Employment Agreement with ANDREW F. PUZDER 01/04
First Amendment 02/01/05
Second Amendment 12/06/05
Third Amendment 10/12/06
Amendment 4 to Employment Agreement
 
                              EMPLOYMENT AGREEMENT
 
         THIS EMPLOYMENT AGREEMENT (the "Agreement") is entered into as of
January____________________, 2004 by and between CKE RESTAURANTS, INC., a
Delaware corporation (the "Company"), and ANDREW F. PUZDER (the "Employee").
 
                                   RECITALS:
 
         A.       The Company and Employee heretofore entered into an Employment
Agreement dated April 9, 1999, which was amended on January 3, 2001
(collectively, the "Prior Employment Agreement").
 
         B.       The Prior Employment Agreement expires on April 4, 2004, and
this Agreement shall become effective concurrently with such expiration on such
date (the "Effective Date").
 
         C.       The Company and Employee desire to supersede the Prior
Employment Agreement with this Agreement, all effective as of the Effective
Date.
 
         NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth herein, the parties agree as follows:
 
         1.       Employment and Duties. Subject to the terms and conditions of
this Agreement, the Company employs the Employee to serve in an executive and
managerial capacity as President and Chief Executive Officer of the Company, and
the Employee accepts such employment and agrees to perform such reasonable
responsibilities and duties commensurate with the aforesaid positions as
directed by the Company's Board of Directors or as set forth in the Articles of
Incorporation and the Bylaws of the Company. Any change in such titles or
delegation of duties inconsistent with such titles without the consent of
Employee shall be deemed a termination without cause under Section 7(b) below.
 
         2.       Term. The term of this Agreement shall commence on the
Effective Date and shall terminate on April 9, 2007, subject to prior
termination as set forth in Section 7 below (the "Term"), The Term may be
extended at any time upon mutual written agreement of the parties.
 
         3.       Salary. Commencing on the Effective Date, and subject to the
other provisions of this Agreement, the Company shall pay the Employee a minimum
base annual salary of $800,000. The Compensation Committee of the Company's
Board of Directors may, from time to time after the Effective Date, increase
such salary in its sole discretion.
 
         4.       Other Compensation and Fringe Benefits. In addition to any
executive bonus, pension, deferred compensation and stock option grants which
the Company may from time to time make available to the Employee upon mutual
agreement, the Employee shall be entitled to the following:
 
                  (a)      The standard Company benefits enjoyed by the
Company's other top executives;
 
                  (b)      Payment by the Company of the Employee's initiation
and membership dues in a social and/or recreational club as deemed necessary and
appropriate by the Employee (and pre-
 
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approved by the Company at the Company's discretion) to maintain various
business relationships on behalf of the Company; provided, however, that the
Company shall not be obligated to pay for any of the Employee's personal
purchases and expenses at such club;
 
                  (c)      Provision by the Company during the Term and any
extensions thereof to the Employee and his dependents of the medical and other
insurance coverage provided by the Company to its other top executives. In
addition, the Company will reimburse Employee for all medical, dental and vision
care expenses incurred by the Employee and his dependents that are not otherwise
reimbursed or covered by the base health insurance plan;
 
                  (d)      Provision by the Company of supplemental disability
insurance sufficient to provide two-thirds of the Employee's pre-disability
minimum base annual salary for a two-year period;
 
                  (e)      For the fiscal years ending in January 2005, 2006 and
2007, Employee and the Compensation Committee of the Board of Directors shall,
prior to the commencement of each such fiscal year, agree upon a reasonable
Target Income (as defined below) for such fiscal year. Employee shall then earn
an annual bonus for each such fiscal year determined as follows:
 
                           (i)      If Actual Income (as defined below) is below
80% of Target Income, no bonus shall be earned,
 
                           (ii)     If Actual Income is 80% of Target Income,
Employee shall receive a bonus equal to 50% of his minimum base annual salary in
effect on the last day of such fiscal year (the "Current Base").
 
                           (iii)    If Actual Income is greater than 80%, but
less than 100%, of Target Income, Employee shall receive a bonus equal to the
Current Base multiplied by the percentage determined as follows:
 
                        50% + [% in excess of 80% x 50%]
                               ------------------
                                       20
 
                           (iv)     If Actual Income is 100% of Target Income,
Employee shall receive a bonus equal to 100% of Current Base.
 
                           (v)      If Actual Income is greater than 100%, but
less than 120%, of Target Income, Employee shall receive a bonus equal to the
Current Base multiplied by the percentage determined as follows:
 
                       100% + [% in excess of 100% x 100%]
                               ------------------
                                       20
 
                           (vi)     If Actual Income is 120% or greater of
Target Income, Employee shall receive a bonus equal to 200% of Current Base.
 
The annual bonus shall be paid within 90 days after the end of the fiscal year.
For purposes hereof, (a) "Actual Income" shall be "Income (loss) before income
taxes, discontinued operations and cumulative effect of accounting change for
goodwill", as reflected on the Company's Consolidated Statement of Operations
for the applicable fiscal year; provided, however, that if there are write-offs
 
                                       2
<PAGE>
 
of goodwill or other extraordinary items included therein, such write-offs shall
be added back to Actual Income; and (b) "Target Income" shall be the targeted
Actual Income for the applicable fiscal year. Nothing in this subsection (e)
shall prevent the Compensation Committee from paying to Employee any other bonus
as and when the Compensation Committee believes that such other bonus is
warranted.
 
         The Company shall deduct from all compensation payable under this
Agreement to the Employee any taxes or withholdings the Company is required to
deduct pursuant to state and federal laws or by mutual agreement between the
parties.
 
