500,000 (excluding sales or
other transfers of assets in the ordinary course of business); and
(n) Other Information. With reasonable promptness, such other
-----------------
information about the Consolidated Companies as the Agent or any Lender
may reasonably request from time to time.
Section 7.08. Financial Covenants.
-------------------
(a) Fixed Charge Coverage. Maintain a Fixed Charge Coverage Ratio
---------------------
greater than the ratio set forth opposite the periods set forth below, measured
as of the last day of each fiscal quarter during such period for the immediately
preceding four quarters ending on such date:
Applicable Period Ratio
----------------- -----
Fiscal Year End 1996 through
Fiscal Year End 1997 1.75:1.00
First day of Fiscal Year
1998 and thereafter 2.00:1.00
Notwithstanding the foregoing: (i) the calculation of the Fixed Charge Coverage
Ratio on June 1, 1996 shall be made solely with respect to the fiscal quarter
ending on such date, (ii) the calculation of the Fixed Charge Coverage Ratio on
August 31, 1996 shall be made solely with respect to the two fiscal quarters
ending on that date, and (iii) the calculation of the Fixed Charge Coverage
Ratio on November 30, 1996 shall be calculated solely with respect to the three
fiscal quarters ending on such date.
(b) Consolidated Funded Debt to Total Capitalization. Maintain at all
------------------------------------------------
times, measured as of the last day of each fiscal quarter of the Borrower,
commencing on Fiscal Year End 1996, a ratio of Consolidated Funded Debt to Total
Capitalization of less than 0.60:1.0.
(c) Consolidated Net Worth. Maintain at all times Consolidated Net
----------------------
Worth in an amount not less than the sum of (i) $180,000,000.00, plus (ii) the
----
greater of (x) $0, and (y) fifty percent (50%) of the Consolidated Net Income
(Loss) earned by Borrower during the period commencing on June 2, 1996 and
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ending on the last day of the fiscal quarter of the Borrower immediately
preceding the date of any calculation hereof (with such period calculated as a
single accounting period and taking into account 100% of all losses during such
period), plus (iii) an amount equal to 100% of the Net Proceeds of all issuances
----
of stock, warrants, Subordinated Debt, or other equity of the Borrower issued
following the date hereof.
Section 7.09. Notices Under Certain Other Indebtedness. Immediately
----------------------------------------
upon its receipt thereof, Borrower shall furnish the Agent a copy of any notice
received by it or any other Consolidated Company from the holder(s) of
Indebtedness referred to in Section 8.01(b), (c), (f), (g) or (i) (or from any
trustee, agent, attorney, or other party acting on behalf of such holder(s)) in
an amount which, in the aggregate, exceeds $2,500,000, 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 to exercise rights under
any Change in Control Provision.
Section 7.10. Additional Credit Parties and Collateral. Promptly
----------------------------------------
after (i) the formation or acquisition of any Material Subsidiary not listed on
Schedule 6.13, (ii) the transfer of assets to any Consolidated Company if notice
- -------------
thereof is required to be given pursuant to Section 7.07(m) and as a result
thereof the recipient of such assets becomes a Material Subsidiary, or (iii) the
occurrence of any other event creating a new Material Subsidiary, Borrower shall
cause to be executed and delivered a Guaranty Agreement from each such Material
Subsidiary, together with related corporate authorization documents,
organizational documents, secretary's certificates and opinions, all in form and
substance satisfactory to the Agent and the Required Lenders.
ARTICLE VIII.
NEGATIVE COVENANTS
------------------
So long as any Commitment remains in effect hereunder or any Note
shall remain unpaid, Borrower will not and will not permit any Subsidiary to:
Section 8.01. Indebtedness. Create, incur, assume, guarantee, suffer
------------
to exist or otherwise become liable on or with respect to, directly or
indirectly, any Indebtedness, other than:
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(a) Indebtedness of the Borrower under this Agreement and of the
Material Subsidiaries of Borrower pursuant to the Guaranty Agreement;
(b) Indebtedness outstanding or incurred on the Closing Date and
described on Schedule 8.01 (other than the Restructured Indebtedness to be
-------------
repaid in full on the Effective Date);
(c) purchase money Indebtedness to the extent secured by a Lien
permitted by Section 8.02(b) or Indebtedness of a Person acquired by the
Borrower to the extent secured by a Lien permitted by Section 8.02(h);
(d) unsecured current liabilities (other than liabilities for borrowed
money or liabilities evidenced by promissory notes, bonds or similar
instruments) incurred in the ordinary course of business and either (i)
not more than 30 days past due, or (ii) being disputed in good faith by
appropriate proceedings with reserves for such disputed liability
maintained in conformity with GAAP;
(e) Indebtedness of Borrower or any of its Subsidiaries under Interest
Rate Contracts;
(f) Subordinated Debt of the Borrower (but not Subsidiaries of the
Borrower);
(g) Guarantees of advances to officers and employees in the ordinary
course of business, or Guarantees otherwise disclosed to and approved in
writing by the Agent and the Required Lenders;
(h) Endorsements of instruments for deposit or collection in the
ordinary course of business; and
(i) Other unsecured Indebtedness of the Borrower (but not Subsidiaries
of the Borrower) (other than Guarantees) which does not result in a
Default or an Event of Default pursuant hereto.
