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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-KSB/A-2
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 29, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM TO
COMMISSION FILE NUMBER
0-22582
NASHVILLE COUNTRY CLUB, INC.
(Name of Small Business Issuer in its Charter)
TENNESSEE 62-1535897
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
402 HERITAGE PLANTATION WAY
HICKORY VALLEY, TENNESSEE 38042
(Address of principal executive offices) (Zip Code)
ISSUER'S TELEPHONE NUMBER, INCLUDING AREA CODE: (901) 764-2300
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT: NONE
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
COMMON STOCK, NO PAR VALUE PER SHARE
REDEEMABLE COMMON STOCK PURCHASE WARRANTS
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. YES X NO .
----- -----
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. X
-----
The aggregate market value of the voting stock held by non-affiliates
of the registrant (based on the closing price of such stock as reported on
March 27, 1997 on The Nasdaq National Market of the National Association of
Securities Dealers, Inc.) was approximately $18,820,300.
As of March 31, 1997, 4,590,435 shares of the registrant's Common
Stock were outstanding.
Transitional Small Business Disclosure Format (Check One):
Yes No X
--- ---
DOCUMENTS INCORPORATED BY REFERENCE: NONE
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EXPLANATORY NOTE
This Form 10-KSB/A is being filed in order to amend and restate in
its entirety Item 13 of the Registrant's Form 10-KSB for the fiscal year ended
December 29, 1996.
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ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits.
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
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3.1 -- Charter of the Company, as amended. (1)
3.2 -- Restated Bylaws of the Company. (1)
4.1 -- Specimen Common Stock Certificate. (1)
4.2 -- Paragraph 6 of the Charter of the Company (included in
Exhibit 3.1). (1)
4.3 -- Specimen Warrant Certificate. (2)
10.1 -- Lease dated September 30, 1993 between the Company and
William Madison Smith. (1)
10.2 -- Employment Agreement dated as of January 1, 1994 between the
Company and Thomas Jackson Weaver, III. (1)
10.3 -- Employment Agreement dated as of January 1, 1994 between the
Company and Prab Nallamilli. (1)
10.4 -- Intentionally omitted.
10.5 -- Stock Purchase Warrant dated February 24, 1994 between the
Company and Yee, Desmond, Schroeder & Allen, Inc. (1)
10.6 -- Form of Indemnification Agreement between the Company and
each of the directors and executive officers. (1)
10.7 -- Employment Agreement dated April 29, 1996 between the Company
and Jeffrey McIntyre. (2)
10.8 -- Employment Agreement dated April 29, 1996 between the Company
and Mark van Hartesvelt. (2)
10.9 -- Nashville Country Club, Inc. 1995 Stock Option Plan. (3)
10.10 -- Form of Stock Option Agreement for options granted under the
1995 Stock Option Plan. (3)
10.11 -- Nashville Country Club, Inc. 1997 Stock Option Plan.
10.12 -- Forms of Stock Option Agreement for options granted under the
1997 Stock Option Plan.
10.13 -- Representative's Warrant Agreement dated April 23, 1996
between the Company and H.J. Meyers & Co., Inc. (3)
10.14 -- Warrant Agreement dated April 23, 1996 among the Company,
H.J. Meyers & Co., Inc. and American Stock Transfer & Trust
Company. (3)
10.15 -- Registration Rights Agreement between the Company, Robert E.
Geddes, Greg M. Janese, Thomas Miserendino, Brian K. Murphy
and Marc W. Oswald.
</TABLE>
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<TABLE>
<S> <C>
10.16 -- Consulting Agreement between Avalon Entertainment Group, Inc.
and Robert E. Geddes.
10.17 -- Consulting Agreement between Avalon Entertainment Group, Inc.
and Thomas Miserendino.
10.18 -- Employment Agreement between Avalon Entertainment Group, Inc.
and Marc W. Oswald.
10.19 -- Employment Agreement between Avalon Entertainment Group, Inc.
and Greg M. Janese.
21.1 -- Subsidiaries of the Company.
27.1 -- Financial Data Schedule.
</TABLE>
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(1) Incorporated by reference to the same exhibit number in the Company's
Registration Statement on Form SB-2 (Registration No. 33-69944).
(2) Incorporated by reference to the same exhibit number in the Company's
Registration Statement on Form SB-2 (Registration No. 33-97890).
(3) Incorporated by reference to the same exhibit number in the Company's Form
10-KSB for the fiscal year ended December 31, 1995.
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the quarterly period ended December
29, 1996.
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SIGNATURES
In accordance with the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized in the city
of Hickory Valley, Tennessee, on the 30th day of April, 1997.
NASHVILLE COUNTRY CLUB, INC.
By: /s/ Thomas Jackson Weaver III
----------------------------------
Thomas Jackson Weaver III
Chairman of the Board, Chief
Executive Officer and
President
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EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Description
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<S> <C>
10.11 Nashville Country Club, Inc. 1997 Stock Option Plan.
10.12 Forms of Stock Option Agreements for options granted under the 1997 Stock Option Plan.
10.15 Registration Rights Agreement between the Company, Robert E. Geddes, Greg M. Janese, Thomas
Miserendino, Brian K. Murphy and Marc W. Oswald.
10.16 Consulting Agreement between Avalon Entertainment Group, Inc. and Robert E. Geddes.
10.17 Consulting Agreement between Avalon Entertainment Group, Inc. and Thomas Miserendino.
10.18 Employment Agreement between Avalon Entertainment Group, Inc. and Marc W. Oswald.
10.19 Employment Agreement between Avalon Entertainment Group, Inc. and Greg M. Janese.
</TABLE>
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EXHIBIT 10.11
NASHVILLE COUNTRY CLUB, INC.
1997 STOCK OPTION PLAN
ARTICLE I
Purpose of Plan; Administration
1.1 Purpose. The purpose of the Nashville Country Club, Inc. 1997
Stock Option Plan (the "Plan") is to strengthen Nashville Country Club, Inc.
(the "Corporation") by providing a means of retaining and attracting competent
personnel by extending to certain key employees, officers and directors of the
Corporation, and to certain consultants providing services to the Corporation
("Consultants"), added long-term incentives for high levels of performance and
for unusual efforts designed to improve the financial performance of the
Corporation. It is intended that this purpose be achieved through the
opportunity for ownership of shares of Common Stock of the Corporation (the
"Common Stock") and the benefits of stock appreciation offered under the Plan.
It is further intended that pursuant to this Plan the Committee (as defined
herein) may grant either incentive stock options as defined in Section 422 of
the Internal Revenue Code of 1986, as amended (the "Code"), or nonqualified
stock options.
1.2 Administration. The Plan shall be administered by a committee
selected by the Board of Directors of the Corporation (the "Committee"), which
shall be comprised of two (2) or more directors, each of whom shall be a
"Non-Employee Director," as defined in Rule 16b-3(b)(3)(i), promulgated under
the Securities Exchange Act of 1934, as amended (the "Exchange Act").
Subject to the express provisions of the Plan, the Committee shall
have the authority to construe and interpret the Plan, to define the terms used
in the Plan, to prescribe, amend and rescind rules and regulations relating to
the administration of the Plan, to determine the duration
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and purposes of leaves of absence which may be granted to participants without
constituting a termination of their employment for purposes of the Plan, and to
make all other determinations necessary or advisable for the administration of
the Plan. The determinations of the Committee on all matters referred to in
this Plan shall be conclusive. No member of the Committee shall be liable for
any action, failure to act, determination or interpretation made in good faith
with respect to the Plan or any transaction under the Plan.
Subject to the express provisions of the Plan, the Committee shall
determine from the eligible class those individuals to whom incentive stock
options or nonqualified stock options under the Plan shall be granted (the
"Optionees"), the terms and provisions of the respective agreements (which need
not be identical) evidencing such options, the time at which options shall be
granted, and the number of shares of stock subject to each option.
1.3 Participation. Key employees, officers and directors of the
Corporation and Consultants shall be eligible for selection to participate in
the Plan upon approval by the Committee.
1.4 Stock Subject to the Plan. Subject to adjustment as provided
in Section 3.1 hereof, the stock to be offered under the Plan shall be treasury
shares or shares of the Corporation's authorized but unissued Common Stock, no
par value, (hereinafter collectively called "Stock"). The aggregate number of
shares of Stock to be issued upon exercise of all options granted under the
Plan shall not exceed three hundred thousand (300,000) shares, subject to
adjustment as set forth in Sections 3.1 and 3.2 hereof. If any option granted
hereunder shall lapse or terminate for any reason without having been fully
exercised, the shares subject thereto shall again be available for purposes of
the Plan.
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1.5 Restrictions on Exercise. No option granted hereunder may be
exercised unless and until the Committee determines that such exercise will be
made in compliance with all applicable laws, rules and regulations, including,
without limitation, applicable securities laws, rules and regulations. The
Corporation does not have any obligation to take any action to register or
qualify shares of Common Stock pursuant to applicable securities laws or to
perfect an exemption from such registration/qualification requirements.
ARTICLE II
Stock Options
2.1 Grant and Option Price. The Committee may grant one or more
options to any eligible individual. Options granted under the Plan shall be
granted within ten (10) years from the earlier of the date the Plan is adopted
by the Board of Directors of the Corporation (the "Board of Directors") or
approved by the shareholders of the Corporation, and such options may be
intended to qualify as an Incentive Stock Option (as hereinafter defined), or
the Committee may in its discretion grant nonqualified stock options under the
Plan; provided, however, that no option granted hereunder shall be considered
an Incentive Stock Option unless the Plan is approved by the shareholders of
the Corporation within twelve (12) months before or after the date on which the
Plan is adopted by the Board of Directors. All options shall be subject to the
terms and conditions set forth in the Plan and such other terms and conditions
established by the Committee as are not inconsistent with the purposes and
provisions of the Plan.
Except as otherwise provided herein, the purchase price of the Stock
covered by each option shall be determined by the Committee and set forth in an
Option Agreement (as hereinafter defined), but as to Stock covered by an
Incentive Stock Option the purchase price
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shall not be less than 100% of the Fair Market Value (as such term is defined
in this Section 2.1) of such Stock on the date of the grant of the option;
provided, however, that as to Stock covered by an Incentive Stock Option
granted to an Optionee who owns or is deemed to own more than 10% of the total
combined voting power and value of all classes of stock of the Corporation, the
purchase price shall not be less than 110% of the Fair Market Value of such
Stock on the date of the grant of the option. For purposes of the Plan, the
term "Fair Market Value" on any date shall mean (i) if the Stock is listed or
admitted to trade on a national securities exchange, the closing price of the
Stock on the Composite Tape, as published in the Wall Street Journal, of the
principal national securities exchange on which the Stock is so listed or
admitted to trade, on such date or, if there is no trading of the Stock on such
date, then the closing price of the Stock as quoted on such Composite Tape on
the next preceding date on which there was trading in such shares; (ii) if the
Stock is not listed or admitted to trade on a national securities exchange,
then the closing price of the Stock as quoted on the National Market System of
the National Association of Securities Dealers, Inc. ("NASD") on such date;
(iii) if the Stock is not listed to trade on the National Market System of the
NASD, the mean between the bid and asked price for the Stock on such date, as
furnished by the NASD through NASDAQ or a similar organization if NASDAQ is no
longer reporting such information; or (iv) if the Stock is not listed or
admitted to trade on a national securities exchange and if bid and asked prices
for the stock are not so furnished by the NASD or a similar organization, the
values established by the Committee for purposes of granting options under the
Plan. In addition to the above rules, Fair Market Value shall be determined
without regard to any restriction other than a restriction which, by its terms,
will never lapse.
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2.2 Stock Option Agreement. Each option granted pursuant to the
Plan shall, subject to the power of the Committee to prescribe certain terms of
the options granted hereunder, be evidenced by a Stock Option Agreement in
substantially the form of Exhibit "A"" or "B" attached hereto and incorporated
fully herein by reference (each, an "Option Agreement"). Exhibit "A" shall be
used whenever such option is intended to be an "incentive stock option" within
the meaning of Section 422 of the Code ("Incentive Stock Option"). Exhibit "B"
shall be used whenever such option is intended to be a nonqualified stock
option, as determined in the sole and absolute discretion of the Committee.
2.3 Option Period. Except as otherwise provided herein, each
option and all rights or obligations thereunder shall expire on such date as
the Committee shall determine (the "Expiration Date"), but not later than the
tenth anniversary of the date on which the option is granted, and shall be
subject to earlier termination as hereinafter provided. Notwithstanding the
foregoing, the Expiration Date of any Incentive Stock Option granted to an
Optionee who owns or is deemed to own more than 10% of the total combined
voting power and value of all classes of stock of the Corporation shall be no
later than the fifth anniversary of the date on which the option is granted,
and shall be subject to earlier termination as hereinafter provided.
2.4 Terms of Options. Each option granted under this Plan to an
employee, officer or director of the Corporation by its terms shall require the
employee, officer or director granted such option to remain in the continuous
employ or service of the Corporation for such period of time, if any, from the
date of grant of his option, before the right to exercise any part of the
option will accrue as the Committee may determine at the time of granting such
option. The
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Committee shall prescribe such rules as it deems appropriate in connection with
the grant of options to Consultants.
2.5 Exercise of Options. Each option shall become exercisable and
the total number of shares subject thereto shall be as the Committee shall
determine, as set forth in the Option Agreement evidencing such option. The
purchase price of the Stock purchased upon exercise of an option shall be paid
in full in cash or by check at the time of each exercise of an option or by
such other consideration as may be provided for in the Option Agreement by the
Committee; provided, however, that if the Option Agreement so provides and upon
receipt of all regulatory approvals, the person exercising the option may
deliver in payment of a portion or all of the purchase price certificates for
Common Stock, including a multiple series of exchanges of such Common Stock,
which shall be valued at the Fair Market Value of such Common Stock on the date
of exercise of the option. No options shall be exercisable except in respect
of whole shares of Stock.
2.6 Nontransferability of Options. An option granted under the
Plan shall, by its terms, be nontransferable by the Optionee other than by will
or by the laws of descent and distribution, and shall be exercisable during the
Optionee's lifetime only by the Optionee or by the Optionee's duly appointed
guardian or personal representative.
2.7 Termination of Relationship.
(a) If the employment or service of an Optionee (who is
an employee, officer or director of the Corporation) is terminated for
any reason other than (i) Disability (as hereinafter defined) of the
Optionee, (ii) death of the Optionee, or (iii) for cause (as
determined by the Committee in its sole and absolute discretion), then
such Optionee shall
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have the right at any time prior to the Expiration Date of the option
or within three (3) months after the date of termination of employment
or service, whichever is the shorter period, to exercise the option
for the full number of shares or any portion thereof (except as to the
issuance of fractional shares), but only to the extent such option was
otherwise exercisable on the date of termination of employment or
service.
(b) If the employment or service of an Optionee (who is
an employee, officer or director of the Corporation) is terminated by
reason of the Optionee's Disability, then such Optionee shall have the
right at any time prior to the Expiration Date of the option or within
twelve (12) months after the date of termination of employment or
service, whichever is the shorter period, to exercise the option for
the full number of shares or any portion thereof (except as to the
issuance of fractional shares) which are vested on or before the date
on which the Optionee's termination of employment or service occurs,
or which would otherwise have vested during the twelve month period
beginning on the date on which such termination of employment or
service occurs. As used herein, the term "Disability" shall mean the
inability to engage in any substantial gainful activity by reason of
any medically determinable physical or mental impairment which can be
expected to result in death or which has lasted or can be expected to
last for a continuous period of not less than twelve (12) months. The
determination of whether or not an Optionee's employment or service is
terminated by reason of Disability shall be in the sole and absolute
discretion of the Committee. An individual shall not be considered
Disabled unless he furnishes proof of the existence thereof in such
form and manner, and at such times, as the Committee may require.
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(c) If the employment or service of an Optionee (who is
an employee, officer or director of the Corporation) is terminated by
reason of the death of such Optionee, the option shall be exercisable
at any time prior to the Expiration Date of the option or within
twelve (12) months after the date of such death, whichever is the
shorter period, for the full number of shares or any portion thereof
(except as to the issuance of fractional shares) which are vested on
or before the date on which the Optionee's death occurs, or which
would otherwise have vested during the twelve month period beginning
on the date on which the Optionee's death occurs. Options exercisable
under this subsection may be exercised by the person or persons
entitled to do so under the Optionee's will, or if the Optionee shall
fail to make testamentary disposition of said option or shall die
intestate, by the Optionee's legal representative or representatives,
(d) If the employment or service of an Optionee (who is
an employee, officer or director of the Corporation) is terminated for
cause (which determination shall be made in the sole and absolute
discretion of the Committee), any then outstanding options of such
Optionee shall automatically terminate as of the date on which the
employment or service of such Optionee is terminated.
2.8 Issuance of Stock Certificates. Upon exercise of an option,
but subject to the provisions of Section 3.7 of the Plan, the person exercising
the option shall be entitled to one (1) stock certificate evidencing the shares
acquired upon such exercise; provided, however, that any person who tenders
Common Stock in payment of a portion or all of the purchase price of Stock
purchased upon exercise of the option shall be entitled to receive a separate
certificate
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representing the number of shares purchased in consideration of the tender of
such Common Stock.
2.9 Limitation on Grant of Incentive Stock Options. The aggregate
Fair Market Value (determined at the time the option is granted) of the Stock
with respect to which Incentive Stock Options are exercisable for the first
time by an Optionee during any calendar year (under all such plans of the
individual's employer corporation and its parent and subsidiary corporations,
if any) shall not exceed $100,000. In the event the limits of this Section 2.9
would otherwise be exceeded, the Optionee may still exercise his option, but
such option, to the extent of such excess, shall be deemed to be a nonqualified
option.
2.10 Other Limitations. The Board of Directors shall impose any
other limitations on the terms and conditions of Incentive Stock Options
granted under the Plan required in order that such options qualify as Incentive
Stock Options as that term is defined in Section 422 of the Code.
ARTICLE III
Other Provisions
3.1 Adjustments upon Changes in Capitalization. In the event that
a dividend payable in shares of Common Stock or a stock split shall be
hereinafter declared upon the Common Stock, the number of shares of Common
Stock then subject to any option granted hereunder and the number of shares
reserved for issuance pursuant to the Plan but not yet covered by an option
shall be adjusted by adding to each such share the number of shares which would
be distributable thereon if such share had been outstanding on the date fixed
for determining the shareholders entitled to receive such stock dividend or
stock split. In the event that the outstanding shares of
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the Common Stock shall be changed into or exchanged for a different number or
kind of shares of stock or other securities of the Corporation or of another
corporation, whether through reorganization, recapitalization, stock split,
combination of shares, merger or consolidation, then there shall be substituted
for each share of Common Stock subject to any such option and for each share of
Common Stock reserved for issuance pursuant to the Plan but not yet covered by
an option, the number and kind of shares of stock or other securities into
which each outstanding share of Common Stock shall be so changed or for which
each such share shall be exchanged. In the event there shall be any change,
other than as specified above in this Section 3.1, in the number or kind of
outstanding shares of Common Stock or of any stock or other securities into
which Common Stock shall have been changed or for which it shall have been
exchanged, then if the Committee shall in its sole discretion determine that
such change equitably requires an adjustment in the number or kind of shares
theretofore reserved for issuance pursuant to the Plan but not yet covered by
an option and of the shares then subject to an option or options, such
adjustment shall be made by the Committee and shall be effective and binding
for all purposes of the Plan and of each Option Agreement. In the case of any
such substitution or adjustment as provided for in this Section, the option
price in each Option Agreement for each share covered thereby prior to such
substitution or adjustment will be the option price for all shares of stock or
other securities which shall have been substituted for such share or to which
such adjustment provided for in this Section 3.1 shall be made, in accordance
with Section 424(a) of the Code. No adjustment or substitution provided for in
this Section 3.1 shall require the Corporation pursuant to any Option Agreement
to sell a fractional share, and the total substitution or adjustment with
respect to each Option Agreement shall be limited accordingly.
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3.2 Acceleration. In the event of a Change of Control (as defined
herein), the provisions of subsections (a) and (b) of this Section 3.2 shall
apply to determine the exercisability of options granted hereunder. A "Change
of Control" for purposes of this Plan shall mean (i) the acquisition by a
single entity or group of affiliated entities of more than fifty percent (50%)
of the Common Stock issued and outstanding immediately prior to such
acquisition; or (ii) the dissolution or liquidation of the Corporation or the
consummation of any merger or consolidation of the Corporation or any sale or
other disposition of all or substantially all of its assets, if the
shareholders of the Corporation immediately before such transaction own,
immediately after consummation of such transaction, equity securities (other
than options and other rights to acquire equity securities) possessing less
than fifty percent (50%) of the voting power of the surviving or acquiring
corporation.
(a) Change of Control with Provision Being Made Therefor.
If provision be made in writing in connection with a Change of Control
for the assumption and continuance of any option granted under the
Plan, or the substitution for such option of a new option covering the
shares of the successor employer corporation, with appropriate
adjustment as to number and kind of shares and prices, the option
granted under the Plan, or the new option substituted therefor, as the
case may be, shall continue in the manner and under the terms
provided.
(b) Change of Control Without Provisions Being Made
Therefor. In the event provision is not made in connection with a
Change of Control for the continuance and assumption of the option
granted under the Plan or for the substitution of any option covering
the shares of the successor employer corporation, then the holder of
any such
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option shall be entitled, prior to the effective date of any such
Change of Control, to purchase the full number of shares not
previously exercised under such option, without regard to the
determination as to the periods and installments of exercisability
made pursuant to Section 2.4 and 2.5 if (and only if) such option has
not at that time expired or been cancelled, failing which purchase,
any unexercised portion shall be deemed cancelled as of the effective
date of such Change of Control.
All adjustments under this Section 3.2 shall be made by the Committee,
whose determination as to what adjustments shall be made and the extent thereof
shall be final, binding and conclusive for all purposes of the Plan and of each
Option Agreement.
3.3 Continuation of Employment. Nothing contained in the Plan (or
in any option granted pursuant to the Plan) shall confer upon any employee,
officer or director any right to continue in the employ or service of the
Corporation or constitute any contract or agreement of employment or service or
interfere in any way with the right of the Corporation to reduce any person's
compensation from the rate in existence at the time of the granting of an
option or to terminate such person's employment or service. Nothing contained
herein or in any Option Agreement shall affect any other contractual rights of
an employee.