         5.       Vacation. For and during each year of the Term and any
extensions thereof, the Employee shall be entitled to reasonable paid vacation
periods consistent with his positions with the Company and in accordance with
the Company's standard policies, or as the Company's Board of Directors may
approve. In addition, the Employee shall be entitled to such holidays consistent
with the Company's standard policies or as the Company's Board of Directors may
approve.
 
         6.       Expense Reimbursement. In addition to the compensation and
benefits provided herein, the Company shall, upon receipt of appropriate
documentation, reimburse the Employee each month for his reasonable travel,
lodging, entertainment, promotion and other ordinary and necessary business
expenses in accordance with the Company's policies then in effect.
 
         7.       Termination.
 
                  (a)      For Cause. The Company may terminate this Agreement
immediately for cause upon written notice to the Employee, in which event the
Company shall be obligated only to pay the Employee that portion of the minimum
base annual salary due him through the date of termination. Cause shall be
limited to (i) the persistent failure to perform duties consistent with a
commercially reasonable standard of care; (ii) the willful neglect of duties;
(iii) criminal or other illegal activities involving dishonesty; or, (iv) a
material breach of this Agreement.
 
                  (b)      Without Cause. Either party may terminate this
Agreement immediately without cause by giving written notice to the other. If
the Company terminates under this Section 7(b), then it shall pay to the
Employee the sum of (i) all amounts owed through the date of termination, plus
(ii) an amount equal to the product of the Employee's minimum base annual salary
in effect as of the date of termination times either the number of years
(including partial years) remaining in the Term, or the number one, whichever is
greater, plus (iii) an amount equal to 200% of the Employee's minimum base
annual salary in effect as of the date of termination times the number of years
under Section 4(e) for which an annual bonus had not yet been calculated (e.g.,
if such termination occurs on December 1, 2004, the number is three, and if on
December 1, 2005, the number is two, and if on December 1, 2006, the number is
one). Such payment to be made in a lump sum on or before the fifth day following
the date of termination, or as otherwise directed by the Employee, and shall be
in lieu of all further payments of salary and bonus under this Agreement. In
addition, if the Company terminates under this Section 7(b), (i) all options
granted to the Employee which had not vested as of the date of such termination
shall vest concurrently with such termination, and, notwithstanding the terms of
any option agreements, Employee may exercise any vested options, including by
reason of acceleration, for a period after such termination which is the greater
of what is provided in the respective option agreement or 30 days, and (ii) the
Company shall maintain in full force and effect for the continued benefit of the
Employee for the remainder of the Term, all employee benefit plans (except for
the Company's stock option plans) and programs in
 
                                       3
<PAGE>
 
which the Employee was entitled to participate immediately prior to the date of
termination, provided that the Employee's continued participation is possible
under the general terms and provisions of such plans and programs. In the event
that the Employee's participation in any such plan or program is prohibited, the
Company shall, at its expense, arrange to provide the Employee with benefits
substantially similar to those which the Employee would otherwise have been
entitled to receive under such plans and programs from which his continued
participation is prohibited. If the Employee terminates under this Section 7(b),
then the Company shall only be obligated to pay the Employee the minimum annual
base salary due him through the date of termination.
 
                  (c)      Disability. If the Employee fails to perform his
duties hereunder on account of illness or other incapacity for a period of six
consecutive months, then the Company shall have the right upon written notice to
the Employee to terminate this Agreement without further obligation by paying
the Employee the minimum base annual salary, without offset, for the remainder
of the Term in a lump sum or as otherwise directed by the Employee.
 
                  (d)      Death. If the Employee dies during the Term, then
this Agreement shall terminate immediately and the Employee's legal
representatives shall be entitled to receive the minimum annual base salary for
the remainder of the Term in a lump sum or as otherwise directed by the
Employee's legal representative. Executive's outstanding Company options will
immediately vest in full and be exercisable for a period of 90 days from
Employee's death.
 
                  (e)      Effect of Termination. Termination for any reason or
for no reason shall not constitute a waiver of the Company's rights under this
Agreement nor a release of the Employee from any obligation hereunder except his
obligation to perform his day-to-day duties as an employee.
 
                  (f)      Mitigation. Employee shall not be required to
mitigate the amount of any payment provided for in this Section 7 by seeking
other employment or otherwise, nor shall any compensation or other payments
received by the Employee after the date of termination reduce any payments due
under this Section 7.
 
         8.       Severance Payment.
 
                  (a)      The Employee may terminate his employment hereunder
for "Good Reason", which, for purposes of this Agreement, shall mean (i)
Employee is required to relocate from Santa Barbara County, California, to
perform his duties under this Agreement without his consent, or (ii) a "change
in control of the Company." A "change in control of the Company" shall, for
purposes of this Agreement, be deemed to have occurred if (i) there shall be
consummated (x) any consolidation or merger of the Company in which the holders
of the Company's Common Stock immediately prior to the merger own less than 50%
of the voting securities of the surviving corporation immediately after the
merger, or (y) any sale, lease, exchange or other transfer (in one transaction
or a series of related transactions) of all, or substantially all, of the assets
of the Company, or (ii) the stockholders of the Company approve any plan or
proposal for the liquidation or dissolution of the Company, or (iii) any
"person" (as that term is used in Sections 13(d) and 14(d) of the Securities
Exchange Act of 1934 (the "Exchange Act")), other than the Company or any
"person" who, on the date hereof, is a director or officer of the Company, is or
becomes the "beneficial owner" (as defined in Rule 13d-3 under the Exchange
Act), of securities of the Company representing 30% or more of the combined
voting power of the Company's then outstanding securities, or (iv) during any
period of two (2) consecutive years during the Term or any extensions thereof,
individuals, who, at the beginning of such period, constitute the Board of
Directors, cease for any reason to constitute at least a majority
 
                                       4
<PAGE>
 
thereof, unless the election of each director who was not a director at the
beginning of such period has been approved in advance by directors representing
at least two-thirds of the directors then in office who were directors at the
beginning of the period. The Employee may only terminate this Agreement for Good
Reason during the period commencing 60 days and expiring 365 days after such
change in control.
 
