UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of Earliest Event Reported): March 5, 2018

 

 

BOJANGLES’, INC.

(Exact Name of Issuer as Specified in Charter)

 

 

 

Delaware   001-37374   45-2988924

(State or Other Jurisdiction of

Incorporation or Organization)

 

(Commission

File Number)

 

(I.R.S. Employer

Identification Number)

9432 Southern Pine Boulevard,

Charlotte, NC 28273

(Address of Principal Executive Offices)

(704) 527-2675

(Registrant’s Telephone Number, Including Area Code)

 

 

Check the appropriate box below if the Form 8-K is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☒

 

 

 

 


Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

The Bojangles’, Inc. (the “Company”) Board of Directors (the “Board”) has announced that, on March 5, 2018, James R. Kibler, a director and former Chief Executive Officer of the Company, was named Interim President and Interim Chief Executive Officer, replacing Clifton Rutledge. Mr. Rutledge has stepped down as a member of the Company’s Board effective immediately.

In connection with Mr. Rutledge’s departure, the Company has entered into a Separation and Release Agreement with Mr. Rutledge (the “Release Agreement”), pursuant to which Mr. Rutledge has granted a general release in favor of the Company as a condition of receiving the payments and other benefits specified in the Release Agreement. If not revoked by Mr. Rutledge within seven days pursuant to his statutory right to do so unilaterally, the Release Agreement will be effective on March 13, 2018. The payments and other benefits specified in the Release Agreement are in lieu of any payments or benefits to which Mr. Rutledge may be entitled under his employment agreement or any other Company severance agreement.

Under the terms of the Release Agreement, Mr. Rutledge will receive a salary continuation of 18 months, cash out of any accrued but unused vacation and personal days, and waiver of COBRA premiums for the 12 months following the conclusion of his employment. The Release Agreement further provides that Mr. Rutledge will receive an additional 12 months of service credit for purposes of determining the vested status of his outstanding equity awards and that any vested stock options held by Mr. Rutledge (including those vesting as a result of the additional service credit described above) will remain exercisable for one year following the conclusion of his employment. The Release Agreement also provides that the Company will reimburse up to $8,000 of Mr. Rutledge’s legal fees incurred in connection with the negotiation of the Release Agreement.

In respect of Mr. Kibler’s service as Interim President and Interim Chief Executive Officer, he and the Company entered into a letter agreement (the “Letter Agreement”) concerning compensation. The Letter Agreement was approved by the Board and the Compensation Committee of the Board. Mr. Kibler’s annual base salary payable under the Letter Agreement for his service as Interim President and Interim Chief Executive Officer is $600,000. As Interim President and Interim Chief Executive Officer, absent a subsequent decision by the Board, Mr. Kibler will not be eligible to receive an annual bonus, to participate in any of the Company’s cash or equity incentive programs or to receive severance pay upon cessation of his service.

The foregoing descriptions of the Release Agreement and the Letter Agreement do not purport to be complete and are each qualified in their entirety by the terms and conditions of the Release Agreement and Letter Agreement, as applicable, which are filed herewith as Exhibit 10.1 and Exhibit 10.2, respectively, and are incorporated herein by reference.

 

Item 7.01 Regulation FD Information.

On March 5, 2018, the Company issued a press release relating to the management changes described in this Form 8-K. A copy of the press release is attached hereto as Exhibit 99.1 and incorporated herein by reference.

 

Item 9.01 Financial Statements and Exhibits.

 

Exhibit
No.

  

Description

10.1    Separation and Release Agreement, dated March 5, 2018, by and between the Company and Clifton Rutledge.
10.2    Letter Agreement, dated March 5, 2018, by and between the Company and James R. Kibler.
99.1    Press Release dated March 5, 2018.


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

   

Bojangles’, Inc.