Section 8.02. Liens. Create, incur, assume or suffer to exist any
-----
Lien on any of its property now owned or hereafter acquired to secure any
Indebtedness other than:
(a) Liens existing on the Closing Date and disclosed on Schedule 8.02;
-------------
(b) any Lien on any property and proceeds thereof securing
Indebtedness incurred or assumed for the purpose of
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financing all or any part of the acquisition cost of such property and any
refinancing thereof, provided that such Lien does not extend to any other
--------
property (other than the proceeds of such property);
(c) Liens for taxes not yet due, and Liens for taxes or Liens imposed
by ERISA which are being contested in good faith by appropriate
proceedings and with respect to which adequate reserves are being
maintained in accordance with GAAP;
(d) statutory Liens of landlords and Liens of carriers, warehousemen,
mechanics, materialmen and other Liens imposed by law and created in the
ordinary course of business for amounts not yet due or which are being
contested in good faith by appropriate proceedings and with respect to
which adequate reserves are being maintained in accordance with GAAP;
(e) Liens incurred or deposits made in the ordinary course of business
in connection with workers' compensation, unemployment insurance and other
types of social security, or to secure the performance of tenders,
statutory obligations, surety and appeal bonds, bids, leases, government
contracts, performance and return-of-money bonds and other similar
obligations (exclusive of obligations for the payment of borrowed money);
(f) zoning, easements and restrictions on the use of real property
which do not materially impair the use of such property;
(g) rights in property reserved or vested in any governmental
authority which do not materially impair the use of such property; and
(h) any Lien existing on property of a Person immediately prior to its
being consolidated with or merged into the Borrower or into any
Consolidated Company, or any Lien existing on any property acquired by any
Consolidated Company at the time such property is so acquired (whether or
not the Indebtedness secured thereby shall have been assumed), provided
that (x) no such Lien shall have been created or assumed in contemplation
of consolidation or merger or such Person's becoming a Consolidated
Company or such acquisition of property and (y) each such Lien shall at
all times be confined solely to the item or items of property so acquired
and, if required by the terms of the instruments originally creating such
Lien, other property which is an improvement to
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or is acquired for specific use in connection with such acquired property;
provided that, the aggregate amount of Indebtedness secured by Liens permitted
- -------------
pursuant to this Section 8.02 shall at no time exceed 15% of the Consolidated
Net Worth of the Borrower calculated as of the last day of the most recently
ended fiscal quarter of the Borrower.
Section 8.03. Mergers, Sales, Etc. (a) Merge or consolidate with any
-------------------
other Person, except that this Section 8.03 shall not apply to (i) any merger or
consolidation of Borrower with any other Person provided that the Borrower is
the surviving corporation after such merger or consolidation, (ii) any merger or
consolidation of any of the Borrower's Subsidiaries with any other Person
provided that any such Subsidiary shall be the surviving corporation after such
merger or consolidation or (iii) any merger between Subsidiaries of Borrower,
and (b) sell, lease, transfer or otherwise dispose of its accounts, property or
other assets (including capital stock of any Subsidiary of Borrower), except
that this Section 8.03 shall not apply to (i) any sale, lease, transfer or other
disposition of assets of any Subsidiary of the Borrower to the Borrower or any
of its Material Subsidiaries, (ii) sales of inventory in the ordinary course of
business of the Borrower and its Subsidiaries, (iii) disposition of equipment or
inventory determined in good faith to be obsolete or unusable by the Borrower or
its Subsidiaries, or (iv) any other sale of the Borrower's assets during the
term of this Agreement with an aggregate book value, when aggregated with all
other such sales since the Closing Date, not exceeding 7.5% of the aggregate
book value of all of the Borrower's assets on the date of such transfer;
provided, however, that no transaction pursuant to clause (a), clause (b)(i) or
clause (b)(iv) above shall be permitted if any Default or Event of Default
exists at the time of such transaction or would exist as a result of such
transaction.
Section 8.04. Investments, Loans, Etc. Make, permit or hold any
-----------------------
Investments in any Person, or otherwise acquire or hold any Subsidiaries, other
than:
(a) Investments in Subsidiaries of Borrower existing as of the Closing
Date;
(b) Investments in the stock or other assets of any other Person that
is engaged in a business permitted by Section 8.08 hereof that, as a
result of such Investment, becomes a Subsidiary of Borrower (other than
Hostile Acquisitions); provided, however, that the aggregate amount of
-------- -------
Investments made pursuant to this subsection (b) shall not exceed, during
the term of this Agreement, a total value of
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ten percent (10%) of the Consolidated Net Worth of the Borrower as
calculated on the last day of the most recently ended fiscal quarter of
the Borrower;
(c) marketable direct obligations of the United States or any agency
thereof, or obligations guaranteed by the United States or any agency
thereof, in each case supported by the full faith and credit of the United
States and maturing within one year from the date of creation thereof;
(d) Investments received in settlement of Indebtedness created in the
ordinary course of business;
(e) marketable direct obligations issued by any state of the United
States of America or any political subdivision of any such state or any
public instrumentality thereof, the interest from which is exempt from
Federal income taxes, maturing within one year from the date of
acquisition thereof and either having as at any date of determination the
one of the two highest ratings obtainable from either Standard & Poor's or
Moody's;
(f) unsecured commercial paper, the interest from which is exempt from
Federal income taxes, maturing no more than 270 days from the date of