                  (b)      If the Employee terminates his employment for Good
Reason, or, if after a change in control of the Company, the Company shall
terminate the Employee's employment in breach of this Agreement or pursuant to
Section 7(b), then, in lieu of and notwithstanding Section 7 above:
 
                           (i)      the Company shall pay the Employee his
minimum base annual salary due him through the date of termination;
 
                           (ii)     in lieu of any further salary and bonus
payments or other payments due to the Employee for periods subsequent to the
date of termination, the Company shall pay, as severance to the Employee, the
sum of (A) an amount equal to the product of the Employee's minimum base annual
salary in effect as of the date of termination times either the number of years
(including partial years) remaining in the Term or the number one, whichever is
greater, plus (B) an amount equal to 200% of the Employee's minimum base annual
salary in effect as of the date of termination times the number of years under
Section 4(e) for which an annual bonus had not yet been calculated (e.g., if
such termination occurs on December 1, 2004, the number is three, and if on
December 1, 2005, the number is two, and if on December 1, 2006, the number is
one), such payment to be made in a lump sum on or before the fifth day following
the date of termination;
 
                           (iii)    all options granted to the Employee which
had not vested as of the date of such termination shall vest concurrently with
such termination; and
 
                           (iv)     the Company shall maintain in full force and
effect, for the continued benefit of the Employee for the number of years
(including partial years) remaining in the Term, all employee benefit plans
(except for the Company's stock option plans) and programs in which the Employee
was entitled to participate immediately prior to the date of termination,
provided that the Employee's continued participation is possible under the
general terms and provisions of such plans and programs. In the event that the
Employee's participation in any such plan or program is prohibited, the Company
shall, at its expense, arrange to provide the Employee with benefits
substantially similar to those which the Employee would otherwise have been
entitled to receive under such plans and programs from which his continued
participation is prohibited.
 
                  (c)      The Employee shall not be required to mitigate the
amount of any payment provided for in this Section 8 by seeking other employment
or otherwise, nor shall any compensation or other payments received by the
Employee after the date of termination, reduce any payments due under this
Section 8.
 
                  (d)      Notwithstanding anything to the contrary herein, if
and to the extent any payment made under this Agreement, either alone or in
conjunction with other payments Employee has the right to receive either
directly or indirectly from the Company, which would constitute an "excess
parachute payment" under Section 280G of the Internal Revenue Code of 1986, as
amended, then Employee shall be entitled to receive an excise tax gross-up
payment not exceeding one million dollars ($1,000,000) in accordance with
Appendix A.
 
                                       5
<PAGE>
 
         9.       Non-Delegation of Employee's Rights. The obligations, rights
and benefits of the Employee hereunder are personal and may not be delegated,
assigned or transferred in any manner whatsoever, nor are such obligations,
rights or benefits subject to involuntary alienation, assignment or transfer.
 
         10.      Confidential Information. The Employee acknowledges that in
his capacity as an employee of the Company he will occupy a position of trust
and confidence and he further acknowledges that he will have access to and learn
substantial information about the Company and its operations that is
confidential or not generally known in the industry, including, without
limitation, information that relates to purchasing, sales, customers, marketing,
and the Company's financial position and financing arrangements. The Employee
agrees that all such information is proprietary or confidential, or constitutes
trade secrets and is the sole property of the Company. The Employee will keep
confidential, and will not reproduce, copy or disclose to any other person or
firm, any such information or any documents or information relating to the
Company's methods, processes, customers, accounts, analyses, systems, charts,
programs, procedures, correspondence or records, or any other documents used or
owned by the Company, nor will the Employee advise, discuss with or in any way
assist any other person, firm or entity in obtaining or learning about any of
the items described in this Section 10. Accordingly, the Employee agrees that
during the Term and at all times thereafter he will not disclose, or permit or
encourage anyone else to disclose, any such information, nor will he utilize any
such information, either alone or with others, outside the scope of his duties
and responsibilities with the Company.
 
         11.      Non-Competition During Employment Term. The Employee agrees
that, during the Term and any extensions thereof, he will devote substantially
all his business time and effort, and give undivided loyalty, to the Company,
and that he will not engage in any way whatsoever, directly or indirectly, in
any business that is competitive with the Company or its affiliates, nor
solicit, or in any other manner work for or assist any business which is
competitive with the Company or its affiliates. In addition, during the Term and
any extensions thereof, the Employee will undertake no planning for or
organization of any business activity competitive with the work he performs as
an employee of the Company, and the Employee will not combine or conspire with
any other employee of the Company or any other person for the purpose of
organizing any such competitive business activity.
 
         12.      Non-Competition After Employment Term. The parties acknowledge
that the Employee will acquire substantial knowledge and information concerning
the business of the Company and its affiliates as a result of his employment.
The parties further acknowledge that the scope of business in which the Company
is engaged as of the Effective Date is national and very competitive and one in
which few companies can successfully compete. Competition by the Employee in
that business after this Agreement is terminated would severely injure the
Company. Accordingly, for a period of two years after this Agreement is
terminated or the Employee leaves the employment of the Company for any reason
whatsoever, except as otherwise stated hereinbelow, the Employee agrees (i) not
to become an employee, consultant, advisor, principal, partner or substantial
shareholder of any firm or business that in any way competes with the Company or
its affiliates in any of their presently-existing or then-existing products and
markets; and (ii) not to solicit any person or business that was at the time of
such termination and remains an executive employee of the Company or any of its
affiliates. Notwithstanding any of the foregoing provisions to the contrary, the
Employee shall not be subject to the restrictions set forth in this Section 12
under the following circumstances:
 
                                       6
<PAGE>
 
                  (a)      If the Employee's employment with the Company is
terminated by the Company without cause;
 
                  (b)      If the Employee's employment with the Company is
terminated as a result of the Company's unwillingness to extend the Term of this
Agreement; or
 
                  (c)      If the Employee leaves the employment of the Company
for Good Reason pursuant to Section 8, above.
 
