Employment Agreement - AFC Enterprises Inc. and Gerald J. Wilkins
EMPLOYMENT AGREEMENT
dated as of December 8, 2000 between
AFC Enterprises, Inc. (the "Company") and
Gerald J. Wilkins ("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 premises and mutual covenants
contained herein and for other good and valuable consideration, the parties
agree as follows:
1. Term of Agreement
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This Agreement shall be effective as of the date hereof and, unless earlier
terminated pursuant to Section 8 hereof, shall be for an initial term of two (2)
years (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.
2. Employment
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2.01 Position. Employee shall serve as Executive Vice President and
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Chief Financial Officer 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,
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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.
3. Base Salary.
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Employee's Initials:
GJW
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1
<PAGE>
Beginning on the date hereof and continuing during the term hereof, the
Company shall pay Employee, in equal installments no less frequently than
monthly, a base salary at the rate of no less than Three Hundred Twenty-five
Thousand Dollars ($325,000.00 U.S.) per annum (the "Base Salary"). 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.
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4.01 Annual Plan. The Board of Directors of the Company, acting in its
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sole discretion, shall annually, at or prior to the beginning of each fiscal
year of the Company, approve an annual incentive plan (the "Annual Incentive
Plan") for the senior officers of the Company, including 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
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Pay") for Employee for the fiscal year of the Company ending in 2000 shall be as
follows: $195,000.00 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 2000, 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
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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 105 days following the end of each fiscal year.
4.04 Termination of Employment. If Employee's employment hereunder
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shall terminate other than pursuant to Sections 8.03 or 8.04, the 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.
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Employee's Initials:
GJW
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2
<PAGE>
5.01 Stock Options. The Company has heretofore granted to Employee
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certain nonqualified stock options to purchase shares of the Company's common
stock. As part of the Company's compensation strategy, the Company intends to
grant additional stock options in the future based upon Employee's performance
as determined in the sole discretion of the Board of Directors of the Company.
5.02 Shareholders' Agreement. The Employee has agreed to be bound by the
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terms of the shareholders' agreements (the "Shareholders' Agreements")
heretofore executed by Employee or identified in the stock option agreements
heretofore granted to Employee, copies of which are on file in the records of
the Company, which Shareholders' Agreements shall be applicable to all shares of
common stock issued to Employee upon the exercise of any stock options granted
to Employee before or after the date hereof.
6. Employee Benefits.
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6.01 Executive Flex Perk. Employee shall be entitled to participate in
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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 per year payable in the same manner as Employee's Base Salary is paid.
6.02 Life Insurance. Subject to Section 6.07 below, in the event of
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the death of Employee during the term of his employment with the Company and
after the Company first obtains the Life Insurance Policy described herein, the
Employee's named beneficiary shall be entitled to receive an amount equal to
three (3) times Employee's Base Salary as of the date hereof (the "Death
Benefit") payable solely from, and to the extent of, the death benefit proceeds
payable under such Life Insurance Policy.
(a) As soon as practicable after the execution of this Agreement,
the Company will procure and maintain on the life of Employee life insurance
protection in an amount not less than the Death Benefit determined based upon
the Base Salary in effect as of the date hereof (any and all such policies are
referred to herein, collectively, as the "Life Insurance Policy"). The Company
may, at its option, purchase term or permanent life insurance protection on
Employee. Notwithstanding the foregoing, if the premiums for the Life Insurance
Policy on Employee shall exceed regular, non-rated premiums, the Company may,
but shall have no obligation to, fund such excess premium payments. 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 Life Insurance Policy required herein for
Employee, then Employee shall not be entitled to any benefits whatsoever under
this Section 6.02 except as may otherwise be determined in the discretion of the
Company and set forth in writing.
Employee's Initials:
GJW
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3
<PAGE>
The Company shall have and may exercise all ownership rights in such Life
Insurance Policy, except as provided in this Section 6.02.