creation and having as at any date of determination either the highest
rating obtainable from either Standard & Poor's or Moody's;
(g) commercial paper issued by corporations, each of which has a
consolidated net worth of not less than $500,000,000, and conducts a
substantial portion of its business in the United States of America,
maturing no more than 365 days from the date of acquisition thereof and
having as at any date of determination the highest rating obtainable from
either Standard & Poor's or Moody's; and
(h) money market or similar depository accounts, certificates of
deposit or bankers acceptances, in each case redeemable upon demand or
maturing within one year from the date of acquisition thereof, issued by
commercial banks incorporated under the laws of the United States of
America or any state thereof or the District of Columbia, provided (x)
each such bank has at any date of determination combined capital and
surplus of not less than $1,000,000,000 and a rating of its long-term debt
of at least A by Standard & Poor's or at least A by Moody's or a long-term
deposit rating of at least A issued by Standard & Poor's or at least A
issued by Moody's, (y) the aggregate amount of all such certificates of
deposit issued by such bank are fully insured at all times by the Federal
Deposit Insurance Company;
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provided however, notwithstanding the foregoing, the Borrower and any
- --------- -------
Subsidiary may continue to own any Investment which (A) complied with the
provisions of clauses (f), (g) or (h) at the time such Investment was made and
(B) at any date of determination does not so comply solely because (x) such
Investment no longer has the rating required from Standard & Poor's or Moody's
or (y) the bank having the money market or depository account or issuing the
certificate of deposit or bankers acceptance ceases to have the required level
of capital and surplus or to have a rating of its long-term debt of at least A
by Standard & Poor's or at least A by Moody's or to have a long-term deposit
rating of at least A by Standard & Poor's or at least A by Moody's, if, and for
so long as, in the good faith judgment of the relevant Executive Officer, no
loss of the principal amount of such Investment would occur as the result of the
Borrower or such Subsidiary continuing to own such Investment to maturity.
Nothing contained in the foregoing proviso shall be deemed to be applicable to
any new or renewed Investment at the time such Investment is made or renewed.
Section 8.05 Letters of Credit. Create, incur, issue, assume,
-----------------
guarantee, suffer to exist or otherwise become liable on or with respect to,
directly or indirectly, letters of credit where the maximum amount available to
be drawn under all such letters of credit would exceed, at any one time
outstanding, $50,000,000 in the aggregate.
Section 8.06. Sale and Leaseback Transactions. Sell or transfer any
-------------------------------
property, real or personal, whether now owned or hereafter acquired, and
thereafter rent or lease such property or other property which any Consolidated
Company intends to use for substantially the same purpose or purposes as the
property being sold or transferred; provided that, the Consolidated Companies
-------------
shall be permitted to sell or transfer property and rent or lease such property
or other property back so long as the aggregate market value of such property
sold or transferred during the term of this Agreement does not exceed
$5,000,000.
Section 8.07. Transactions with Affiliates.
----------------------------
(a) Enter into any transaction or series of related transactions which
in the aggregate would be material, whether or not in the ordinary course of
business, with any Affiliate of any Consolidated Company (but excluding any
Affiliate which is also a wholly-owned Subsidiary of Borrower and any
compensation arrangement with an officer or director of the Borrower or any
other Consolidated Company entered into in the ordinary course of business),
other than on terms and conditions substantially as favorable to such
Consolidated Company as would be obtained by such Consolidated Company at the
time in a comparable arm's-length transaction with a Person other than an
Affiliate.
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<PAGE>
(b) Convey or transfer to any other Person (including any other
Consolidated Company) any real property, buildings, or fixtures used in the
manufacturing or production operations of any Consolidated Company, or convey or
transfer to any other Consolidated Company any other assets (excluding
conveyances or transfers in the ordinary course of business) if at the time of
such conveyance or transfer any Default or Event of Default exists or would
exist as a result of such conveyance or transfer.
Section 8.08. Changes in Business. Enter into or engage in any
-------------------
business which is substantially different from the business engaged in by the
Borrower and its Subsidiaries on the Closing Date.
Section 8.09. ERISA. Take or fail to take any action with respect to
-----
any Plan of any Consolidated Company or, with respect to its ERISA Affiliates,
any Plans which are subject to Title IV of ERISA or to continuation health care
requirements for group health plans under the Tax Code, including without
limitation (i) establishing any such Plan, (ii) amending any such Plan (except
where required to comply with applicable law), (iii) terminating or withdrawing
from any such Plan, or (iv) incurring an amount of unfunded benefit liabilities,
as defined in Section 4001(a)(18) of ERISA, or any withdrawal liability under
Title IV of ERISA with respect to any such Plan, which together with any other
action or omission referred to in this Section 7.09 (taken as a whole) would
have a Materially Adverse Effect, without first obtaining the written approval
of the Required Lenders.
Section 8.10. Limitation on Payment Restrictions Affecting
--------------------------------------------
Consolidated Companies. Create or otherwise cause or suffer to exist or become
- ----------------------
effective, any consensual encumbrance or restriction on the ability of any
Consolidated Company to (i) pay dividends or make any other distributions on any
stock of a Subsidiary of the Borrower, or (ii) pay any intercompany debt owed to
Borrower or any other Consolidated Company, or (iii) transfer any of its
property or assets to Borrower or any other Consolidated Company, except any
consensual encumbrance or restriction existing as of the Closing Date.