         13.      Return of Company Documents. Upon termination of this
Agreement, Employee shall return immediately to the Company all records and
documents of or pertaining to the Company and shall not make or retain any copy
or extract of any such record or document.
 
         14.      Improvements and Inventions. Any and all improvements or
inventions which the Employee may conceive, make or participate in during the
period of his employment shall be the sole and exclusive property of the
Company. The Employee will, whenever requested by the Company, execute and
deliver any and all documents which the Company shall deem appropriate in order
to apply for and obtain patents for improvements or inventions or in order to
assign and convey to the Company the sole and exclusive right, title and
interest in and to such improvements, inventions, patents or applications.
 
         15.      Actions. The parties agree and acknowledge that the rights
conveyed by this Agreement are of a unique and special nature and that the
Company will not have an adequate remedy at law in the event of a failure by the
Employee to abide by its terms and conditions nor will money damages adequately
compensate for such injury. It is therefore agreed between the parties that, in
the event of a breach by the Employee of any of his obligations contained in
this Agreement, the Company shall have the right, among other rights, to damages
sustained thereby and to obtain an injunction or decree of specific performance
from any court of competent jurisdiction to restrain or compel the Employee to
perform as agreed herein. The Employee agrees that this Section 15 shall survive
the termination of his employment and he shall be bound by its terms at all
times subsequent to the termination of his employment for so long a period as
Company continues to conduct the same business or businesses as conducted during
the Term or any extensions thereof. Nothing herein contained shall in any way
limit or exclude any other right granted by law or equity to the Company.
 
         16.      Amendment; Integration. This Agreement contains, and its terms
constitute, the entire agreement of the parties, and it may be amended only by a
written document signed by both parties to this Agreement. This Agreement
supersedes and replaces the Prior Employment Agreement, which is of no further
force or effect after the Effective Date.
 
         17.      Governing Law. California law shall govern the construction
and enforcement of this Agreement and the parties agree that any litigation
pertaining to this Agreement shall be adjudicated in courts located in
California.
 
         18.      Attorneys' Fees. If any party finds it necessary to employ
legal counsel or to bring an action at law or other proceedings against the
other party to enforce any of the terms hereof, the party prevailing in any such
action or other proceeding shall be paid by the other party its reasonable
attorneys' fees as well as court costs, all as determined by the court and not a
jury.
 
                                       7
<PAGE>
 
         19.      Severability. If any section, subsection or provision hereof
is found for any reason whatsoever, to be invalid or inoperative, that section,
subsection or provision shall be deemed severable and shall not affect the force
and validity of any other provision of this Agreement. If any covenant herein is
determined by a court to be overly broad thereby making the covenant
unenforceable, the parties agree and it is their desire that such court shall
substitute a reasonable judicially enforceable limitation in place of the
offensive part of the covenant and that as so modified the covenant shall be as
fully enforceable as if set forth herein by the parties themselves in the
modified form. The covenants of the Employee in this Agreement shall each be
construed as an agreement independent of any other provision in this Agreement,
and the existence of any claim or cause of action of the Employee against the
Company, whether predicated on this Agreement or otherwise, shall not constitute
a defense to the enforcement by the Company of the covenants in this Agreement.
 
         20.      Notices. Any notice, request, or instruction to be given
hereunder shall be in writing and shall be deemed given when personally
delivered or three days after being sent by United States certified mail,
postage prepaid, with return receipt requested, to the parties at their
respective addresses set for the below:
 
                      To the Company:
 
                               CKE Restaurants, Inc.
                               6307 Carpinteria Avenue, Suite A
                               Carpinteria, CA 93013
                               Attention: General Counsel
 
                      To the Employee:
 
                               Andrew F. Puzder
                               570 Meadow Wood Lane
                               Montecito, California 93108
 
         21.      Waiver of Breach. The waiver by any party of any provisions of
this Agreement shall not operate or be construed as a waiver of any prior or
subsequent breach by the other party.
 
         IN WITNESS WHEREOF the parties have executed this Agreement to be
effective as of the date first set forth above.
 
                                CKE RESTAURANTS, INC.
 
                                By: /s/ Peter Churm
                                    -----------------------------
                                    Peter Churm
                                    Its: Chairman of the Compensation Committee
 
                                EMPLOYEE
 
                                /s/ Andrew F. Puzder
                                --------------------------------------
                                Andrew F. Puzder
 
                                       8
<PAGE>
 
                                   APPENDIX A
                              (GROSS UP PROVISION)
 
         (a)      In the event it is determined (pursuant to (b) below) or
finally determined (as defined in (c)(iii) below) that any payment,
distribution, transfer, benefit or other event with respect to the Company or a
successor, direct or indirect subsidiary or affiliate of the Company (or any
successor or affiliate of any of them, and including any benefit plan of any of
them), and arising in connection with an event described in Section
280G(b)(2)(a)(i) of the Internal Revenue Code of 1986, as amended (the "Code"),
occurring after the Effective Date, to or for the benefit of Employee or
Employee's dependents, heirs or beneficiaries (whether such a payment, transfer,
distribution, benefit or other event occurs pursuant to the terms of this
Agreement or otherwise, but determined without regard to any additional payments
required under this Appendix A) (each a "Payment" and collectively the
"Payments") is or was subject to the excise tax imposed by Section 4999 of the
Code, and any successor provisions or any comparable provisions of state or
local income tax (collectively, "Section 4999"), or any interest, penalty or
addition to tax is or was incurred by Employee with respect to such excise tax
(such excise tax, together with any such interest, penalty, addition to tax, and
costs (including professional fees)) (hereinafter collectively referred to as
the "Excise Tax"), then within 10 days after such determination or final
determination, as the case may be, the Company shall pay to Employee (or to the
applicable taxing authority on Employee's behalf) an additional cash payment
(hereinafter referred to as the "Gross-Up Payment") equal to the lesser of (i)
$1,000,000 or (ii) an amount such that after payment by Employee of all taxes,
interest, penalties, additions to tax and costs imposed or incurred with respect
to the Gross-Up Payment (including, without limitation, any income and excise
taxes imposed upon the Gross-Up Payment), Employee retains an amount of the
Gross-Up Payment equal to the excise tax imposed upon such Payment or Payments.
Subject to the limitations in clause (i) of the preceding sentence, this
provision is intended to put Employee in the same position as Employee would
have been had no Excise Tax been imposed upon or incurred as a result of any
Payment.
 