(b) Upon issuance of the Life Insurance Policy, the Company and
Employee shall enter into an insurance agreement (the "Insurance Agreement")
which shall specify in detail the relative rights and obligations of the Company
and Employee with respect to the Life Insurance Policy including, but not
limited to, (i) obligations of the Company and the Employee with respect to the
payment of premiums, (ii) designation of beneficiaries, (iii) policy ownership
and the exercise of rights incident thereto and (iv) the relative rights of
Employee and the Company upon Employee's termination of employment.
(c) Except as otherwise provided in this Agreement or the Insurance
Agreement, the obligations of the Company and Employee under this Section 6.02
and the Insurance Agreement shall automatically terminate upon Employee's
termination of employment for any reason prior to his death.
6.03 Disability Insurance.
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(a) The Company shall procure for Employee as soon as practical
after the date hereof and 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
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Employee's Initials:
GJW
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4
<PAGE>
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
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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.
6.06 Vacation. Employee shall be entitled to four (4) weeks paid
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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.
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(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 herein are subject to
reduction or other 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 or as
may be determined by the Chief Executive Officer or the Board of Directors of
the Company, provided that in no event shall any such adjustment exceed the
maximum benefit provided for herein. The initial amount of each such benefit is
set forth on Exhibit A, attached hereto, and such amounts may be increased or
decreased pursuant to the plan or insurance contract pursuant to which such
benefit is being paid or by the Chief Executive Officer or the Board of
Directors at any time or from time to time hereafter and the Employee will be
given written notice of any such change. Anything in this Agreement to the
contrary notwithstanding, the Chief
Employee's Initials:
GJW
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5
<PAGE>
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. Subject to Section 12.04, 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.
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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.
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8.01 Definitions. For purposes of this Section 8, the following terms
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shall have the following meanings:
(a) Cause. The term "Cause" shall mean (i) Employee commits fraud or
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is convicted of a crime involving moral turpitude, (ii) Employee, in carrying
out her 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
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
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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 an aggregate of ninety (90)
calendar days.
8.02 Termination upon Death or Disability. If Employee's employment is
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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 for other than Death or Disability or for Cause. If
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Employee's employment is terminated by the Company other than (i) by reason of
Employee's Initials:
GJW
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6
<PAGE>
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, at the election of the Company, either within thirty (30) days after
the date of Employee's termination of employment or, at the Company's election,
in fifty-two (52) equal installments, payable at the same time and on the same
basis as was the payment of Employee's Base Salary prior to such termination.
8.04 Voluntary Termination by Employee or Termination for Cause.
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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:
(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.
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Upon the occurrence of both of the following events:
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(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 or all of the outstanding shares of Common Stock immediately
prior to such reorganization, merger or consolidation own in the aggregate,
directly
Employee's Initials:
GJW
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7
<PAGE>
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 more
than 50% of the then outstanding shares of Common Stock of the Company in a
single transaction or series of related transactions (a "Change in Control");
and
(b) Within one (1) year of such Change in Control there is a termination of
employment without cause or a material diminution of or change in Employee's
responsibilities or duties, Employee may elect, in writing, within ninety (90)
days following the occurrence of such events, to terminate this Agreement and
his employment with the Company will terminate, effective thirty (30) days after
the Company's receipt of such notice. In such event Employee shall be deemed to
have been terminated by the Company other than for Cause and all amounts payable
to Employee pursuant to Section 8.03 shall become immediately due and payable.
A Change in Control of the Company shall not be deemed to occur by reason
of any public offering of the Common Stock of the Company.