Section 8.11. Actions Under Certain Documents. Without the prior
-------------------------------
written consent of the Required Lenders (i) modify, amend, cancel or rescind any
agreements or documents evidencing or governing Subordinated Debt or
intercompany debt, (ii) make any payment with respect to Subordinated Debt,
except that current interest accrued on such Subordinated Debt as of the date of
this Agreement and all interest subsequently accruing thereon (whether or not
paid currently) may be paid unless a Default or Event of Default has occurred
and is continuing, (iii) voluntarily prepay any portion of intercompany debt, or
(iv) amend or revise the
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Sharing Agreements so as to materially increase the liabilities or obligations
of the Consolidated Companies thereunder.
Section 8.12. Changes in Fiscal Year. Change the calculation of the
----------------------
Fiscal Year of the Borrower.
Section 8.13. Issuance of Stock by Subsidiaries. Permit any
---------------------------------
Subsidiary (either directly or indirectly by the issuance of rights or options
for, or securities convertible into such shares) to issue, sell or dispose of
any shares of its stock of any class (other than directors' qualifying shares,
if any) except to the Borrower or another Subsidiary.
ARTICLE IX.
EVENTS OF DEFAULT
-----------------
Upon the occurrence and during the continuance of any of the following
specified events (each an "Event of Default"):
Section 9.01. 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 three (3) days of its due
date;
Section 9.02. Covenants Without Notice. Borrower shall fail to
------------------------
observe or perform any covenant or agreement contained in Sections 7.01, 7.05,
7.07, 7.08, 7.09 or Article VIII;
Section 9.03. Other Covenants. Borrower shall fail to observe or
---------------
perform any covenant or agreement contained in this Agreement, other than those
referred to in Sections 9.01 and 9.02, and, if capable of being remedied, such
failure shall remain unremedied for 30 days after the earlier of (i) Borrower's
obtaining knowledge thereof, or (ii) written notice thereof shall have been
given to Borrower by Agent or any Lender;
Section 9.04. Representations. Any representation or warranty made
---------------
or deemed to be made by Borrower or any other Credit Party 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 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;
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Section 9.05. 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 $2,500,000 individually or in the aggregate;
Section 9.06. Defaults Under Other Agreements; Change In Control
--------------------------------------------------
Provisions. (a) Any Consolidated Company shall fail to observe or perform any
- ----------
covenants or agreements (whether or not waived) contained in any agreements or
instruments relating to any of its Indebtedness exceeding $2,500,000
individually or in the aggregate, or any other event shall occur if the effect
of such failure or other event is to accelerate, or with notice or passage of
time or both, 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; or (b) any event or condition
shall occur or exist which, pursuant to the terms of any Change in Control
Provision, requires or permits the holder(s) of the Indebtedness subject to such
Change in Control Provision 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;
Section 9.07. Bankruptcy. The Borrower or any Material Subsidiary
----------
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 Borrower or any Material Subsidiary and the petition is not
controverted 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 the Borrower or
any Material Subsidiary; or the Borrower or any Material Subsidiary 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 the Borrower or
any Material Subsidiary or there is commenced against the Borrower or any
Material Subsidiary any such proceeding which remains undismissed for a period
of 60 days; or the Borrower or any Material Subsidiary is adjudicated insolvent
or bankrupt; or any order of relief or other order approving any such case or
proceeding is entered; or the Borrower or any Material Subsidiary suffers any
appointment of any custodian or the like for it or any substantial part of its
property to continue undischarged or
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unstayed for a period of 60 days; or the Borrower or any Material Subsidiary
makes a general assignment for the benefit of creditors; or the Borrower or any
Material Subsidiary 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 the
Borrower or any Material Subsidiary shall call a meeting of its creditors with a
view to arranging a composition or adjustment of its debts; or the Borrower or
any Material Subsidiary 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 the Borrower or any Material Subsidiary for the purpose of effecting
any of the foregoing;
Section 9.08. ERISA. A Plan of either a Consolidated Company or of
-----
any of its ERISA Affiliates which is subject to Title IV of ERISA:
(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
described in clauses (i) through (iv) above a liability to the PBGC or a Plan
that would have a Materially Adverse Effect;
Section 9.09. Judgments. Judgments or orders for the payment of money in
---------
excess of $2,500,000 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
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which execution shall not be effectively stayed or deferred (whether by action
of a court, by agreement or otherwise);
Section 9.10. Ownership of Credit Parties. If Borrower shall at any time
---------------------------
fail to own and control the shares of Voting Stock of any Guarantor which it
owned or controlled at the time such Guarantor became a Credit Party hereunder
other than due to sale of the Voting Stock of such Guarantor permitted pursuant
to Section 8.03 hereof;
Section 9.11. Change in Control of Borrower. With the exception of
-----------------------------
Morrison prior to the Effective Date, any person or group (within the meaning of
Rule 13d-5 of the Securities and Exchange Commission as in effect on the date
hereof) shall become the owner, beneficially or of record, of shares
representing more than thirty percent (30%) of the aggregate ordinary voting
power represented by the issued and outstanding capital stock of the Borrower;
or
Section 9.12. Default Under Other Credit Documents; Sharing Agreements.
--------------------------------------------------------
(x) There shall exist or occur any "Event of Default" as provided under the
terms of any other 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 Credit Party, or at any time it is or becomes
unlawful for Borrower or any other Credit Party to perform or comply with its
obligations under any Credit Document, or the obligations of Borrower or any
other Credit Party under any Credit Document are not or cease to be legal, valid
and binding on Borrower or any such Credit Party or (y) any party to the Sharing
Agreements shall default with respect to its covenants or obligations thereunder
where such default results in a Materially Adverse Effect with respect to the
Credit Parties;
then, and in any such event, and at any time thereafter if any Event of Default
shall then be continuing, the Agent may, and upon the written or telex request
of the Required Lenders, shall, take any or all of the following actions,
without prejudice to the rights of the Agent, any Lender or the holder of any
Note to enforce its claims against Borrower or any other Credit Party: (i)
declare all Commitments terminated, whereupon the Commitments of each Lender
shall terminate immediately and any commitment 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 9.07 shall occur, the result which would occur upon the giving of
notice by the Agent to any Credit Party, shall occur automatically without the
giving of any such notice, and (iii) may exercise any other rights or remedies
available under the Credit Documents, at law or in equity.