         (b)      Except as provided in subsection (c) below, the determination
that a payment is subject to an Excise Tax shall be made in writing by a
certified public accounting firm selected by Employee ("Employee's Accountant").
Such determination shall include the amount of the Gross-Up Payment and
detailed computations thereof, including any assumptions used in such
computations (the written determination of the Employee's Accountant,
hereinafter "Employee's Determination"). The Employee's Determination shall be
reviewed on behalf of the Company by a certified accounting firm selected by the
Company (the "Company's Accountant"). The Company shall notify Employee within
10 business days after receipt of the Employee's Determination of any
disagreement or dispute therewith, and failure to so notify within that period
shall be considered an agreement by the Company to make payment as provided in
subsection (a) above within 10 days from expiration of such 10 business-day
period. In the event of an objection by the Company to the Employee's
Determination, any amount not in dispute shall be paid within 10 days following
the 10 business-day period referred to herein, and with respect to the amount in
dispute, the Employee's Accountant and the Company's Accountant shall jointly
select a third nationally recognized certified public accounting firm to resolve
the dispute and the decision of such third firm shall be final, binding and
conclusive upon the Employee and the Company. In such a case, the third
accounting firm's findings shall be deemed the binding determination with
respect to the amount in dispute, obligating the Company to make any payment as
a result thereof within 10 days following the receipt of such third party
accounting firm's determination. All fees and expenses of each of the accounting
firms referred to in this Appendix A shall be borne solely by the Company.
 
<PAGE>
 
         (c)      (i)      Employee shall notify the Company in writing of any
claim by the Internal Revenue Service (or any successor thereof) or any state or
local taxing authority (individually or collectively the "Taxing Authority")
that, if successful, would require the payment by the Company of a Gross-Up
Payment. Such notification shall be given as soon as practicable but no later
than 30 days after the Employee receives written notice of such a claim and
shall apprise the Company of the nature of such claim and the date on which such
claim is requested to be paid; provided, however, that failure by the Employee
to give such notice within such 30-day period shall not result in a waiver or
forfeiture of any of Employee's rights under this Section and this Appendix A
except to the extent of actual damage suffered by the Company as a result of
such failure. Employee shall not pay such claim prior to the expiration of the
15-day period following the date on which Employee gives such notice to the
Company (or such shorter period ending on the date that any payment of taxes,
interest, penalties, or additional tax with respect to such claim is due). If
the Company notifies Employee in writing prior to the expiration of such 15-day
period (regardless of whether such claim was earlier paid as contemplated by the
preceding parenthetical) that it desires to contest such claim (and demonstrates
to the reasonable satisfaction of Employee its ability to make the payments to
Employee which may ultimately be required under this section before assuming
responsibility for the claim), Employee shall:
 
                           (A)      give the Company any information reasonably
         requested by the Company relating to such claim;
 
                           (B)      take such action in connection with
         contesting such claim as the Company shall reasonably request in
         writing from time to time, including, without limitation, accepting
         legal representation with respect to such claim by an attorney selected
         by the Company that is reasonably acceptable to Employee;
 
                           (C)      cooperate with the Company in good faith in
         order to effectively contest such claim; and
 
                           (D)      permit the Company to participate in any
         proceeding relating to such claim; provided, however, that the Company
         shall bear and pay directly all costs, expenses, attorneys' and
         accountants' fees (including additional interest, penalties and
         additions to tax) incurred in connection with such contest and shall
         indemnify and hold Employee harmless, on an after-tax basis, for all
         taxes (including, without limitation, income and excise taxes),
         interest, penalties, and additions to tax imposed in relation to such
         claim and in relation to the payment of such costs and expenses or
         indemnification. Without limitation on the foregoing provisions of this
         Appendix A, and to the extent its actions do not unreasonably interfere
         with or prejudice Employee's disputes with the Taxing Authority as to
         other issues, the Company shall control all proceedings taken in
         connection with such contest and, in its reasonable discretion, may
         pursue or forego any and all administrative appeals, proceedings,
         hearings, and conferences with the Taxing Authority in respect of such
         claim and may, at its sole option, either direct Employee to pay the
         tax, interest or penalties claimed and sue for a refund or contest the
         claim in any permissible manner, and Employee agrees to prosecute such
         contest to a determination before any administrative tribunal, in a
         court of initial jurisdiction and in one or more appellate courts, as
         the Company shall determine; provided, however, that if the Company
         directs Employee to pay such claim and sue for a refund, the Company
         shall advance an amount equal to such payment to Employee, on an
         interest-free basis, and shall indemnify and hold Employee harmless, on
         an after-tax basis, from all taxes (including, without limitation,
         income and excise taxes), interest, penalties and additions to
 
                                        2
<PAGE>
 
         tax imposed with respect to such advance or with respect to any imputed
         income with respect to such advance, as any such amounts are incurred;
         and, further provided, that any extension of the statute of limitations
         relating to payment of taxes, interest, penalties or additions to tax
         for the taxable year of Employee with respect to which such contested
         amount is claimed to be due is limited solely to such contested amount;
         and, provided further, that any settlement of any claim shall be
         reasonably acceptable to the Employee and the Company's control of the
         contest shall be limited to issues with respect to which a Gross-Up
         Payment would be payable hereunder, and Employee shall be entitled to
         settle or contest, as the case may be, any other issue.
 