Notwithstanding any other provision contained in this Agreement, if the
aggregate of the payments provided for in this Agreement which result from
Employee's election to terminate his employment under this Section 9 and the
other payments and benefits which the Employee has the right to receive from the
Company as a result thereof (the "Total Payments") would constitute a "parachute
payment," as defined in Section 280G(b)(2) of the Internal Revenue Code of 1986,
as amended (the "Code"), the Employee shall receive, instead of the Total
Payments, an increased amount (the "Gross Up Total") equal to the product of (x)
the Total Payments and (y) a fraction, the numerator of which is 1 and the
denominator of which is 1 minus the maximum effective combined tax rate with
respect to all federal, state, and local income taxes payable by the Employee
under Code Section 4999 (the "Excise Taxes"). It is the intention of this
provision that the Gross Up Total minus the Excise Taxes shall equal the Total
Payments and this provision shall be read and interpreted accordingly.
Except as expressly contemplated by this Agreement, or in any other
agreement referred to in Section 5 hereof, no merger, reorganization,
recapitalization, sale of stock, sale of assets or other change in the capital
structure of the Company or in the identity of the legal or beneficial owners of
the Company shall affect the rights or obligations of the Company or Employee
hereunder.
10. Confidentiality and Non-Competition.
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10.01 Definitions. For purposes of this Section 10, the following
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terms shall have the following meanings:
Employee's Initials:
GJW
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8
<PAGE>
"Affiliate" means any corporation, limited liability company,
partnership or other entity of which the Company owns at least fifty percent
(50%) of the outstanding equity and voting rights, directly or indirectly,
through any other corporation, limited liability company, partnership or other
entity.
"Businesses" means the businesses engaged in by the Company directly
or through its Affiliates immediately prior to termination of employment.
"Confidential Information" means information which does not rise to
the level of a Trade Secret, but is valuable to the Company or any Affiliate and
provided in confidence to Employee.
"Proprietary Information" means, collectively, Trade Secrets and
Confidential Information.
"Restricted Period" means the period commencing as of the date hereof
and ending on that date two years (2) year after the termination of Employee's
employment with the Company for any reason, whether voluntary or involuntary.
"Trade Secrets" means information which derives economic value, actual
or potential, from not being generally known to, and not being readily
ascertainable by proper means by, other persons who can obtain economic value
from its disclosure or use, and is the subject of efforts that are reasonable
under the circumstances to maintain its secrecy.
10.02 Covenant Not-To-Disclose. The Company and Employee recognize that,
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during the course of Employee's employment with the Company, the Company has
disclosed and will continue to disclose to Employee Proprietary Information
concerning the Company and the Affiliates, their products, their franchisees,
their services and other matters concerning their Businesses, all of which
constitute valuable assets of the Company and the Affiliates. The Company and
Employee further acknowledge that the Company has, and will, invest considerable
amounts of time, effort and corporate resources in developing such valuable
assets and that disclosure by Employee of such assets to the public shall cause
irreparable harm, damage and loss to the Company and the Affiliates.
Accordingly, Employee acknowledges and agrees:
(a) that the Proprietary Information is and shall remain the exclusive
property of the Company (or the applicable Affiliate);
(b) to use the Proprietary Information exclusively for the purpose of
fulfilling the obligations under this Agreement;
Employee's Initials:
GJW
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9
<PAGE>
(c) to return the Proprietary Information, and any copies thereof, in
his possession or under his control, to the Company (or the applicable
Affiliate) upon request of the Company (or the Affiliate), or expiration or
termination of Employee's employment hereunder for any reason; and
(d) to hold the Proprietary Information in confidence and not copy,
publish or disclose to others or allow any other party to copy, publish or
disclose to others in any form, any Proprietary Information without the prior
written approval of an authorized representative of the Company.
The obligations and restrictions set forth in this Section 10.02 shall survive
the expiration or termination of this Agreement, for any reason, and shall
remain in full force and effect as follows:
(x) as to Trade Secrets, indefinitely, and
(y) as to Confidential Information, for a period of two (2) years
after the expiration or termination of this Agreement for any reason.