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ARTICLE X.
THE AGENT AND THE ADMINISTRATIVE AGENT.
--------------------------------------
Section 10.01. (a) Appointment of Agent. Each Lender hereby designates
--------------------
SunTrust as 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 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 Agent by the terms hereof and thereof and such other powers as are
reasonably incidental thereto. The Agent may perform any of its duties hereunder
by or through their agents or employees.
(b) Administrative Agent. Each Lender hereby designates SunTrust as the
--------------------
Administrative Agent to administer Money Market Bid Facility and to receive the
notices and to undertake such other duties specifically delegated to the
Administrative Agent herein. Except as set forth in the preceding sentence, the
Administrative Agent, as such, shall have no duties or obligations whatsoever
under this Agreement or any other Loan Document or any other document or any
matter related hereto or thereto, but shall nevertheless be entitled to all of
the indemnities and other protection afforded to the Agent under this Article X
for all actions taken by the Administrative Agent during the period that the
Administrative Agent is SunTrust.
Section 10.02. Authorization of Agent with Respect to the Security
---------------------------------------------------
Documents. (a) Each Lender hereby authorizes the Agent to enter into each of the
- ---------
Security Documents substantially in the form attached hereto, and to take all
action contemplated thereby. All rights and remedies under the Security
Documents may be exercised by the Agent for the benefit of the Agent and the
Lenders and the other beneficiaries thereof upon the terms thereof. The Lenders
further agree that the Agent may assign its rights and obligations under any of
the Security Documents to any affiliate of the Agent or to any trustee, if
necessary or appropriate under applicable law, which assignee in each such case
shall (subject to compliance with any requirements of applicable law governing
the assignment of such Security Documents) be entitled to all the rights of the
Agent under and with respect to the applicable Security Document.
(b) In each circumstance where, under any provision of any Security
Document, the Agent shall have the right to grant or
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withhold any consent, exercise any remedy, make any determination or direct any
action by the Agent under such Security Document, the Agent shall act in respect
of such consent, exercise of remedies, determination or action, as the case may
be, with the consent of and at the direction of the Required Lenders; provided,
--------
however, that no such consent of the Required Lenders shall be required with
- -------
respect to any consent, determination or other matter that is, in the Agent's
judgment, ministerial or administrative in nature. In each circumstance where
any consent of or direction from the Required Lenders is required, the Agent
shall send to the Lenders a notice setting forth a description in reasonable
detail of the matter as to which consent or direction is requested and the
Agent's proposed course of action with respect thereto. In the event the Agent
shall not have received a response from any Lender within five (5) Business Days
after such Lender's receipt of such notice, such Lender shall be deemed to have
agreed to the course of action proposed by the Agent.
Section 10.03. Nature of Duties of Agent. The Agent shall have no duties
-------------------------
or responsibilities except those expressly set forth in this Agreement and the
other Credit Documents. None of the 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 Agent shall be
ministerial and administrative in nature; the 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 Agent any obligations in respect of this Agreement or the
other Credit Documents except as expressly set forth herein.
Section 10.04. Lack of Reliance on the Agent.
-----------------------------
(a) Independently and without reliance upon the 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 Credit
Parties in connection with the taking or not taking of any action in connection
herewith, and (ii) its own appraisal of the creditworthiness of the Credit
Parties, and, except as expressly provided in this Agreement, the 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.
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(b) The 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
Guaranty Agreement or any other documents contemplated hereby or thereby, or the
financial condition of the Credit Parties, or be required to make any inquiry
concerning either the performance or observance of any of the terms, provisions
or conditions of this Agreement, the Notes, the Guaranty Agreement or the other
documents contemplated hereby or thereby, or the financial condition of the
Credit Parties, or the existence or possible existence of any Default or Event
of Default.
Section 10.05. Certain Rights of the Agent. If the 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 Agent
shall be entitled to refrain from such act or taking such act, unless and until
the Agent shall have received instructions from the Required Lenders; and the
Agent shall not incur liability in any Person by reason of so refraining.
Without limiting the foregoing, no Lender shall have any right of action
whatsoever against the Agent as a result of the Agent acting or refraining from
acting hereunder in accordance with the instructions of the Required Lenders.
Section 10.06. Reliance by Agent. The 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 Agent may consult with legal counsel
(including counsel for any Credit Party), 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 10.07. Indemnification of Agent. To the extent the Agent is not
------------------------
reimbursed and indemnified by the Credit Parties, each Lender will reimburse and
indemnify the 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 Commitments), in either case, for and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses (including counsel fees
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and disbursements) or disbursements of any kind or nature whatsoever which may
be imposed on, incurred by or asserted against the 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 Agent for
--------
any portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements resulting from the
Agent's gross negligence or willful misconduct.
Section 10.08. The 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 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 Agent in its individual capacity. The
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 10.09. Holders of Notes. The 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 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 10.10. Successor Agent.
