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EXHIBIT 10.3
EMPLOYMENT AGREEMENT
EFFECTIVE AS OF SEPTEMBER 1, 2005 BETWEEN
AFC ENTERPRISES, INC. (THE "COMPANY") AND
HAROLD M. COHEN ("EMPLOYEE")
WHEREAS, the Company desires to continue the employment of Employee
and
to enter into an agreement embodying the
terms of such employment; and
WHEREAS, Employee desires to accept such employment and to enter
into
such agreement;
NOW, THEREFORE, in consideration of the promises and mutual
covenants
contained herein and for other good and
valuable consideration, the parties
agree as follows:
1.
Term of Agreement.
This Agreement shall be effective as of the date hereof and,
unless
earlier terminated pursuant to Section 8 or
Section 9 hereof, shall be for an
initial term of one (1) year (the "Term").
The Term of this Agreement and
Employee's employment hereunder will
automatically be extended for an additional
one-year period following the expiration of
each year of employment hereunder
(the "Renewal Date"), without further
action by Employee or the Company. Such
automatic one-year renewal shall continue
from year to year unless and until
either the Company or Employee gives to the
other written notice not less than
thirty (30) days prior to the applicable
Renewal Date of its decision not to
renew for an additional one year.
For purposes of this Section 1 only, the first "year" of the Term
shall
be deemed to begin as of the date hereof
and end on December 25, 2005, and each
one (1) year period thereafter shall
coincide with the Company's fiscal year.
2.
Employment.
2.01 Position. Employee shall serve as Senior Vice
President--Legal Affairs, General Counsel
and Secretary of the Company and shall
perform such duties consistent with his
position as may be assigned to him from
time to time by the Chief Executive Officer
or the Board of Directors of the
Company.
2.02 Time and Efforts. Employee, so long as he is employed
hereunder, shall devote his full business
time and attention to the services
required of him hereunder, except as
otherwise agreed and for vacation time and
reasonable periods of absence due to
sickness or personal injury, and shall use
his best efforts, judgment and energy to
perform, improve and advance the
business and interests of the Company in a
manner consistent with the duties of
his position.
Employee's Initials:
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3.
Base Salary.
The Company shall pay Employee, in equal installments no less
frequently than monthly, a base salary at
the rate of no less than Two Hundred
Twenty Thousand Dollars ($220,000 U.S.) per
annum (the "Base Salary") during the
term hereof. The Employee's Base Salary
shall be reviewed by the Chief Executive
Officer or the Board of Directors of the
Company on an annual basis.
4.
Incentive Pay.
4.01 Annual
Plan. The Board of Directors of the Company, acting in
its sole discretion, shall annually, at the
beginning of each fiscal year of the
Company, approve an annual incentive plan
(the "Annual Incentive Plan") for
Employee, which Plan shall contain such
terms and provisions as the Board of
Directors shall determine. Any amounts
payable to Employee pursuant to the
Annual Incentive Plan is hereinafter
referred to as "Incentive Pay".
4.02 Target
Incentive Pay. The target Incentive Pay ("Target
Incentive Pay") for Employee for the 2005
fiscal year of the Company shall be as
follows: One Hundred Ten Thousand Dollars
(U.S. $110,000); provided, however,
that the Target Incentive Pay with respect
to any fiscal year is subject to, and
may be modified by, the Annual Incentive
Plan approved by the Board of Directors
pursuant to Section 4.01 above and this
Section 4.02 shall be read accordingly.
After 2005, the Target Incentive Pay for
Employee will be set by the Chief
Executive Officer or the Board of Directors
of the Company for each fiscal year
and will be included in the Annual
Incentive Plan for such year.
4.03 Payment of
Incentive Pay. If Employee is entitled to payment of
any Incentive Pay for any fiscal year, an
accounting will be furnished and
payment will be made to Employee as set
forth in the Annual Incentive Plan, but
in no event later than two and one-half
months following the end of each fiscal
year.
4.04 Termination
of Employment. If Employee's employment hereunder
shall terminate other than pursuant to
Sections 8.03 or 8.04, Employee shall
receive, at the time contemplated by the
Annual Incentive Plan, such Incentive
Pay, if any, to which he would have been
entitled under the terms of the Annual
Incentive Plan had Employee remained in the
employ of the Company for the entire
fiscal year in which such termination
occurs. If Employee's employment hereunder
shall terminate pursuant to (a) Section
8.03, the provisions of Section 8.03
shall determine the amount of Incentive Pay
payable to Employee; or (b) Section
8.04, no Incentive Pay shall be payable to
Employee after such termination.
5.
Stock Options.
As part of the Employee's compensation, Employee may be granted
stock options in the future based upon
Employee's performance as determined in
the sole discretion of the Board of
Directors of the Company.
