Exhibit 10.40
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the “
Agreement ”) is entered into as of January 27, 2009 by
and between HARDEE’S FOOD SYSTEMS, INC., a North Carolina
corporation (the “ Company ”), and ROBERT J.
STARKE (the “ Employee ”).
R E C I T A L S:
A. Employee
is a key employee of the Company.
B. The
Company and Employee desire to enter into this Agreement to set
forth the terms and provisions of Employee’s employment by
the Company.
NOW, THEREFORE, in consideration of the mutual
covenants and agreements set forth herein, the parties agree as
follows:
1. Employment and
Duties . Subject to the terms and conditions of this
Agreement, the Company employs the Employee to serve in an
executive and managerial capacity as President of the Company, and
the Employee accepts such employment and agrees to perform such
reasonable responsibilities and duties commensurate with the
aforesaid positions as directed by the Company’s Board of
Directors or as set forth in the Articles of Incorporation and the
Bylaws of the Company. Any change in such titles or
delegation of duties inconsistent with such titles without the
consent of Employee, shall be deemed a termination without cause
under Section 7(b) below.
2. Term
. The term of this Agreement shall commence on the first
day of the Company’s fiscal year commencing in the year 2009
(the “ Effective Date ”) and, prior to July 11,
2012, shall terminate three (3) years following the date on which
notice of non-renewal or termination of this Agreement is given by
either party to the other and, on and subsequent to July 11, 2012,
shall terminate on July 11, 2015, subject in all cases to prior
termination as set forth in Section 7 below (the “
Term ”). Thus, prior to July 11, 2012, the
Term shall be renewed automatically on a daily basis so that the
outstanding Term is always three (3) years following the date on
which notice of non-renewal or termination is given by either party
to the other and, on July 11, 2012, the Term shall convert into a
remaining three (3) year term ending on July 11,
2015. The Term may be extended at any time upon mutual
written agreement of the parties.
3. Salary
. Commencing on the Effective Date, and subject to the
other provisions of this Agreement, the Company shall pay the
Employee a minimum base annual salary of $275,000. The
Chief Executive Officer of the Company may, from time to time,
increase such salary in his sole discretion.
4. Other
Compensation and Fringe Benefits . In addition to
any executive bonus, pension, deferred compensation and stock
option grants which the Company may from time to time make
available to the Employee upon mutual agreement, the Employee shall
be entitled to the following:
(a) The standard
Company benefits enjoyed by the Company’s other top
executives;
(b) Provision by the
Company during the Term and any extensions thereof to the Employee
and his dependents of the medical and other insurance coverage
provided by the Company to its other top executives;
(c) Provision by the
Company of supplemental disability insurance sufficient to provide
two-thirds of the Employee’s pre-disability minimum base
annual salary for a two-year period; and
(d) For the fiscal
year ending in January 2010, Employee shall be entitled to a bonus
in the amount determined by the Company’s Chief Executive
Officer, in his sole discretion. Such discretionary
bonus shall be evaluated and paid (if applicable) no later than
December 31 of the calendar year following the calendar year to
which such bonus relates.
The Company shall deduct from all compensation
payable under this Agreement to the Employee any taxes or
withholdings the Company is required to deduct pursuant to state
and federal laws or by mutual agreement between the
parties.
5. Vacation
. For and during each year of the Term and any
extensions thereof, the Employee shall be entitled to reasonable
paid vacation periods consistent with his positions with the
Company and in accordance with the Company’s standard
policies, or as the Company’s Board of Directors may
approve. In addition, the Employee shall be entitled to
such holidays consistent with the Company’s standard policies
or as the Company’s Board of Directors may
approve.
6. Expense
Reimbursement . In addition to the compensation and
benefits provided herein, the Company shall, upon receipt of
appropriate documentation, reimburse the Employee each month for
his reasonable travel, lodging, entertainment, promotion and other
ordinary and necessary business expenses in accordance with the
Company’s policies then in effect. Any amounts
payable under this Section 6 shall be paid no later than December
31 of the year following the year in which the expenses are
incurred.
(a) For Cause
. The Company may terminate this Agreement immediately
for cause upon written notice to the Employee, in which event the
Company shall be obligated only to pay the Employee that portion of
the minimum base annual salary due him through the date of
termination. Cause shall be limited to (i) the
persistent failure to perform duties consistent with a commercially
reasonable standard of care; (ii) the willful neglect of duties;
(iii) criminal or other illegal activities involving dishonesty;
or, (iv) a material breach of this Agreement.
(b) Without
Cause . Either party may terminate this Agreement
immediately without cause by giving written notice to the
other. If the Company terminates under this
Section 7(b) , then it shall pay to the Employee the sum of
(i) all amounts owed through the date of termination, plus (ii) an
amount equal to the product of the Employee’s minimum base
annual salary in effect as of the date of termination times the
number of years (including partial years) remaining in the
Term. Such payment to be made in a lump sum on or before
the fifth day following the date of termination, and shall be in
lieu of all further salary and bonus obligations under this
Agreement. In addition, if the Company terminates under
this Section 7(b), (i) all options granted to the Employee
which had not vested as of the date of such termination shall vest
concurrently with such termination, and, notwithstanding the terms
of any option agreements, Employee may exercise any vested options,
including by reason of acceleration, for a period after such
termination which is the greater of what is provided in the
respective option agreement or 30 days, and (ii) the Company shall
maintain in full force and effect for the continued benefit of the
Employee during the period commencing on the date of termination
and ending on the December 31 of the second calendar year following
the calendar year in which the termination occurred, all employee
benefit plans (except for the Company’s stock option plans)
and programs in which the Employee was entitled to participate
immediately prior to the date of termination, provided that the
Employee’s continued participation is possible under the
general terms and provisions of such plans and
programs. In the event that the Employee’s
participation in any such plan or program is prohibited, the
Company shall, at its expense, arrange to provide the Employee with
benefits substantially similar to those which the Employee would
otherwise have been entitled to receive under such plans and
programs from which his co