3.4 Withholding. The Corporation shall have the right to deduct
any sums that the Committee reasonably determines that federal, state or local
tax law requires to be withheld with respect to the exercise of any option or
as otherwise may be required by those laws. The Corporation may require as a
condition to issuing shares of Stock upon exercise of the option that the
Optionee or other person exercising the option pay any sums that federal, state
or local tax law requires to be withheld with respect to the exercise. The
Corporation shall not be obligated
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to advise any Optionee of the existence of the tax or the amount which it will
be so required to withhold. Upon the exercise of a nonqualified option, if tax
withholding is required, an Optionee may, with the consent of the Committee,
have shares of Stock withheld ("Share Withholding") by the Corporation from the
shares otherwise to be received; provided, that if the Optionee is subject to
the provisions of Section 16 under the Exchange Act, no Share Withholding shall
be permitted unless such transaction complies with the requirements of the
Exchange Act and the rules and regulations promulgated thereunder. The number
of shares so withheld should have an aggregate Fair Market Value on the date of
exercise sufficient to satisfy the applicable withholding taxes.
3.5 Amendment and Termination. The Board of Directors may at any
time suspend or terminate the Plan and may, with the consent of the holder of
an option, make such modifications of the terms and conditions of such holder's
option as it shall deem advisable. No option may be granted during any
suspension of the Plan or after such termination. The amendment, suspension or
termination of the Plan shall not, without the consent of the Optionee, alter
or impair any rights or obligations under any option theretofore granted under
the Plan.
The Board of Directors may at any time amend the Plan as it shall deem
advisable without further action on the part of the shareholders of the
Corporation; provided, that any amendment to the Plan must be approved by the
shareholders of the Corporation, if the amendment would (i) increase the
aggregate number of shares of Stock which may be issued pursuant to options
granted under the Plan; (ii) change the minimum option price; (iii) increase
the maximum terms of options provided for herein; (iv) materially modify the
requirements as
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to eligibility for participation in the Plan; (v) remove the administration of
the Plan from the Committee; or (vi) materially increase the benefits accruing
to holders of options under the Plan.
Notwithstanding the above, the Committee may grant to an Optionee, if
he is otherwise eligible, additional options or, with the consent of the
Optionee, may grant a new option in lieu of an outstanding option, at a price
and for a term which in any respect is greater or less than that of the earlier
option, subject to the general limitations of Article II hereof.
3.6 Time of Grant and Exercise. The granting of an option
pursuant to the Plan shall take place at the time of the Committee's action, as
described in the third paragraph of Section 1.2 hereof; provided, however, that
if the appropriate resolutions of the Committee indicate that an option is to
be granted as of and at some future date, the date of grant shall be such
future date. In the event action by the Committee is taken by written consent
of its members, the action by the Committee shall be deemed to have been taken
at the time the last member required for a valid action of the Committee signs
the consent.
An option shall be deemed to be exercised when the Secretary of the
Corporation receives written notice of such exercise from the person entitled
to exercise the option together with payment of the purchase price made in
accordance with Section 2.5 of this Plan.
3.7 Privileges of Stock Ownership; Non-Distributive Intent. The
holder of an option shall not be entitled to the privileges of stock ownership
as to any shares of Stock not actually issued and delivered to the holder.
3.8 Effective Date of the Plan. The Plan shall be effective upon
approval by the Board of Directors of the Corporation.
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<PAGE> 15
3.9 Expiration. Unless previously terminated by the Board of
Directors, the Plan shall expire at the close of business on the date which is
the last day of the ten (10) year period beginning on the earlier of the date
on which the Plan is adopted by the Board of Directors or the date on which the
stockholders approve the Plan, and no option shall be granted under it
thereafter, but such expiration shall not affect any option theretofore
granted.
3.10 Governing Law. The Plan and the options issued hereunder
shall be governed by, and constructed and enforced in accordance with, the laws
of the State of Tennessee applicable to contracts made and performed within
that State.
3.11 Application of Funds. The proceeds received by the
Corporation from the sale of shares pursuant to options shall be used for
general corporate purposes.
3.12 No Liability for Good Faith Determinations. No member of the
Board of Directors shall be liable for any act, omission or determination taken
or made in good faith with respect to the Plan or any option granted under it.
3.13 Other Benefits. Participation in the Plan shall not preclude
the Optionee from eligibility in any other stock option plan of the Corporation
or any old age benefit, insurance, pension, profit sharing, retirement, bonus
or other extra compensation plans which the Corporation has adopted, or may, at
any time, adopt for the benefit of its employees.
3.14 Execution of Receipts and Releases. Any payment or any
issuance or transfer of shares of Stock to the Optionee, or to his legal
representative, heir, legatee or distributee, in accordance with the provisions
hereof, shall, to the extent thereof, be in full satisfaction of all claims of
such persons hereunder. The Board of Directors may require any Optionee, legal
- 15 -
<PAGE> 16
representative, heir, legatee or distributee, as a condition precedent to such
payment, to execute a release and receipt therefor in such form as it shall
determine.
3.15 No Guarantee of Interests. Neither the Board of Directors nor
the Corporation guarantees the Stock of the Corporation from loss or
depreciation.
3.16 Payment of Expenses. All expenses incident to the
administration, termination or protection of the Plan, including, but not
limited to, legal and accounting fees, shall be paid by the Corporation.
3.17 Corporation Records. Records of the Corporation regarding
the Optionee's period of employment, termination of employment and the reason
therefor, leaves of absence, re-employment and other matters shall be
conclusive for all purposes hereunder, unless determined by the Committee to be
incorrect.
3.18 Information. The Corporation shall, upon request or as may be
specifically required hereunder, furnish or cause to be furnished all of the
information or documentation which is necessary or required by the Committee to
perform its duties and functions under the Plan.
3.19 No Liability of Corporation. The Corporation assumes no
obligation or responsibility to the Optionee or his personal representatives,
heirs, legatees or distributees for any act of, or failure to act on the part
of, the Committee.
3.20 Severability. In the event any provision of this Plan shall
be held to be illegal or invalid for any reason, the illegality or invalidity
shall not affect the remaining provisions hereof, but shall be fully severable
and the Plan shall be construed and enforced as if the illegal or invalid
provision had never been included herein.
- 16 -
<PAGE> 17
3.21 Notice. Whenever any notice is required or permitted
hereunder, such notice must be in writing and personally delivered or sent by
mail. Except as otherwise provided in Section 3.6 of this Plan, any notice
required or permitted to be delivered hereunder shall be deemed to be delivered
on the date on which it is personally delivered or, whether actually received
or not, on the third (3rd) business day after it is deposited in the United
States mail, certified or registered, postage pre-paid, addressed to the person
who is to receive it at the address which such person has theretofore specified
by written notice delivered in accordance herewith. The Corporation or an
Optionee may change, at any time and from time to time, by written notice to
the other, the address which it or he had theretofore specified for receiving
notices. Until it is changed in accordance herewith, the Corporation and each
Optionee shall specify as its and his address for receiving notices the address
set forth in the Option Agreement pertaining to the shares to which such notice
relates.
3.22 Waiver of Notices. Any person entitled to notice hereunder
may waive such notice.
3.23 Successors. The Plan shall be binding upon the Optionee, his
heirs, legatees and legal representatives and upon the Corporation and its
successors and assigns.
3.24 Headings. The titles and headings of sections and paragraphs
are included for convenience of reference only and are not to be considered in
construction of the provisions hereof.
3.25 Word Usage. Words used in the masculine shall apply to the
feminine where applicable and, wherever the context of this Plan dictates, the
plural shall be read as the singular and the singular as the plural.
- 17 -
<PAGE> 1
EXHIBIT 10.12
Exhibit "A"
INCENTIVE STOCK OPTION AGREEMENT
UNDER THE NASHVILLE COUNTRY CLUB, INC.
1997 STOCK OPTION PLAN
This STOCK OPTION AGREEMENT (the "Agreement") is made and entered into
as of the _____ day of ____________, 1997, by and between NASHVILLE COUNTRY
CLUB, INC., a Tennessee corporation (herein called the "Corporation"), and
__________ (herein called the "Optionee").
W I T N E S S E T H:
WHEREAS, the Board of Directors of the Corporation (the "Board of
Directors") has resolved that the interests of the Corporation will be advanced
by extending to certain employees of the Corporation the opportunity to acquire
proprietary shares in the Corporation, thus providing them with a more direct
concern in the welfare of the Corporation and assuring a closer identification
of their interests with those of the Corporation; and
WHEREAS, the Board of Directors believes that the acquisition of such
an interest in the Corporation will stimulate the endeavors of such employees
on behalf of the Corporation and strengthen their desire to remain with the
Corporation; and
WHEREAS, the person named above has been selected by the committee
(hereinafter referred to as the "Committee") which administers the Nashville
Country Club, Inc. 1997 Stock Option Plan (hereinafter referred to as the
"Plan") as one of such individuals;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained and other good and valuable consideration, the
parties hereto agree as follows:
<PAGE> 2
1. The Corporation hereby grants to the Optionee as a matter of
separate inducement and agreement in connection with Optionee's employment with
the Corporation, and not in lieu of any salary or other compensation for
Optionee's services, the right and option to purchase, at the time and on the
terms and conditions hereinafter set forth, a number of shares, as set forth on
Schedule A attached hereto, of the presently authorized common stock, no par
value per share, of the Corporation (the "Common Stock") at the purchase price
set forth on Schedule A.
2. The option provided for in this Agreement is granted pursuant
to the Plan. The terms and provisions of such Plan are incorporated herein by
reference and, in the event of any conflict between the terms and provisions of
this Agreement and those of such Plan, the terms and provisions of the Plan,
including without limitation, those with respect to the powers of the Committee
appointed thereunder, shall prevail and be controlling.
3. This option shall continue for the term set forth on Schedule
A, except and to the extent that such term may be reduced as provided in
Paragraphs 6, 7, 8, 9 and 14 hereof; provided, however, that if any termination
date provided for herein shall fall on a Saturday, Sunday or legal holiday,
then such termination date shall be deemed to be the first normal business day
of the Corporation, at its office specified in Paragraph 20 hereof, before such
Saturday, Sunday or legal holiday.
4. Except as otherwise provided herein, this option shall be
exercisable only to the extent of shares that have vested in accordance with
the vesting schedule set forth on Schedule A. The Optionee's right to exercise
the option granted hereunder accrues only in accordance with the preceding
sentence and, except as otherwise provided herein, only to the extent that the
Optionee remains in the continuous employ of the Corporation. This option shall
be exercisable during the lifetime of the Optionee only by the Optionee. In no
event may the Optionee or any
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<PAGE> 3
person exercising this option pursuant to Paragraph 8 hereof exercise this
option (before or after any adjustment or substitution pursuant to Paragraph
13, 14, or 16 hereof) for a fraction of a share.
5. The option granted hereby shall be exercisable upon and
subject to the following terms and conditions:
(a) The option granted hereby may be exercised by
delivering to the Secretary of the Corporation from time to time within the
time limits specified in Paragraph 3 hereof a written notice specifying the
number of vested shares the Optionee then desires to purchase.
(b) Upon receipt of Optionee's written notice of exercise
and full compliance with all other obligations under this Agreement, the
Corporation shall allow the Optionee to consummate the purchase of the number
of shares indicated in the notice of exercise in accordance with the terms of
this Agreement.
(c) The Optionee shall have delivered to the Secretary of
the Corporation payment in an amount equal to the option price for such number
of shares, such payment to be in a form set forth on Schedule A hereto. The
payment shall be accompanied by such other instruments or agreements duly
signed by the Optionee as in the opinion of counsel for the Corporation may be
necessary or advisable in order that the issuance of such number of shares
comply with applicable rules and regulations under the Securities Act of 1933,
as amended (the "Act"), any appropriate state securities laws or any
requirement of any securities exchange on which such stock may be traded. As
soon as practicable after any such exercise of the option in whole or in part
by the Optionee, the Corporation will deliver to the Optionee a certificate for
the number of shares with respect to which the option shall have been so
exercised, issued in the Optionee's name. Such stock certificate shall carry
such appropriate legend, and such written
-3-
<PAGE> 4
instructions shall be given to the Corporation's transfer agent, as may be
deemed necessary or advisable by counsel to the Corporation to satisfy the
requirements of the Act or any state securities laws.
6. If the employment of the Optionee is terminated for any reason
other than Disability (as defined in the Plan) of the Optionee, death of the
Optionee or for cause (as determined by the Committee in its sole and absolute
discretion), then the Optionee shall have the right at any time within three
(3) months after the termination of such employment or, if shorter, during the
unexpired term of this option, to exercise this option for the full number of
shares or any portion thereof (except as to the issuance of fractional shares),
but only to the extent this option was otherwise exercisable in accordance with
Paragraph 4 hereof on the date of such cessation of employment.
7. If the employment of Optionee is terminated by reason of
Disability, then the Optionee shall have the right at any time within twelve
(12) months after the termination of such employment or, if shorter, during the
unexpired term of this option, to exercise this option for the full number of
shares or any portion thereof (except as to the issuance of fractional shares)
which are vested on or before the date on which the Optionee's termination of
employment occurs, or which would otherwise have vested during the twelve (12)
month period beginning on the date on which such termination of employment
occurs.
8. If the Optionee dies while in the employ of the Corporation,
this option may be exercised at any time within twelve (12) months from the
date of death of the Optionee or, if shorter, during the unexpired term of this
option, for the full number of shares, or any portion thereof (except as to the
issuance of fractional shares) which are vested on or before the date on which
the Optionee's death occurs, or which would otherwise have vested during the
twelve (12)
-4-
<PAGE> 5
month period beginning on the date on which the Optionee's death occurs. Such
option may be exercised by the person or persons to whom the Optionee's rights
under this option shall pass by the Optionee's will or by the laws of descent
and distribution, whichever is applicable.
9. If the Optionee's employment is terminated for cause (which
determination shall be made in the sole and absolute discretion of the
Committee), any then outstanding options of such Optionee shall automatically
terminate as of the date on which the employment of such Optionee is
terminated.
10. Shares to be issued on the exercise of this option may, at the
election of the Corporation, be either authorized and unissued shares, or
shares previously issued and reacquired by the Corporation.
11. The Corporation shall not be required to issue or deliver any
certificates for shares purchased upon the exercise of this option unless and
until: (i) the Committee determines that such issuance or delivery is in
compliance with all applicable laws, rules and regulations, including, without
limitation, applicable securities laws and regulations; and (ii) the Committee
determines that the Optionee has tendered to the Corporation the full purchase
price plus any federal, state or local tax owed by Optionee as a result of
exercising this option when the Corporation has a legal liability to satisfy
such tax.
12. In connection with the exercise of the option by the Optionee
and, as a condition to the Corporation's obligation to deliver shares upon
exercise of the option, the Optionee shall make arrangements satisfactory to
the Committee, including, with the prior consent of the Committee, an election
of Share Withholding, as such term is defined in the Plan, to insure that the
amount of federal, state or local withholding tax, if any, required to be
withheld with respect
-5-
<PAGE> 6
to delivery of the shares is made available by the Optionee for timely payment
of the tax by the Corporation to the appropriate taxing authority.
13. If, prior to the delivery of all the shares in respect to
which this option is granted, there shall be any change in the outstanding
shares of Common Stock, through reorganization, recapitalization, stock split,
combination of shares, then subject to any required action by the shareholders
of the Corporation, an appropriate and proportionate adjustment shall be made
in the number and/or kind of securities allocated to the option hereby granted,
without change in the aggregate purchase price applicable to the unexercised
portion of the option, but with a corresponding adjustment in the number and
price for each share or other unit of any security covered by the option. Such
adjustment shall be made by the Committee, whose determination in that respect
shall be final, binding and conclusive.
14. If, prior to the delivery of all the shares in respect of
which this option is granted, a Change of Control of the Corporation shall
occur, as defined in Section 3.2 of the Plan:
(a) If provision be made in writing in connection with
such transaction for the assumption and continuance of the option
hereby granted, or the substitution for such option of a new option
covering the shares of the successor corporation, with appropriate
adjustment as to number and kind of shares and prices, the option
hereby granted, or the new option substituted therefor, as the case
may be, shall continue in the manner and under the terms provided.
(b) If provision is not made in such transaction for the
continuance and assumption of the option hereby granted or for the
substitution of an option covering the shares of the successor
corporation, then Optionee shall be entitled, prior to the effective
date of any such Change of Control, to purchase the full number of
shares under this option (without regard to the period of
exercisability set forth in Paragraph 4) that have not at that time
expired or been cancelled, failing which purchase, any unexercised
portion shall be deemed cancelled as of the effective date of such
Change of Control.
-6-
<PAGE> 7
All adjustments under this paragraph shall be made by the Committee,
whose determination as to what adjustments shall be made and the extent
thereof, shall be final, binding and conclusive on the Corporation, Optionee
and Optionee's legal representatives.
15. Neither the Optionee nor the Optionee's legal representative
shall be or have any of the rights or privileges of a shareholder of the
Corporation in respect to any of the shares issuable upon the exercise of this
option unless and until certificates representing such shares shall have been
issued and delivered to the Optionee.
16. If, prior to the delivery of all of the shares with respect to
which this option is granted, there shall be a merger or consolidation of the
Corporation in which the Corporation is the surviving corporation and, if as a
result thereof, outstanding shares of Common Stock are changed, converted or
exchanged, then there shall be substituted for each share of stock subject to
the option granted hereby the number, kind or amount of shares of stock or
other securities or cash into which the outstanding shares of Common Stock
shall be so changed, converted or exchanged as a result of such merger or
consolidation. In the case of any such substitution or adjustment as provided
in this paragraph, the option price referred to in this Agreement for the
shares covered hereby shall be the option price for the shares or other
securities or cash which shall have been substituted for the shares covered
hereby or to which such shares shall have been adjusted. Any adjustment or
substitutions pursuant to this paragraph shall be made by the Committee, whose
determination in the matter shall be conclusive and binding on the Corporation,
Optionee and Optionee's legal representatives.
17. Neither the granting of this option, the exercise of any part
hereof, nor any provision of this Agreement shall constitute or be evidence of
any understanding, express or implied, on the part of the Corporation, to
employ the Optionee for any specified period.
-7-
<PAGE> 8
18. Except as otherwise herein provided, this option and the
rights and privileges conferred hereby may not be transferred, assigned,
pledged or hypothecated in any way (whether by operation of law or otherwise)
and shall not be subject to execution, attachment or similar process. Upon any
attempt to transfer, assign, pledge, hypothecate or otherwise dispose of this
option or any right or privilege conferred hereby, contrary to the provisions
hereof, this option and the rights and privileges conferred hereby shall
immediately become null and void.
19. The Committee shall have authority to make reasonable
constructions of this option and to correct any defect or supply any omission
or reconcile any inconsistency in this option, and to prescribe reasonable
rules and regulations relating to the administration of this option and other
similar options granted under the Plan.
20. Any notice relating to this Agreement shall be in writing and
delivered in person or by registered mail to the Corporation at the
Corporation's main office, 402 Heritage Plantation Way, Hickory Valley,
Tennessee 38042, or such other address as may be hereafter specified by the
Corporation, to the attention of its Secretary. All notices to the Optionee or
other person or persons then entitled to exercise the option shall be delivered
to the Optionee or such other person or persons at the Optionee's address
specified below.
21. Any payment or any issuance or transfer of shares of the
Common Stock to the Optionee or the Optionee's legal representative, heir,
legatee or distributee, in accordance with the provisions hereof, shall, to the
extent thereof, be in full satisfaction of all claims of such persons
hereunder. The Board of Directors may require the Optionee, legal
representative, heir, legatee or distributee, as a condition precedent to such
payment, to execute a release and receipt therefor in such form as it shall
determine.
-8-
<PAGE> 9
22. This option is intended to qualify as an "incentive stock
option" within the meaning of Section 422 of the Internal Revenue Code of 1986,
as amended (the "Code"), and shall be so construed; provided however, that
nothing in this Agreement shall be interpreted as a representation, guarantee
or other undertaking on the part of the Corporation that this option is or will
be determined to be an "incentive stock option" within the meaning of that or
any other section of the Code.
IN WITNESS WHEREOF, the Corporation has caused this Agreement to be
executed in its name by its President and its corporate seal to be hereunto
affixed and attested by its Secretary on the date and year first above written,
and the Optionee has hereunto set Optionee's hand on the day and year specified
above.
NASHVILLE COUNTRY CLUB, INC.
ATTEST:
By:
- ------------------------------ ----------------------------------
, Secretary Thomas J. Weaver, III, President
(SEAL)
-------------------------------------
Optionee
-------------------------------------
Street Address (No P.O. Box please)
-------------------------------------
City, State and Zip Code
-9-
<PAGE> 10
Schedule A
1. Grant Date:_________________________________________________
2. Number of Shares Optionee is entitled to purchase pursuant to this
option: _____________________________
3. Purchase Price: ____________________________________________ DOLLARS ($____)
per share [must not be less than 100% of fair market value (or 110% of fair
market value for persons owning more than 10% of the issued and outstanding
voting power of the Corporation and its subsidiaries)]
4. Option Term: _____________________ [may not exceed 10 years
(or 5 years in the case of persons owning more than 10% of the issued and
outstanding voting power of the Corporation and its subsidiaries)]
5. Vesting Schedule:
<TABLE>
<CAPTION>
Portion of Shares That is Vested
On and After Such Vesting Date
Vesting Date and Before Next Vesting Date
------------ ----------------------------
<S> <C>
_______________, 19__ _______
_______________, 19__ _______
_______________, 19__ _______
_______________, 19__ _______
</TABLE>
6. Permissible Form of Payment: [ ] Cashier's Check payable in United
States currency
[ ] Personal check
[ ] Certificates for Common Stock
[ ] Any combination of the above
<PAGE> 11
Exhibit "B"
NONQUALIFIED STOCK OPTION AGREEMENT
UNDER THE NASHVILLE COUNTRY CLUB, INC.
1997 STOCK OPTION PLAN
This STOCK OPTION AGREEMENT (the "Agreement") is made and entered into
as of the _____ day of ____________, 1997, by and between NASHVILLE COUNTRY
CLUB, INC., a Tennessee corporation (herein called the "Corporation"), and
______________ (herein called the "Optionee").
W I T N E S S E T H:
WHEREAS, the Board of Directors of the Corporation (the "Board of
Directors") has resolved that the interests of the Corporation will be advanced
by extending to certain key employees, officers and directors of the
Corporation the opportunity to acquire proprietary shares in the Corporation,
thus providing them with a more direct concern in the welfare of the
Corporation and assuring a closer identification of their interests with those
of the Corporation; and
WHEREAS, the Board of Directors believes that the acquisition of such
an interest in the Corporation will stimulate the endeavors of such key
employees, officers and directors on behalf of the Corporation and strengthen
their desire to remain in the employment or service of the Corporation; and
WHEREAS, the person named above has been selected by the committee
(hereinafter referred to as the "Committee") which administers the Nashville
Country Club, Inc. 1997 Stock Option Plan (hereinafter referred to as the
"Plan") as one of such individuals;
<PAGE> 12
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained and other good and valuable consideration, the
parties hereto agree as follows:
1. The Corporation hereby grants to the Optionee as a matter of
separate inducement and agreement in connection with his employment by or
service with the Corporation and not in lieu of any salary or other
compensation for his services, the right and option to purchase, at the time
and on the terms and conditions hereinafter set forth, a number of shares, as
set forth on Schedule A attached hereto, of the presently authorized common
stock, no par value per share, of the Corporation (the "Common Stock") at the
purchase price set forth on Schedule A.