The confidentiality, property, and proprietary rights protections
available in this Agreement are in addition to, and not exclusive of, any and
all other corporate rights, including those provided under copyright, corporate
officer or director fiduciary duties, and trade secret and confidential
information laws. The obligations set forth in this Section 10.02 shall not
apply or shall terminate with respect to any particular portion of the
Proprietary Information which (i) was in Employee's possession, free of any
obligation of confidence, prior to his receipt from the Company or its
Affiliate, (ii) Employee establishes the Proprietary Information is already in
the public domain at the time the Company or the Affiliate communicates it to
Employee, or becomes available to the public through no breach of this Agreement
by Employee, or (iii) Employee establishes that he received the Proprietary
Information independently and in good faith from a third party lawfully in
possession thereof and having no obligation to keep such information
confidential.
10.03 Covenant of Non-Disparagement and Cooperation. Employee agrees
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that he shall not at any time during or following the term of this Agreement
make any remarks disparaging the conduct or character of the Company or the
Affiliates or any of the Company's or the Affiliates' current or former agents,
employees, officers, directors, successors or assigns (collectively the "Related
Parties"). In addition, Employee agrees to cooperate with the Related Parties,
at no extra cost, in any litigation or administrative proceedings (e.g., EEOC
charges) involving any matters with which Employee was involved during
Employee's employment with the Company. The Company shall reimburse Employee for
travel expenses approved by the Company or the Affiliates incurred in providing
such assistance.
Employee's Initials:
GJW
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10
<PAGE>
10.04 Covenant Not-To-Induce. Employee covenants and agrees that
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during the Restricted Period, he will not, directly or indirectly, on his own
behalf or in the service or on behalf of others, hire, solicit, take away or
attempt to hire, solicit or take away any person who is or was an employee of
the Company or any Affiliate during the one (1) year period preceding the
termination of Employee's employment.
10.05 Remedies. The Company and Employee expressly agree that a
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violation of any of the covenants contained in subsections 10.02 through and
including 10.04 of this Section 10, or any provision thereof, shall cause
irreparable injury to the Company and that, accordingly, the Company shall be
entitled, in addition to any other rights and remedies it may have at law or in
equity, to an injunction enjoining and restraining Employee from doing or
continuing to do any such act and any other violation or threatened violation of
said Sections 10.02 through and including 10.04 hereof.
10.06 Severability. In the event any provision of this Agreement shall
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be found to be void, the remaining provisions of this Agreement shall
nevertheless be binding with the same effect as though the void part were
deleted; provided, however, if subsections 10.02 through and including 10.04 of
this Section 10 shall be declared invalid, in whole or in part, Employee shall
execute, as soon as possible, a supplemental agreement with the Company,
granting the Company, to the extent legally possible, the protection afforded by
said subsections. It is expressly understood and agreed by the parties hereto
that the Company shall not be barred from enforcing the restrictive covenants
contained in each of subsections 10.02 through and including 10.04, as each are
separate and distinct, so that the invalidity of any one or more of said
covenants shall not affect the enforceability and validity of the other
covenants.
10.07 Ownership of Property. Employee agrees and acknowledges that all
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works of authorship and inventions, including but not limited to products,
goods, know-how, Trade Secrets and Confidential Information, and any revisions
thereof, in any form and in whatever stage of creation or development, arising
out of or resulting from, or in connection with, the services provided by
Employee to the Company or any Affiliate under this Agreement are works made for
hire and shall be the sole and exclusive property of the Company or such
Affiliate. Employee agrees to execute such documents as the Company may
reasonably request for the purpose of effectuating the rights of the Company or
the Affiliate in any such property.
10.08 No Defense. The existence of any claim, demand, action or cause
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of action of the Employee against the Company shall not constitute a defense to
the enforcement by the Company of any of the covenants or agreements herein.