                  (ii)     If, after receipt by Employee of an amount advanced
by the Company pursuant to paragraph (c)(i), Employee receives any refund with
respect to such claims, Employee shall (subject to the Company's complying with
the requirements of this Appendix A) promptly pay to the Company an amount equal
to such refund (together with any interest paid or credited thereof after any
taxes applicable thereto), net of any taxes (including, without limitation, any
income or excise taxes), interest, penalties, or additions to tax and any other
costs incurred by Employee in connection with such advance, after giving effect
to such repayment. If, after receipt by Employee of an amount advanced by the
Company pursuant to paragraph (c)(i), it is finally determined that Employee is
not entitled to any refund with respect to such claim, then such advance shall
be forgiven and shall not be required to be repaid and the amount of such
advance shall be treated as a Gross-Up Payment otherwise required to be paid.
 
                  (iii)    For purposes of the Appendix A, whether the Excise
Tax is applicable to a Payment shall be deemed to be "finally determined" upon
the earliest of: (A) the expiration of the 15-day period referred to in
paragraph (c)(i) above if the Company has not notified Employee that it intends
to contest the underlying claim, (B) the expiration of any period following
which no right of appeal exists, (C) the date upon which a closing agreement or
similar agreement with respect to the claim is executed by Employee and the
Taxing Authority (which agreement may be executed only in compliance with this
Appendix A), or (D) the receipt by Employee of notice from the Company that it
no longer seeks to pursue a contest (which shall be deemed received if the
Company does not, within 15 days following receipt of a written inquiry from
Employee, affirmatively indicate in writing to Employee that the Company intends
to continue to pursue such contest).
 
         (d)      As a result of uncertainty in the application of Section 4999
that may exist at the time of any determination that a Gross-Up Payment is due,
it may be possible that in making the calculations required to be made
hereunder, the parties or their accountants shall determine that a Gross-Up
Payment need not be made (or shall make no determination with respect to a
Gross-Up Payment) that properly should be made ("Underpayment"), or that a
Gross-Up Payment not properly needed to be made should be made ("Overpayment").
The determination of any Underpayment shall be made using the procedures set
forth in paragraph (b) above and shall be paid to Employee as an additional
Gross-Up Payment. The Company shall be entitled to use procedures similar to
those available to Employee in paragraph (b) to determine the amount of any
Overpayment (provided that the Company shall bear all costs of the accountants
as provided in paragraph (b)). In the event of a determination that an
Overpayment was made, any such Overpayment shall be treated for all purposes as
a loan to Employee with interest at the applicable Federal rate provided for in
Section 1274(d) of the Code; provided, however, that the amount to be repaid by
Employee to the Company shall be subject to reduction to the extent necessary to
put Employee in the same after-tax position as if such Overpayment was never
made.
 
                                        3
 

#Top of the Document

 

                                                                   Exhibit 10.60
 
 
                             CKE RESTAURANTS, INC.
 
                                   AMENDMENT
                                       TO
                              EMPLOYMENT AGREEMENT
 
      This Amendment (the "Amendment") to Employment Agreement is made effective
as of February 1, 2005 (the "Effective Date"), by and between CKE Restaurants,
Inc. (the "Company") and Andrew F. Puzder (the "Employee").
 
                                    RECITALS
 
      A.    The Company and the Employee entered into an Employment Agreement,
dated as of January __, 2004 (the "Agreement").
 
      B.    The Company and Founder now desire to amend the Agreement as set
forth below.
 
                                   AGREEMENT
 
      1.    Bonus Calculation. Clauses (v) and (vi) of Section 4(e) of the
Agreement shall be amended in their entirety to read as follows:
 
            "(v) If Actual Income is greater than 100%, but less than 120%, of
            Target Income, Employee shall receive a bonus equal to the Current
            Base multiplied by the percentage determined as follows:
 
                       100% + [% in excess of 100% x 150%]
                               -------------------
                                       20
 
            (vi) If Actual Income is 120% or greater of Target Income, Employee
            shall receive a bonus equal to 250% of Current Base."
 
      2.    Definitions. Terms used but not defined in this Amendment shall have
the respective meanings assigned to them in the Agreement.
 
      3.    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.
 
      4.    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.
 
                            [SIGNATURE PAGE FOLLOWS]
<PAGE>
      IN WITNESS WHEREOF, this Amendment is executed by the undersigned as of
the date first written above.
 
 
                                             /s/ Andrew F. Puzder
                                             -----------------------------------
                                             Andrew F. Puzder
 
 
 
                                             CKE RESTAURANTS, INC.
 
 
 
                                             By:  /s/ Peter Churm
                                                  ------------------------------
                                                  Peter Churm
                                                  Director and Chairman of the
                                                  Compensation Committee of the
                                                  Board of Directors

#Top of the Document

 

                                                                   EXHIBIT 10.71
 
                              CKE RESTAURANTS, INC.
 
                                 AMENDMENT NO. 2
                                       TO
                              EMPLOYMENT AGREEMENT
 
      This Amendment No. 2 (the "Amendment") to Employment Agreement is made
effective as of December 6, 2005, by and between CKE Restaurants, Inc. (the
"Company") and Andrew F. Puzder (the "Employee").
 
                                R E C I T A L S:
 
      A. The Company and the Employee entered into an Employment Agreement,
dated as of January 2004, as amended on February 1, 2005 (the "Agreement").
 
