CKE RESTAURANTS, INC. AMENDMENT NO. 4 TO EMPLOYMENT AGREEMENT
Exhibit
10.18
CKE
RESTAURANTS, INC.
AMENDMENT
NO. 4
TO
This
Amendment No. 4 (the “Amendment”) to Employment Agreement is made effective as
of December 16, 2008, by and between CKE Restaurants, Inc. (the “Company”) and
Xxxxxx X. Xxxxxx (the “Employee”).
RECITALS:
A. The
Company and the Employee entered into an Employment Agreement, dated as of
January 2004, and amended on February 1, 2005, December 6, 2005 and October 12,
2006 (collectively, the “Agreement”).
B. The
Company and the Employee now desire to further amend the Agreement as set forth
below.
AGREEMENT
1. Employment and
Duties. Section 1 is hereby amended to change and replace the
Employee’s stated position from “President and Chief Executive Officer” to
“Chief Executive Officer,” which amendment shall be effective on January 27,
2009.
2. Term. Section
2 is hereby amended to read in its entirety as follows:
“2. Term. The
term of this Agreement shall commence on 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. Other Compensation and
Fringe Benefits. The definition of “Actual Income” as set
forth in Section 4(e) is hereby amended to add the following phrase at the end
thereof:
“provided,
further, that any accounting credits or charges associated with any interest
rate swap derivatives shall be excluded from Actual Income;”
4. Other Compensation and
Fringe Benefits. Clause (g) is hereby added to Section 4,
which clause reads in its entirety as follows:
“(g) Section 409A
Limitation. Any amounts payable under Sections 4(b), 4(c) or 6
shall be paid no later than December 31 of the year following the year in which
the expenses are incurred.”
5. Termination. Section
7(b)(ii) is hereby amended to add the following text immediately following the
phrase which reads “...subject to the Employee executing and delivering to the
Company a release of the Company and its affiliates from all known and unknown
claims at the date of such termination based upon or arising out of this
Agreement or the termination, in form reasonably acceptable to the
Employee”:
“(provided
that such release shall be executed and delivered on or prior to the fifty-fifth
(55th) day
following the date of the Employee’s termination and shall be in the form of an
effective release agreement for which any applicable revocation period has
expired)”
6. Termination. Section
7(b)(ii)(B) is hereby amended as follows:
(1) To reduce
the multiplier stated therein from “200%” to “100%”; and
(2) To add
the following phrase at the end thereof:
“if, at
the time the Company terminates Employee’s employment under this Section 7(b),
the Company is not a reporting company under the Exchange Act (as defined
below), or the Employee is not a “specified employee” for purposes of Section
409A(a)(2)(B)(i) of the Internal Revenue Code of 1986, as amended (the “Code”);
however, if at the time the Company terminates Employee’s employment under this
Section 7(b), the Company is a reporting company under the Exchange Act and the
Employee is a “specified employee” for purposes of Section 409A(a)(2)(B)(i) of
the Code, then Employee shall be entitled to such sum in a single lump sum on
the first business day that occurs at the end of the period commencing on the
date of termination and ending six months after the last day of the calendar
month in which the date of termination occurs (e.g., if the Company terminates
Employee’s employment on March 15, 2009, the Company will pay the amount
specified herein on the first business day immediately following September 30,
2009).”
7. Termination. Section
7(b)(v) is hereby amended as follows:
(1) To add
the following text immediately following the phrase which reads “...if the
Company is a reporting company under the Securities Exchange Act of 1934, as
amended (the “Exchange Act”)”:
“and the
Employee is a “specified employee” for purposes of Section 409A(2)(B)(i) of the
Code”;
(2) To change
and replace the timing for the grant of Restricted Shares as provided therein
from “the date of such termination” to:
“the
first business day that occurs at the end of the period commencing on the date
of termination and ending six months after the last day of the calendar month in
which the date of termination occurs”; and
(3) To change
and replace the provision regarding vesting in the final phrase therein from
“concurrently with such termination” to “on such date of grant.”
8. Termination. Section
7(b)(vi) is hereby amended to add the following text immediately following the
phrase which reads “...if the Company is not a reporting company under the
Exchange Act”:
“or the
Employee is not a “specified employee” for purposes of Section 409A(a)(2)(B)(i)
of the Code”
9. Termination. There
is hereby added as a new final paragraph to Section 7(b), the
following:
“Notwithstanding
anything in Section 7(b) to the contrary, no amount shall be payable pursuant to
this Section 7(b) unless Employee has incurred a Separation from Service (within
the meaning of Section 409A(a)(2)(A)(i) of the Code, and Treasury Regulation
Section 1.409A-1(h) (“Separation from Service”) by reason of a termination of
the Employee’s employment by the Company under this Section 7(b).”