11. Indemnification.
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Employee's Initials:
GJW
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11
<PAGE>
11.01 Company Obligations. The Company hereby indemnifies and agrees
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to hold harmless Employee, to the extent allowed by applicable law, against all
liabilities, obligations, claims, demands, actions, causes of action, lawsuits,
judgments, expenses and costs, including but not limited to the reasonable costs
of investigation and attorney's fees, incurred by the Employee as a result of
any threat, demand, claim action or lawsuits, made, instituted or initiated
against the Employee, which arises out of, results from or relates to this
Agreement or any action taken by Employee in the course of performance of
Employee's duties hereunder, except for Employee's own gross negligence or
willful misconduct.
11.02 Notice and Defense of Claim. If any claim suit or other legal
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proceeding shall be commenced, or any claim or demand be asserted against the
Employee and Employee desires indemnification pursuant to this paragraph, the
Company shall be notified to such effect with reasonable promptness and shall
have the right to assume at its full cost and expense the entire control of any
legal proceeding, subject to the right of the Employee to participate at his
full cost and expense and with counsel of his choice in the defense, compromise
or settlement thereof. The Employee shall cooperate fully in all respects with
the Company in any such defense, compromise or settlement, including, without
limitation, making available to the Company all pertinent information under the
control of the Employee. The Company may compromise or settle any such action,
suit, proceeding, claim or demand without Employee's approval so long as the
Company obtains for Employee's benefit a release of liability with respect to
such claim from the claimant and the Company assumes and agrees to pay any
amounts due with respect to such settlement. In no event shall the Company be
liable for any settlement entered into by the Employee without the Company's
prior written consent.
11.03 Survival. The provisions of this paragraph 12 shall survive the
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termination of this Agreement for a period of four (4) years, unless Employee is
terminated for Cause, in which event the provisions of this Section 11 shall not
survive termination of this Agreement.
12. Dispute Resolution
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12.01 Agreement to Arbitrate. In consideration for his continued
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employment with the Company, and other consideration, the sufficiency of which
is hereby acknowledged, but subject to Section 6.07(b) above, Employee
acknowledges and agrees that any controversy or claim arising out of or relating
to Employees employment, termination of employment, or this Agreement including,
but not limited to, controversies and claims that are protected or covered by
any federal, state, or local statute, regulation or common law, shall be settled
by arbitration pursuant to the Federal Arbitration Act. This includes, but is
not limited to, violations or alleged violations of any federal or state statute
or common law (including, but not limited to, the laws of the United States or
of any state, or the Constitution of the United States or of any state), or of
any other law, statute,
Employee's Initials:
GJW
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12
<PAGE>
ordinance, including but not limited to, the Age Discrimination in Employment
Act, Title VII of the Civil Rights Act of 1964, as amended, the Americans with
Disabilities Act, the Equal Pay Act, the Employee Retirement Income Security
Act, the Rehabilitation Act of 1973, and any other statute or common law. This
provision shall not, however, preclude the Company from seeking equitable relief
as provided in Section 10.06 of this Agreement.
12.02 Procedure. The arbitration shall be conducted in accordance with
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the Employment Arbitration Rules of the American Arbitration Association: a
single arbitrator who is experienced in employment law shall be selected under
those Rules, and the arbitration shall be initiated in Atlanta, Georgia, unless
the parties agree in writing to a different location or the Arbitrator directs
the arbitration to be held at a different location. Except for filing fees, all
costs of the arbitrator shall be allocated by the arbitrator. The award rendered
by the arbitrator shall be final and binding on the parties hereto and judgment
thereon may be entered in any court having jurisdiction thereof. In addition to
that provided for in the Employment Arbitration Rules, the arbitrator has sole
discretion to permit discovery consistent with the Federal Rules of Civil
Procedure and the judicial interpretation of those rules upon request by any
party; provided, however, it is the intent of the parties that the arbitrator
limit the time and scope of any such discovery to the greatest extent
practicable and provide a decision as rapidly as possible given the
circumstances of the claims to be determined. The arbitrator also shall have the
power and authority to grant injunctive relief for any violation of Sections
10.02 through and including 10.04 and the arbitrator's order granting such
relief may be entered in any court of competent jurisdiction. The agreement to
arbitrate any claim arising out of the employment relationship or termination of
employment shall not apply to those claims which cannot be made subject to this
provision by statute, regulation or common law. These include, but are not
limited to, any claims relating to work related injuries and claims for
unemployment benefits under applicable state laws.
