EXECUTION COPY
EMPLOYMENT
AGREEMENT
EMPLOYMENT AGREEMENT ("Employment Agreement"),
dated as of August 1, 2008, between Perkins & Marie Callender's
Inc. (the "Company"), and Pete Pascuzzi (the
"Executive").
WHEREAS, the Company wishes to assure itself of
the management services of the Executive for the period provided in
this Employment Agreement, and the Executive desires to serve in
the employ of the Company for such period, upon the terms and
conditions hereinafter provided.
IT IS THEREFORE AGREED AS FOLLOWS:
1.
Employment, Duties and Acceptance .
1.1
Employment by the Company . Effective May 19, 2008 (the
"Effective Date"), the Company hereby employs the Executive, for
itself and its affiliates, for the Term (as herein defined), to
render exclusive and full-time services in the capacity of
Executive Vice President, Corporate Restaurant Operations, subject
to the direction of the Company's Chief Executive Officer and the
Board of Directors of P&MC's Holding LLC, the indirect parent
of the Company (the "Board of Directors"), in accordance with
applicable law and the Company's corporate governance policies. The
Executive may engage in personal, charitable, professional and
investment activities except to the extent that the Board of
Directors reasonably determines that ally such activity conflicts
or significantly interferes with the performance of his
responsibilities to the Company under this Employment
Agreement.
1.2
Duties/Authority . The Executive shall have responsibilities
commensurate with the office of Executive Vice President, Corporate
Restaurant Operations, subject to the control and direction of the
Chief Executive Officer and Board of Directors in accordance with
applicable law and the Company's corporate governance policies. The
Executive agrees to hold such additional offices of the Company and
its affiliates as may reasonably be assigned to him by the Board of
Directors or the Chief Executive Officer from time to
time.
1.3
Acceptance of Employment by the Executive . The Executive
accepts such employment and shall render the services described
above. Subject to election (i) by the Company's stockholders or
appointment by the Board of Directors, the Executive may also serve
during all or any part of the Term as a director of the Company,
and (ii) by the Company, the Executive may also serve during all or
any part of the Term as an officer or director of any other entity
controlled by or under common control with the Company, in each
case without any compensation therefor other than that specified in
this Employment Agreement.
1.4
Place of Employment . The Executive's principal place of
employment shall be Memphis, TN (the "Headquarters"), subject to
such reasonable travel as the rendering of the services hereunder
may require, at the direction of the Chief Executive Officer.
Unless agreed to otherwise in writing by the Executive, the Company
shall not change the Executive's principal place of employment
further than fifty (50) miles from the Headquarters.
2.
Term of Employment . Subject to earlier termination pursuant
to Section 4 of this Employment Agreement, the initial term of
Executive's employment under this Employment Agreement shall
commence on the Effective Date and shall end eighteen (18) months
following the Effective Date (the "Initial Term"); provided, that
the term shall automatically renew for successive periods of one
year (each such one year period, a "Subsequent Term") until one of
the parties gives written notice of non-renewal to the other party
at least 90 days before the end of the Initial Term or any
Subsequent Term, as applicable, unless sooner terminated as herein
provided. For the purposes of this Employment Agreement, (i) "Term"
shall mean the Initial Term, or the Subsequent Term, as
appropriate, and (ii) if a party gives the other party a notice of
non-renewal pursuant hereto, this Employment Agreement shall be
deemed to expire at the end of the current Term and no termination
shall be deemed to have occurred for the purpose of Section 4.
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3.1
Salary . As compensation for all services to be rendered
pursuant to this Employment Agreement, the Company (directly or
through one or more subsidiaries) shall pay the Executive during
the Term a salary of $257,400 per annum (the "Base Salary"),
payable not less frequently than monthly, less such deductions as
shall be required to be withheld by applicable law and regulations.
The Executive's Base Salary shall be reviewed at least annually by
the Board of Directors and may be increased from time to time, but
in no event shall the amount of the Executive's Base Salary be
decreased from its then existing level.
3.2
Incentive Bonus . The Executive shall be eligible to receive
an annual bonus (the "Incentive Bonus") under a plan established by
the Company from time to time in the amount determined by the Board
of Directors based upon achievement of performance measures derived
from the annual business plan approved by the Board of Directors
and payable on the date such bonuses are paid to other executives
of the Company. The Executive's target bonus shall be 45% of Base
Salary (the "Target Bonus"). Except as otherwise provided in
Section 4, the Incentive Bonus shall be pro-rated to reflect the
percentage of the fiscal year the Executive has performed services
for the Company pursuant to this Employment Agreement.
3.3
Participation in Employee Benefit Plans . The Executive
shall be permitted during the Term, if and to the extent eligible,
to participate in any group life, hospitalization, accidental death
and dismemberment or disability insurance plan, health (Executive
Health and Life Benefit Plan) program, pension plan or similar
benefit plan or perquisite program of the Company, which may be
available generally to other senior executives and managers of the
Company and its subsidiaries on the same terms as such other
persons in accordance with the terms of such plans and programs.
The Board of Directors may determine to offer the Executive
participation in other compensation or benefit plans, in its
discretion.
3.4
Expenses. Subject to such written policies, applicable to
senior executives generally, as may from time to time be
established by the Board of Directors, the Company shall pay or
reimburse the Executive for all reasonable expenses (including
travel expenses) actually incurred or paid by the Executive during
the Term in the performance of the Executive's services under this
Employment Agreement upon presentation of expense statements or
vouchers or such other supporting information as it may
require.