2. The option provided for in this Agreement is granted pursuant
to the Plan. The terms and provisions of such Plan are incorporated herein by
reference and, in the event of any conflict between the terms and provisions of
this Agreement and those of such Plan, the terms and provisions of the Plan,
including without limitation, those with respect to the powers of the Committee
appointed thereunder, shall prevail and be controlling.
3. This option shall continue for the term set forth on Schedule
A, except and to the extent that such term may be reduced as provided in
Paragraphs 6, 7, 8, 9 and 14 hereof; provided, however, that if any termination
date provided for herein shall fall on a Saturday, Sunday or legal holiday,
then such termination date shall be deemed to be the first normal business day
of the Corporation, at its office specified in Paragraph 20 hereof, before such
Saturday, Sunday or legal holiday.
4. Except as otherwise provided herein, this option shall be
exercisable only to the extent of shares that have vested in accordance with
the vesting schedule set forth on Schedule A. The Optionee's right to exercise
the option granted hereunder accrues only in accordance with the preceding
sentence and, except as otherwise provided herein, only to the extent that the
-2-
<PAGE> 13
Optionee remains in the continuous employ or service of the Corporation. This
option shall be exercisable during the lifetime of the Optionee only by the
Optionee. In no event may the Optionee or any person exercising this option
pursuant to Paragraph 8 hereof exercise this option (before or after any
adjustment or substitution pursuant to Paragraph 13, 14 or 16 hereof) for a
fraction of a share.
5. The option granted hereby shall be exercisable upon and
subject to the following terms and conditions:
(a) The option granted hereby may be exercised by
delivering to the Secretary of the Corporation from time to time within the
time limits specified in Paragraph 3 hereof a written notice specifying the
number of vested shares the Optionee then desires to purchase.
(b) Upon receipt of Optionee's written notice of exercise
and full compliance with all other obligations under this Agreement, the
Corporation shall allow the Optionee to consummate the purchase of the number
of shares indicated in the notice of exercise in accordance with the terms of
this Agreement.
(c) The Optionee shall have delivered to the Secretary of
the Corporation payment in an amount equal to the option price for such number
of shares, such payment to be in a form set forth on Schedule A hereto. The
payment shall be accompanied by such other instruments or agreements duly
signed by the Optionee as in the opinion of counsel for the Corporation may be
necessary or advisable in order that the issuance of such number of shares
comply with applicable rules and regulations under the Securities Act of 1933,
as amended (the "Act"), any appropriate state securities laws or any
requirement of any securities exchange on which such stock may be traded. As
soon as practicable after any such exercise of the option in whole or in part
by the Optionee, the Corporation will deliver to the Optionee a certificate for
-3-
<PAGE> 14
the number of shares with respect to which the option shall have been so
exercised, issued in the Optionee's name. Such stock certificate shall carry
such appropriate legend, and such written instructions shall be given to the
Corporation's transfer agent, as may be deemed necessary or advisable by
counsel to the Corporation to satisfy the requirements of the Act or any state
securities laws.
6. If the employment or service of the Optionee is terminated for
any reason other than Disability (as defined in the Plan) of the Optionee,
death of the Optionee or for cause (as determined by the Committee in its sole
and absolute discretion), then the Optionee shall have the right at any time
within three (3) months after the termination of such employment or service or,
if shorter, during the unexpired term of this option, to exercise this option
for the full number of shares or any portion thereof (except as to the issuance
of fractional shares), but only to the extent this option was otherwise
exercisable in accordance with Paragraph 4 hereof on the date of such cessation
of employment or service.
7. If the employment or service of Optionee is terminated by
reason of Disability, then the Optionee shall have the right at any time within
twelve (12) months after the termination of such employment or service or, if
shorter, during the unexpired term of this option, to exercise this option for
the full number of shares or any portion thereof (except as to the issuance of
fractional shares) which are vested on or before the date on which the
Optionee's termination of employment occurs, or which would otherwise have
vested during the twelve (12) month period beginning on the date on which such
termination of employment occurs.
8. If the Optionee dies while in the employ or service of the
Corporation, this option may be exercised at any time within twelve (12) months
from the date of death of the Optionee or, if shorter, during the unexpired
term of this option, for the full number of shares or any
-4-
<PAGE> 15
portion thereof (except as to the issuance of fractional shares) which are
vested on or before the date on which the Optionee's death occurs, or which
would otherwise have vested during the twelve (12) month period beginning on
the date on which the Optionee's death occurs. Such option may be exercised by
the person or persons to whom the Optionee's rights under this option shall
pass by the Optionee's will or by the laws of descent and distribution,
whichever is applicable.
9. If the Optionee's employment or service is terminated for
cause (which determination shall be made in the sole and absolute discretion of
the Committee), any then outstanding options of such Optionee shall
automatically terminate as of the date on which the employment or service of
such Optionee is terminated.
10. Shares to be issued on the exercise of this option may, at the
election of the Corporation, be either authorized and unissued shares, or
shares previously issued and reacquired by the Corporation.
11. The Corporation shall not be required to issue or deliver any
certificates for shares purchased upon the exercise of this option unless and
until: (i) the Committee determines that such issuance or delivery is in
compliance with all applicable laws, rules and regulations, including, without
limitation, applicable securities laws and regulations; and (ii) the Committee
determines that the Optionee has tendered to the Corporation the full purchase
price plus any federal, state or local tax owed by Optionee as a result of
exercising this option when the Corporation has a legal liability to satisfy
such tax.
12. In connection with the exercise of the option by the Optionee
and, as a condition to the Corporation's obligation to deliver shares upon
exercise of the option, the Optionee shall make arrangements satisfactory to
the Committee, including, with the prior consent of the
-5-
<PAGE> 16
Committee, an election of Share Withholding, as such term is defined in the
Plan, to insure that the amount of federal, state or local withholding tax, if
any, required to be withheld with respect to delivery of the shares is made
available by the Optionee for timely payment of the tax by the Corporation to
the appropriate taxing authority.
13. If, prior to the delivery of all the shares in respect to
which this option is granted, there shall be any change in the outstanding
shares of Common Stock, through reorganization, recapitalization, stock split,
combination of shares, then subject to any required action by the shareholders
of the Corporation, an appropriate and proportionate adjustment shall be made
in the number and/or kind of securities allocated to the option hereby granted,
without change in the aggregate purchase price applicable to the unexercised
portion of the option, but with a corresponding adjustment in the number and
price for each share or other unit of any security covered by the option. Such
adjustment shall be made by the Committee, whose determination in that respect
shall be final, binding and conclusive.
14. If, prior to the delivery of all the shares in respect of
which this option is granted, a Change of Control of the Corporation shall
occur, as defined in Section 3.2 of the Plan:
(a) If provision be made in writing in connection with
such transaction for the assumption and continuance of the option
hereby granted, or the substitution for such option of a new option
covering the shares of the successor corporation, with appropriate
adjustment as to number and kind of shares and prices, the option
hereby granted, or the new option substituted therefor, as the case
may be, shall continue in the manner and under the terms provided.
(b) If provision is not made in such transaction for the
continuance and assumption of the option hereby granted or for the
substitution of an option covering the shares of the successor
corporation, then Optionee shall be entitled, prior to the effective
date of any such Change of Control, to purchase the full number of
shares under this option (without regard to the period of
exercisability set forth in Paragraph 4) that have not at that time
expired or been cancelled, failing which purchase, any unexercised
portion shall be deemed cancelled as of the effective date of such
Change of Control.
-6-
<PAGE> 17
All adjustments under this paragraph shall be made by the Committee,
whose determination as to what adjustments shall be made and the extent
thereof, shall be final, binding and conclusive on the Corporation, Optionee
and Optionee's legal representatives.
15. Neither the Optionee nor the Optionee's legal representative
shall be or have any of the rights or privileges of a shareholder of the
Corporation in respect to any of the shares issuable upon the exercise of this
option unless and until certificates representing such shares shall have been
issued and delivered to the Optionee.
16. If, prior to the delivery of all of the shares with respect to
which this option is granted, there shall be a merger or consolidation of the
Corporation in which the Corporation is the surviving corporation and, if as a
result thereof, outstanding shares of Common Stock are changed, converted or
exchanged, then there shall be substituted for each share of stock subject to
the option granted hereby the number, kind or amount of shares of stock or
other securities or cash into which the outstanding shares of Common Stock
shall be so changed, converted or exchanged as a result of such merger or
consolidation. In the case of any such substitution or adjustment as provided
in this paragraph, the option price referred to in this Agreement for the
shares covered hereby shall be the option price for the shares or other
securities or cash which shall have been substituted for the shares covered
hereby or to which such shares shall have been adjusted. Any adjustment or
substitutions pursuant to this paragraph shall be made by the Committee, whose
determination in the matter shall be conclusive and binding on the Corporation,
Optionee and Optionee's legal representatives.
17. Neither the granting of this option, the exercise of any part
hereof, nor any provision of this Agreement shall constitute or be evidence of
any understanding, express or implied, on the part of the Corporation, to
employ or retain the Optionee for any specified period.
-7-
<PAGE> 18
18. Except as otherwise herein provided, this option and the
rights and privileges conferred hereby may not be transferred, assigned,
pledged or hypothecated in any way (whether by operation of law or otherwise)
and shall not be subject to execution, attachment or similar process. Upon any
attempt to transfer, assign, pledge, hypothecate or otherwise dispose of this
option or any right or privilege conferred hereby, contrary to the provisions
hereof, this option and the rights and privileges conferred hereby shall
immediately become null and void.
19. The Committee shall have authority to make reasonable
constructions of this option and to correct any defect or supply any omission
or reconcile any inconsistency in this option, and to prescribe reasonable
rules and regulations relating to the administration of this option and other
similar options granted under the Plan.
20. Any notice relating to this Agreement shall be in writing and
delivered in person or by registered mail to the Corporation at the
Corporation's main office, 402 Heritage Plantation Way, Hickory Valley,
Tennessee 38042, or such other address as may be hereafter specified by the
Corporation, to the attention of its Secretary. All notices to the Optionee or
other person or persons then entitled to exercise the option shall be delivered
to the Optionee or such other person or persons at the Optionee's address
specified below.
21. Any payment or any issuance or transfer of shares of the
Common Stock to the Optionee or the Optionee's legal representative, heir,
legatee or distributee, in accordance with the provisions hereof, shall, to the
extent thereof, be in full satisfaction of all claims of such persons
hereunder. The Board of Directors may require the Optionee, legal
representative, heir, legatee or distributee, as a condition precedent to such
payment, to execute a release and receipt therefor in such form as it shall
determine.
-8-
<PAGE> 19
22. This option is not intended to qualify as an "incentive stock
option" within the meaning of Section 422 of the Internal Revenue Code of 1986,
as amended.
IN WITNESS WHEREOF, the Corporation has caused this Agreement to be
executed in its name by its President and its corporate seal to be hereunto
affixed and attested by its Secretary on the date and year first above written,
and the Optionee has hereunto set his hand on the day and year specified above.
NASHVILLE COUNTRY CLUB, INC.
ATTEST:
By:
- ------------------------------ ----------------------------------
, Secretary Thomas J. Weaver, III, President
(SEAL)
-------------------------------------
Optionee
-------------------------------------
Street Address (No P.O. Box please)
-------------------------------------
City, State and Zip Code
-9-
<PAGE> 20
Schedule A
1. Grant Date:________________________________________________
2. Number of Shares Optionee is entitled to purchase pursuant to this
option: _____________________________________
3. Purchase Price: ___________________________________________ DOLLARS
($_______) per share
4. Option Term: _____________________ (may not exceed 10 years)
5. Vesting Schedule:
<TABLE>
<CAPTION>
Portion of Shares That is Vested
On and After Such Vesting Date
Vesting Date and Before Next Vesting Date
------------ ----------------------------
<S> <C>
_______________, 19__ _______
_______________, 19__ _______
_______________, 19__ _______
_______________, 19__ _______
</TABLE>
6. Permissible Form of Payment: [ ] Cashier's Check payable
in United States currency
[ ] Personal Check
[ ] Certificates for Common Stock
[ ] Any combination of the above
7. Share Withholding [ ] is [ ] is not permitted.
<PAGE> 1
EXHIBIT 10.15
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement"), dated as of
April 21, 1997, is by and among NASHVILLE COUNTRY CLUB, INC., a Tennessee
corporation (the "Company"), and the other parties identified on the signature
pages hereto (the "Signatory Holders").
This Agreement is made pursuant to that certain Merger Agreement,
dated as of April 21, 1997, by and among the Company and the other parties
identified therein (the "Merger Agreement"). The execution of this Agreement is
a condition to the closing of the transactions contemplated by the Merger
Agreement.
1. Definitions. As used herein, unless the context otherwise
requires, the following terms have the following respective meanings:
"Closing Date" shall have the meaning ascribed to such term in the
Merger Agreement.
"Commission" means the Securities and Exchange Commission.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations of the Commission thereunder, all as the same
shall be in effect at the time.
"Holder" means each registered or beneficial holder of Registrable
Securities.
"NCCI Common Stock" shall have the meaning ascribed to such term in
the Merger Agreement.
"Person" means a corporation, an association, a partnership, an
organization, a business, an individual, a trustee or custodian acting in a
fiduciary capacity, a governmental or political subdivision thereof or a
governmental agency.
"Registration Expenses" means all expenses incident to the Company's
performance of or compliance with Section 2, excluding underwriting discounts
and commissions.
"Registrable Securities" means the Shares and any securities of the
Company issued with respect to the Shares by way of a dividend, stock split or
other distribution or in connection with a combination of shares,
recapitalization, merger, consolidation or other reorganization; provided,
however, that securities shall cease to be Registrable Securities when (a) a
registration statement with respect to the sale of such securities shall have
become effective under the Securities Act and such securities shall have been
disposed of in accordance with such registration statement, (b) such securities
shall have been sold as permitted by Rule 144 or Rule 144A (or any successor
provisions) under the Securities Act, or (c) such securities shall have ceased
to be outstanding.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations of the Commission thereunder, all as the same shall be in
effect at the time.
<PAGE> 2
"Shares" means the shares of NCCI Common Stock issued to the Signatory
Holders pursuant to the Merger Agreement.
"Signatory Holder" means each Person that is a party hereto and whose
name appears on the signature page hereof.
2. Registration Under the Securities Act, Etc.
2.1 Shelf Registration. The Company shall file one or more "shelf"
registration statements with respect to all of the Registrable Securities on an
appropriate form pursuant to Rule 415 under the Securities Act and/or any
similar rule that may be adopted by the Commission (the "Shelf Registration"),
and shall use its best efforts to have the Shelf Registration declared
effective no later than 12 months after the Closing Date and to keep the Shelf
Registration with respect to the Registrable Securities continuously effective
for a period of the later of (a) 12 months following the date on which the
Shelf Registration is declared effective and (b) 24 months following the
Closing Date; provided, however, that if for any reason the effectiveness of
the Shelf Registration is suspended, such period shall be extended by the
aggregate number of days of each such suspension period; and provided, further,
that the effectiveness of the Shelf Registration may be terminated earlier if
and to the extent that all of the Registrable Securities registered therein
cease to be Registrable Securities in accordance with the terms hereof. The
Company agrees, if necessary, to supplement or amend any Shelf Registration, as
required by the registration form utilized by the Company or by the
instructions applicable to such registration form or by the Securities Act and
the Company agrees to furnish to the holders of the Registrable Securities
copies of any such supplement or amendment prior to its being used. The Company
agrees to pay all Registration Expenses in connection with the Shelf
Registration, whether or not it becomes effective.
2.2 Piggyback Registrations.
(a) Right to Piggyback. If at any time the Company
proposes to file a registration statement under the Securities Act
(except on Form S-4, Form S-8 or any successor forms thereto), whether
or not for its own account, then the Company shall give written notice
of such proposed filing to the Holders at least thirty days before the
anticipated filing date (the "Piggyback Notice"). The Piggyback Notice
shall offer such Holders the opportunity to register such amount of
Registrable Securities as each such Holder may request (a "Piggyback
Registration"). Subject to Section 2.2(b) hereof, the Company shall
include in each such Piggyback Registration all Registrable Securities
requested to be included in the registration for such offering. The
Holders shall be permitted to withdraw all or part of the Registrable
Securities from a Piggyback Registration at any time prior to the
effective date of such Piggyback Registration.
(b) Priority on Piggyback Registrations. In connection
with any proposed underwritten offering with respect to which Section
2.2(a) shall apply, the Company shall cause the managing underwriters
of such offering to permit the Holders requested to be included in the
registration for such offering to include all such Registrable
Securities on
REGISTRATION RIGHTS AGREEMENT - Page 2
<PAGE> 3
the same terms and conditions as any similar securities, if any, of
the Company or any selling securityholder included therein.
Notwithstanding the foregoing, if the managing underwriters of such
underwritten offering determine in good faith that the total number of
securities that such Holders, the Company, and any other persons
having rights to participate in such registration propose to include
in such offering is such as to materially and adversely affect the
success of such offering, then the securities to be offered for the
account of all Holders shall be reduced or limited pro rata in
proportion to the respective dollar amounts of securities owned to the
extent necessary to reduce the total number of securities to be
included in such offering to the amount recommended by such managing
underwriters.
2.3 Hold-Back Agreements.
(a) Restrictions on Public Sale by Holders of Registrable
Securities. Each holder of Registrable Securities whose Registrable
Securities are covered by a Registration Statement filed pursuant to
Section 2.2 hereof agrees, if requested (pursuant to a timely written
notice) by the managing underwriters in an underwritten offering, not
to effect any public sale or distribution of any of the Company's
securities, including a sale pursuant to Rule 144 or Rule 144A (except
as part of such underwritten offering), during the period beginning 10
days prior to, and ending 180 days after (or such shorter period as
may be agreed to by any managing underwriter of an underwritten
offering effected pursuant to Section 2.2), the closing date of each
underwritten offering made pursuant to such registration statement.
(b) Restrictions on Public Sale by the Company and
Others. The Company agrees (i) without the written consent of the
managing underwriters in an underwritten offering of Registrable
Securities covered by a Registration Statement filed pursuant to
Section 2.1 or 2.2 hereof, not to effect any public or private sale or
distribution of its securities, including a sale pursuant to
Regulation D under the Securities Act, during the period beginning 10
days prior to, and ending 180 days after (or such shorter period as
may be agreed to by any managing underwriter of an underwritten
offering effected pursuant to Section 2.1 or 2.2), the closing date of
each underwritten offering made pursuant to such Registration
Statement (except on Forms S-4 or S-8 or any successor forms to such
forms); (provided, however, that such period shall be extended by the
number of days from and including the date of the giving of any notice
pursuant to Section 2.4(g)(i) hereof to and including the date when
each seller of Registrable Securities covered by such registration
statement shall have received the copies of the supplemented or
amended prospectus contemplated by Section 2.4(g)(i) hereof), and (ii)
to use its best efforts to cause each holder of its securities
purchased from the Company at any time on or after the date of this
Agreement (other than securities purchased in a registered public
offering) to agree not to effect any public sale or distribution of
any such securities during such periods, including a sale pursuant to
Rule 144 or Rule 144A.