12.03 Rights of Parties. Nothing in this clause shall be construed to
------------------
prevent the Company from asking a court of competent jurisdiction to enter
appropriate equitable relief to enjoin any violation of this Agreement by
Employee. The Company shall have the right to seek such relief in connection
with or apart from the parties' rights under this clause to arbitrate all
disputes. With respect to disputes arising under this Agreement that are
submitted to a court rather than an arbitrator, including actions to compel
arbitration or for equitable relief in aid of arbitration, the parties agree
that venue and jurisdiction are proper in any state or federal court lying
within Atlanta, Georgia and specifically consent to the jurisdiction and venue
of such court for the purpose of any proceedings contemplated by this paragraph.
By entering into this Agreement the parties have waived any right which may
exist for a trial by jury and have expressly agreed to resolve any disputes
covered by this Agreement through the arbitration process described herein.
Employee's Initials:
GJW
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<PAGE>
12.04 Employee Benefit Plan Issues. With respect to any benefits provided
-----------------------------
to Employee hereunder which may be subject to the provisions of the Employee
Retirement Income Security Act of 1974, as amended (the "Covered Plans"), and
notwithstanding Section 6.07(b) above, the adjudication of any claims under the
Covered Plans shall be administered in accordance with the terms and conditions
of such Covered Plan. If the Covered Plan does not contain a claims adjudication
provision then, if for any reason, a claim for benefits under a Covered Plan is
denied by the Company, the Company shall deliver to the Employee or his
representative (the "claimant") a written explanation setting forth the specific
reasons for the denial, pertinent references to the Agreement section or section
of the Covered Plan on which the denial is based, such other data as may be
pertinent and information on the procedures to be followed by the claimant in
obtaining a review of his claim, all written in a manner calculated to be
understood by the claimant. For this purpose: (A)The claimant's claim shall be
deemed filed when presented orally or in writing to the individual at the
Company then performing the duties currently being performed by the individual
in charge of the People Services and Development Department (the "Claims
Manager"). (B) The Claims Manager's explanation shall be in writing delivered to
the claimant within 90 days of the date the claim is filed. The claimant shall
have 60 days following his receipt of the denial of the claim to file with the
Claim's Manager a written request for review of the denial. The claimant or his
representative may review pertinent documents related to this Agreement and in
the Claim's Manager's possession in order to prepare the request for review. The
Claims Manager shall decide the issue on review and furnish the claimant with a
copy of its decision within 60 days of receipt of the claimant's request for
review of his claim. The decision on review shall be in writing and, if denied,
shall include specific reasons for the decision, written in a manner calculated
to be understood by the claimant, as well as specific references to the
pertinent provisions on which the decision is based. If a copy of the decision
is not so furnished to the claimant within such 60 days, the claim shall be
deemed denied on review. Any payment to a claimant shall to the extent thereof
be in full satisfaction of all claims hereunder against the Company and the
Claims Manager, either of whom may require such claimant, as a condition to such
payment, to execute a receipt and release therefor in such form as shall be
determined by the Company and the Claims Manager. If a receipt and release is
required by the claimant and the claimant does not provide such receipt and
release in a timely enough manner to permit a timely distribution in accordance
with the general timing of distribution provisions in this Agreement, the
payment of any affected distribution may be delayed until the Company and the
Claims Manager receive a proper receipt and release.