March 5, 2018    

By:

 

/s/ M. John Jordan

       

M. John Jordan

       

Senior Vice President of Finance,

Chief Financial Officer and Treasurer

Exhibit 10.1

SEPARATION AND RELEASE AGREEMENT

THIS SEPARATION AND RELEASE AGREEMENT (this “ Release ”) is made by and between Clifton Rutledge (the “ Executive ”) and Bojangles’ Restaurants, Inc. (the “ Company ”). The Executive and the Company shall be referred to individually as a “ Party ” and collectively as “ Parties ”.

WHEREAS, the Company and the Executive are parties to an Amended & Restated Employment Agreement entered into on December 18, 2014, and amended on November 1, 2016 (the “ Employment Agreement ”). All capitalized terms used herein but not defined shall have the meanings ascribed to such terms in the Employment Agreement; and

WHEREAS, the Executive’s employment with the Company has ceased on March 5, 2018 (the “ Termination Date ”), prior to the execution hereof; and

WHEREAS, the Company has agreed to pay the Executive certain amounts in connection with the cessation of his employment, subject to his execution of this Release.

NOW THEREFORE, in consideration of these premises and the mutual promises contained herein, and intending to be legally bound hereby, the parties agree as follows:

1.     Termination; Consideration .

1.1.    The Parties acknowledge and agree that the Executive’s employment, and his service in any officer or director position, with the Company, the Parent and their Affiliates ceased on the Termination Date. In accordance with Section 15 of the Employment Agreement, Executive hereby confirms his resignation as an officer and/or member of the board of directors of the Company, the Parent and any of their Affiliates, and as a fiduciary of any Company benefit plan, as of the Termination Date.

1.2.    The Parties acknowledge that the Company is obligated to pay the Accrued Benefits, as described in Section 12(a)(i) of the Employment Agreement, to the Executive, irrespective of whether the Executive executes this Release. For avoidance of doubt, the Accrued Benefits will include a total payment of $43,846 (less required withholdings) in respect of accrued but unused vacation and personnel days.

1.3.    In connection with the termination of the Executive’s employment, and in consideration of the Executive’s execution of this Release and such Release becoming irrevocable in accordance with its terms, the Company will make the payments described in Paragraph 2 below.

1.4.    The Executive acknowledges that, except as otherwise provided specifically in this Release (including Paragraph 1.2 hereto), the Company, the Parent and their Affiliates do not and will not have any other liability or obligation to the Executive. The Executive further acknowledges that, in the absence of his execution of this Release, the payments specified in Paragraph 2 below would not otherwise be payable.

2.     Severance Payments and Benefits . In lieu of the payments described in Section 12(a)(ii) of the Employment Agreement and in consideration for his execution of this Release, the Executive will be entitled to the payments, rights and benefits described in this Section 2.

2.1.     Salary Continuation . The Company will continue the Executive’s Base Salary (as in effect immediately prior to the Termination Date, i.e., $600,000 per annum) for a period of eighteen (18) months following the Termination Date. The total amount of such salary continuation payments will be $900,000 (less requirement withholdings). Such salary continuation will be paid in accordance with the Company’s regular payroll practices; provided that, subject to Section 19(h)(ii) of the Employment Agreement, the first payment pursuant to this paragraph will be made on the regularly scheduled payroll date next following the sixtieth (60th) day after the Termination Date and will include payment of any amounts that would otherwise have been paid between the Termination Date and that date.


2.2.     Equity Awards.

2.2.1.    Any unvested stock options and restricted stock units held by the Executive immediately prior to the Termination Date and that were otherwise scheduled to vest within twelve months following the Termination Date will be deemed vested as of the Termination Date. This will result in the vesting of additional stock options with respect to 147,698 shares and 12,812 additional restricted stock units. These equity awards are listed on the attached Exhibit A .