REGISTRATION RIGHTS AGREEMENT - Page 3
<PAGE> 4
2.4 Registration Procedures. If and whenever the Company is
required to effect the registration of any Registrable Securities under the
Securities Act as provided in Sections 2.1 and 2.2, the Company will as
expeditiously as possible:
(a) furnish to the Holders of the Registrable Securities
covered by such registration statement, their counsel and the managing
underwriters, if any, copies of all such documents proposed to be
filed, which documents will be subject to the review of such holders,
their counsel and such underwriters, if any, and the Company shall not
file any such registration statement or prospectus or any amendments
or supplements thereto (including such documents that, upon filing,
would be incorporated or deemed to be incorporated by reference
therein) to which the holders of a majority of the Registrable
Securities covered by such registration statement, their counsel, or
the managing underwriters, if any, shall reasonably object, in
writing, on a timely basis;
(b) prepare and file with the Commission such amendments
and supplements to such registration statement and the prospectus used
in connection therewith as may be necessary to keep such registration
statement effective and to comply with the provisions of the
Securities Act with respect to the disposition of the Registrable
Securities covered by such registration statement for such period as
shall be required;
(c) furnish to each seller of Registrable Securities
covered by such registration statement, such number of conformed
copies of such registration statement and of each such amendment and
supplement thereto (in each case including all exhibits), such number
of copies of the prospectus contained in such registration statement
(including each preliminary prospectus and any summary prospectus) and
any other prospectus filed under Rule 424 under the Securities Act, in
conformity with the requirements of the Securities Act, and such other
documents, as such seller may reasonably request;
(d) (x) use its best efforts to register or qualify all
Registrable Securities and other securities covered by such
registration statement under such other securities or blue sky laws of
such states of the United States of America where an exemption is not
available and as the sellers of Registrable Securities covered by such
registration statement shall reasonably request, and to notify the
sellers of Registrable Securities of the jurisdictions in which the
securities have been qualified or registered, (y) keep such
registration or qualification in effect for so long as such
registration statement remains in effect, and (z) take any other
action which may be reasonably necessary or advisable to enable such
sellers to consummate the disposition in such jurisdictions of the
securities to be sold by such sellers, except that the Company shall
not for any such purpose be required to qualify generally to do
business as a foreign corporation in any jurisdiction wherein it would
not but for the requirements of this subdivision (d) be obligated to
be so qualified or to consent to general service of process in any
such jurisdiction;
(e) use its best efforts to cause all Registrable
Securities covered by such registration statement to be registered
with or approved by such other federal or state governmental agencies
or authorities as may be necessary in the opinion of counsel to the
REGISTRATION RIGHTS AGREEMENT - Page 4
<PAGE> 5
Company and counsel to the sellers to enable the sellers to consummate
the disposition of such Registrable Securities;
(f) use its best efforts to furnish to each seller of
Registrable Securities a signed counterpart of a "comfort" letter
signed by the independent public accountants who have certified the
Company's financial statements included or incorporated by reference
in such registration statement, covering substantially the same
matters with respect to such registration statement (and the
prospectus included therein) and with respect to events subsequent to
the date of such financial statements, as are customarily covered in
accountants' comfort letters delivered to the underwriters in
underwritten public offerings of securities and dated the date such
comfort letters are customarily dated;
(g) notify in writing each seller of Registrable
Securities at any time when a prospectus relating to Registrable
Securities covered by such registration statement is required to be
delivered under the Securities Act, (i) upon discovery that, or upon
the happening of any event as a result of which, the prospectus
included in such registration statement, as then in effect, includes
an untrue statement of a material fact or omits to state any material
fact required to be stated therein or necessary to make the statements
therein not misleading, in the light of the circumstances under which
they were made, and at the request of any such seller promptly
prepare, cause to be filed with and declared effective by the
Commission (if required), and furnish to it a reasonable number of
copies of a supplement to or an amendment of such prospectus as may be
necessary so that, as thereafter delivered to the purchasers of such
securities, such prospectus shall not include an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, in
the light of the circumstances under which they were made, (ii) of any
request by the Commission or any other federal or state governmental
authority for amendments or supplements to a registration statement or
related prospectus covering Registrable Securities or for additional
information relating thereto, (iii) of the issuance by the Commission
of any stop order suspending the effectiveness of a registration
statement covering Registrable Securities or the initiation of any
proceedings for that purpose, or (iv) of the receipt by the Company of
any notification with respect to the suspension of the qualification
or exemption from qualification of any of the Registrable Securities
for sale in any jurisdiction, or the initiation or threatening of any
proceeding for such purpose;
(h) use its best efforts to obtain the withdrawal of any
order suspending the effectiveness of a Registration Statement, or the
lifting of any suspension of the qualification (or exemption from
qualification) of any of the Registrable Securities for sale in any
jurisdiction, at the earliest possible moment;
(i) otherwise comply with all material applicable rules
and regulations of the Commission and promptly furnish to each seller
of Registrable Securities a copy of any amendment or supplement to
such registration statement or prospectus;
REGISTRATION RIGHTS AGREEMENT - Page 5
<PAGE> 6
(j) enter into customary agreements (including an
underwriting agreement containing representations and warranties,
conditions to closing and indemnification and contribution obligations
in customary form), use its best efforts to obtain any necessary
consents, including without limitation any necessary consents of the
Company's lenders, in connection with any proposed registration and
sale of Registrable Securities;
(k) provide and cause to be maintained a transfer agent
and registrar for all Registrable Securities covered by such
registration statement from and after a date not later than the
effective date of such registration;
(l) use its best efforts to (i) list all Registrable
Securities covered by such registration statement on any national
securities exchange on which Registrable Securities of the same class
covered by such registration statement are then listed or (ii) seek
the authority for such Registrable Securities to be quoted on The
Nasdaq National Market if the securities so qualify;
(m) cooperate with the sellers of Registrable Securities
and the managing underwriters, if any, to facilitate the timely
preparation and delivery of certificates representing Registrable
Securities to be sold, which certificates shall be in a form eligible
for deposit with The Depository Trust Company; and enable such
Registrable Securities to be in such denominations and registered in
such names as the managing underwriters, if any, or sellers may
request at least two business days prior to any sale of Registrable
Securities;
(n) prior to the effective date of the first Registration
Statement relating to any issue of Registrable Securities, use its
best efforts to provide CUSIP numbers for such Registrable Securities;
and
(o) take such other actions as are reasonably required in
order to expedite or facilitate the disposition of such Registrable
Securities.
The Company may require each seller of Registrable Securities as to which any
registration is being effected to furnish the Company such information
regarding such seller and the distribution of such securities as the Company
may from time to time reasonably request in writing. However, no seller of
Registrable Securities shall be required to make any representations or
warranties to or agreements with the Company or any underwriter other than
customary representations, warranties or agreements regarding such holder, such
holder's Registrable Securities and such holder's intended method of
distribution and any other representation concerning such holder or such
holder's Registrable Securities required by law.
Each seller of Registrable Securities agrees that upon receipt of any
written notice from the Company of the happening of any event of the kind
described in subdivision (g) of this Section 2.4, such holder will forthwith
discontinue such holder's disposition of Registrable Securities pursuant to the
registration statement relating to such Registrable Securities until such
holder's receipt of the copies of the supplemented or amended prospectus
contemplated by
REGISTRATION RIGHTS AGREEMENT - Page 6
<PAGE> 7
subdivision (g) of this Section 2.4 and, if so directed by the Company, will
deliver to the Company (at the Company's expense) all copies, other than
permanent file copies, then in such holder's possession of the prospectus
relating to such Registrable Securities current at the time of receipt of such
notice.
2.5 Preparation; Reasonable Investigation. In connection with the
preparation and filing of each registration statement under the Securities Act
pursuant to this Agreement, the Company will give the holders of Registrable
Securities registered under such registration statement the opportunity to
review such registration statement, each prospectus included therein or filed
with the Commission, and, to the extent practicable, each amendment thereof or
supplement thereto, and such opportunities to discuss the business of the
Company with its officers and the independent public accountants who have
certified its financial statements as shall be necessary, in the opinion of
such holders, to conduct a reasonable investigation within the meaning of the
Securities Act.
2.6 Indemnification.
(a) Indemnification by the Company. In the event of any
registration of any securities of the Company under the Securities
Act, the Company will, and hereby does, indemnify and hold harmless,
in the case of any registration statement filed pursuant to Sections
2.1 and 2.2, each seller of any Registrable Securities covered by such
registration statement, its directors, officers, partners, agents and
affiliates and each other Person who participates as an underwriter in
the offering or sale of such securities and each other Person, if any,
who controls such seller or any such underwriter within the meaning of
the Securities Act, against any losses, claims, damages or
liabilities, joint or several, to which such seller or any such Person
may become subject under the Securities Act or otherwise, insofar as
such losses, claims, damages or liabilities (or actions or
proceedings, whether commenced or threatened, in respect thereof)
arise out of or are based upon (i) any untrue statement or alleged
untrue statement of any material fact contained in any registration
statement under which such securities were registered under the
Securities Act, any preliminary prospectus, final prospectus or
summary prospectus contained therein, or any amendment or supplement
thereto, or (ii) any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein in light of the circumstances in which they were
made not misleading, and, subject to Section 2.6(c), the Company will
reimburse any such seller and each such director, officer, partner,
agent or affiliate, underwriter and controlling Person for any legal
or any other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, liability, action or
proceeding; provided, that the Company shall not be liable in any such
case to the extent that any such loss, claim, damage, liability (or
action or proceeding in respect thereof) or expense arises out of or
is based upon an untrue statement or alleged untrue statement or
omission or alleged omission made in such registration statement, any
such preliminary prospectus, final prospectus, summary prospectus,
amendment or supplement in reliance upon and in conformity with
written information furnished to the Company through an instrument
duly executed by or on behalf of such seller specifically stating that
it is for use in the
REGISTRATION RIGHTS AGREEMENT - Page 7
<PAGE> 8
preparation thereof. Such indemnity shall remain in full force and
effect regardless of any investigation made by or on behalf of any
such seller, or any such director, officer, partner, agent or
affiliate or controlling person and shall survive the transfer of such
securities by such seller.
(b) Indemnification by the Selling Holders. As a
condition to including any Registrable Securities in any registration
statement, the Company shall have received an undertaking satisfactory
to it from the prospective seller of such Registrable Securities, to
indemnify and hold harmless (in the same manner and to the same extent
as set forth in subdivision (a) of this Section 2.6) the Company, and
each director of the Company, each officer of the Company and each
other Person, if any, who controls the Company within the meaning of
the Securities Act, with respect to any statement or alleged statement
in or omission or alleged omission from such registration statement,
any preliminary prospectus, final prospectus or summary prospectus
contained therein, or any amendment or supplement thereto, if such
statement or alleged statement or omission or alleged omission was
made in reliance upon and in conformity with written information
furnished to the Company through any instrument duly executed by such
seller specifically stating that it is for use in the preparation of
such registration statement, preliminary prospectus, final prospectus,
summary prospectus, amendment or supplement. Such indemnity shall
remain in full force and effect, regardless of any investigation made
by or on behalf of the Company or any such director, officer or
controlling person and shall survive the transfer of such securities
by such seller.
(c) Notices of Claims, etc. Promptly after receipt by an
indemnified party of written notice of the commencement of any action
or proceeding involving a claim referred to in the preceding
subdivisions of this Section 2.6, such indemnified party will, if a
claim in respect thereof is to be made against an indemnifying party,
give written notice to the latter of the commencement of such action,
provided that the failure of any indemnified party to give notice as
provided herein shall not relieve the indemnifying party of its
obligations under the preceding subdivisions of this Section 2.6,
except to the extent that the indemnifying party is actually
prejudiced by such failure to give notice. In case any such action is
brought against an indemnified party the indemnifying party shall be
entitled to participate in and, unless in such indemnified party's
reasonable judgment a conflict of interest between such indemnified
and indemnifying parties may exist in respect of such claim, to assume
the defense thereof, jointly with any other indemnifying party
similarly notified to the extent that it may wish, with one counsel
reasonably satisfactory to such indemnified party and all other
indemnified parties that may be represented without conflict by one
counsel, and after written notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof,
the indemnifying party shall not be liable to such indemnified party
for any legal or other expenses subsequently incurred by the latter in
connection with the defense thereof other than reasonable costs of
investigation. No indemnifying party shall be liable for any
settlement of any action or proceeding effected without its written
consent. No indemnifying party shall, without the consent of the
indemnified party, consent to entry of any judgment or enter into any
settlement which does not include as an unconditional
REGISTRATION RIGHTS AGREEMENT - Page 8
<PAGE> 9
term thereof the giving by the claimant or plaintiff to such
indemnified party of a release from all liability in respect to such
claim or litigation.
(d) Contribution. If the indemnification provided for in
this Section 2.6 shall for any reason be held by a court to be
unavailable to an indemnified party under subparagraph (a) or (b)
hereof in respect of any loss, claim, damage or liability, or any
action in respect thereof, then, in lieu of the amount paid or payable
under subparagraph (a) or (b) hereof, the indemnified party and the
indemnifying party under subparagraph (a) or (b) hereof shall
contribute to the aggregate losses, claims, damages and liabilities
(including legal or other expenses reasonably incurred in connection
with investigating the same), (i) in such proportion as is appropriate
to reflect the relative fault of the Company and the prospective
sellers of Registrable Securities covered by the registration
statement which resulted in such loss, claims, damage or liability, or
action in respect thereof, with respect to the statements or omissions
which resulted in such loss, claim, damage or liability, or action in
respect thereof, as well as any other relevant equitable
considerations or (ii) if the allocation provided by clause (i) above
is not permitted by applicable law, in such proportion as shall be
appropriate to reflect the relative benefits received by the Company
and such prospective sellers from the offering of the securities sold
pursuant to such registration statement. No Person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any Person
who was not guilty of such fraudulent misrepresentation. Such
prospective sellers' obligations to contribute as provided in this
subparagraph (d) are several in proportion to the relative value of
their respective Registrable Securities sold pursuant to such
registration statement and not joint. In addition, no Person shall be
obligated to contribute hereunder any amounts in payment for any
settlement of any action or claim effected without such Person's
consent, which consent shall not be unreasonably withheld.
(e) Other Indemnification. Indemnification and
contribution similar to that specified in the preceding subdivisions
of this Section 2.6 (with appropriate modifications) shall be given by
the Company and each seller of Registrable Securities with respect to
any required registration or other qualification of securities under
any federal or state law or regulation of any governmental authority
other than the Securities Act.
(f) Indemnification Payments. The indemnification and
contribution required by this Section 2.6 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 expense, loss, damage or
liability is incurred.
2.7 Certain Other Agreements.
(a) The Company will not hereafter enter into any
agreement which would permit the registration of any securities to the
exclusion of any portion of the Registrable Securities, unless such
exclusion is first waived in writing by the holders of more than 50%
of the Registrable Securities then outstanding.
REGISTRATION RIGHTS AGREEMENT - Page 9
<PAGE> 10
(b) The Company will not effect or permit to occur, any
combination or subdivision of Registrable Securities which would
adversely affect the ability of the holders of Registrable Securities
to include such Registrable Securities in any registration of its
securities contemplated by this Section 2 or the marketability of such
Registrable Securities under any such registration.
(c) Each Signatory Holder agrees to not sell, assign,
convey, encumber or otherwise transfer shares of NCCI Common Stock
acquired pursuant to the Merger Agreement for a period of one year
following the Closing Date.
2.8 Certain Rights If Named in a Registration Statement. If any
statement contained in a registration statement under the Securities Act refers
to a holder of Registrable Securities by name or otherwise as the holder of any
securities of the Company, then such holder shall have the right to require the
insertion therein of language, in form and substance reasonably satisfactory to
such holder, to the effect that the holding by such holder of such securities
does not necessarily make such holder a "controlling person" of the Company
within the meaning of the Securities Act.
3. Rule 144 and Rule 144A. The Company shall take all actions
reasonably necessary to enable holders of Registrable Securities to sell such
securities without registration under the Securities Act within the limitation
of the exemptions provided by (a) Rule 144 and Rule 144A under the Securities
Act, as such Rule may be amended from time to time, or (b) any similar rule or
regulation hereafter adopted by the Commission including, without limiting the
generality of the foregoing, keeping effective the registration of the NCCI
Common Stock under the Exchange Act and filing on a timely basis all reports
required to be filed by the Exchange Act. Upon the request of any holder of
Registrable Securities, the Company will deliver to such holder a written
statement as to whether it has complied with such requirements.
4. Amendments and Waivers. This Agreement may be amended with the
consent of the Company and the Company may take any action herein prohibited,
or omit to perform any act herein required to be performed by it, in each of
the foregoing cases only if the Company shall have obtained the written consent
to such amendment, action or omission to act, of the holder or holders of at
least a majority of the Registrable Securities at the time of such consent.
Notwithstanding the foregoing, a waiver or consent to depart from the
provisions hereof with respect to a matter that relates exclusively to the
rights of holders of Registrable Securities whose securities are being sold
pursuant to a registration statement and that does not directly or indirectly
affect the rights of other holders of Registrable Securities may be given by
holders of at least a majority of the Registrable Securities being sold by such
holders pursuant to such Registration Statement; provided, however, that the
provisions of this sentence may not be amended, modified, or supplemented
except in accordance with the provisions of the immediately preceding sentence.
5. Nominees for Beneficial Owners. In the event that any
Registrable Securities are held by a nominee for the beneficial owner thereof,
the beneficial owner thereof may, at its election in writing delivered to the
Company, be treated as the holder of such Registrable
REGISTRATION RIGHTS AGREEMENT - Page 10
<PAGE> 11
Securities for purposes of any request or other action by any holder or holders
of Registrable Securities pursuant to this Agreement or any determination of
any number or percentage of shares of Registrable Securities held by any holder
or holders of Registrable Securities contemplated by this Agreement. If the
beneficial owner of any Registrable Securities so elects, the Company may
require assurances reasonably satisfactory to it of such owner's beneficial
ownership of such Registrable Securities.
6. Notices. All communications provided for hereunder shall be
sent by postage prepaid first-class mail, receipted courier service or
facsimile telecommunication, shall be deemed to be received three days after
being sent, or, if earlier, the date of actual receipt at the indicated
address, and shall be addressed as follows:
(a) if to a Signatory Holder or any transferee of
Registrable Securities, addressed to such person(s) at such address as
shown on stock ledger of the Company;
(b) if to the Company, addressed to it at its principal
executive office or at such other address as the Company shall have
furnished to each holder of Registrable Securities at the time
outstanding.
7. Assignment; Calculation of Percentage Interests in Registrable
Securities.
(a) This Agreement shall be binding upon and inure to the
benefit of and be enforceable by the parties hereto and their
respective successors and assigns, including any Person to whom
Registrable Securities are transferred; provided that the securities
so transferred continue to be considered Registrable Securities in the
hands of such Person.
(b) For purposes of this Agreement, all references to a
percentage of the Registrable Securities shall be calculated based
upon the number of shares held by those holders needed to be included
for purposes of such calculation.
8. Descriptive Headings. The descriptive headings of the several
sections and paragraphs of this Agreement are inserted for reference only and
shall not limit or otherwise affect the meaning hereof.
9. Governing Law. This Agreement shall be construed and enforced
in accordance with, and the rights of the parties shall be governed by, the
internal laws of the State of Tennessee.
10. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all such
counterparts shall together constitute one and the same instrument.
11. Third Party Beneficiaries. This Agreement is intended to be
for the benefit of all Holders, whether or not a direct party hereto, and each
Holder shall be entitled to enforce the provisions hereof against the Company
as if such Holder were a Signatory Holder and in direct
REGISTRATION RIGHTS AGREEMENT - Page 11
<PAGE> 12
privity with the Company. The Company hereby waives any and all defenses of
lack of privity in connection with any claims or actions brought by any Holder
which is not a Signatory Holder arising from any purported breach or violation
of this Agreement.
[THE REMAINDER OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK]
REGISTRATION RIGHTS AGREEMENT - Page 12
<PAGE> 13
IN WITNESS WHEREOF, the parties have caused their authorized
representatives to execute this Agreement.
NASHVILLE COUNTRY CLUB, INC.,
a Tennessee corporation
By: /s/ Thomas Jackson Weaver III
----------------------------------
Thomas Jackson Weaver III
President
/s/ Robert E. Geddes
----------------------------------
Robert E. Geddes
/s/ Greg M. Janese
----------------------------------
Greg M. Janese
/s/ Thomas Miserendino
----------------------------------
Thomas Miserendino
/s/ Brian F. Murphy
----------------------------------
Brian F. Murphy
/s/ Marc W. Oswald
----------------------------------
Marc W. Oswald
REGISTRATION RIGHTS AGREEMENT - Page 13
<PAGE> 1
EXHIBIT 10.16
CONSULTING AGREEMENT
THIS CONSULTING AGREEMENT (the "Agreement") is entered into as of this
21st day of April, 1997, by and among AVALON ENTERTAINMENT GROUP, INC., a
Tennessee corporation ("AEG"), NASHVILLE COUNTRY CLUB, INC., a Tennessee
corporation ("NCCI"), and ROBERT E. GEDDES (the "Consultant"). NCCI, together
with its subsidiaries and affiliates, including AEG, are hereinafter referred
to collectively as the "NCCI Group."
R E C I T A L S:
WHEREAS, pursuant to that certain Merger Agreement (the "Merger
Agreement"), dated as of April 21, 1997, by and among NCCI, Avalon Acquisition
Corp., Inc., a Tennessee corporation and a wholly-owned subsidiary of NCCI
("AAC"), AEG and Messrs. Robert E. Geddes, Thomas Miserendino, Marc W. Oswald,
Greg M. Janese and Brian F. Murphy (collectively, the "Avalon Group"), AAC has,
concurrently herewith, acquired by merger all of the assets and liabilities of
AEG. Immediately subsequent to the merger, AAC shall change its name to Avalon
Entertainment Group, Inc. and such entity, as it shall exist subsequent to said
merger, shall hereinafter be defined as "Avalon."
WHEREAS, the Consultant has heretofore provided executive services to
AEG, and, through such service, has acquired special and unique knowledge,
abilities and expertise.
WHEREAS, the parties hereto acknowledge that the Consultant will
receive significant benefits if the transactions contemplated by the Merger
Agreement are consummated. It is further acknowledged that the execution and
delivery of this Agreement are conditions to the obligations of NCCI and AAC to
consummate the transactions contemplated by the Merger Agreement.
WHEREAS, the parties to this Agreement mutually acknowledge that if
the Consultant either directly or indirectly was to become involved in the
ownership and operation of any business which competes with the NCCI Group,
that such business involvement could adversely impact the NCCI Group in the
operation of its business and, in particular, the operation and management of
Avalon.
WHEREAS, Avalon desires to retain the services of the Consultant as a
consultant and advisor to Avalon in the operation and management of its
business, and the Consultant desires to provide services as a consultant and
advisor with regard to the operation and management of the business of Avalon,
on the terms and conditions set forth in this Agreement.
A G R E E M E N T:
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained in this Agreement, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
Avalon and the Consultant agree as follows:
<PAGE> 2
1. SERVICES.
(a) Subject to the terms and conditions set forth in this
Agreement, Avalon hereby retains the Consultant to render consulting
and advisory services regarding the management and operation of
Avalon. During the term hereof, the Consultant shall make available at
least fifteen percent (15%) of his full business time and his best
efforts, business judgment, skill and knowledge to the advancement of
the business and interests of the NCCI Group and to the discharge of
his duties and responsibilities hereunder. The Consultant shall use
his best efforts and skills to preserve the business of the NCCI Group
and the goodwill of its employees and persons having business
relations with the NCCI Group.
(b) Avalon engages the services of the Consultant as an
independent contractor and not as an employee. As such, Consultant
shall not be eligible to participate in any benefits provided by
Avalon to its employees.
(c) The Consultant shall not hold himself out as an agent of
Avalon, nor shall he act in any manner so as to bind Avalon.
2. TERM. Subject to earlier termination as hereinafter provided,
the term of the Agreement shall commence on the effective date hereof and shall
continue through December 31, 2002.
3. COMPENSATION. As compensation for all services performed by
the Consultant under and during the term hereof:
(a) Base compensation. Avalon shall pay the Consultant
base compensation at the rate of One Hundred Thousand Dollars
($100,000) per annum, with cost of living adjustments as reasonably
determined by the Board of Directors of NCCI (the "NCCI Board") for
1999, 2000, 2001 and 2002, payable monthly in arrears.
(b) Incentive compensation. In addition to the base
compensation, the Consultant will, at his option exercisable
separately with respect to each calendar year ended after December 31,
1996, be entitled to incentive compensation as follows:
(i) an Incentive Bonus (herein so called) of
$33,667 for such calendar year in which the Pre-Tax Net Income
of Avalon (as hereinafter defined) equals or exceeds
$1,000,000, and, if the applicable income level is achieved,
either:
(ii) a Partial Participating Bonus (herein so
called) of 3.333% of the amount by which the Pre-Tax Net
Income of Avalon for such calendar year exceeds seventy-five
percent (75%) of the Projected Pre-Tax Net Income of Avalon
(as hereinafter defined) for such year, or
<PAGE> 3
(iii) a Full Participating Bonus (herein so called)
of 3.333% of the Pre-Tax Net Income of Avalon for such
calendar year if the Projected Pre-Tax Net Income for such
year is realized.