3.5
Vacation . The Executive shall be entitled to such amount of
vacation which is available generally to other senior executives
and managers of the Company and its subsidiaries.
3.6
Insurance. During the Term, the Company shall maintain
director's and officer's liability indemnification and insurance
coverage for the Executive.
3.7
Automobile Allowance . The Executive shall be permitted to
use a vehicle provided by the Company or receive an automobile
allowance, at the Company's sole discretion, from the Company in
accordance with the policies of the Company.
4.1
Termination upon Death . If the Executive dies during the
`Perm, this Employment Agreement shall terminate and the Company
shall pay to the Executive (i) all Base Salary and benefits from
the Company and its employee benefit plans earned and accrued as of
the date of termination and (ii) a pro rata amount of his annual
Incentive Bonus in accordance with the terms of the Plan,
determined at the end of the fiscal year in which the Executive's
death occurred, and pro rated through the date of
termination.
4.2
Termination upon Disability . If during the Term the
Executive becomes physically or mentally disabled, whether totally
or partially, so that Executive is unable to perform the essential
functions of his employment, with or without reasonable
accommodations (as determined, in good faith, by the Board of
Directors) for (i) a period of three (3) consecutive months, or
(ii) for shorter periods aggregating three (3) months during any
six (6) month period, the Company may at any time after the last
day of the three (3) consecutive months of disability or the day on
which the shorter periods of disability equal an aggregate of three
(3) months, by written notice to the Executive, terminate the Term
of the Executive's employment hereunder. Nothing in this Section
4.2 shall be deemed to extend the Term. In the event of termination
of this Employment Agreement by reason of disability, subject to
the execution, without revocation, of a valid release agreement
reasonably acceptable to the Company, the Company shall pay to the
Executive (i) the Executive's Base Salary on the date of
termination for the lesser of four (4) months or the remainder of
the Term, payable in accordance with the provisions of Section 3.1
hereof, (ii) all Base Salary and benefits from the Company and its
employee benefit plans earned and accrued as of the date of
termination and (iii) a pro rata amount of his annual Incentive
Bonus in accordance with the terms of the Plan, determined at the
end of the fiscal year in which the disability occurred, and pro
rated through the date of termination.
4.3
Termination for Cause or Without Good Reason . The Company
may at any time by written notice to the Executive terminate the
Term of the Executive's employment hereunder for Cause and the
Executive may at any time by written notice to the Company
terminate the Term of the Executive's employment hereunder without
Good Reason and, in either such case, the Executive shall have no
right to receive any compensation or benefit hereunder on and after
the effective date of such notice other than Base Salary and
benefits accrued but not paid as of the date of
termination.
4.4
Termination with Good Reason or without Cause . During the
Term, the Executive may terminate his employment with the Company
at any time with Good Reason, and the Company may terminate the
Executive's employment without Cause, upon 10 (ten) days' written
notice to the other party hereto. Subject to Section 4.6, the
Executive shall, subject to the execution, without revocation, of a
valid release agreement reasonably acceptable to the Company, have
the right to continue to receive his Base Salary (the "Termination
Payments") and to continue to be a participant in the Company's
Executive Health and Life Benefit Plan (the "Termination
Benefits"), as in effect on the date of such notice, payable in
accordance with the provisions of Sections 3.1 and 3.3 hereof, for
the remainder of the Term; provided, that in the event that the
Executive's participation in any benefit plans, programs, practices
or policies referred to in Section 3.3 is barred by the terms of
such plans, programs, practices or policies due to the termination
of the Executive's employment with the Company, then the Company
shall provide him with benefits substantially similar to those
which he would be entitled to as a participant in such benefit
plans, programs, practices or policies; provided further, that
(subject to Section 4.6 and the execution without revocation of a
release reasonably acceptable to the Company) the Executive shall
receive such Base Salary and group health benefits for a minimum of
twelve months from the effective date of such notice. In the event
the Executive's employment terminates pursuant to this Section 4.4,
he shall be entitled to receive a pro rata amount of his annual
Incentive Bonus in accordance with the terms of the Plan,
determined at the end of the fiscal year in which the Executive's
employment terminated, and pro rated through the date of
termination; provided further, that if the Executive's employment
is terminated pursuant to this Section 4.4 after a Change in
Control has occurred, in the event that any payment or distribution
by the Company to or for the benefit of the Executive (whether
pursuant to the terms of this Employment Agreement or otherwise) (a
"Payment") would be subject to the excise tax imposed by Section
4999 of the Internal Revenue Code of 1986, as amended (the "Code"),
or any interest or penalties are incurred by the Executive due to
the miscalculation by an independent auditor with respect to such
excise tax or untimely payment of the Gross-Up Payment (as defined
below) by the Company with respect to such excise tax (such excise
tax, together with any interest or penalties thereon incurred by
the Executive due to miscalculation by the independent auditor or
untimely payment of the Gross-Up Payment (as defined below) by the
Company, are hereinafter referred to as the "Excise Tax"), then the
Company will pay to the Executive an additional payment (the
"Gross-Up Payment") in an amount such that after payment by the
Executive of all taxes, including, without limitation, any income
taxes and Excise Tax imposed upon the Gross-Up Payment, the
Executive retains an amount of the Gross-Up Payment equal to the
Excise Tax imposed upon the Payments. The determination of amounts
required to be paid pursuant to the preceding