---------------
(a) The 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 Agent may not resign or be removed
-------- -------
until a successor 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 Agent subject to Borrower's prior written
approval. If no successor Agent shall have been so appointed by the Required
Lenders, and shall have accepted such appointment, within 30 days after the
retiring Agent's giving of
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notice of resignation or the Required Lenders' removal of the retiring Agent,
then the retiring Agent may, on behalf of the Lenders, appoint a successor 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 $1,000,000,000.
(b) Upon the acceptance of any appointment as the Agent hereunder by a
successor Agent, such successor Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring Agent,
and the retiring Agent shall be discharged from its duties and obligations under
this Agreement. After any retiring Agent's resignation or removal hereunder as
Agent, the provisions of this Article X shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was an Agent under this
Agreement. Prior to the exercise by the Borrower of the option to assume the
obligations of the Administrative Agent hereunder, any resignation or removal of
the Agent shall also be deemed to be a resignation or removal of the
Administrative Agent so that the Agent and the Administrative Agent shall at all
times be the same Person except as provided in Section 10.11.
Section 10.11. Replacement of Administrative Agent with the Borrower.
-----------------------------------------------------
Upon no less than thirty days' prior written notice to the Administrative Agent
and each Lender, the Borrower shall have the option, on each anniversary of the
Closing Date, to elect to assume the obligations of the Administrative Agent
pursuant to this Agreement without the consent of the Agent or any Lender. In
the event that the Borrower so assumes such obligations in writing, all
references to the Administrative Agent set forth herein or in any other Loan
Document shall be deemed to refer to the Borrower.
ARTICLE XI.
MISCELLANEOUS
-------------
Section 11.01. 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 Agent and Borrower. Each such
notice, request or other communication shall be effective (i) if given by telex,
when such telex is
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transmitted to the telex number specified in this Section and the appropriate
answerback is received, (ii) if given by mail, 72 hours 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 and the Agent shall
--------
not be effective until received.
Section 11.02. Amendments, Etc. No amendment or waiver of any provision
----------------
of this Agreement or the other Credit Documents, nor consent to any departure by
any Credit Party therefrom, shall in any event be effective unless the same
shall be in writing and signed by the Required Lenders (and in the case of any
amendment, the applicable Credit Party), 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 5.01 or 5.02, (ii) increase the Commitments
or contractual obligations of the Lenders 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) agree to release any Guarantor from its
obligations under any Guaranty Agreement, (vii) modify the definition of
"Required Lenders," or (viii) modify this Section 11.02. Notwithstanding the
foregoing, no amendment, waiver or consent shall, unless in writing and signed
by the Agent and the Administrative Agent in addition to the Lenders required
hereinabove to take such action, affect the rights or duties of the Agent or the
Administrative Agent, as the case may be, under this Agreement or under any
other Credit Document.
Section 11.03. No Waiver; Remedies Cumulative. No failure or delay on the
------------------------------
part of the Agent, 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 Credit Party and the Agent, 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
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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 Agent, the Administrative Agent, any Lender or the
holder of any Note would otherwise have. No notice to or demand on any Credit
Party not required hereunder or under any other Credit Document in any case
shall entitle any Credit Party to any other or further notice or demand in
similar or other circumstances or constitute a waiver of the rights of the
Agent, 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 11.04. 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 Agent and the
Administrative Agent in the administration (both before and after the
execution hereof and including reasonable expenses actually incurred relating
to advice of counsel as to the rights and duties of the Agent, the
Administrative Agent and the Lenders with respect thereto) of, and in
connection with the preparation, execution and delivery of, preservation of
rights under, enforcement of, and, after a Default or Event of Default,
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 Agent and 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 changes of counsel), for any of the Lenders;
(ii) subject, in the case of certain Taxes, to the applicable provisions of
Section 4.07(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 save 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 Agent, the Administrative Agent and each Lender, and
their respective officers, directors, employees, representatives and agents
from, and hold each of
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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 Credit Party's
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 Credit Party's
ownership, operation, possession or control of its business, property or
facilities or before, on or after the date hereof, and in cluding 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 11.04
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 11.05. Right of Setoff. In addition to and not in limitation
---------------
of all rights of offset that any Lender or other
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holder of a Note may have under applicable law, each Lender or other holder of a
Note shall, upon the occurrence of any Event of Default and whether or not such
Lender or such holder has made any demand or any Credit Party's obligations have
matured, have the right to appropriate and apply to the payment of any Credit
Party's obligations hereunder and under the other Credit Documents, all deposits
of any Credit Party (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 Credit Party, whether or not related
to this Agreement or any transaction hereunder.
Section 11.06. Benefit of Agreement; Assignments; 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 any of its
Commitments and the Loans at the time owing to it and the Notes held by it) to
any Eligible Assignee; provided, however, that (i) the Borrower must give its
-------- -------
prior written consent to such assignment (which consent shall not be
unreasonably withheld or delayed) unless such assignment is an Affiliate of the
assigning Lender or unless an Event of Default has occurred and is continuing
hereunder, (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 Agent) shall not be less than an
amount equal to $5,000,000 or greater integral multiplies of $1,000,000, (iii)
the parties to each such assignment shall execute and deliver to the Agent an
Assignment and Acceptance, together with a Note or Notes subject to such
assignment and, unless such assignment is to an Affiliate of such Lender, a
processing and recordation fee of $2,500, (iv) a Lender must assign a
proportionate amount of both its Revolving Loan Commitment and Term Loans, and
(v) no Lender shall make more than two (2) assignments to any Person or Persons
which are not Affiliates of such Lender during the term of this Agreement
without the prior written consent of the Borrower and the Agent (such consent
not to be unreasonably withheld or delayed). Borrower shall not be responsible
for such processing and
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recordation fee or any costs or expenses incurred by any Lender or the Agent in
connection with such assignment. 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.
