Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Employment Agreement with Chief Financial Officer
As previously disclosed, on June 2, 2022, El Pollo Loco Holdings, Inc. (the
"Company") appointed Ira Fils as Executive Vice President, Chief Financial
Officer of the Company, effective as of June 27, 2022 (the "Start Date"). On
June 28, 2022, the Company entered into an employment agreement (the "Employment
Agreement") with Mr. Fils. The following summary of the Employment Agreement is
qualified in its entirety by reference to the full text of the Employment
Agreement, a copy of which is filed as Exhibit 10.1 to this Current Report on
Form 8-K and incorporated by reference herein.
The Employment Agreement provides for a term beginning on the Start Date and
ending on the 12th month anniversary of the Start Date, and on such date and on
each subsequent anniversary of such date, the term shall, without further action
by Mr. Fils or the Company, be extended by an additional one-year period subject
to earlier termination as provided in the Employment Agreement (the "Employment
Term").
As previously disclosed, Mr. Fils will receive an annual base salary of
$400,000. Mr. Fils will also be eligible for an annual incentive bonus with a
target amount equal to 75% of his annual base salary based upon the achievement
of specified performance goals as determined by the Company's Board of
Directors. Mr. Fils' annual incentive bonus for fiscal year 2022 will be an
amount equal to or greater than 50% of his target bonus amount. Mr. Fils will
also be eligible for an annual grant of restricted stock and/or stock options
with an aggregate grant date target value of $500,000, subject to the terms and
conditions of the Company's 2021 Equity Incentive Plan and as determined by the
Company's Board of Directors. Mr. Fil's annual equity grant will be made during
the Company's regular equity grant window, which typically occurs in May of each
year. In addition, Mr. Fils will receive an initial grant of restricted stock
units with a grant date value of $500,000 during the first open trading window
after the Start Date, which will vest in four equal annual installments
beginning on the one-year anniversary of the grant date (subject to his
continued employment). Mr. Fils will also be eligible to participate in the
employee benefit plans available to other executives of the Company.
In addition, the Employment Agreement provides that in the event Mr. Fils'
employment is terminated by the Company without "Cause" or by Mr. Fils with
"Good Reason" (as such terms are defined in the Employment Agreement), Mr. Fils
will be entitled to receive (i) any amounts or benefits due under any applicable
plan, program, agreement or arrangement of the Company or pursuant to applicable
law (the "Accrued Rights"), (ii) the annual incentive bonus, if any, that Mr.
Fils would have been entitled to receive pursuant to the Employment Agreement in
respect of the year in which such termination occurs based upon the actual
achievement of the performance goals, prorated for the portion of such year
during which Mr. Fils served, and (iii) his base salary for a period of twelve
(12) months following the date of such termination, and, in the case of (ii) and
(iii), subject to Mr. Fils providing a general release of claims in favor of the
Company and his compliance with certain restrictive covenants.
The Employment Agreement further provides that in the event Mr. Fils' employment
is terminated by the Company for "Cause," if Mr. Fils resigns without "Good
Reason" or if the Employment Term expires due to the delivery by the Company or
Mr. Fils of a "Non-Renewal Notice" (as such terms are defined in the Employment
Agreement), Mr. Fils will be entitled to receive (i) his base salary through the
date of termination, (ii) except in the cause of termination for "Cause," any
annual incentive bonus earned but unpaid as of the date of termination for any
previously completed calendar year, (iii) reimbursement for any reimbursed
business expenses properly incurred by Mr. Fils prior to the date of
termination, (iv) certain employment benefits, if any, as to which Mr. Fils may
be entitled under the Company's employment benefit plans, and (v) the Accrued
Rights.
The Employment Agreement also contains a twelve-month post-termination
non-solicitation of employees or consultants clause and a customary
confidentiality provision.
Item 9.01 Financial Statements and Exhibits.
Exhibit
No. Description
10.1 Employment Agreement, dated June 28, 2022, between El Pollo Loco
Holdings, Inc. and Ira Fils
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document)
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