Employee's Initials:
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6. Employee
Benefits.
6.01 Executive
Flex Perk. Employee shall be entitled to participate
in the Company's Executive Flex Perk Plan
subject to the terms, conditions and
limitations thereof. Subject to Section
6.07 below and the terms of the Plan,
the Company will pay to, or for the benefit
of Employee, an amount equal to
$15,000.00 per year payable in the same
manner as Employee's Base Salary is
paid.
(a) 6.02 Life
Insurance. During the
term, Executive shall be
entitled to life insurance coverage in an
amount not less than $1,100,000.
6.03 Disability
Insurance.
(a) During the Term, Executive shall be entitled to disability
insurance coverage in an amount not less
than his disability coverage on the
date of this Agreement and the Company
shall maintain in full force and effect
during the Term a Supplemental Disability
Policy which will supplement the
benefits payable under any disability
benefit provided to Employee by the
Company under its basic employee health
care benefit program, so that, subject
to Section 6.07 below, with respect to a
disability as defined in the
Supplemental Disability Policy occurring
after the Company has obtained the
Supplemental Disability Policy, the total
monthly disability benefit (the
"Disability Benefit") payable to Employee
under all disability policies
maintained by the Company, after a maximum
elimination period of ninety (90)
days, shall equal 70% of the sum of
Employee's Base Compensation and Incentive
Pay for the year immediately preceding the
year in which the termination for
Disability occurs.
(b) Notwithstanding anything herein to the contrary, if the
premiums for the Supplemental Disability
Income Policy for Employee shall exceed
regular, non-rated premiums, the Company
may, but shall have no obligation to,
fund such excess. In the event the Company
determines not to fund such excess it
shall promptly notify Employee and Employee
may, at his option, elect to pay the
excess. If Employee fails to pay such
excess or if for any other reason the
Company, after reasonable efforts, is not
able to obtain the Supplemental
Disability Income Policy required herein,
then Employee shall not be entitled to
any Disability Benefit hereunder except as
may otherwise be determined in the
discretion of the Company and set forth in
writing.
6.04 Executive
Medical Benefit. Subject to Section 6.07, the Company,
at its expense, shall provide Employee with
an annual physical examination to be
conducted by a physician or physicians as
determined by the Company, or by
Employee with the approval of the
Company.
6.05 Other
Benefits. Employee shall be provided additional employee
benefits, including health, accident and
disability insurance under the
Company's regular and ongoing plans,
policies and programs available, from time
to time, to senior officers of the Company,
in accordance with the provisions of
such plans, policies and programs governing
eligibility and participation;
provided, however, that such benefits may
be modified, amended or rescinded by
the Board of Directors of the Company in
its sole discretion.
Employee's Initials:
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6.06 Vacation.
Employee shall be entitled to four (4) weeks paid
vacation each year during the term hereof.
Any vacation not used in any year
shall not accrue for use in subsequent
years and shall be forfeited as of the
end of such year.
6.07 Paramount
Provisions.
(a) Notwithstanding anything in Sections 6.02 and 6.03 above or
any other provision of this Agreement to
the contrary, if the Company has met
all of its obligations under this Agreement
(and the Insurance Agreement, if
applicable) with respect to obtaining and
maintaining in force (i) the Life
Insurance Policy described in Section 6.02
hereof on the life of Employee to
fund the Death Benefit or (ii) the
Supplemental Disability Policy maintained for
Employee pursuant to Section 6.03 hereof to
fund such Employee's Disability
Benefit, but all or any portion of the
proceeds under any such policy are not
actually received by the Company for any
reason whatsoever, including without
limitation the insolvency of the insurer or
any misrepresentation made by
Employee in the application for such
insurance, then the right of Employee or
his designated beneficiary to receive a
Disability Benefit or a Death Benefit,
as the case may be, shall be reduced (but
not below zero) by the amount by which
the Disability Benefit or Death Benefit
otherwise payable exceeds the insurance
proceeds actually received.
(b) Anything in Sections 6.01, 6.02, 6.03, and 6.04 to the
contrary notwithstanding, the amount of the
benefits provided for in Section 6
are subject to adjustment as shall be
provided for in the plan or insurance
contract, as the case may be, pursuant to
which such benefit is being paid and
the Employee will be given written notice
of any such change. Anything in this
Agreement to the contrary notwithstanding,
the Chief Executive Officer or the
Board of Directors shall have full
authority to make all determinations deemed
necessary or advisable for the
administration of the benefits described in this
Section 6. The good faith interpretation
and construction by the Chief Executive
Officer or the Board of Directors of the
terms of this Section 6 or the benefit
programs described herein shall be final,
conclusive and binding on Employee.