Notwithstanding the foregoing, the assigning Lender must retain after the
consummation of such Assignment and Acceptance, a minimum aggregate amount of
Commitments of $5,000,000; 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. Within five (5) Business Days after receipt of the
notice and the Assignment and Acceptance, Borrower shall execute and deliver to
the 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 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. Such new Note or Notes shall be in an aggregate 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 Borrower or the Agent,
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) no Lender may sell a participation in its aggregate
- -------
Commitments (after giving effect to any permitted assignment hereof) unless it
retains an aggregate exposure of $5,000,000, provided, however, sales of
participations to an Affiliate of such Lender shall not be included in such
calculation; provided, however, no such maximum amount shall be applicable to
-------- -------
any such participation sold at any time there exists an Event of Default
hereunder, (ii) such Lender's obligations under this Agreement shall remain
unchanged, (iii) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations, and (iv) 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 IV of this Agreement, and (v) Borrower and the Agent, 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,
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modification or waiver of any provisions of this Agreement. Each Lender shall
promptly notify in writing the Agent and the Borrower of any sale of a
participation hereunder.
(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 pur pose 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 (i) to directors,
employees, auditors or counsel to whom it is necessary to show such information,
each of whom shall be informed of the confidential nature of the information,
(ii) in any statement or testimony pursuant to a subpoena or order by any court,
governmental body or other agency asserting jurisdiction over such entity, or as
otherwise required by law (provided prior notice is given to Borrower and the
Agent unless otherwise prohibited by the subpoena, order or law), and (iii) upon
the request or demand of any regulatory agency or authority with proper
jurisdiction. The proposed participant or assignee shall further agree to return
all documents or other written material and copies thereof received from any
Lender, the Agent, 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
in 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 4.07(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
or any Lender shall make demand for payment of any material additional amounts
as compensation for increased cost pursuant to Section 4.10, then and in such
event, upon request from the Borrower delivered to such Lender, the Agent, such
Lender shall assign, in accordance with the provisions of Section 11.06(c), all
of its rights and obligations under this Agreement and the other Credit
Documents to an Eligible Assignee selected by the Borrower and consented to by
the Agent in consideration for the payment by such assignee to the Lender
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of the principal of and interest on the outstanding Loans accrued to the date of
such assignment, the assumption of such Lender's Commitments hereunder, 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 11.07. Governing Law; Submission to Jurisdiction.
-----------------------------------------
(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 (WITHOUT GIVING EFFECT TO THE CONFLICT OF LAW PRINCIPLES
THEREOF) OF THE STATE OF GEORGIA.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT, THE
NOTES OR ANY OTHER CREDIT DOCUMENT MAY BE BROUGHT IN THE SUPERIOR COURT OF
FULTON COUNTY, GEORGIA, OR ANY OTHER COURT OF THE STATE OF GEORGIA OR OF THE
UNITED STATES OF AMERICA FOR THE NORTHERN DISTRICT OF GEORGIA, 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. THE PARTIES HERETO HEREBY IRREVOCABLY WAIVE 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.
(c) BORROWER HEREBY IRREVOCABLY DESIGNATES PRENTICE HALL CORPORATION,
ATLANTA, GEORGIA, AS ITS DESIGNEE, APPOINTEE AND LOCAL AGENT TO RECEIVE, FOR AND
ON BEHALF OF BORROWER, SERVICE OF PROCESS IN SUCH RESPECTIVE JURISDICTIONS IN
ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR THE NOTES OR
ANY DOCUMENT RELATED THERETO. IT IS UNDERSTOOD THAT A COPY OF SUCH PROCESS
SERVED ON SUCH LOCAL AGENT WILL BE PROMPTLY FORWARDED BY SUCH LOCAL AGENT AND BY
THE SERVER OF SUCH PROCESS BY MAIL TO BORROWER AT ITS ADDRESS SET FORTH OPPOSITE
ITS SIGNATURE BELOW, BUT THE FAILURE OF BORROWER TO RECEIVE SUCH COPY SHALL NOT
AFFECT IN ANY WAY THE SERVICE OF SUCH PROCESS. BORROWER FURTHER IRREVOCABLY
CONSENTS TO THE SERVICE OF PROCESS OF ANY OF THE AFOREMENTIONED COURTS IN ANY
SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR
CERTIFIED MAIL, POSTAGE PREPAID, TO BORROWER AT ITS SAID ADDRESS, SUCH SERVICE
TO BECOME EFFECTIVE 30 DAYS AFTER SUCH MAILING.
(d) Nothing herein shall affect the right of the Agent, the
Administrative Agent, any Lender, any holder of a Note or any Credit Party to
serve process in any other manner permitted by law
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or to commence legal proceedings or otherwise proceed against Borrower in any
other jurisdiction.
Section 11.08. 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 pur
pose.
Section 11.09. 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 ex ecuted and delivered shall be an
original, but all of which shall together constitute one and the same
instrument.
Section 11.10. Effectiveness; Termination of Commitments; Survival.