For purposes of this subparagraph (b), "Pre-Tax Net Income of
Avalon" shall mean, for a calendar year, the annual net income before
taxes realized by Avalon as calculated in accordance with generally
accepted accounting principles, calculated without the allocation of
(i) any costs and expenses incurred by AEG, Avalon or NCCI in
connection with the transactions contemplated by the Merger Agreement,
or (ii) any general overhead or management fees of NCCI or any
affiliate, but deducting the executive compensation and consulting
fees payable to Messrs. Geddes, Miserendino, Oswald and Janese
pursuant to this Agreement and employment agreements or consulting
agreements of even date herewith among Avalon, NCCI and such other
applicable members of the Avalon Group, and the projected Incentive
Bonus and Partial Participating Bonus or Full Participating Bonus
payable with respect to such calendar year pursuant to this Agreement
and the employment agreements of even date herewith between Avalon,
NCCI and Messrs. Oswald and Janese.
For purposes of this subparagraph (b), the "Projected Pre-Tax
Net Income of Avalon" shall be as follows:
<TABLE>
<S> <C>
1997 $1,200,000
1998 $1,500,000
1999 $1,700,000
2000 $2,000,000
2001 $2,000,000
2002 $2,000,000
</TABLE>
The incentive compensation payable pursuant to this
subparagraph (b) shall be paid as soon as practicable after the
Pre-Tax Net Income of Avalon shall have been determined, but in no
event later than March 30 of the subsequent year. The Partial
Participating Bonus shall not be paid for any year for which the Full
Participating Bonus is paid. The parties hereto acknowledge that the
"Projected Pre-Tax Net Income of Avalon" amounts were derived by the
parties hereto based on the assumption that Avalon would be operated
during the term hereof substantially as AEG was operated during the
three (3) years prior to the merger contemplated by the Merger
Agreement. Should the operations of Avalon during the term hereof
change materially, the parties hereto shall negotiate in good faith to
determine whether the "Projected Pre-Tax Net Income of Avalon" amounts
should be revised, and if so, such revised amounts.
(c) Business expenses. Avalon shall pay or reimburse the
Consultant for all reasonable and customary expenses incurred or paid
by the Consultant in the performance of his duties and
responsibilities hereunder, subject to periodic review of the amount
of
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<PAGE> 4
such expenses from time to time by Avalon, and subject to such
reasonable substantiation and documentation as may be specified by
Avalon from time to time.
(d) Guarantee of payment. NCCI hereby guarantees payment
of the amounts to be paid to the Consultant under Paragraphs 3(a) and
3(b) hereof.
(e) No participation in benefit plans. The Consultant
shall not be entitled to participate in any pension, profit sharing,
bonus, supplemental compensation, group insurance or other employee
benefit plan now in effect or hereafter established by Avalon.
(f) Form 1099. Avalon shall issue a Form 1099 to the
Consultant for the amounts paid to the Consultant hereunder.
(g) Taxes. The Consultant shall pay all taxes, including
without limitation federal, state and local taxes, and contributions
required by social security and unemployment compensation laws with
respect to the compensation paid pursuant to this Agreement.
4. TERMINATION.
(a) Death or Disability. This Agreement shall terminate
upon the death or Disability (as hereinafter defined) of the
Consultant. The term "Disability" shall mean the Consultant is unable
to perform his duties under this Agreement for 90 consecutive days or
for 120 days out of 150 consecutive days due to the Consultant's
physical or mental illness as determined (after expiration of either
such periods) by a qualified physician selected by Avalon in its sole
discretion.
(b) Termination by Avalon for Cause. Avalon may terminate
this Agreement for Cause upon notice to the Consultant setting forth
in reasonable detail the nature of such cause. The following, as
determined by the Avalon Board in its reasonable judgment, shall
constitute Cause for termination:
(i) The Consultant's failure to perform (other
than by reason of disability), or gross negligence or willful
misconduct in the performance of, his duties and
responsibilities to the NCCI Group, such duties and
responsibilities not to be unreasonably imposed;
(ii) Breach by the Consultant of any provision of
this Agreement;
(iii) Fraud, embezzlement or other dishonesty with
respect to the NCCI Group;
(iv) Conviction of, or a plea of nolo contendere
to, a felony or other crime involving moral turpitude;
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<PAGE> 5
(v) Other conduct by the Consultant that would
generally be considered seriously harmful to the business,
interests or reputation of the NCCI Group;
(vi) The Consultant's intentional failure to
comply with any instructions of Avalon, such instructions not
to be unreasonably imposed; or
(vii) Failure of Avalon to materially achieve
financial and operational performance objectives established
by the Board of Directors of Avalon, unless such failure
results from an act of God or catastrophic event beyond the
control of the Consultant;
provided, however, in the case of subparagraphs (i), (ii), (v) and
(vi), the Consultant shall have been informed in writing of the act,
or failure to act, constituting Cause for termination, and shall have
been provided with a reasonable opportunity, but in no event greater
than thirty (30) days, to cure such act or failure to act.
Notwithstanding the foregoing sentence, the Consultant shall be
entitled to written notification and opportunity to cure an act, or
failure to act, constituting Cause for termination no more than two
times. Subsequent to such second notification, the Consultant shall
have no right to cure any subsequent act, or failure to act, and
Avalon may proceed with termination for Cause as defined herein
without further notice to the Consultant.
(c) Termination by Consultant for Good Reason. The
Consultant may terminate this Agreement for "Good Reason" or without
"Good Reason" at any time. For purposes of this Agreement, "Good
Reason" shall mean (i) a material breach by NCCI of any material
provision of the Merger Agreement and related agreements executed in
conjunction with the Merger Agreement, and failure of NCCI to cure
such breach within thirty (30) days of receipt of written notification
thereof from the Consultant, and (ii) any breach by Avalon of any
material provision of this Agreement or any failure by Avalon to carry
out any of its material obligations hereunder, and the failure to cure
such breach or failure within thirty (30) days' written notice thereof
from the Consultant. Notwithstanding the foregoing sentence, Avalon
shall be entitled to written notification and opportunity to cure an
act, or failure to act, providing the Consultant Good Reason for
termination no more than two times. Subsequent to such second
notification, Avalon shall have no right to cure any subsequent act,
or failure to act, and the Consultant may proceed with termination for
Good Reason as defined herein without further notice to Avalon.
(d) Other termination. Any termination of this Agreement,
other than as a result of the Consultant's death, shall be
communicated by a "Notice of Termination" to the other parties to this
Agreement. For purposes of this Agreement, a "Notice of Termination"
shall mean a notice in writing which shall indicate the specific
termination provision in this Agreement relied upon and shall set
forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of this Agreement under the provisions
so indicated.
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<PAGE> 6
(e) Date of termination. The Date of Termination (herein
so called) shall mean (a) if this Agreement is terminated as a result
of death, the date of the Consultant's death, (b) if this Agreement is
terminated as a result of the Consultant's Disability, the date Notice
of Termination is delivered to the Consultant, (c) if this Agreement
is terminated by Consultant, the earlier of ten (10) days following
the date on which a Notice of Termination is delivered pursuant to
Paragraph 10 or the date specified in the Notice of Termination, and
(d) if this Agreement is terminated for any other reason, then ten
(10) days following the date on which a Notice of Termination is
delivered pursuant to Paragraph 10.
5. EFFECTS ON COMPENSATION UPON DISABILITY OR TERMINATION OF
AGREEMENT.
(a) Disability. During any period that the Consultant
fails to perform his duties under this Agreement as a result of a
Disability, Avalon shall continue to pay him his base compensation
pursuant to Paragraph 3(a) until the Date of Termination.
(b) Death. If this Agreement terminates because of the
death of the Consultant, then Avalon shall pay the Consultant's estate
his base compensation pursuant to Paragraph 3(a) through the date of
his death.
(c) Termination for Cause or without Good Reason. If the
Consultant voluntarily terminates this Agreement without Good Reason
or if this Agreement is terminated by Avalon for Cause, Avalon shall
pay the Consultant his base compensation pursuant to Paragraph 3(a)
through the Date of Termination.
(d) Termination for Good Reason or without Cause. If the
Consultant terminates this Agreement for Good Reason or if Avalon
terminates this Agreement without Cause, then the Consultant shall be
entitled to receive one payment in an amount equal to the highest
total compensation paid the Consultant in a prior calendar year
pursuant to Paragraphs 3(a) and (b) for the lesser of (i) the
remaining portion of the term, or (ii) two years. Such payment shall
be paid to the Consultant within fifteen (15) days of the Date of
Termination.
(e) Incentive Compensation. Should this Agreement
terminate as a result of the Consultant's Disability or death, or
should the Consultant terminate this Agreement for Good Reason, or if
this Agreement is terminated without Cause, in addition to the
compensation set forth in subparagraphs (a), (b) and (d) of this
Paragraph 5, the Consultant (or his estate, if applicable) shall also
be entitled to incentive compensation under Paragraph 3(b) hereof
calculated on the Partial Period Amount (hereinafter defined) of the
calendar year in which the Date of Termination occurs. For purposes of
this Agreement, the "Partial Period Amount" shall be equal to the
total amount of the bonuses payable pursuant to Paragraph 3(b) for the
year in which the Date of Termination occurs, divided by the number of
days in such calendar year, times the number of days from the first
day of such calendar year to and including the Date of Termination.
The
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<PAGE> 7
Consultant's incentive compensation calculated on the Partial Period
Amount shall be paid in accordance with Paragraph 3(b) hereof.
6. NONDISCLOSURE COVENANTS. During the term of this Agreement,
the Consultant will have access to and become familiar with various trade
secrets and other sensitive information belonging to the NCCI Group consisting
of, but not limited to, processes, computer programs, compilations of
information, records, sales procedures, customer requirements, pricing
techniques, customer lists, technical data, know-how, market reports, consumer
investigations, methods of doing business and other confidential information
(collectively, the "Confidential Information"), which are acquired, developed
and used by the NCCI Group and regularly used in the operation of its business.
The Consultant acknowledges and agrees that all Confidential Information is and
shall remain the property of the NCCI Group. The Consultant further agrees that
he shall not use in any way or disclose any of the Confidential Information,
directly or indirectly, either during the term of this Agreement or at any time
thereafter, except as required in the course of his services under this
Agreement or to the extent such Confidential Information is publicly known. All
files, records, documents, information, data, and similar items relating to the
business of the NCCI Group, whether prepared by the Consultant or otherwise
coming into his possession, shall remain the exclusive property of NCCI and
shall not be removed from the premises of the NCCI Group under any
circumstances without the prior written consent of the NCCI Board (except in
the ordinary course of business during the term of this Agreement), and in any
event shall be promptly delivered to NCCI (without the Consultant retaining any
copies) upon termination of this Agreement.
7. NONCOMPETITION COVENANT. Except in the case of the termination
of this Agreement other than (i) for Cause, or (ii) for Good Reason, without
the prior written consent of NCCI, the Consultant shall not, prior to January
1, 2003, directly or indirectly, as a director, officer, agent, employee,
consultant or independent contractor, or in any other individual or
representative capacity, (i) invest (other than investments in publicly-owned
companies which constitute not more than one percent (1%) of the outstanding
securities of any such company) or engage in any business or activity that is
competitive with the business of the NCCI Group in the same geographic areas in
which the NCCI Group primarily operates or (ii) accept employment with or
render services to a direct competitor of the NCCI Group which competitor
operates in the same geographic areas as the NCCI Group.
8. COVENANT NOT TO HIRE. During the term of this Agreement and
for a period of one (1) year after the termination of this Agreement for any
reason, the Consultant shall not, on his own behalf or on behalf of any other
person, partnership, association, corporation or other entity, hire, or solicit
for employment any employee of the NCCI Group, or in any manner attempt to
influence or induce any employee of the NCCI Group, to leave the employment of
the NCCI Group, nor shall the Consultant use or disclose to any person,
partnership, association, corporation or other entity any information obtained
during the term of this Agreement, concerning the names and addresses of the
NCCI Group employees; provided, however, if the Consultant terminates this
Agreement for Good Reason or if Avalon terminates this Agreement without Cause,
the Consultant may hire or solicit for employment any employee of Avalon who
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<PAGE> 8
was an employee of AEG on the effective date of the merger contemplated by the
Merger Agreement.
9. SEVERABILITY. If any provision of this Agreement is held to be
illegal, invalid or unenforceable under present or future laws effective during
the term hereof, such provision shall be fully severable and this Agreement
shall be construed and enforced as if such illegal, invalid or unenforceable
provision never comprised a part of this Agreement; and the remaining
provisions of this Agreement shall remain in full force and effect and shall
not be affected by the illegal, invalid or unenforceable provision or by its
severance herefrom. Furthermore, in lieu of such illegal, invalid or
unenforceable provision, there shall be added automatically as part of this
Agreement a provision as similar in its terms to such illegal, invalid or
unenforceable provision as may be possible and be legal, valid and enforceable.
10. NOTICE. All notices, demands, requests or other communications
that may be or are required to be given, served or sent by any party to any
other party pursuant to this Agreement shall be in writing and shall be mailed
by first-class, registered or certified mail, return receipt requested, postage
prepaid, or transmitted by hand delivery, telegram or facsimile transmission
addressed as set forth on the signature pages hereof. Each party may designate
by notice in writing a new address to which any notice, demand, request or
communication may thereafter be so given, served or sent. Each notice, demand,
request or communication that is mailed, delivered or transmitted in the manner
described above shall be deemed sufficiently given, served, sent and received
for all purposes at such time as it is delivered to the addressee with the
return receipt, the delivery receipt, the affidavit of messenger or (with
respect to a facsimile transmission) the answer back being deemed conclusive
evidence of such delivery or at such time as delivery is refused by the
addressee upon presentation.
11. AMENDMENT; WAIVER. No provisions of this Agreement may be
modified, waived or amended unless such waiver, modification or amendment is
agreed to in writing and signed by the Consultant and such officers as may be
specifically designated by the Avalon Board and the NCCI Board, respectively,
and such provisions shall be modified, waived or amended only to the extent set
forth in such writing.
12. VALIDITY. The invalidity or unenforceability of any provision
of this Agreement shall not effect the validity or enforceability of any other
provision of this Agreement, which shall remain in full force and effect.
13. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
14. ARBITRATION. Any dispute arising from this Agreement shall be
settled by arbitration in accordance with the commercial rules then in effect
of the American Arbitration Association, except as modified in this Paragraph
14 and, except that the arbitrator(s) shall be selected in accordance with the
following procedure: such dispute shall be referred to and
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<PAGE> 9
decided by a single arbitrator if the parties can agree upon one within thirty
(30) days after either of the parties shall notify the other that it wishes to
avail itself of the provisions of this Paragraph 14; otherwise, such dispute
shall be referred to and decided by three arbitrators, one to be appointed by
Avalon and one to be appointed by the Consultant, each such appointment to be
made within twenty (20) days after the expiration of the thirty (30) day period
referred to above, and the third arbitrator to be appointed by the first two
arbitrators within thirty (30) days after the expiration of such twenty (20)
day period. If the first two arbitrators cannot reach agreement on the third
arbitrator within said thirty (30) day period, the third arbitrator shall be an
impartial arbitrator appointed by the President of the American Arbitration
Association within twenty (20) days after the expiration of said thirty (30)
day period. Hearings of the arbitrator(s) shall be held in Nashville,
Tennessee, unless the parties agree otherwise. The presentations of the parties
in the arbitration proceeding shall be commenced and completed within sixty
(60) days after selection of the arbitration panel, and the arbitration panel
shall render its decision in writing within thirty (30) days after completion
of such presentations. Any decision concurred in by any two (2) of the
arbitrators shall constitute the decision of the arbitration panel, and
unanimity shall not be required. Judgment upon an award rendered by the
arbitrator(s) may be entered in any court of competent jurisdiction. Any award
so rendered shall be final and binding upon the parties hereto. All costs and
expenses of the arbitrator(s) shall be paid as determined by such
arbitrator(s), and all costs and expenses of experts, witnesses and other
persons retained by the parties shall be borne by them respectively.
15. GENERAL CREDITOR. Nothing contained in this Agreement and no
action taken pursuant to the provisions of this Agreement shall create or be
construed to create a trust relationship between Avalon and the Consultant or
any other person, nor shall any money or property of Avalon or NCCI be
segregated for the benefit of the Consultant to satisfy the obligations of
Avalon or NCCI hereunder.
16. NO ASSIGNMENT. The right of the Consultant or any other person
to the payment of amounts or other benefits under this Agreement shall not be
assigned, alienated, hypothecated, placed in trust, disposed of, transferred,
pledged or encumbered (except by will or by the laws of descent and
distribution), and, to the extent permitted by law, no such amount or payment
shall in any way be subject to any legal process to subject the same to the
payments of any claim against the Consultant or any other person.
17. INJUNCTIVE RELIEF. Notwithstanding the provisions of Paragraph
14, if there is a breach or threatened breach by a party to this Agreement of
the provisions of this Agreement, any other party to this Agreement shall be
entitled to an injunction to prevent irreparable injury to said party.
18. INTEGRATION. This Agreement represents the entire
understanding and agreement between the parties with respect to the subject
matter of this Agreement, and all other written or oral agreements relating to
the subject matter hereof are hereby superseded.
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<PAGE> 10
19. GOVERNING LAW. The terms and provisions of this Agreement,
including without limitation the provisions for arbitration under Paragraph 14,
shall be construed in accordance with, and governed by, the laws of the State
of Tennessee.
20. SURVIVAL. Notwithstanding the termination of this Agreement,
the provisions of Paragraphs 6 through 12 and Paragraphs 14 through 16 shall
survive and continue in full force and effect in accordance with their terms.
21. INDEPENDENT CONSULTANT. Notwithstanding the provisions of this
Agreement, Consultant is providing consulting services to Avalon pursuant to
this Agreement as an independent consultant and nothing contained in this
Agreement shall under any circumstances be construed to imply or otherwise
suggest that Consultant is acting as an employee of Avalon in his performance
of services pursuant hereto.
IN WITNESS WHEREOF, the parties have executed this Agreement to be
effective as of the 21st day of April, 1997.
AEG:
AVALON ENTERTAINMENT GROUP, INC.,
a Tennessee corporation
By: /s/ Thomas Jackson Weaver III
---------------------------------
Thomas Jackson Weaver III, President
1025 16th Avenue South
Nashville, Tennessee 37212
NCCI:
NASHVILLE COUNTRY CLUB, INC.,
a Tennessee corporation
By: /s/ Thomas Jackson Weaver III
---------------------------------
Thomas Jackson Weaver III, President
402 Heritage Plantation Way
Hickory Valley, Tennessee 38042
CONSULTANT:
/s/ Robert E. Geddes
------------------------------------
Robert E. Geddes
c/o Avalon Entertainment Group, Inc.
17835 Ventura Boulevard, Suite 300
Encino, California 91316
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<PAGE> 1
EXHIBIT 10.17
CONSULTING AGREEMENT
THIS CONSULTING AGREEMENT (the "Agreement") is entered into as of this
21st day of April, 1997, by and among AVALON ENTERTAINMENT GROUP, INC., a
Tennessee corporation ("AEG"), NASHVILLE COUNTRY CLUB, INC., a Tennessee
corporation ("NCCI"), and THOMAS MISERENDINO (the "Consultant"). NCCI, together
with its subsidiaries and affiliates, including AEG, are hereinafter referred
to collectively as the "NCCI Group."
R E C I T A L S:
WHEREAS, pursuant to that certain Merger Agreement (the "Merger
Agreement"), dated as of April 21, 1997, by and among NCCI, Avalon Acquisition
Corp., Inc., a Tennessee corporation and a wholly-owned subsidiary of NCCI
("AAC"), AEG and Messrs. Robert E. Geddes, Thomas Miserendino, Marc W. Oswald,
Greg M. Janese and Brian F. Murphy (collectively, the "Avalon Group"), AAC has,
concurrently herewith, acquired by merger all of the assets and liabilities of
AEG. Immediately subsequent to the merger, AAC shall change its name to Avalon
Entertainment Group, Inc. and such entity, as it shall exist subsequent to said
merger, shall hereinafter be defined as "Avalon."
WHEREAS, the Consultant has heretofore provided executive services to
AEG, and, through such service, has acquired special and unique knowledge,
abilities and expertise.
WHEREAS, the parties hereto acknowledge that the Consultant will
receive significant benefits if the transactions contemplated by the Merger
Agreement are consummated. It is further acknowledged that the execution and
delivery of this Agreement are conditions to the obligations of NCCI and AAC to
consummate the transactions contemplated by the Merger Agreement.
WHEREAS, the parties to this Agreement mutually acknowledge that if
the Consultant either directly or indirectly was to become involved in the
ownership and operation of any business which competes with the NCCI Group,
that such business involvement could adversely impact the NCCI Group in the
operation of its business and, in particular, the operation and management of
Avalon.
WHEREAS, Avalon desires to retain the services of the Consultant as a
consultant and advisor to Avalon in the operation and management of its
business, and the Consultant desires to provide services as a consultant and
advisor with regard to the operation and management of the business of Avalon,
on the terms and conditions set forth in this Agreement.
<PAGE> 2
A G R E E M E N T:
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained in this Agreement, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
Avalon and the Consultant agree as follows:
1. SERVICES.
(a) Subject to the terms and conditions set forth in this
Agreement, Avalon hereby retains the Consultant to render consulting
and advisory services regarding the management and operation of
Avalon. During the term hereof, the Consultant shall make available at
least fifteen percent (15%) of his full business time and his best
efforts, business judgment, skill and knowledge to the advancement of
the business and interests of the NCCI Group and to the discharge of
his duties and responsibilities hereunder. The Consultant shall use
his best efforts and skills to preserve the business of the NCCI Group
and the goodwill of its employees and persons having business
relations with the NCCI Group.
(b) Avalon engages the services of the Consultant as an
independent contractor and not as an employee. As such, Consultant
shall not be eligible to participate in any benefits provided by
Avalon to its employees.
(c) The Consultant shall not hold himself out as an agent of
Avalon, nor shall he act in any manner so as to bind Avalon.
2. TERM. Subject to earlier termination as hereinafter provided,
the term of the Agreement shall commence on the effective date hereof and shall
continue through December 31, 2002.
3. COMPENSATION. As compensation for all services performed by
the Consultant under and during the term hereof:
(a) Base compensation. Avalon shall pay the Consultant
base compensation at the rate of Fifty Thousand Dollars ($50,000) per
annum, with cost of living adjustments as reasonably determined by the
Board of Directors of NCCI (the "NCCI Board") for 1999, 2000, 2001 and
2002, payable monthly in arrears.