7. Business
Expenses.
All reasonable and customary business expenses incurred by Employee
in
the performance of his duties hereunder
shall be paid or reimbursed by the
Company in accordance with the Company's
policies in effect, from time to time.
8. Termination of
Employment.
8.01 Definitions.
For purposes of this
Section 8, the following terms
shall have the following meanings:
(a) Cause. The term "Cause" shall mean (i) Employee commits
fraud or is convicted of a crime involving
moral turpitude, (ii) Employee, in
carrying out his duties hereunder, has been
guilty of gross neglect or gross
misconduct resulting in harm to the Company
or any of its subsidiaries or
affiliates, (iii) Employee shall have
failed to materially comply with the
policies of the Company or shall have
refused to follow or comply with the duly
promulgated directives
Employee's Initials:
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of the Chief Executive Officer or the Board
of Directors of the Company, (iv)
Employee has breached any of the provisions
of Section 10.02 through and
including 10.04 or (v) Employee otherwise
materially breaches this Agreement.
(b) Disability. The term "Disability" shall mean the good faith
determination by the Chief Executive
Officer or of the Board of Directors of the
Company that Employee has failed to or has
been unable to perform his duties as
the result of any physical or mental
disability for a period of ninety (90)
consecutive days during any one period of
Disability.
8.02 Termination
upon Death or Disability. If Employee's employment
is terminated due to his death or
Disability, the Company shall pay to the
estate of the Employee or to the Employee,
as the case may be, within fifteen
(15) days following Employee's death or
upon his termination in the event of
Disability, all amounts then payable to
Employee pro rated through the date of
termination pursuant to Sections 3, 6.01,
and 7, and the amount of any accrued
but unused vacation under Section 6.06 for
the year in which such termination
occurs. In addition, the Company shall pay
to Employee any Incentive Pay payable
pursuant to Section 4.04 hereof in
accordance with the terms thereof.
8.03 Termination
by the Company for other than Death or Disability or
for Cause. The Company may terminate
Employee's employment hereunder without
cause at any time, upon written notice. If
upon expiration of the term of this
Agreement or if Employee's employment is
terminated by the Company prior to the
expiration of the term of this Agreement
without cause or other than (i) by
reason of Employee's death or Disability or
(ii) for Cause, the Company shall
pay or provide to Employee, in lieu of all
other amounts payable hereunder or
benefits to be provided hereunder the
following: (a) a payment equal to the sum
of one (1) times Employee's Base Salary at
the time of termination; (b) a
payment equal to one (1) times Employee's
Target Incentive Pay for the year in
which such termination occurs (or, if no
Target Incentive Pay has been
designated for such year, then the Target
Incentive Pay for the last year in
which it was designated prior to such
termination), and (c) the acceleration of
any unvested rights of Employee under any
stock options or other equity
incentive programs such that they shall
immediately vest under the terms of such
plans. As a condition precedent to the
requirement of Company to make such
payments or grant such accelerated vesting,
Employee shall not be in breach of
his obligations under Section 10 hereof and
Employee shall execute and deliver
to Company a general release in favor of
the Company in substantially the same
form as the general release then contained
in the latest Severance Agreement
being used by the Company.
Any payments required to be made under this Section 8.03 shall be
made
to Employee within thirty (30) days after
the date of Employee's termination of
employment.
8.04 Voluntary Termination by Employee or Termination for
Cause.
Employee may terminate his employment
hereunder at any time whatsoever, with or
without cause, upon thirty (30) days prior
written notice to the Company. The
Company may terminate Employee's employment
hereunder at any time without notice
for Cause. In the event Employee's
employment is terminated voluntarily by
Employee or by the Company for Cause:
Employee's Initials:
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(a) The Company shall pay to Employee upon such termination all
amounts then due under sections 3, 4 (but
only to the extent of earned but
unpaid Incentive Pay), 6, and 7, prorated,
through the date of termination for
the year in which he is terminated; and
(b) The Company shall be under no obligation to make severance
payments to Employee or continue any
benefits being provided to Employee beyond
the date of such termination.
9.
Change of Control, Change in Responsibilities.
Upon the occurrence of both of the following events:
(a) The dissolution or liquidation of the Company, or a
reorganization, merger or consolidation of
the Company with one or more
corporations as a result of which the
owners of all of the outstanding shares of
Common Stock immediately prior to such
reorganization, merger or consolidation
own in the aggregate, directly and
indirectly, less than 50% of the outstanding
shares of Common Stock of the Company or
any other entity into which the Company
shall be merged or consolidated immediately
following the consummation thereof,
or the sale, transfer or other disposition
of all or substantially all of the
assets or