      B. The Company and Employee now desire to amend the Agreement as set forth
below.
 
 
                                    AGREEMENT
 
      1. Salary. Effective January 1, 2006, the minimum base annual salary shall
be $925,000.
 
      2. Term. Section 2 of the Agreement shall read in its entirety as follows:
 
            "2. Term. The term of this Agreement (the "Term") shall commence on
      the Effective Date and, subject to prior termination as set forth in
      Section 7 below, 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. Thus, 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. The Term may be extended at any time upon
      mutual written agreement of the parties."
 
      3. Definitions. Terms used but not defined in this Amendment shall have
the respective meanings assigned to them in the Agreement.
 
      4. 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.
 
      5. 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.
 
 
                            [SIGNATURE PAGE FOLLOWS]
<PAGE>
      IN WITNESS WHEREOF, this Amendment is executed by the undersigned as of
the date first written above.
 
                                /s/ ANDREW F. PUZDER
 
                                ------------------------------------------------
                                Andrew F. Puzder
 
 
                                CKE Restaurants, Inc.
 
                                       /s/ PETER CHURM
                                By:
                                       -----------------------------------------
                                       Peter Churm
                                       Director and Chairman of the Compensation
                                       Committee of the Board of Directors
 
                                       2

#Top of the Document

 

 

Exhibit 10.1

CKE Restaurants, Inc.

Amendment No. 3
to
Employment Agreement

     This Amendment No. 3 (the “Amendment”) to Employment Agreement is made effective as of October 12, 2006, by and between CKE Restaurants, Inc. (the “Company”) and Andrew F. Puzder (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 and December 6, 2005 (collectively, the “Agreement”).

     B. The Company and the Employee now desire to further amend the Agreement as set forth below.

AGREEMENT

     1. Salary. Section 3 is hereby amended to provide that the minimum base annual salary shall be $1,000,000, retroactive to August 14, 2006.

     2. Other Compensation and Fringe Benefits. Section 4(e) is hereby amended to extend the bonus provided for therein to fiscal years 2008, 2009 and 2010.

     3. Other Compensation and Fringe Benefits. Clause (f) is hereby added to Section 4, which clause reads in its entirety as follows:

     “(f) Restricted Shares.

     (i) Employee shall be granted, subject to items (iii) and (iv) below, “restricted shares” as provided on Exhibits A and B attached hereto. The “restricted shares” provided for on Exhibit A are hereinafter referred to as “Time-Based Shares,” the “restricted shares” provided for on Exhibit B are hereinafter referred to as “Performance Shares” and, collectively, the Time-Based Shares and the Performance Shares are hereinafter referred to as the “Restricted Shares.” The amount of Restricted Shares, the dates of grant (hereinafter, each date of grant on Exhibits A and B is referred to as “Date of Grant”), the terms and conditions of vesting and other provisions relating thereto are set forth on the respective Exhibits. All Restricted Shares shall be granted under one or more of the Company’s equity-based plans approved by the Company’s stockholders (a “Company Equity Plan”), as determined by the Company’s Compensation Committee at the time of grant, except as provided in Sections 7(b)(vi) and 8(b)(vi) below.

     (ii) The purchase price for all Restricted Shares shall be $0.00.

     (iii) All grants provided for on Exhibits A and B shall be subject to the availability of “restricted shares” under a Company Equity Plan on the Date of Grant, except as provided in Sections 7(b)(vi) and 8(b)(vi) below. If there are not enough “restricted shares” available

 


 

under a Company Equity Plan on any Date of Grant, (a) any short-fall shall be allocated first to Performance Shares and then to Time-Based Shares, and (b) the Company shall have no obligation to make any other form of compensation available to the Employee in lieu of any short-fall. The Company shall use its best efforts to cause the stockholders of the Company to approve either an amendment to any current Company Equity Plan or the adoption of a new Company Equity Plan, to assure that, at any given time, “restricted shares” are available to fulfill the grants provided for on Exhibits A and B.

     (iv) The Employee must be an eligible participant under a Company Equity Plan on the Date of Grant in order to be entitled to a grant of Restricted Shares on that date, except as provided in Sections 7(b)(vi) and 8(b)(vi) below.

     (v) All grants of Restricted Shares shall be on the form of agreement being used on the respective Date of Grant, containing, however, the specific terms set forth in this Amendment.

     (vi) All grants of Restricted Shares pursuant to this Amendment shall be administered pursuant to the terms and provisions of the Company Equity Plan under which they were granted.

     (vii) The Employee agrees that he may only sell Restricted Shares after they vest, as follows, subject to compliance with all securities’ laws:

     (a) Restricted Shares necessary to pay any income taxes (including withholding taxes) on the vesting thereof;

     (b) For Restricted Shares whose Date of Grant is the Date Hereof and October 12, 2007, any time on or after the later of two years from their date of vesting or October 12, 2011;

     (c) For Restricted Shares whose Date of Grant is October 12, 2008, any time on or after October 12, 2011;

     (d) For Restricted Shares whose Date of Grant is October 12, 2009 and October 12, 2010, any time on or after the vesting thereof;

     (e) With the written approval of the Company’s Compensation Committee; and/or

     (f) Any time on or after the death, disability or termination without cause of Employee, or after a Change In Control (as defined in Section 8(a)(ii)).”