---------------------------------------------------
(a) This Agreement shall become effective on the 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 Agent or, in the case
of the Lenders, shall have given to the Agent written or telex notice (actually
received) that the same has been signed and mailed to them, provided that, the
-------- ----
Lenders shall have no obligation to make a Loan hereunder until the effective
Date. In the event that the Effective Date does not occur by March 22, 1996,
the Commitments and this Agreement shall terminate subject to the survival of
the Sections referenced below.
(b) The obligations of Borrower under Sections 4.07(b), 4.10, 4.12,
4.13, 4.16 and 11.04 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 11.11. Severability. In case any provision in or obligation
------------
under this Agreement or the 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 af
fected or impaired thereby.
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Section 11.12. 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 11.13. Change in Accounting Principles, Fiscal Year or Tax
---------------------------------------------------
Laws. If (i) any preparation of the financial statements referred to in Section
- ----
7.07 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 de sired 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 11.14. 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.
-82-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered in Atlanta, Georgia, by their duly authorized
officers as of the day and year first above written.
Address for Notices: RUBY TUESDAY (GEORGIA), INC.
- -------------------
4271 Morrison Drive
P. O. Box 160266-0001
Mobile, Alabama 36625 By:/s/ J. Russell Mothershed
---------------------------
J. Russell Mothershed
Vice President
Attn: J. Russell Mothershed
Telecopy: (205) 344-9513
Attest:/s/ Pfilip G. Hunt
-----------------------
Pfilip G. Hunt
Secretary
[CORPORATE SEAL]
STATE OF GEORGIA
COUNTY OF _____________
Signed, sealed and delivered
in the presence of:
[SIGNATURE APPEARS HERE]
- ---------------------------------------------
Notary Public
Date Executed by Notary:
CAROL I. McEWEN
Notary Public, Dekalb County, Georgia 3/6/96
- ---------------------------------------------
My Commission Expires August 4th, 1996
[NOTARIAL SEAL]
-83-
<PAGE>
Address for Notices: SUNTRUST BANK, ATLANTA,
- -------------------
As Agent and Administrative
Agent
25 Park Place, N.E.
24th Floor
Atlanta, Georgia 30303 By:/s/ Brian K. Peters
Attention: Jeffrey A. Howard -------------------------
Brian K. Peters
Vice President
Telecopy No.: 404/827-6270
By:/s/ Jeffrey A. Howard
-------------------------
Jeffrey A. Howard
Corporate Banking Officer
Payment Office:
- --------------
25 Park Place, N.E.
24th Floor
Atlanta, Georgia 30303
-84-
<PAGE>
Address for Notices: SUNTRUST BANK, ATLANTA
- -------------------
25 Park Place, N.E.
24th Floor
Atlanta, Georgia 30303 By:/s/ Brian K. Peters
Attention: Jeffrey A. Howard -----------------------
Brian K. Peters
Vice President
Telecopy No.: 404/827-6270
By:/s/ Jeffrey A. Howard
-----------------------
Jeffrey A. Howard
Banking Officer
-85-
<PAGE>
Address for Notices:
- -------------------
AMSOUTH BANK OF ALABAMA
63 South Royal Street
Commercial Lending Department
Second Floor By:/s/ J. Walters Ginn
Mobile, Alabama 36602 -------------------------
J. Walters Ginn
Vice President
Attention: J. Walters Ginn
Telecopy: (334) 438-8377
-86-
<PAGE>
Address for Notices:
- -------------------
WACHOVIA BANK OF GEORGIA, N.A.
191 Peachtree Street, N.W.
Atlanta, Georgia 30303
By:/s/ Leif Murphy
--------------------------------
Leif Murphy
Corporate Banking Officer
Attention: Leif Murphy
Telecopy: (404) 332-5016
-87-
<PAGE>
Address for Notices:
- -------------------
FIRST AMERICAN NATIONAL BANK
First American Center
4th and Union
Nashville, TN 37237-0310 By:/s/ Russell S. Rogers
------------------------------
Russell S. Rogers
Vice President
Attention: Russell S. Rogers
Telecopy: (615) 748-6072
-88-
<PAGE>
Address for Notices:
- -------------------
BARNETT BANK OF JACKSONVILLE, N.A.
50 North Laura Street
17th Floor
Jacksonville, Florida 32202
By: [signature appears here]
-------------------------------
Vice President
Attention: Meredith Richter
Telecopy: (904) 791-7023
-89-
<PAGE>
EXHIBIT 21.1
LIST OF SUBSIDIARIES
OF
RUBY TUESDAY, INC.
NAME STATE OF INCORPORATION
- ---- ----------------------
Tias, Inc. Texas
Morrison International, Inc. Delaware
Jezebel, Inc. Maryland
SRD of Wisconsin, Inc. Wisconsin
Jubilee, Inc. Wisconsin
Britz, Inc. Maryland
Orpah, Inc. Maryland
Morrison of New Jersey, Inc. New Jersey
Ruby Tuesday of Columbia, Inc. Maryland
LW Beverage Co., Inc. Texas
Ruby Tuesday of Salisbury, Inc. Maryland
Free Race Mall Rest, L.P. New Jersey
Lamar Permit Co., Inc. Texas
Tia's Club-Denton, Inc. Texas
Tia's Club-Lewisville, Inc. Texas
Tia's Club-Carrollton, Inc. Texas
Tia's Club-Plano, Inc. Texas
Tia's Club-Red Bird, Inc. Texas
Tia's Club-Mesquite, Inc. Texas
Tia's Club-Richardson, Inc. Texas