(b) Incentive compensation. In addition to the base
compensation, the Consultant will, at his option exercisable
separately with respect to each calendar year ended after December 31,
1996, be entitled to incentive compensation as follows:
(i) an Incentive Bonus (herein so called) of
$16,333 for such calendar year in which the Pre-Tax Net Income
of Avalon (as hereinafter defined) equals or exceeds
$1,000,000, and, if the applicable income level is achieved,
either:
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<PAGE> 3
(ii) a Partial Participating Bonus (herein so
called) of 1.667% of the amount by which the Pre-Tax Net
Income of Avalon for such calendar year exceeds seventy-five
percent (75%) of the Projected Pre-Tax Net Income of Avalon
(as hereinafter defined) for such year, or
(iii) a Full Participating Bonus (herein so called)
of 1.667% of the Pre-Tax Net Income of Avalon for such
calendar year if the Projected Pre-Tax Net Income for such
year is realized.
For purposes of this subparagraph (b), "Pre-Tax Net Income of
Avalon" shall mean, for a calendar year, the annual net income before
taxes realized by Avalon as calculated in accordance with generally
accepted accounting principles, calculated without the allocation of
(i) any costs and expenses incurred by AEG, Avalon or NCCI in
connection with the transactions contemplated by the Merger Agreement,
or (ii) any general overhead or management fees of NCCI or any
affiliate, but deducting the executive compensation and consulting
fees payable to Messrs. Geddes, Miserendino, Oswald and Janese
pursuant to this Agreement and employment agreements or consulting
agreements of even date herewith among Avalon, NCCI and such other
applicable members of the Avalon Group, and the projected Incentive
Bonus and Partial Participating Bonus or Full Participating Bonus
payable with respect to such calendar year pursuant to this Agreement
and the employment agreements of even date herewith between Avalon,
NCCI and Messrs. Oswald and Janese.
For purposes of this subparagraph (b), the "Projected Pre-Tax
Net Income of Avalon" shall be as follows:
<TABLE>
<S> <C>
1997 $1,200,000
1998 $1,500,000
1999 $1,700,000
2000 $2,000,000
2001 $2,000,000
2002 $2,000,000
</TABLE>
The incentive compensation payable pursuant to this
subparagraph (b) shall be paid as soon as practicable after the
Pre-Tax Net Income of Avalon shall have been determined, but in no
event later than March 30 of the subsequent year. The Partial
Participating Bonus shall not be paid for any year for which the Full
Participating Bonus is paid. The parties hereto acknowledge that the
"Projected Pre-Tax Net Income of Avalon" amounts were derived by the
parties hereto based on the assumption that Avalon would be operated
during the term hereof substantially as AEG was operated during the
three (3) years prior to the merger contemplated by the Merger
Agreement. Should the operations of Avalon during the term hereof
change materially, the parties hereto shall negotiate in good faith to
determine whether the "Projected Pre-Tax Net Income of Avalon" amounts
should be revised, and if so, such revised amounts.
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<PAGE> 4
(c) Business expenses. Avalon shall pay or reimburse the
Consultant for all reasonable and customary expenses incurred or paid
by the Consultant in the performance of his duties and
responsibilities hereunder, subject to periodic review of the amount
of such expenses from time to time by Avalon, and subject to such
reasonable substantiation and documentation as may be specified by
Avalon from time to time.
(d) Guarantee of payment. NCCI hereby guarantees payment
of the amounts to be paid to the Consultant under Paragraphs 3(a) and
3(b) hereof.
(e) No participation in benefit plans. The Consultant
shall not be entitled to participate in any pension, profit sharing,
bonus, supplemental compensation, group insurance or other employee
benefit plan now in effect or hereafter established by Avalon.
(f) Form 1099. Avalon shall issue a Form 1099 to the
Consultant for the amounts paid to the Consultant hereunder.
(g) Taxes. The Consultant shall pay all taxes, including
without limitation federal, state and local taxes, and contributions
required by social security and unemployment compensation laws with
respect to the compensation paid pursuant to this Agreement.
4. TERMINATION.
(a) Death or Disability. This Agreement shall terminate
upon the death or Disability (as hereinafter defined) of the
Consultant. The term "Disability" shall mean the Consultant is unable
to perform his duties under this Agreement for 90 consecutive days or
for 120 days out of 150 consecutive days due to the Consultant's
physical or mental illness as determined (after expiration of either
such periods) by a qualified physician selected by Avalon in its sole
discretion.
(b) Termination by Avalon for Cause. Avalon may terminate
this Agreement for Cause upon notice to the Consultant setting forth
in reasonable detail the nature of such cause. The following, as
determined by the Avalon Board in its reasonable judgment, shall
constitute Cause for termination:
(i) The Consultant's failure to perform (other
than by reason of disability), or gross negligence or willful
misconduct in the performance of, his duties and
responsibilities to the NCCI Group, such duties and
responsibilities not to be unreasonably imposed;
(ii) Breach by the Consultant of any provision of
this Agreement;
(iii) Fraud, embezzlement or other dishonesty with
respect to the NCCI Group;
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<PAGE> 5
(iv) Conviction of, or a plea of nolo contendere
to, a felony or other crime involving moral turpitude;
(v) Other conduct by the Consultant that would
generally be considered seriously harmful to the business,
interests or reputation of the NCCI Group;
(vi) The Consultant's intentional failure to
comply with any instructions of Avalon, such instructions not
to be unreasonably imposed; or
(vii) Failure of Avalon to materially achieve
financial and operational performance objectives established
by the Board of Directors of Avalon, unless such failure
results from an act of God or catastrophic event beyond the
control of the Consultant;
provided, however, in the case of subparagraphs (i), (ii), (v) and
(vi), the Consultant shall have been informed in writing of the act,
or failure to act, constituting Cause for termination, and shall have
been provided with a reasonable opportunity, but in no event greater
than thirty (30) days, to cure such act or failure to act.
Notwithstanding the foregoing sentence, the Consultant shall be
entitled to written notification and opportunity to cure an act, or
failure to act, constituting Cause for termination no more than two
times. Subsequent to such second notification, the Consultant shall
have no right to cure any subsequent act, or failure to act, and
Avalon may proceed with termination for Cause as defined herein
without further notice to the Consultant.
(c) Termination by Consultant for Good Reason. The
Consultant may terminate this Agreement for "Good Reason" or without
"Good Reason" at any time. For purposes of this Agreement, "Good
Reason" shall mean (i) a material breach by NCCI of any material
provision of the Merger Agreement and related agreements executed in
conjunction with the Merger Agreement, and failure of NCCI to cure
such breach within thirty (30) days of receipt of written notification
thereof from the Consultant, and (ii) any breach by Avalon of any
material provision of this Agreement or any failure by Avalon to carry
out any of its material obligations hereunder, and the failure to cure
such breach or failure within thirty (30) days' written notice thereof
from the Consultant. Notwithstanding the foregoing sentence, Avalon
shall be entitled to written notification and opportunity to cure an
act, or failure to act, providing the Consultant Good Reason for
termination no more than two times. Subsequent to such second
notification, Avalon shall have no right to cure any subsequent act,
or failure to act, and the Consultant may proceed with termination for
Good Reason as defined herein without further notice to Avalon.
(d) Other termination. Any termination of this Agreement,
other than as a result of the Consultant's death, shall be
communicated by a "Notice of Termination" to the other parties to this
Agreement. For purposes of this Agreement, a "Notice of Termination"
shall mean a notice in writing which shall indicate the specific
termination
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<PAGE> 6
provision in this Agreement relied upon and shall set forth in
reasonable detail the facts and circumstances claimed to provide a
basis for termination of this Agreement under the provisions so
indicated.
(e) Date of termination. The Date of Termination (herein
so called) shall mean (a) if this Agreement is terminated as a result
of death, the date of the Consultant's death, (b) if this Agreement is
terminated as a result of the Consultant's Disability, the date Notice
of Termination is delivered to the Consultant, (c) if this Agreement
is terminated by Consultant, the earlier of ten (10) days following
the date on which a Notice of Termination is delivered pursuant to
Paragraph 10 or the date specified in the Notice of Termination, and
(d) if this Agreement is terminated for any other reason, then ten
(10) days following the date on which a Notice of Termination is
delivered pursuant to Paragraph 10.
5. EFFECTS ON COMPENSATION UPON DISABILITY OR TERMINATION OF
AGREEMENT.
(a) Disability. During any period that the Consultant
fails to perform his duties under this Agreement as a result of a
Disability, Avalon shall continue to pay him his base compensation
pursuant to Paragraph 3(a) until the Date of Termination.
(b) Death. If this Agreement terminates because of the
death of the Consultant, then Avalon shall pay the Consultant's estate
his base compensation pursuant to Paragraph 3(a) through the date of
his death.
(c) Termination for Cause or without Good Reason. If the
Consultant voluntarily terminates this Agreement without Good Reason
or if this Agreement is terminated by Avalon for Cause, Avalon shall
pay the Consultant his base compensation pursuant to Paragraph 3(a)
through the Date of Termination.
(d) Termination for Good Reason or without Cause. If the
Consultant terminates this Agreement for Good Reason or if Avalon
terminates this Agreement without Cause, then the Consultant shall be
entitled to receive one payment in an amount equal to the highest
total compensation paid the Consultant in a prior calendar year
pursuant to Paragraphs 3(a) and (b) for the lesser of (i) the
remaining portion of the term, or (ii) two years. Such payment shall
be paid to the Consultant within fifteen (15) days of the Date of
Termination.
(e) Incentive Compensation. Should this Agreement
terminate as a result of the Consultant's Disability or death, or
should the Consultant terminate this Agreement for Good Reason, or if
this Agreement is terminated without Cause, in addition to the
compensation set forth in subparagraphs (a), (b) and (d) of this
Paragraph 5, the Consultant (or his estate, if applicable) shall also
be entitled to incentive compensation under Paragraph 3(b) hereof
calculated on the Partial Period Amount (hereinafter defined) of the
calendar year in which the Date of Termination occurs. For purposes of
this
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<PAGE> 7
Agreement, the "Partial Period Amount" shall be equal to the total
amount of the bonuses payable pursuant to Paragraph 3(b) for the year
in which the Date of Termination occurs, divided by the number of days
in such calendar year, times the number of days from the first day of
such calendar year to and including the Date of Termination. The
Consultant's incentive compensation calculated on the Partial Period
Amount shall be paid in accordance with Paragraph 3(b) hereof.
6. NONDISCLOSURE COVENANTS. During the term of this Agreement,
the Consultant will have access to and become familiar with various trade
secrets and other sensitive information belonging to the NCCI Group consisting
of, but not limited to, processes, computer programs, compilations of
information, records, sales procedures, customer requirements, pricing
techniques, customer lists, technical data, know-how, market reports, consumer
investigations, methods of doing business and other confidential information
(collectively, the "Confidential Information"), which are acquired, developed
and used by the NCCI Group and regularly used in the operation of its business.
The Consultant acknowledges and agrees that all Confidential Information is and
shall remain the property of the NCCI Group. The Consultant further agrees that
he shall not use in any way or disclose any of the Confidential Information,
directly or indirectly, either during the term of this Agreement or at any time
thereafter, except as required in the course of his services under this
Agreement or to the extent such Confidential Information is publicly known. All
files, records, documents, information, data, and similar items relating to the
business of the NCCI Group, whether prepared by the Consultant or otherwise
coming into his possession, shall remain the exclusive property of NCCI and
shall not be removed from the premises of the NCCI Group under any
circumstances without the prior written consent of the NCCI Board (except in
the ordinary course of business during the term of this Agreement), and in any
event shall be promptly delivered to NCCI (without the Consultant retaining any
copies) upon termination of this Agreement.
7. NONCOMPETITION COVENANT. Except in the case of the termination
of this Agreement other than (i) for Cause, or (ii) for Good Reason, without
the prior written consent of NCCI, the Consultant shall not, prior to January
1, 2003, directly or indirectly, as a director, officer, agent, employee,
consultant or independent contractor, or in any other individual or
representative capacity, (i) invest (other than investments in publicly-owned
companies which constitute not more than one percent (1%) of the outstanding
securities of any such company) or engage in any business or activity that is
competitive with the business of the NCCI Group in the same geographic areas in
which the NCCI Group primarily operates or (ii) accept employment with or
render services to a direct competitor of the NCCI Group which competitor
operates in the same geographic areas as the NCCI Group.
8. COVENANT NOT TO HIRE. During the term of this Agreement and
for a period of one (1) year after the termination of this Agreement for any
reason, the Consultant shall not, on his own behalf or on behalf of any other
person, partnership, association, corporation or other entity, hire, or solicit
for employment any employee of the NCCI Group, or in any manner attempt to
influence or induce any employee of the NCCI Group, to leave the employment of
the NCCI Group, nor shall the Consultant use or disclose to any person,
partnership, association,
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<PAGE> 8
corporation or other entity any information obtained during the term of this
Agreement, concerning the names and addresses of the NCCI Group employees;
provided, however, if the Consultant terminates this Agreement for Good Reason
or if Avalon terminates this Agreement without Cause, the Consultant may hire
or solicit for employment any employee of Avalon who was an employee of AEG on
the effective date of the merger contemplated by the Merger Agreement.
9. SEVERABILITY. If any provision of this Agreement is held to be
illegal, invalid or unenforceable under present or future laws effective during
the term hereof, such provision shall be fully severable and this Agreement
shall be construed and enforced as if such illegal, invalid or unenforceable
provision never comprised a part of this Agreement; and the remaining
provisions of this Agreement shall remain in full force and effect and shall
not be affected by the illegal, invalid or unenforceable provision or by its
severance herefrom. Furthermore, in lieu of such illegal, invalid or
unenforceable provision, there shall be added automatically as part of this
Agreement a provision as similar in its terms to such illegal, invalid or
unenforceable provision as may be possible and be legal, valid and enforceable.
10. NOTICE. All notices, demands, requests or other communications
that may be or are required to be given, served or sent by any party to any
other party pursuant to this Agreement shall be in writing and shall be mailed
by first-class, registered or certified mail, return receipt requested, postage
prepaid, or transmitted by hand delivery, telegram or facsimile transmission
addressed as set forth on the signature pages hereof. Each party may designate
by notice in writing a new address to which any notice, demand, request or
communication may thereafter be so given, served or sent. Each notice, demand,
request or communication that is mailed, delivered or transmitted in the manner
described above shall be deemed sufficiently given, served, sent and received
for all purposes at such time as it is delivered to the addressee with the
return receipt, the delivery receipt, the affidavit of messenger or (with
respect to a facsimile transmission) the answer back being deemed conclusive
evidence of such delivery or at such time as delivery is refused by the
addressee upon presentation.
11. AMENDMENT; WAIVER. No provisions of this Agreement may be
modified, waived or amended unless such waiver, modification or amendment is
agreed to in writing and signed by the Consultant and such officers as may be
specifically designated by the Avalon Board and the NCCI Board, respectively,
and such provisions shall be modified, waived or amended only to the extent set
forth in such writing.
12. VALIDITY. The invalidity or unenforceability of any provision
of this Agreement shall not effect the validity or enforceability of any other
provision of this Agreement, which shall remain in full force and effect.
13. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
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<PAGE> 9
14. ARBITRATION. Any dispute arising from this Agreement shall be
settled by arbitration in accordance with the commercial rules then in effect
of the American Arbitration Association, except as modified in this Paragraph
14 and, except that the arbitrator(s) shall be selected in accordance with the
following procedure: such dispute shall be referred to and decided by a single
arbitrator if the parties can agree upon one within thirty (30) days after
either of the parties shall notify the other that it wishes to avail itself of
the provisions of this Paragraph 14; otherwise, such dispute shall be referred
to and decided by three arbitrators, one to be appointed by Avalon and one to
be appointed by the Consultant, each such appointment to be made within twenty
(20) days after the expiration of the thirty (30) day period referred to above,
and the third arbitrator to be appointed by the first two arbitrators within
thirty (30) days after the expiration of such twenty (20) day period. If the
first two arbitrators cannot reach agreement on the third arbitrator within
said thirty (30) day period, the third arbitrator shall be an impartial
arbitrator appointed by the President of the American Arbitration Association
within twenty (20) days after the expiration of said thirty (30) day period.
Hearings of the arbitrator(s) shall be held in Nashville, Tennessee, unless the
parties agree otherwise. The presentations of the parties in the arbitration
proceeding shall be commenced and completed within sixty (60) days after
selection of the arbitration panel, and the arbitration panel shall render its
decision in writing within thirty (30) days after completion of such
presentations. Any decision concurred in by any two (2) of the arbitrators
shall constitute the decision of the arbitration panel, and unanimity shall not
be required. Judgment upon an award rendered by the arbitrator(s) may be
entered in any court of competent jurisdiction. Any award so rendered shall be
final and binding upon the parties hereto. All costs and expenses of the
arbitrator(s) shall be paid as determined by such arbitrator(s), and all costs
and expenses of experts, witnesses and other persons retained by the parties
shall be borne by them respectively.
15. GENERAL CREDITOR. Nothing contained in this Agreement and no
action taken pursuant to the provisions of this Agreement shall create or be
construed to create a trust relationship between Avalon and the Consultant or
any other person, nor shall any money or property of Avalon or NCCI be
segregated for the benefit of the Consultant to satisfy the obligations of
Avalon or NCCI hereunder.
16. NO ASSIGNMENT. The right of the Consultant or any other person
to the payment of amounts or other benefits under this Agreement shall not be
assigned, alienated, hypothecated, placed in trust, disposed of, transferred,
pledged or encumbered (except by will or by the laws of descent and
distribution), and, to the extent permitted by law, no such amount or payment
shall in any way be subject to any legal process to subject the same to the
payments of any claim against the Consultant or any other person.
17. INJUNCTIVE RELIEF. Notwithstanding the provisions of Paragraph
14, if there is a breach or threatened breach by a party to this Agreement of
the provisions of this Agreement, any other party to this Agreement shall be
entitled to an injunction to prevent irreparable injury to said party.
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<PAGE> 10
18. INTEGRATION. This Agreement represents the entire
understanding and agreement between the parties with respect to the subject
matter of this Agreement, and all other written or oral agreements relating to
the subject matter hereof are hereby superseded.
19. GOVERNING LAW. The terms and provisions of this Agreement,
including without limitation the provisions for arbitration under Paragraph 14,
shall be construed in accordance with, and governed by, the laws of the State
of Tennessee.
20. SURVIVAL. Notwithstanding the termination of this Agreement,
the provisions of Paragraphs 6 through 12 and Paragraphs 14 through 16 shall
survive and continue in full force and effect in accordance with their terms.
21. INDEPENDENT CONSULTANT. Notwithstanding the provisions of this
Agreement, Consultant is providing consulting services to Avalon pursuant to
this Agreement as an independent consultant and nothing contained in this
Agreement shall under any circumstances be construed to imply or otherwise
suggest that Consultant is acting as an employee of Avalon in his performance
of services pursuant hereto.
IN WITNESS WHEREOF, the parties have executed this Agreement to be
effective as of the 21st day of April, 1997.
AEG:
AVALON ENTERTAINMENT GROUP, INC.,
a Tennessee corporation
By: /s/ Thomas Jackson Weaver III
------------------------------------
Thomas Jackson Weaver III, President
1025 16th Avenue South
Nashville, Tennessee 37212
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<PAGE> 11
NCCI:
NASHVILLE COUNTRY CLUB, INC.,
a Tennessee corporation
By: /s/ Thomas Jackson Weaver III
---------------------------------
Thomas Jackson Weaver III, President
402 Heritage Plantation Way
Hickory Valley, Tennessee 38042
CONSULTANT:
/s/ Thomas Miserendino
---------------------------------------
Thomas Miserendino
c/o Avalon Entertainment Group, Inc.
17835 Ventura Boulevard, Suite 300
Encino, California 91316
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<PAGE> 1
EXHIBIT 10.18
EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") is made and entered into
by and among Avalon Entertainment Group, Inc., a Tennessee corporation ("AEG"),
Nashville Country Club, Inc., a Tennessee corporation ("NCCI"), and Marc W.
Oswald (the "Executive"), effective as of the 21st day of April, 1997. NCCI,
together with its subsidiaries and affiliates, including AEG, are hereinafter
referred to collectively as the "NCCI Group."
R E C I T A L S:
WHEREAS, pursuant to that certain Merger Agreement (the "Merger
Agreement"), dated as of April 21, 1997, by and among NCCI, Avalon Acquisition
Corp., Inc., a Tennessee corporation and a wholly-owned subsidiary of NCCI
("AAC"), AEG and Messrs. Robert E. Geddes, Thomas Miserendino, Marc W. Oswald,
Greg M. Janese and Brian F. Murphy (collectively, the "Avalon Group"), AAC has,
concurrently herewith, acquired by merger all of the assets and liabilities of
AEG. Immediately subsequent to the merger, AAC shall change its name to Avalon
Entertainment Group, Inc. and such entity, as it shall exist subsequent to said
merger, shall hereinafter be defined as "Avalon."
WHEREAS, the Executive has heretofore served as an executive officer
of AEG, and, through such service, has acquired special and unique knowledge,
abilities and expertise.
WHEREAS, the parties hereto acknowledge that the Executive will
receive significant benefits if the transactions contemplated by the Merger
Agreement are consummated. It is further acknowledged that the execution and
delivery of this Agreement are conditions to the obligations of NCCI and AAC to
consummate the transactions contemplated by the Merger Agreement.
WHEREAS, Avalon desires to employ the Executive in an executive
capacity, and the Executive desires to accept such employment, on the terms and
conditions set forth in this Agreement.
A G R E E M E N T:
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained in this Agreement, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
Avalon and the Executive agree as follows:
1. EMPLOYMENT. Subject to the terms and conditions set forth in
this Agreement, Avalon agrees to employ and does hereby employ the Executive,
and the Executive agrees to accept such employment and does hereby accept such
employment.
<PAGE> 2
2. TERM. Subject to earlier termination as hereinafter provided,
the Executive's employment hereunder shall be for a term commencing on the
effective date hereof and shall continue through December 31, 2002.
3. CAPACITY AND PERFORMANCE.
(a) During the term hereof, the Executive shall serve in
an executive capacity with Avalon and shall have the responsibilities,
duties and authorities reasonably assigned to him by Avalon. In
addition, and without further compensation, the Executive shall serve
as an officer and/or director of one or more members of the NCCI Group
if so elected or appointed from time to time.