2.2.2.    All the vested stock options held by Executive as of the Termination Date, including the stock options vesting pursuant to Paragraph 2.2.1 above, will (notwithstanding anything in any other agreement governing such awards) remain exercisable until the earliest of: (a) the first anniversary of the Termination Date, or (b) the expiration of the original term of the stock option, or (c) any accelerated expiration date contemplated by the Bojangles’, Inc. Amended and Restated 2011 Equity Incentive Plan in connection with a change in control or similar event or transaction.

2.3.     COBRA. The Company will waive the applicable premium for COBRA continuation coverage for the Executive and his eligible dependents under the Company’s group health plans for 12 months following the last day of the month in which the Termination Date occurs.

2.4.     Legal Fees. The Company will pay Mr. Rutledge’s reasonable legal fees incurred in connection with the documentation of this Agreement, up to a maximum of $8,000, within 30 days following his presentation of invoices evidencing those fees; provided that such invoices are submitted to the Company within 60 days following the Termination Date.

3.     Release; and Covenant Not to Sue .

3.1.    In exchange for the good and valuable consideration contained in this Release, the Executive hereby fully and forever releases and discharges the Company, the Parent and their Affiliates, and each of their predecessors and successors, assigns, stockholders, officers, directors, trustees, employees, agents and attorneys, past and present (each such person or entity is referred to as a “ Released Person ”) from any and all claims, demands, liens, agreements, contracts, covenants, suits, actions, causes of action, obligations, controversies, debts, costs, expenses, damages, judgments, orders and liabilities, of whatever kind or nature, direct or indirect, in law, equity or otherwise, whether known or unknown, or whether asserted or unasserted, which Executive now has, or hereafter can, shall or may have, upon or by reason of any act, transaction, practice, conduct, matter, cause or thing of any kind or nature whatsoever arising or occurring through the date of this Release (each, a “ Claim ”, and collectively, “ Claims ”), including, but not limited to, any Claim arising out of the Executive’s employment by the Company or the termination thereof, any Claim under the Age Discrimination in Employment Act, 29 U.S.C. § 621, et seq. (the “ ADEA ”), the Employee Retirement Income Security Act, 29 U.S.C. § 1001, et seq., any Claim based upon alleged wrongful or retaliatory discharge or breach of contract, any Claim for attorneys’ fees, and any other Claim under any other federal, state, local or foreign statute, ordinance, regulation, or under any contract, tort or common law theory. The foregoing will not be deemed to release the Company from Claims solely to enforce this Release. Notwithstanding the foregoing, Executive is not releasing any Claims hereunder with respect to (a) Executive’s right to be indemnified pursuant to the Company’s applicable governing documents, or Executive’s right to coverage under any applicable directors’ and officers’ liability insurance policies, (b) the Accrued Benefits, (c) any rights that Executive has to vested equity awards as of his Termination Date, (d) his rights as a stockholder of the Parent, or (e) any rights which arise after the date on which Executive countersigns this Release with respect to matters that occurred after such date or which cannot be released by private agreement.

 

2


4.     Covenant Not to Sue . The Executive expressly represents that he has not filed a lawsuit or initiated any other administrative proceeding against a Released Person and that he has not assigned any Claim against a Released Person. The Executive further promises not to initiate a lawsuit or to bring any other Claim against a Released Person arising out of or in any way related to the Executive’s employment by the Company or the termination of that employment. Notwithstanding anything herein to the contrary, this Release will not prevent the Executive from filing a charge with the Equal Employment Opportunity Commission (the “ EEOC ”) (or similar state agency) or participating in any investigation conducted by the EEOC (or similar state agency); provided, however , that any claim by the Executive for personal relief in connection with such a charge or investigation (such as reinstatement or monetary damages) would be barred.

5.     Non-Disparagement .

As material consideration for the Company’s promises and agreements in this Release, Executive acknowledges and agrees that, except as required by applicable law, or compelled through valid legal process, subpoena or court order, he will not, directly or indirectly, either orally, in writing or otherwise, make any derogatory or disparaging statements about Company, the Parent or their Affiliates, or their officers, directors, products, services, business, business practices or employment practices, or take any action that could reasonably be expected to harm the reputation of the Company, the Parent or their Affiliates, or their officers or directors.