13. Employee Acknowledgment.
------------------------
By signing this Agreement, Employee acknowledges that the Company has
advised Employee of his right to consult with an attorney prior to executing
this Agreement; that he has the right to retain counsel of his own choosing
concerning the agreement to arbitrate or any waiver of rights or claims; that he
has read and
Employee's Initials:
GJW
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14
<PAGE>
fully understands the terms of this Agreement and/or has had the right to have
it reviewed and approved by counsel of choice, with adequate opportunity and
time for such review; and that he is fully aware of its contents and of its
legal effect. Accordingly, this Agreement shall not be construed against any
party on the grounds that the party drafted this Agreement. Instead, this
Agreement shall be interpreted as though drafted equally by all parties.
14. Amendments.
-----------
This Agreement may not be altered, modified or amended except by a written
instrument signed by each of the parties hereto.
15. Successors.
-----------
As used in this Agreement, the term the Company shall include any
successors to all or substantially all of the business and/or assets of the
Company which assumes and agrees to perform this Agreement.
16. Assignment.
-----------
Neither this Agreement nor any of the rights or obligations of either party
hereunder shall be assigned or delegated by any party hereto without the prior
written consent of the other party, except that the Company may without the
consent of Employee assign its rights and delegate its duties hereunder to any
successor to the business of the Company. In the event of the assignment by the
Company of its rights and the delegation of its duties to a successor to the
business of the Company and the assumption of such rights and obligations by
such successor, the Company shall, effective upon such assumption, be relieved
from any and all obligations whatsoever to Employee hereunder.
17. Waiver.
-------
Waiver by any party hereto of any breach or default by any other party of
any of the terms of this Agreement shall not operate as a waiver of any other
breach or default, whether similar to or different from the breach or default
waived.
18. Severability.
-------------
In the event that any one or more of the provisions of this Agreement shall
be or become invalid, illegal or unenforceable in any respect, the validity,
legality and enforceability of the remaining provisions contained herein shall
not be affected thereby.
19. Survival.
---------
Employee's Initials:
GJW
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15
<PAGE>
Notwithstanding anything herein to the contrary, the provisions of Sections
6.07, 7, 8.03, 9, 10, and 12 shall survive the termination of this Agreement.
20. Entire Terms.
-------------
This Agreement contains the entire understanding of the parties with
respect to the employment of Employee by the Company. There are no restrictions,
agreements, promises, warranties, covenants or undertakings other than those
expressly set forth herein. This Agreement supersedes all prior agreements,
arrangements and understandings between the parties, whether oral or written,
with respect to the employment of Employee.
21. Notices.
--------
Notices and all other communications provided for in this Agreement shall
be in writing and shall be deemed to have been duly given when personally
delivered or when mailed by United States registered mail, return receipt
requested, postage prepaid, addressed as follows:
If to Employee:
Gerald J. Wilkins
2790 Carmon on Wesley
Atlanta, GA 30327
If to the Company to:
AFC Enterprises, Inc.
Six Concourse Parkway
Suite 1700
Atlanta, Georgia 30328-5352
Attn: Legal Department
or to such other address or such other person as Employee or the Company shall
designate in writing in accordance with this Section 21 except that notices
regarding changes in notices shall be effective only upon receipt.
22. Headings.
---------
Headings to Sections in this Agreement are for the convenience of the
parties only and are not intended to be a part of, or to affect the meaning or
interpretation of, this Agreement.
23. Governing Laws.
---------------
Employee's Initials:
GJW
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16
<PAGE>
The Agreement shall be governed by the laws of the State of Georgia without
reference to the principles of conflict of laws.
IN WITNESS WHEREOF, the Company has caused this Agreement to be executed
and Employee has hereunto set his hand as of the day and year first above
written.
COMPANY:
AFC ENTERPRISES, INC.
By: /s/ Frank J. Belatti
---------------------------------
Frank J. Belatti
Chairman & Chief Executive Officer
EMPLOYEE:
/s/ Gerald J. Wilkins
--------------------------------------
Gerald J. Wilkins
Employee's Initials:
GJW
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17