(b) During the term hereof, the Executive shall devote
substantially his full business time and his best efforts, business
judgment, skill and knowledge to the advancement of the business and
interests of the NCCI Group and to the discharge of his duties and
responsibilities hereunder. NCCI encourages reasonable participation
by the Executive in community, industry, trade, professional,
governmental, academic and charitable activities generally considered
to be in NCCI's and/or the public interest, but NCCI shall have the
right to approve or disapprove the Executive's participation in such
activities if, in the reasonable judgment of NCCI, such participation
may conflict with NCCI's interests or with the Executive's duties or
responsibilities or the time required for the discharge of those
duties and responsibilities. The Executive shall use his best efforts
and skills to preserve the business of the NCCI Group and the goodwill
of its employees and persons having business relations with the NCCI
Group.
4. COMPENSATION AND BENEFITS. As compensation for all services
performed by the Executive under and during the term hereof:
(a) Base salary. Avalon shall pay the Executive a base
salary at the rate of One Hundred Fifty Thousand Dollars ($150,000)
per annum, with cost of living adjustments as reasonably determined by
the Board of Directors of NCCI (the "NCCI Board") for 1999, 2000, 2001
and 2002, payable in accordance with the payroll practices of Avalon
for its executives, but not less frequently than monthly in arrears
and subject to federal, state and other tax withholdings.
(b) Incentive compensation. In addition to the base
salary, the Executive will, at his option exercisable separately with
respect to each calendar year ended after December 31, 1996, be
entitled to incentive compensation as follows:
(i) an Incentive Bonus (herein so called) of
$50,000 for such calendar year in which the Pre-Tax Net Income
of Avalon (as hereinafter defined) equals or exceeds
$1,000,000, and, if the applicable income level is achieved,
either:
(ii) a Partial Participating Bonus (herein so
called) of five percent (5%) of the amount by which the
Pre-Tax Net Income of Avalon for such calendar year
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<PAGE> 3
exceeds seventy-five percent (75%) of the Projected Pre-Tax
Net Income of Avalon (as hereinafter defined) for such year, or
(iii) a Full Participating Bonus (herein so called)
of five percent (5%) of the Pre-Tax Net Income of Avalon for
such calendar year if the Projected Pre-Tax Net Income for
such year is realized.
For purposes of this subparagraph (b), "Pre-Tax Net Income of
Avalon" shall mean, for a calendar year, the annual net income before
taxes realized by Avalon as calculated in accordance with generally
accepted accounting principles, calculated without the allocation of
(i) any costs and expenses incurred by AEG, Avalon or NCCI in
connection with the transactions contemplated by the Merger Agreement,
or (ii) any general overhead or management fees of NCCI or any
affiliate, but deducting the executive compensation and consulting
fees payable to Messrs. Geddes, Miserendino, Oswald and Janese
pursuant to this Agreement and employment agreements or consulting
agreements of even date herewith among Avalon, NCCI and such other
applicable members of the Avalon Group, and the projected Incentive
Bonus and Partial Participating Bonus or Full Participating Bonus
payable with respect to such calendar year pursuant to this Agreement
and the employment agreement of even date herewith between Avalon,
NCCI and Mr. Janese.
For purposes of this subparagraph (b), the "Projected Pre-Tax
Net Income of Avalon" shall be as follows:
<TABLE>
<S> <C>
1997 $1,200,000
1998 $1,500,000
1999 $1,700,000
2000 $2,000,000
2001 $2,000,000
2002 $2,000,000
</TABLE>
The incentive compensation payable pursuant to this
subparagraph (b) shall be paid as soon as practicable after the
Pre-Tax Net Income of Avalon shall have been determined, but in no
event later than March 30 of the subsequent year. The Partial
Participating Bonus shall not be paid for any year for which the Full
Participating Bonus is paid. The parties hereto acknowledge that the
"Projected Pre-Tax Net Income of Avalon" amounts were derived by the
parties hereto based on the assumption that Avalon would be operated
during the term hereof substantially as AEG was operated during the
three (3) years prior to the merger contemplated by the Merger
Agreement. Should the operations of Avalon during the term hereof
change materially, the parties hereto shall negotiate in good faith to
determine whether the "Projected Pre-Tax Net Income of Avalon" amounts
should be revised, and if so, such revised amounts.
(c) Options. The Executive shall be entitled to receive
such stock options as NCCI shall approve, including, without
limitation, options contingent upon the
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<PAGE> 4
achievement of specified operating objectives or to reward
extraordinary effort. Such stock options are to be granted to provide
long-term incentives for high levels of performance, for unusual
efforts designed to improve the financial performance of Avalon and
NCCI, and to provide the Executive the opportunity to benefit from the
appreciation in the value of NCCI's stock subject to such options.
Such stock options shall contain terms and conditions comparable to
the terms and conditions made available to other executives of the
NCCI Group having similar responsibilities.
(d) Other benefits. During the term hereof and subject to
any contribution therefor generally required of executives of the NCCI
Group, the Executive shall be entitled to participate in any and all
benefit plans from time to time in effect for executives of the NCCI
Group generally. Such participation shall be subject to (i) the terms
of the applicable plan documents, (ii) generally applicable NCCI Group
policies, and (iii) the discretion of the Boards of Directors of
Avalon (the "Avalon Board") and NCCI or any administrative or other
committee provided for in or contemplated by such plan. Avalon or NCCI
may alter, modify, add to or delete its benefit plans at any time as
it determines to be appropriate, without recourse by the Executive.
(e) Vacations. During the term hereof, the Executive
shall be entitled to three (3) weeks of vacation per annum, to be
taken at such times and intervals as shall be determined by the
Executive, with the approval of Avalon.
(f) Business expenses. Avalon shall pay or reimburse the
Executive for all reasonable and customary expenses incurred or paid
by the Executive in the performance of his duties and responsibilities
hereunder, subject to periodic review of the amount of such expenses
from time to time by Avalon, and subject to such reasonable
substantiation and documentation as may be specified by Avalon from
time to time.
(g) Guarantee of payment. NCCI hereby guarantees payment
of the amounts to be paid to the Executive under Paragraphs 4(a) and
4(b) hereof.
5. TERMINATION.
(a) Death or Disability. This Agreement shall terminate
upon the death or Disability (as hereinafter defined) of the
Executive. The term "Disability" shall mean the Executive is unable to
perform his duties under this Agreement on a full-time basis for 90
consecutive days or for 120 days out of 150 consecutive days due to
the Executive's physical or mental illness as determined (after
expiration of either such periods) by a qualified physician selected
by Avalon in its sole discretion.
(b) Termination by Avalon for Cause. Avalon may terminate
the Executive's employment hereunder for Cause upon notice to the
Executive setting forth in reasonable detail the nature of such cause.
The following, as determined by the Avalon Board in its reasonable
judgment, shall constitute Cause for termination:
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<PAGE> 5
(i) The Executive's failure to perform (other
than by reason of disability), or gross negligence or willful
misconduct in the performance of, his duties and
responsibilities to the NCCI Group, such duties and
responsibilities not to be unreasonably imposed;
(ii) Breach by the Executive of any provision of
this Agreement;
(iii) Fraud, embezzlement or other dishonesty with
respect to the NCCI Group;
(iv) Conviction of, or a plea of nolo contendere
to, a felony or other crime involving moral turpitude;
(v) Other conduct by the Executive that would
generally be considered seriously harmful to the business,
interests or reputation of the NCCI Group;
(vi) The Executive's intentional failure to comply
with any instructions of Avalon, such instructions not to be
unreasonably imposed; or
(vii) Failure of Avalon to materially achieve
financial and operational performance objectives established
by the Board of Directors of Avalon, unless such failure
results from an act of God or catastrophic event beyond the
control of the Executive;
provided, however, in the case of subparagraphs (i), (ii), (v) and (vi), the
Executive shall have been informed in writing of the act, or failure to act,
constituting Cause for termination, and shall have been provided with a
reasonable opportunity, but in no event greater than thirty (30) days, to cure
such act or failure to act. Notwithstanding the foregoing sentence, the
Executive shall be entitled to written notification and opportunity to cure an
act, or failure to act, constituting Cause for termination no more than two
times. Subsequent to such second notification, the Executive shall have no
right to cure any subsequent act, or failure to act, and Avalon may proceed
with termination for Cause as defined herein without further notice to the
Executive.
(c) Termination by Executive for Good Reason. The
Executive may terminate his employment with Avalon for "Good Reason"
or without "Good Reason" at any time. For purposes of this Agreement,
"Good Reason" shall mean (i) a material breach by NCCI of any material
provision of the Merger Agreement and related agreements executed in
conjunction with the Merger Agreement, and failure of NCCI to cure
such breach within thirty (30) days of receipt of written notification
thereof from the Executive, and (ii) any breach by Avalon of any
material provision of this Agreement or any failure by Avalon to carry
out any of its material obligations hereunder, and the failure to cure
such breach or failure within thirty (30) days' written notice thereof
from the Executive. Notwithstanding the foregoing sentence, Avalon
shall be entitled to written notification and opportunity to cure an
act, or failure to act, providing the Executive Good Reason for
termination no more than two times. Subsequent to such second
notification, Avalon
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<PAGE> 6
shall have no right to cure any subsequent act, or failure to act, and
the Executive may proceed with termination for Good Reason as defined
herein without further notice to Avalon.
(d) Other termination. Any termination of employment,
other than as a result of the Executive's death, shall be communicated
by a "Notice of Termination" to the other parties to this Agreement.
For purposes of this Agreement, a "Notice of Termination" shall mean a
notice in writing which shall indicate the specific termination
provision in this Agreement relied upon and shall set forth in
reasonable detail the facts and circumstances claimed to provide a
basis for termination of the Executive's employment under the
provisions so indicated.
(e) Date of termination. The Date of Termination (herein
so called) shall mean (a) if the Executive's employment is terminated
under this Agreement as a result of death, the date of the Executive's
death, (b) if the Executive's employment is terminated as a result of
the Executive's Disability, the date Notice of Termination is
delivered to the Executive, (c) if the Executive terminates his
employment, the earlier of ten (10) days following the date on which a
Notice of Termination is delivered pursuant to Paragraph 11 or the
date specified in the Notice of Termination, and (d) if the
Executive's employment is terminated for any other reason, then ten
(10) days following the date on which a Notice of Termination is
delivered pursuant to Paragraph 11.
6. EFFECTS ON COMPENSATION UPON DISABILITY OR TERMINATION OF
EMPLOYMENT.
(a) Disability. During any period that the Executive
fails to perform his duties under this Agreement as a result of a
Disability, Avalon shall continue to pay him his base salary pursuant
to Paragraph 4(a) until the Date of Termination.
(b) Death. If the employment of the Executive terminates
because of his death, then Avalon shall pay the Executive's estate his
base salary pursuant to Paragraph 4(a) through the date of his death.
(c) Termination for Cause or without Good Reason. If the
Executive voluntarily ceases employment with Avalon without Good
Reason or if his employment is terminated by Avalon for Cause, Avalon
shall pay the Executive his base salary pursuant to Paragraph 4(a)
through the Date of Termination.
(d) Termination for Good Reason or without Cause. If the
Executive ceases employment for Good Reason or if his employment is
terminated without Cause by Avalon, then the Executive shall be
entitled to receive one payment in an amount equal to the highest
total compensation paid the Executive in a prior calendar year
pursuant to Paragraphs 4(a) and (b) for the lesser of (i) the
remaining portion of the term, or (ii) two years. Such payment shall
be paid to the Executive within fifteen (15) days of the Date of
Termination.
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<PAGE> 7
(e) Incentive Compensation. Should the employment of the
Executive terminate as a result of Disability or death, or should the
Executive cease employment for Good Reason, or if his employment is
terminated without Cause, in addition to the compensation set forth in
subparagraphs (a), (b) and (d) of this Paragraph 6, the Executive (or
his estate, if applicable) shall also be entitled to incentive
compensation under Paragraph 4(b) hereof calculated on the Partial
Period Amount (hereinafter defined) of the calendar year in which the
Date of Termination occurs. For purposes of this Agreement, the
"Partial Period Amount" shall be equal to the total amount of the
bonuses payable pursuant to Paragraph 4(b) for the year in which the
Date of Termination occurs, divided by the number of days in such
calendar year, times the number of days from the first day of such
calendar year to and including the Date of Termination. The
Executive's incentive compensation calculated on the Partial Period
Amount shall be paid in accordance with Paragraph 4(b) hereof.
7. NONDISCLOSURE COVENANTS. During the term of this Agreement,
the Executive will have access to and become familiar with various trade
secrets and other sensitive information belonging to the NCCI Group consisting
of, but not limited to, processes, computer programs, compilations of
information, records, sales procedures, customer requirements, pricing
techniques, customer lists, technical data, know-how, market reports, consumer
investigations, methods of doing business and other confidential information
(collectively, the "Confidential Information"), which are acquired, developed
and used by the NCCI Group and regularly used in the operation of its business.
The Executive acknowledges and agrees that all Confidential Information is and
shall remain the property of the NCCI Group. The Executive further agrees that
he shall not use in any way or disclose any of the Confidential Information,
directly or indirectly, either during the term of this Agreement or at any time
thereafter, except as required in the course of his employment under this
Agreement or to the extent such Confidential Information is publicly known. All
files, records, documents, information, data, and similar items relating to the
business of the NCCI Group, whether prepared by the Executive or otherwise
coming into his possession, shall remain the exclusive property of NCCI and
shall not be removed from the premises of the NCCI Group under any
circumstances without the prior written consent of the NCCI Board (except in
the ordinary course of business during the Executive's period of active
employment under this Agreement), and in any event shall be promptly delivered
to NCCI (without the Executive retaining any copies) upon termination of this
Agreement.
8. NONCOMPETITION COVENANT. Except in the case of the Executive's
termination other than (i) for Cause, or (ii) for Good Reason, without the
prior written consent of NCCI, the Executive shall not, prior to January 1,
2003, directly or indirectly, as a director, officer, agent, employee,
consultant or independent contractor, or in any other individual or
representative capacity, (i) invest (other than investments in publicly-owned
companies which constitute not more than one percent (1%) of the outstanding
securities of any such company) or engage in any business or activity that is
competitive with the business of the NCCI Group in the same geographic areas in
which the NCCI Group primarily operates, or (ii) accept employment with or
render services to a direct competitor of the NCCI Group.
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<PAGE> 8
9. COVENANT NOT TO HIRE. For a period of one (1) year after the
termination of this Agreement for any reason, the Executive shall not, on his
own behalf or on behalf of any other person, partnership, association,
corporation or other entity, hire, or solicit for employment any employee of
the NCCI Group, or in any manner attempt to influence or induce any employee of
the NCCI Group, to leave the employment of the NCCI Group, nor shall the
Executive use or disclose to any person, partnership, association, corporation
or other entity any information obtained while an employee of Avalon concerning
the names and addresses of the NCCI Group employees; provided, however, if the
Executive ceases employment for Good Reason or if his employment is terminated
without Cause, the Executive may hire or solicit for employment any employee of
Avalon who was an employee of AEG on the effective date of the merger
contemplated by the Merger Agreement.
10. SEVERABILITY. If any provision of this Agreement is held to be
illegal, invalid or unenforceable under present or future laws effective during
the term hereof, such provision shall be fully severable and this Agreement
shall be construed and enforced as if such illegal, invalid or unenforceable
provision never comprised a part of this Agreement; and the remaining
provisions of this Agreement shall remain in full force and effect and shall
not be affected by the illegal, invalid or unenforceable provision or by its
severance herefrom. Furthermore, in lieu of such illegal, invalid or
unenforceable provision, there shall be added automatically as part of this
Agreement a provision as similar in its terms to such illegal, invalid or
unenforceable provision as may be possible and be legal, valid and enforceable.
11. NOTICE. All notices, demands, requests or other communications
that may be or are required to be given, served or sent by any party to any
other party pursuant to this Agreement shall be in writing and shall be mailed
by first-class, registered or certified mail, return receipt requested, postage
prepaid, or transmitted by hand delivery, telegram or facsimile transmission
addressed as set forth on the signature pages hereof. Each party may designate
by notice in writing a new address to which any notice, demand, request or
communication may thereafter be so given, served or sent. Each notice, demand,
request or communication that is mailed, delivered or transmitted in the manner
described above shall be deemed sufficiently given, served, sent and received
for all purposes at such time as it is delivered to the addressee with the
return receipt, the delivery receipt, the affidavit of messenger or (with
respect to a facsimile transmission) the answer back being deemed conclusive
evidence of such delivery, or at such time as delivery is refused by the
addressee upon presentation.
12. AMENDMENT; WAIVER. No provisions of this Agreement may be
modified, waived or amended unless such waiver, modification or amendment is
agreed to in writing and signed by the Executive and such officers as may be
specifically designated by the Avalon Board and the NCCI Board, respectively,
and such provisions shall be modified, waived or amended only to the extent set
forth in such writing.
13. VALIDITY. The invalidity or unenforceability of any provision
of this Agreement shall not effect the validity or enforceability of any other
provision of this Agreement, which shall remain in full force and effect.
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<PAGE> 9
14. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
15. ARBITRATION. Any dispute arising from this Agreement shall be
settled by arbitration in accordance with the commercial rules then in effect
of the American Arbitration Association, except as modified in this Paragraph
15 and, except that the arbitrator(s) shall be selected in accordance with the
following procedure: such dispute shall be referred to and decided by a single
arbitrator if the parties can agree upon one within thirty (30) days after
either of the parties shall notify the other that it wishes to avail itself of
the provisions of this Paragraph 15; otherwise, such dispute shall be referred
to and decided by three arbitrators, one to be appointed by Avalon and one to
be appointed by the Executive, each such appointment to be made within twenty
(20) days after the expiration of the thirty (30) day period referred to above,
and the third arbitrator to be appointed by the first two arbitrators within
thirty (30) days after the expiration of such twenty (20) day period. If the
first two arbitrators cannot reach agreement on the third arbitrator within
said thirty (30) day period, the third arbitrator shall be an impartial
arbitrator appointed by the President of the American Arbitration Association
within twenty (20) days after the expiration of said thirty (30) day period.
Hearings of the arbitrator(s) shall be held in Nashville, Tennessee, unless the
parties agree otherwise. The presentations of the parties in the arbitration
proceeding shall be commenced and completed within sixty (60) days after
selection of the arbitration panel, and the arbitration panel shall render its
decision in writing within thirty (30) days after completion of such
presentations. Any decision concurred in by any two (2) of the arbitrators
shall constitute the decision of the arbitration panel, and unanimity shall not
be required. Judgment upon an award rendered by the arbitrator(s) may be
entered in any court of competent jurisdiction. Any award so rendered shall be
final and binding upon the parties hereto. All costs and expenses of the
arbitrator(s) shall be paid as determined by such arbitrator(s), and all costs
and expenses of experts, witnesses and other persons retained by the parties
shall be borne by them respectively.
16. GENERAL CREDITOR. Nothing contained in this Agreement and no
action taken pursuant to the provisions of this Agreement shall create or be
construed to create a trust relationship between Avalon and the Executive or
any other person, nor shall any money or property of Avalon or NCCI be
segregated for the benefit of the Executive to satisfy the obligations of
Avalon or NCCI hereunder.
17. NO ASSIGNMENT. The right of the Executive or any other person
to the payment of amounts or other benefits under this Agreement shall not be
assigned, alienated, hypothecated, placed in trust, disposed of, transferred,
pledged or encumbered (except by will or by the laws of descent and
distribution), and, to the extent permitted by law, no such amount or payment
shall in any way be subject to any legal process to subject the same to the
payments of any claim against the Executive or any other person.
18. INJUNCTIVE RELIEF. Notwithstanding the provisions of Paragraph
15, if there is a breach or threatened breach by a party to this Agreement of
the provisions of this Agreement,
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<PAGE> 10
any other party to this Agreement shall be entitled to seek an injunction to
prevent irreparable injury to said party.
19. INTEGRATION. This Agreement represents the entire
understanding and agreement between the parties with respect to the subject
matter of this Agreement, and all other written or oral agreements relating to
the subject matter hereof are hereby superseded.
20. GOVERNING LAW. The terms and provisions of this Agreement,
including without limitation the provisions for arbitration under Paragraph 15,
shall be construed in accordance with, and governed by, the laws of the State
of Tennessee.
21. SURVIVAL. Notwithstanding the termination of this Agreement or
the Executive's termination of employment, the provisions of Paragraphs 7
through 13 and Paragraphs 15 through 17 shall survive and continue in full
force and effect in accordance with their terms.
IN WITNESS WHEREOF, the parties have executed this Agreement to be
effective as of the 21st day of April, 1997.
AEG:
AVALON ENTERTAINMENT GROUP, INC.,
a Tennessee corporation
By: /s/ Thomas Jackson Weaver III
-------------------------------------
Thomas Jackson Weaver III, President
1025 16th Avenue South
Nashville, Tennessee 37212
NCCI:
NASHVILLE COUNTRY CLUB, INC.,
a Tennessee corporation
By: /s/ Thomas Jackson Weaver III
-------------------------------------
Thomas Jackson Weaver III, President
402 Heritage Plantation Way
Hickory Valley, Tennessee 38042
EXECUTIVE:
/s/ Marc W. Oswald
----------------------------------------
Marc W. Oswald
c/o Avalon Entertainment Group, Inc.
1025 16th Avenue South
Nashville, Tennessee 37212
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EXHIBIT 10.19
EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") is made and entered into
by and among Avalon Entertainment Group, Inc., a Tennessee corporation ("AEG"),
Nashville Country Club, Inc., a Tennessee corporation ("NCCI"), and Greg M.
Janese (the "Executive"), effective as of the 21st day of April, 1997. NCCI,
together with its subsidiaries and affiliates, including AEG, are hereinafter
referred to collectively as the "NCCI Group."
R E C I T A L S:
WHEREAS, pursuant to that certain Merger Agreement (the "Merger
Agreement"), dated as of April 21, 1997, by and among NCCI, Avalon Acquisition
Corp., Inc., a Tennessee corporation and a wholly-owned subsidiary of NCCI
("AAC"), AEG and Messrs. Robert E. Geddes, Thomas Miserendino, Marc W. Oswald,
Greg M. Janese and Brian F. Murphy (collectively, the "Avalon Group"), AAC has,
concurrently herewith, acquired by merger all of the assets and liabilities of
AEG. Immediately subsequent to the merger, AAC shall change its name to Avalon
Entertainment Group, Inc. and such entity, as it shall exist subsequent to said
merger, shall hereinafter be defined as "Avalon."
WHEREAS, the Executive has heretofore served as an executive officer
of AEG, and, through such service, has acquired special and unique knowledge,
abilities and expertise.