As material consideration for Executive’s promises and agreements in this Release, Company acknowledges and agrees that, except as required by applicable law, or compelled through valid legal process, subpoena, or court order, the Company will not (through its officers, directors and authorized spokespersons), and will cause its Parent and Bojangles’ International, LLC (the “ Franchisor ”) not to (through their officers, directors, and authorized spokespersons), directly or indirectly, either orally, in writing or otherwise, make any derogatory or disparaging statements about Executive or take any other action that could reasonably be expected to harm the reputation of Executive.

6.     Acknowledgments . The Executive acknowledges and affirms his obligations under the following sections of the Employment Agreement: Section 14 (Return of Company Property), Section 15 (Resignation as Officer or Director), Section 16 (Confidentiality; Non-Solicitation; Non-Competition), and Section 17 (Cooperation). The Company acknowledges and affirms its obligations in Section 16 (Cooperation) of the Employment Agreement, and Paragraphs 1.2 and 5 herein. Both Parties acknowledge that the obligations set forth in Sections 14 through 17 of the Employment Agreement shall continue to be subject to the interpretive and enforcement provisions contained in Sections 18 and 19 of the Employment Agreement, provided that the reference in Section 18 of the Employment Agreement to “Section 12(a)(ii)” shall be deemed to instead refer to Paragraph 2 of this Release.

7.     Rescission Right . The Executive expressly acknowledges and recites that (a) he has read and understands the terms of this Release in its entirety, (b) he has entered into this Release knowingly and voluntarily, without any duress or coercion; (c) he has been advised orally and is hereby advised in writing to consult with an attorney with respect to this Release before signing it; (d) if applicable and required under the ADEA, he was provided twenty-one (21) calendar days after receipt of the Release to consider its terms before signing it; and (e) if applicable and required under the ADEA, he is provided seven (7) calendar days from the date of signing to terminate and revoke this Release, in which case this Release shall be unenforceable, null and void. If applicable and required under the ADEA, the Executive may revoke this Release during those seven (7) days by providing written notice of revocation to

 

3


Bojangles’ Restaurants, Inc., 9423 Southern Pine Boulevard, Charlotte, NC 28273, Attention: General Counsel. If the Executive does not revoke this Release within the seven (7) day revocation period provided for under the ADEA, the Release shall become effective on the eighth (8 th ) day following the Executive’s execution of the Release.

8.     Notice . Nothing in this Release shall (i) prohibit the Executive from making reports of possible violations of federal law or regulation to any governmental agency or entity in accordance with the provisions of and rules promulgated under Section 21F of the Securities Exchange Act of 1934 or Section 806 of the Sarbanes-Oxley Act of 2002, or of any other whistleblower protection provisions of state or federal law or regulation, or (ii) require notification or prior approval by the Company of any reporting described in clause (i).

9.     Miscellaneous .

9.1.     Tax Withholding; 409A . All payments provided to the Executive will be subject to tax withholding in accordance with applicable law and subject to Section 19(h) of the Employment Agreement.

9.2.     No Admission of Liability. This Release is not to be construed as an admission of any violation of any federal, state or local statute, ordinance or regulation or of any duty owed by either Party. There have been no such violations, and each Party specifically denies any such violations, respectively.

9.3.     No Reinstatement . The Executive agrees that he will not apply for reinstatement with the Company or seek in any way to be reinstated, re-employed or hired by the Company in the future unless specifically approached by current Company management or the Company’s or its subsidiaries or Affiliates’ boards of directors regarding re-employment or re-hiring at a future date.