10. Termination for Good
Reason. Section 8(b)(ii)(B) is hereby amended as
follows:
(1) To reduce
the multiplier stated therein from “200%” to “100%”, and
(2) To add
the following text immediately following the phrase which reads “...the Company
is a reporting company under the Exchange Act”:
“and the
Employee is a “specified employee” for purposes of Section 409A(2)(B)(i) of the
Code”; and
(3) To add
the following text immediately following the phrase which reads “...if the
Company is not a reporting company under the Exchange Act”:
“or the
Employee is not a “specified employee” for purposes of Section 409A(a)(2)(B)(i)
of the Code”
11. Termination for Good
Reason. Section 8(b)(v) is hereby amended as
follows:
(1) To add
the following text immediately following the phrase which reads “...if the
Company is a reporting company under the Exchange Act”:
“and the
Employee is a “specified employee” for purposes of Section 409A(2)(B)(i) of the
Code”;
(2) To change
and replace the timing for the grant of Restricted Shares as provided therein
from “the date of such termination” to:
“the
first business day that occurs at the end of the period commencing on the date
of termination and ending six months after the last day of the calendar month in
which the date of termination occurs”; and
(3) To change
and replace the provision regarding vesting in the final phrase therein from
“concurrently with such termination” to “on such date of grant.”
12. Termination for Good
Reason. Section 8(b)(vi) is hereby amended to add the
following text immediately following the phrase which reads “...if the Company
is not a reporting company under the Exchange Act”:
“or the
Employee is not a “specified employee” for purposes of Section 409A(a)(2)(B)(i)
of the Code”
13. Termination for Good
Reason. There is hereby added as a new final paragraph to
Section 8(b), the following:
“Notwithstanding
anything in Section 8(b) to the contrary, no amount shall be payable pursuant to
this Section 8(b) unless Employee has incurred a Separation from Service by
reason of a termination of the Employee’s employment by the Employee for Good
Reason.”
14. Termination For Good
Reason. Section 8(d) is hereby amended to add the following
phrase at the end of the final sentence thereof:
“;
provided, however, in no event shall such “excise tax gross up payment” be paid
to Employee later than the end of the Employee’s taxable year following the
taxable year in which the Employee remits payment of the excise tax (as provided
in Treasury Regulation Section 1.409A-3(i)(1)(v)).”
15. Gross Up
Provision. Clause (a) of Appendix A is hereby amended to add
the following sentence at the end thereof:
“Notwithstanding
anything in this Appendix A to the contrary, in no event shall such Gross-Up
Payment be paid to Employee later than the end of the Employee’s taxable year
following the taxable year in which the Employee remits payment of the Excise
Tax (as provided in Treasury Regulation Section
1.409A-3(i)(1)(v)).”
16. Gross Up
Provision. Clause (c)(i)(D) of Appendix A is hereby amended to
add the following sentence at the end thereof:
“Any
amounts payable to Employee by the Company under this subsection shall be paid
no later than December 31 of the calendar year following the calendar year in
which the taxes that are the subject of the proceeding are remitted to the
taxing authority, or where as a result of such proceeding no taxes are remitted,
then December 31 of the calendar year following the calendar year in which the
proceeding is completed or there is a final and nonappealable settlement or
other resolution of the proceeding.”
17. Definitions. Terms
used but not defined in this Amendment shall have the respective meanings
assigned to them in the Agreement.
18. Counterparts. This
Amendment may be executed in multiple counterparts, each of which shall be
deemed an original, and all of which shall constitute one
Amendment.
19. Terms and Conditions of
Agreement. Except as specifically amended by this Amendment,
all terms and conditions of the Agreement shall remain in full force and
effect.
IN
WITNESS WHEREOF, this Amendment is executed by the undersigned as of the date
first above written.
/s/
Xxxxxx X. Xxxxxx
Xxxxxx X.
Xxxxxx
CKE
Restaurants, Inc.
By:
/s/ Xxxxx
Xxxxx
Xxxxx
Xxxxx,
Director and Chairman of the
Compensation
Committee of the Board of
Directors