WHEREAS, the parties hereto acknowledge that the Executive will
receive significant benefits if the transactions contemplated by the Merger
Agreement are consummated. It is further acknowledged that the execution and
delivery of this Agreement are conditions to the obligations of NCCI and AAC to
consummate the transactions contemplated by the Merger Agreement.
WHEREAS, Avalon desires to employ the Executive in an executive
capacity, and the Executive desires to accept such employment, on the terms and
conditions set forth in this Agreement.
A G R E E M E N T:
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained in this Agreement, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
Avalon and the Executive agree as follows:
1. EMPLOYMENT. Subject to the terms and conditions set forth in
this Agreement, Avalon agrees to employ and does hereby employ the Executive,
and the Executive agrees to accept such employment and does hereby accept such
employment.
<PAGE> 2
2. TERM. Subject to earlier termination as hereinafter provided,
the Executive's employment hereunder shall be for a term commencing on the
effective date hereof and shall continue through December 31, 2002.
3. CAPACITY AND PERFORMANCE.
(a) During the term hereof, the Executive shall serve in
an executive capacity with Avalon and shall have the responsibilities,
duties and authorities reasonably assigned to him by Avalon. In
addition, and without further compensation, the Executive shall serve
as an officer and/or director of one or more members of the NCCI Group
if so elected or appointed from time to time.
(b) During the term hereof, the Executive shall devote
substantially his full business time and his best efforts, business
judgment, skill and knowledge to the advancement of the business and
interests of the NCCI Group and to the discharge of his duties and
responsibilities hereunder. NCCI encourages reasonable participation
by the Executive in community, industry, trade, professional,
governmental, academic and charitable activities generally considered
to be in NCCI's and/or the public interest, but NCCI shall have the
right to approve or disapprove the Executive's participation in such
activities if, in the reasonable judgment of NCCI, such participation
may conflict with NCCI's interests or with the Executive's duties or
responsibilities or the time required for the discharge of those
duties and responsibilities. The Executive shall use his best efforts
and skills to preserve the business of the NCCI Group and the goodwill
of its employees and persons having business relations with the NCCI
Group.
4. COMPENSATION AND BENEFITS. As compensation for all services
performed by the Executive under and during the term hereof:
(a) Base salary. Avalon shall pay the Executive a base
salary at the rate of One Hundred Fifty Thousand Dollars ($150,000)
per annum, with cost of living adjustments as reasonably determined by
the Board of Directors of NCCI (the "NCCI Board") for 1999, 2000, 2001
and 2002, payable in accordance with the payroll practices of Avalon
for its executives, but not less frequently than monthly in arrears
and subject to federal, state and other tax withholdings.
(b) Incentive compensation. In addition to the base
salary, the Executive will, at his option exercisable separately with
respect to each calendar year ended after December 31, 1996, be
entitled to incentive compensation as follows:
(i) an Incentive Bonus (herein so called) of
$50,000 for such calendar year in which the Pre-Tax Net Income
of Avalon (as hereinafter defined) equals or exceeds
$1,000,000, and, if the applicable income level is achieved,
either:
(ii) a Partial Participating Bonus (herein so
called) of five percent (5%) of the amount by which the
Pre-Tax Net Income of Avalon for such calendar year
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exceeds seventy-five percent (75%) of the Projected Pre-Tax
Net Income of Avalon (as hereinafter defined) for such year, or
(iii) a Full Participating Bonus (herein so called)
of five percent (5%) of the Pre-Tax Net Income of Avalon for
such calendar year if the Projected Pre-Tax Net Income for
such year is realized.
For purposes of this subparagraph (b), "Pre-Tax Net Income of
Avalon" shall mean, for a calendar year, the annual net income before
taxes realized by Avalon as calculated in accordance with generally
accepted accounting principles, calculated without the allocation of
(i) any costs and expenses incurred by AEG, Avalon or NCCI in
connection with the transactions contemplated by the Merger Agreement,
or (ii) any general overhead or management fees of NCCI or any
affiliate, but deducting the executive compensation and consulting
fees payable to Messrs. Geddes, Miserendino, Oswald and Janese
pursuant to this Agreement and employment agreements or consulting
agreements of even date herewith among Avalon, NCCI and such other
applicable members of the Avalon Group, and the projected Incentive
Bonus and Partial Participating Bonus or Full Participating Bonus
payable with respect to such calendar year pursuant to this Agreement
and the employment agreement of even date herewith between Avalon,
NCCI and Mr. Oswald.
For purposes of this subparagraph (b), the "Projected Pre-Tax
Net Income of Avalon" shall be as follows:
<TABLE>
<S> <C>
1997 $1,200,000
1998 $1,500,000
1999 $1,700,000
2000 $2,000,000
2001 $2,000,000
2002 $2,000,000
</TABLE>
The incentive compensation payable pursuant to this
subparagraph (b) shall be paid as soon as practicable after the
Pre-Tax Net Income of Avalon shall have been determined, but in no
event later than March 30 of the subsequent year. The Partial
Participating Bonus shall not be paid for any year for which the Full
Participating Bonus is paid. The parties hereto acknowledge that the
"Projected Pre-Tax Net Income of Avalon" amounts were derived by the
parties hereto based on the assumption that Avalon would be operated
during the term hereof substantially as AEG was operated during the
three (3) years prior to the merger contemplated by the Merger
Agreement. Should the operations of Avalon during the term hereof
change materially, the parties hereto shall negotiate in good faith to
determine whether the "Projected Pre-Tax Net Income of Avalon" amounts
should be revised, and if so, such revised amounts.
(c) Options. The Executive shall be entitled to receive
such stock options as NCCI shall approve, including, without
limitation, options contingent upon the
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<PAGE> 4
achievement of specified operating objectives or to reward
extraordinary effort. Such stock options are to be granted to provide
long-term incentives for high levels of performance, for unusual
efforts designed to improve the financial performance of Avalon and
NCCI, and to provide the Executive the opportunity to benefit from the
appreciation in the value of NCCI's stock subject to such options.
Such stock options shall contain terms and conditions comparable to
the terms and conditions made available to other executives of the
NCCI Group having similar responsibilities.
(d) Other benefits. During the term hereof and subject
to any contribution therefor generally required of executives of the
NCCI Group, the Executive shall be entitled to participate in any and
all benefit plans from time to time in effect for executives of the
NCCI Group generally. Such participation shall be subject to (i) the
terms of the applicable plan documents, (ii) generally applicable NCCI
Group policies, and (iii) the discretion of the Boards of Directors of
Avalon (the "Avalon Board") and NCCI or any administrative or other
committee provided for in or contemplated by such plan. Avalon or
NCCI may alter, modify, add to or delete its benefit plans at any time
as it determines to be appropriate, without recourse by the Executive.
(e) Vacations. During the term hereof, the Executive
shall be entitled to three (3) weeks of vacation per annum, to be
taken at such times and intervals as shall be determined by the
Executive, with the approval of Avalon.
(f) Business expenses. Avalon shall pay or reimburse the
Executive for all reasonable and customary expenses incurred or paid
by the Executive in the performance of his duties and responsibilities
hereunder, subject to periodic review of the amount of such expenses
from time to time by Avalon, and subject to such reasonable
substantiation and documentation as may be specified by Avalon from
time to time.
(g) Guarantee of payment. NCCI hereby guarantees payment
of the amounts to be paid to the Executive under Paragraphs 4(a) and
4(b) hereof.
5. TERMINATION.
(a) Death or Disability. This Agreement shall terminate
upon the death or Disability (as hereinafter defined) of the
Executive. The term "Disability" shall mean the Executive is unable
to perform his duties under this Agreement on a full-time basis for 90
consecutive days or for 120 days out of 150 consecutive days due to
the Executive's physical or mental illness as determined (after
expiration of either such periods) by a qualified physician selected
by Avalon in its sole discretion.
(b) Termination by Avalon for Cause. Avalon may
terminate the Executive's employment hereunder for Cause upon notice
to the Executive setting forth in reasonable detail the nature of such
cause. The following, as determined by the Avalon Board in its
reasonable judgment, shall constitute Cause for termination:
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<PAGE> 5
(i) The Executive's failure to perform (other
than by reason of disability), or gross negligence or willful
misconduct in the performance of, his duties and
responsibilities to the NCCI Group, such duties and
responsibilities not to be unreasonably imposed;
(ii) Breach by the Executive of any provision of
this Agreement;
(iii) Fraud, embezzlement or other dishonesty with
respect to the NCCI Group;
(iv) Conviction of, or a plea of nolo contendere
to, a felony or other crime involving moral turpitude;
(v) Other conduct by the Executive that would
generally be considered seriously harmful to the business,
interests or reputation of the NCCI Group;
(vi) The Executive's intentional failure to comply
with any instructions of Avalon, such instructions not to be
unreasonably imposed; or
(vii) Failure of Avalon to materially achieve
financial and operational performance objectives established
by the Board of Directors of Avalon, unless such failure
results from an act of God or catastrophic event beyond the
control of the Executive;
provided, however, in the case of subparagraphs (i), (ii), (v) and (vi), the
Executive shall have been informed in writing of the act, or failure to act,
constituting Cause for termination, and shall have been provided with a
reasonable opportunity, but in no event greater than thirty (30) days, to cure
such act or failure to act. Notwithstanding the foregoing sentence, the
Executive shall be entitled to written notification and opportunity to cure an
act, or failure to act, constituting Cause for termination no more than two
times. Subsequent to such second notification, the Executive shall have no
right to cure any subsequent act, or failure to act, and Avalon may proceed
with termination for Cause as defined herein without further notice to the
Executive.
(c) Termination by Executive for Good Reason. The
Executive may terminate his employment with Avalon for "Good Reason"
or without "Good Reason" at any time. For purposes of this Agreement,
"Good Reason" shall mean (i) a material breach by NCCI of any material
provision of the Merger Agreement and related agreements executed in
conjunction with the Merger Agreement, and failure of NCCI to cure
such breach within thirty (30) days of receipt of written notification
thereof from the Executive, and (ii) any breach by Avalon of any
material provision of this Agreement or any failure by Avalon to carry
out any of its material obligations hereunder, and the failure to cure
such breach or failure within thirty (30) days' written notice thereof
from the Executive. Notwithstanding the foregoing sentence, Avalon
shall be entitled to written notification and opportunity to cure an
act, or failure to act, providing the Executive Good Reason for
termination no more than two times. Subsequent to such second
notification, Avalon
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<PAGE> 6
shall have no right to cure any subsequent act, or failure to act, and
the Executive may proceed with termination for Good Reason as defined
herein without further notice to Avalon.
(d) Other termination. Any termination of employment,
other than as a result of the Executive's death, shall be communicated
by a "Notice of Termination" to the other parties to this Agreement.
For purposes of this Agreement, a "Notice of Termination" shall mean a
notice in writing which shall indicate the specific termination
provision in this Agreement relied upon and shall set forth in
reasonable detail the facts and circumstances claimed to provide a
basis for termination of the Executive's employment under the
provisions so indicated.
(e) Date of termination. The Date of Termination (herein
so called) shall mean (a) if the Executive's employment is terminated
under this Agreement as a result of death, the date of the Executive's
death, (b) if the Executive's employment is terminated as a result of
the Executive's Disability, the date Notice of Termination is
delivered to the Executive, (c) if the Executive terminates his
employment, the earlier of ten (10) days following the date on which a
Notice of Termination is delivered pursuant to Paragraph 11 or the
date specified in the Notice of Termination, and (d) if the
Executive's employment is terminated for any other reason, then ten
(10) days following the date on which a Notice of Termination is
delivered pursuant to Paragraph 11.
6. EFFECTS ON COMPENSATION UPON DISABILITY OR TERMINATION OF
EMPLOYMENT.
(a) Disability. During any period that the Executive
fails to perform his duties under this Agreement as a result of a
Disability, Avalon shall continue to pay him his base salary pursuant
to Paragraph 4(a) until the Date of Termination.
(b) Death. If the employment of the Executive terminates
because of his death, then Avalon shall pay the Executive's estate his
base salary pursuant to Paragraph 4(a) through the date of his death.
(c) Termination for Cause or without Good Reason. If the
Executive voluntarily ceases employment with Avalon without Good
Reason or if his employment is terminated by Avalon for Cause, Avalon
shall pay the Executive his base salary pursuant to Paragraph 4(a)
through the Date of Termination.
(d) Termination for Good Reason or without Cause. If the
Executive ceases employment for Good Reason or if his employment is
terminated without Cause by Avalon, then the Executive shall be
entitled to receive one payment in an amount equal to the highest
total compensation paid the Executive in a prior calendar year
pursuant to Paragraphs 4(a) and (b) for the lesser of (i) the
remaining portion of the term, or (ii) two years. Such payment shall
be paid to the Executive within fifteen (15) days of the Date of
Termination.
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<PAGE> 7
(e) Incentive Compensation. Should the employment of the
Executive terminate as a result of Disability or death, or should the
Executive cease employment for Good Reason, or if his employment is
terminated without Cause, in addition to the compensation set forth in
subparagraphs (a), (b) and (d) of this Paragraph 6, the Executive (or
his estate, if applicable) shall also be entitled to incentive
compensation under Paragraph 4(b) hereof calculated on the Partial
Period Amount (hereinafter defined) of the calendar year in which the
Date of Termination occurs. For purposes of this Agreement, the
"Partial Period Amount" shall be equal to the total amount of the
bonuses payable pursuant to Paragraph 4(b) for the year in which the
Date of Termination occurs, divided by the number of days in such
calendar year, times the number of days from the first day of such
calendar year to and including the Date of Termination. The
Executive's incentive compensation calculated on the Partial Period
Amount shall be paid in accordance with Paragraph 4(b) hereof.
7. NONDISCLOSURE COVENANTS. During the term of this Agreement,
the Executive will have access to and become familiar with various trade
secrets and other sensitive information belonging to the NCCI Group consisting
of, but not limited to, processes, computer programs, compilations of
information, records, sales procedures, customer requirements, pricing
techniques, customer lists, technical data, know-how, market reports, consumer
investigations, methods of doing business and other confidential information
(collectively, the "Confidential Information"), which are acquired, developed
and used by the NCCI Group and regularly used in the operation of its business.
The Executive acknowledges and agrees that all Confidential Information is and
shall remain the property of the NCCI Group. The Executive further agrees that
he shall not use in any way or disclose any of the Confidential Information,
directly or indirectly, either during the term of this Agreement or at any time
thereafter, except as required in the course of his employment under this
Agreement or to the extent such Confidential Information is publicly known.
All files, records, documents, information, data, and similar items relating to
the business of the NCCI Group, whether prepared by the Executive or otherwise
coming into his possession, shall remain the exclusive property of NCCI and
shall not be removed from the premises of the NCCI Group under any
circumstances without the prior written consent of the NCCI Board (except in
the ordinary course of business during the Executive's period of active
employment under this Agreement), and in any event shall be promptly delivered
to NCCI (without the Executive retaining any copies) upon termination of this
Agreement.
8. NONCOMPETITION COVENANT. Except in the case of the
Executive's termination other than (i) for Cause, or (ii) for Good Reason,
without the prior written consent of NCCI, the Executive shall not, prior to
January 1, 2003, directly or indirectly, as a director, officer, agent,
employee, consultant or independent contractor, or in any other individual or
representative capacity, (i) invest (other than investments in publicly-owned
companies which constitute not more than one percent (1%) of the outstanding
securities of any such company) or engage in any business or activity that is
competitive with the business of the NCCI Group in the same geographic areas in
which the NCCI Group primarily operates, or (ii) accept employment with or
render services to a direct competitor of the NCCI Group.
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<PAGE> 8
9. COVENANT NOT TO HIRE. For a period of one (1) year after the
termination of this Agreement for any reason, the Executive shall not, on his
own behalf or on behalf of any other person, partnership, association,
corporation or other entity, hire, or solicit for employment any employee of
the NCCI Group, or in any manner attempt to influence or induce any employee of
the NCCI Group, to leave the employment of the NCCI Group, nor shall the
Executive use or disclose to any person, partnership, association, corporation
or other entity any information obtained while an employee of Avalon concerning
the names and addresses of the NCCI Group employees; provided, however, if the
Executive ceases employment for Good Reason or if his employment is terminated
without Cause, the Executive may hire or solicit for employment any employee of
Avalon who was an employee of AEG on the effective date of the merger
contemplated by the Merger Agreement.
10. SEVERABILITY. If any provision of this Agreement is held to
be illegal, invalid or unenforceable under present or future laws effective
during the term hereof, such provision shall be fully severable and this
Agreement shall be construed and enforced as if such illegal, invalid or
unenforceable provision never comprised a part of this Agreement; and the
remaining provisions of this Agreement shall remain in full force and effect
and shall not be affected by the illegal, invalid or unenforceable provision or
by its severance herefrom. Furthermore, in lieu of such illegal, invalid or
unenforceable provision, there shall be added automatically as part of this
Agreement a provision as similar in its terms to such illegal, invalid or
unenforceable provision as may be possible and be legal, valid and enforceable.
11. NOTICE. All notices, demands, requests or other
communications that may be or are required to be given, served or sent by any
party to any other party pursuant to this Agreement shall be in writing and
shall be mailed by first-class, registered or certified mail, return receipt
requested, postage prepaid, or transmitted by hand delivery, telegram or
facsimile transmission addressed as set forth on the signature pages hereof.
Each party may designate by notice in writing a new address to which any
notice, demand, request or communication may thereafter be so given, served or
sent. Each notice, demand, request or communication that is mailed, delivered
or transmitted in the manner described above shall be deemed sufficiently
given, served, sent and received for all purposes at such time as it is
delivered to the addressee with the return receipt, the delivery receipt, the
affidavit of messenger or (with respect to a facsimile transmission) the answer
back being deemed conclusive evidence of such delivery, or at such time as
delivery is refused by the addressee upon presentation.
12. AMENDMENT; WAIVER. No provisions of this Agreement may be
modified, waived or amended unless such waiver, modification or amendment is
agreed to in writing and signed by the Executive and such officers as may be
specifically designated by the Avalon Board and the NCCI Board, respectively,
and such provisions shall be modified, waived or amended only to the extent set
forth in such writing.
13. VALIDITY. The invalidity or unenforceability of any provision
of this Agreement shall not effect the validity or enforceability of any other
provision of this Agreement, which shall remain in full force and effect.
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<PAGE> 9
14. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
15. ARBITRATION. Any dispute arising from this Agreement shall be
settled by arbitration in accordance with the commercial rules then in effect
of the American Arbitration Association, except as modified in this Paragraph
15 and, except that the arbitrator(s) shall be selected in accordance with the
following procedure: such dispute shall be referred to and decided by a single
arbitrator if the parties can agree upon one within thirty (30) days after
either of the parties shall notify the other that it wishes to avail itself of
the provisions of this Paragraph 15; otherwise, such dispute shall be referred
to and decided by three arbitrators, one to be appointed by Avalon and one to
be appointed by the Executive, each such appointment to be made within twenty
(20) days after the expiration of the thirty (30) day period referred to above,
and the third arbitrator to be appointed by the first two arbitrators within
thirty (30) days after the expiration of such twenty (20) day period. If the
first two arbitrators cannot reach agreement on the third arbitrator within
said thirty (30) day period, the third arbitrator shall be an impartial
arbitrator appointed by the President of the American Arbitration Association
within twenty (20) days after the expiration of said thirty (30) day period.
Hearings of the arbitrator(s) shall be held in Nashville, Tennessee, unless the
parties agree otherwise. The presentations of the parties in the arbitration
proceeding shall be commenced and completed within sixty (60) days after
selection of the arbitration panel, and the arbitration panel shall render its
decision in writing within thirty (30) days after completion of such
presentations. Any decision concurred in by any two (2) of the arbitrators
shall constitute the decision of the arbitration panel, and unanimity shall not
be required. Judgment upon an award rendered by the arbitrator(s) may be
entered in any court of competent jurisdiction. Any award so rendered shall be
final and binding upon the parties hereto. All costs and expenses of the
arbitrator(s) shall be paid as determined by such arbitrator(s), and all costs
and expenses of experts, witnesses and other persons retained by the parties
shall be borne by them respectively.
16. GENERAL CREDITOR. Nothing contained in this Agreement and no
action taken pursuant to the provisions of this Agreement shall create or be
construed to create a trust relationship between Avalon and the Executive or
any other person, nor shall any money or property of Avalon or NCCI be
segregated for the benefit of the Executive to satisfy the obligations of
Avalon or NCCI hereunder.
17. NO ASSIGNMENT. The right of the Executive or any other person
to the payment of amounts or other benefits under this Agreement shall not be
assigned, alienated, hypothecated, placed in trust, disposed of, transferred,
pledged or encumbered (except by will or by the laws of descent and
distribution), and, to the extent permitted by law, no such amount or payment
shall in any way be subject to any legal process to subject the same to the
payments of any claim against the Executive or any other person.
18. INJUNCTIVE RELIEF. Notwithstanding the provisions of
Paragraph 15, if there is a breach or threatened breach by a party to this
Agreement of the provisions of this Agreement,
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any other party to this Agreement shall be entitled to seek an injunction to
prevent irreparable injury to said party.
19. INTEGRATION. This Agreement represents the entire
understanding and agreement between the parties with respect to the subject
matter of this Agreement, and all other written or oral agreements relating to
the subject matter hereof are hereby superseded.
20. GOVERNING LAW. The terms and provisions of this Agreement,
including without limitation the provisions for arbitration under Paragraph 15,
shall be construed in accordance with, and governed by, the laws of the State
of Tennessee.
21. SURVIVAL. Notwithstanding the termination of this Agreement
or the Executive's termination of employment, the provisions of Paragraphs 7
through 13 and Paragraphs 15 through 17 shall survive and continue in full
force and effect in accordance with their terms.
IN WITNESS WHEREOF, the parties have executed this Agreement to be
effective as of the 21st day of April, 1997.
AEG:
AVALON ENTERTAINMENT GROUP, INC.,
a Tennessee corporation
By: /s/ Thomas Jackson Weaver III
------------------------------------
Thomas Jackson Weaver III
1025 16th Avenue South
Nashville, Tennessee 37212
NCCI:
NASHVILLE COUNTRY CLUB, INC.,
a Tennessee corporation
By: /s/ Thomas Jackson Weaver III
------------------------------------
Thomas Jackson Weaver III, President
402 Heritage Plantation Way
Hickory Valley, Tennessee 38042
EXECUTIVE:
/s/ Greg M. Janese
--------------------------------------
Greg M. Janese
c/o Avalon Entertainment Group, Inc.
1025 16th Avenue South
Nashville, Tennessee 37212
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