9.4.     Successors and Assigns . This Release shall inure to the benefit of and be binding upon the Company and the Executive and their respective successors, assigns, subsidiaries, Affiliates, executors, administrators and heirs. For avoidance of doubt, each Released Person is an intended third party beneficiary of this Release.

9.5.     Severability . Whenever possible, each provision of this Release will be interpreted in such manner as to be effective and valid under applicable law. However, if any provision of this Release is held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability will not affect any other provision, and this Release will be reformed, construed and enforced as though the invalid, illegal or unenforceable provision had never been herein contained.

9.6.     Entire Agreement; Amendments The Parties agree that this Release contains their entire agreement and understanding relating to the subject matter hereof and merges and supersedes all prior and contemporaneous discussions, agreements and understandings of every nature relating to the subject matter hereof. This Release may not be changed or modified, except by an agreement in writing signed by each of the Parties hereto.

9.7.     Governing Law . This Release shall be governed by, and enforced in accordance with, the laws of the State of North Carolina without regard to the application of the principles of conflicts of laws.

 

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9.8.     Execution Date; Counterparts and Facsimiles . This Release may not be signed by the Executive prior to the Termination Date. This Release may be executed, including execution by facsimile signature, in multiple counterparts, each of which shall be deemed an original, and all of which together shall be deemed to be one and the same instrument.

[ space intentionally left blank; signature page follows ]

 

5


IN WITNESS WHEREOF, the Company has caused this Release to be executed by its duly authorized officer, and the Executive has executed this Release, on the date(s) below written.

 

    BOJANGLES’ RESTAURANTS, INC.
    By:   /s/ M. John Jordan
      Name:   M. John Jordan
      Title:   Senior Vice President, Chief Financial Officer and Treasurer
      Date:   March 5, 2018
    CLIFTON RUTLEDGE
    /s/ Clifton Rutledge
      Date:   March 5, 2018

 

6


Exhibit A

Accelerated Equity Award Vesting

 

 

Rutledge Stock Options

 

       
 Grant Date   

Previously Vested

Stock Options

   Stock Options Vesting per
Separation Agreement
   Exercise Price

 6/8/17

   0    16,875    $17.10

 6/8/16

   8,750    8,750    $18.05

 2/7/14

   488,292    122,073    $8.42

 2/7/14

   203,574    N/A    $8.42

 Total

   700,616    147,698     
 

Rutledge RSUs

 

       
 Grant Date   

Previously Vested

RSUs

  

RSUs Vesting per

Separation Agreement

     

 6/8/17

   0    8,437     

 6/8/16

  

4,375

(less 1,442 for tax net settlement)

 

= 2,933*

   4,375     

 Total

  

* 2,933 these shares are

already in Mr.  Rutledge’s

personal account

   12,812     

 

7

Exhibit 10.2

LOGO

March 5, 2018

Via Hand Delivery

James R. Kibler

Dear Mr. Kibler:

On behalf of Bojangles’ Restaurants, Inc. (the “ Company ”), this letter will confirm your appointment and agreement to serve as the Interim President and Interim Chief Executive Officer of both the Company and its parent corporation, Bojangles’, Inc. (the “ Parent ”), commencing March 5, 2018.

During your period of service as Interim President and Interim Chief Executive Officer (your “ Interim Service ”), you will report directly to the Board of Directors of the Parent (the “ Board ”) and perform such duties as may be reasonably assigned to you by the Board. You will be subject to all Company and Parent policies in effect from time to time, including (without limitation) policies regarding securities trading. While it is anticipated that your Interim Service will last for several months, the Board may choose to end your Interim Service at any time, whether or not a new Chief Executive Officer has by then been identified.

During your Interim Service, you will be paid base salary at an annualized rate $600,000 per year. Absent a subsequent determination by the Board (or its Compensation Committee), you will not be eligible for an annual bonus or to otherwise participate in cash or equity incentive programs. You will be eligible to participate in the employee benefit plans generally available to the Company’s salaried employees, subject to the eligibility and other terms of those plans in effect from time to time. Your employment will be “at-will,” meaning it may be terminated by either you or the Company at any time, for any reason. Upon cessation of your employment for any reason, you will not be entitled to severance pay or benefits.

To acknowledge your agreement with the foregoing, please execute and date this letter in the space provided below and return the executed original to me.

[ space intentionally left blank; signature page follows ]


Sincerely,
Bojangles’ Restaurants, Inc.
By:   /s/ M. John Jordan
 

M. John Jordan

Senior Vice President, Chief Financial

Officer and Treasurer

 

 

Acknowledged and agreed on this

5th day of March, 2018:

/s/ James R. Kibler
James R. Kibler

 

2

Exhibit 99.1

 

LOGO

For Investor Relations Inquiries:

Raphael Gross of ICR

203.682.8253

For Media Inquiries:

Brian Little of Bojangles’ Restaurants, Inc.

704.519.2118

Bojangles’, Inc. Appoints Current Director James “Randy” Kibler

as Interim President and CEO

Company Accepts Resignation from Clifton Rutledge

CHARLOTTE, N.C. — (Globe Newswire) — March  5, 2018 — Bojangles’, Inc. (Bojangles’) (NASDAQ: BOJA) today announced that the Board of Directors has appointed James “Randy” Kibler as Interim President and CEO following the resignation of Clifton Rutledge for personal reasons. The Board of Directors will also initiate a search for a permanent President and CEO.

Mr. Kibler has been a Director of the Company since August 2011 and served as a Director and Non-Executive Chairman from February 2014 to June 2016. Prior to this, from September 2007 to January 2014, Mr. Kibler served as President, CEO, and Director for Bojangles’ Restaurants, Inc., the Company’s subsidiary. Mr. Kibler was previously President of Kibler-Mitchell Enterprises, Inc., a restaurant company in Spartanburg, South Carolina, from September 1996 to April 2011.

William Kussell, Director and Non-Executive Chairman of the Board, stated, “We appreciate Randy stepping into these roles on a temporary basis. The Board is fully confident in his ability to lead the Bojangles’ team until we can complete the process of identifying a suitable replacement. Randy possesses extensive management experience in the casual dining and quick-service restaurant sectors, franchisee expertise, and a deep understanding of operations. Additionally, his familiarity and leadership as our previous President and CEO is ideal for ensuring a smooth and orderly transition during this interim period. We would also like to thank Clifton for his dedicated service to Bojangles’ and respect his personal decision to resign. We wish him all the best.”

Randy Kibler, Interim President and CEO, said, “I appreciate the opportunity to accept this expanded role with the Company and look forward to working with the Board and the talented management team in continuing to build upon the strong brand and reputation we have established at Bojangles’.”

Clifton Rutledge added, “After 40 years in the restaurant industry including four plus years as President and CEO of Bojangles’, I have decided it’s time to step down and take some time to enjoy my family. I have enjoyed being a part of growing the brand’s footprint throughout the Southeast, and also the development of the talented teams both at the Support Center and in the field. I am confident the team at Bojangles’ will carry forward this great brand into the future, and I look forward to watching its growth, just from a different seat.”

About Bojangles’, Inc.

Bojangles’, Inc. is a highly differentiated and growing restaurant operator and franchisor dedicated to serving customers high-quality, craveable food made from our Southern recipes, including breakfast served All Day, Every Day. Founded in 1977 in Charlotte, N.C., Bojangles’ ® serves menu items such as made-from-scratch biscuit breakfast sandwiches, delicious hand-breaded bone-in chicken, flavorful fixin’s (sides) and Legendary Iced Tea ® . At September 24, 2017, Bojangles’ had 749 system-wide restaurants, of which 316 were company-operated and 433 were franchised restaurants, primarily located in the Southeastern United States. For more information, visit www.bojangles.com or follow Bojangles’ on Facebook and Twitter.