     4. Termination. Section 7(b) is hereby amended to read in its entirety as follows:

     “(b) Without Cause. Either party may terminate this Agreement immediately without cause by giving written notice to the other. If the Company terminates under this Section 7(b):

2


 

     (i) The Company shall pay the Employee all amounts owed through the date of termination;

     (ii) In lieu of any further salary and bonus payments or other payments due to the Employee for periods subsequent to the date of termination, under this Agreement or otherwise, the Company shall pay, as severance to the Employee, subject to the Employee executing and delivering to the Company a release of the Company and its affiliates from all known or 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, the sum of:

     (A) An amount equal to the product of the Employee’s minimum base annual salary in effect as of the date of termination multiplied by the number three, plus

     (B) An amount equal to the product of 200% of the Employee’s minimum base annual salary in effect as of the date of termination multiplied by the number three, which sum shall be made in a single lump sum in accordance with its normal payroll procedures within five days following the date of termination;

     (iii) All options granted to the Employee which had not vested as of the date of such termination shall vest concurrently with such termination, and, notwithstanding the terms of any option agreements, Employee may exercise any vested options, including by reason of acceleration, for a period after such termination which is the greater of what is provided in the respective option agreement, or 30 days;

     (iv) All restricted stock awards, restricted stock unit awards, and other forms of equity compensation awards granted to the Employee, which had not vested as of the date of such termination, shall vest concurrently with such termination;

     (v) All Restricted Shares provided for in Amendment No. 3 to this Agreement to be granted after the date of such termination shall, if the Company is a reporting company under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), at the time of termination, be granted on the date of such termination; provided, however, if, in doing so, such grant shall exceed the limitations imposed under the Company Equity Plans, such excess shall be spread back to Dates of Grant within the period from the date of such Amendment No. 3 through the date of such termination in a manner that would result in the maximum number of Restricted Shares permitted to be granted to Employee under the Company Equity Plans during such period, and shall vest concurrently with such termination;

     (vi) All Restricted Shares provided for in Amendment No. 3 to this Agreement to be granted after the date of such termination shall, if the Company is not a reporting company under the Exchange Act at the time of termination, be granted on the date of such termination either under a Company Equity Plan, or, if for some reason such Restricted Shares cannot be so granted, otherwise outside a

3


 

Company Equity Plan as necessary to effect the grant, by the Company, and shall vest concurrently with such termination; and

     (vii) The Company shall maintain in full force and effect for the continued benefit of the Employee during the period commencing on the date of termination and ending on the December 31 of the second calendar year following the calendar year in which the termination occurred, all employee benefit plans (except for the company’s stock incentive plans) and programs in which the Employee was entitled to participate immediately prior to the date of termination, provided that the Employee’s continued participation is not prohibited under the general terms and provisions of such plans and programs, but, if prohibited, the Company shall, at the Company’s expense, arrange for substantially equivalent benefits; provided, however, that notwithstanding the foregoing, there shall only be included, and Employee shall only be entitled to, those benefit plans or programs that are exempt from the term “nonqualified deferred compensation plan” under Section 409A of the Code.

If the Employee voluntarily terminates his employment with the Company under this Section 7(b), then the Company shall not pay him any separation or severance pay or other benefit in connection with his termination, but shall only be obligated to pay the Employee any unpaid portion of his base salary that he earned for services he performed through his date of termination. Notwithstanding any other provision in this Agreement, under no circumstances, will the Employee be permitted to exercise any discretion to modify the vesting of an award or the amount, timing or form of payment described in this Section 7.”

     5. Termination For Good Reason. Section 8 of the Agreement is hereby amended to read in its entirety as follows:

     “8. Termination For Good Reason.

     (a) The Employee may terminate his employment hereunder for “Good Reason,” which for purposes of this Agreement, means

     (i) Written notice (the “Relocation Notice”) to the Employee that Employee’s principal place of employment is being relocated outside the city limits of either Carpinteria or Santa Barbara, California (any request to Employee that he so relocate must be in writing); or

     (ii) One of the following events occurs (a “Change In Control”):

     (A) A change in the ownership of the Company, which shall occur on the date that any one person, or multiple persons acting as a group, acquires ownership of stock of the Company that, together with the stock held by such person, or group of persons, constitutes more than 50% of the total fair market value or total voting power of the stock of the Company;

     (B) A change in effective control of the Company, which shall occur on the date that either:

4


 

     (1) Any one person, or multiple persons acting as a group, acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such persons or group) ownership of the corporation possessing at least 35% of the total voting power of the stock of such corporation; or

     (2) A majority of members of the Company’s board of directors is replaced during any 12-month period by directors whose appointment or election is not endorsed by a majority of the members of the board of directors prior to the date of such appointment or election; or

     (C) A change in the ownership of a substantial portion of the Company’s assets, which shall occur on the date that any one person, or multiple persons acting as a group, acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such persons or group) assets from the Company that have a total gross fair market value (determined without regard to any liabilities associated with such assets) equal to or more than 40% of the total gross fair market value of all of the assets of the Company immediately prior to such acquisition or acquisitions.

The Employee may only terminate this Agreement for Good Reason during the period commencing 60 days and expiring 365 days after the Relocation Notice or Change In Control, as the case may be.

     (b) If the Employee terminates his employment for Good Reason:

     (i) The Company shall pay the Employee all amounts owed through the date of termination; and

     (ii) In lieu of any further salary and bonus payments or other payments due to the Employee for periods subsequent to the date of termination, under this Agreement or otherwise, the Company shall pay, as severance to the Employee, the sum of:

     (A) An amount equal to the product of the Employee’s minimum base annual salary in effect as of the date of termination multiplied by the number three, plus

     (B) An amount equal to the product of 200% of the Employee’s minimum base annual salary in effect as of the date of termination multiplied by the number three, which sum shall be paid as follows: (1) if, on the date that the Employee terminates his employment for Good Reason under subsection (a) of this Section 8, the Company is a reporting company under the Exchange Act (as defined above), then Employee will be entitled to receive such payment 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 Employee terminates employment on March 15,

5


 

2006, the Company will pay the amount specified herein on the first business day immediately following September 30, 2006); (2) however, if the Company is not a reporting company under the Exchange Act at the time the Employee terminates his employment for Good Reason as described herein, the Employee shall be entitled to receive such payment in a single lump sum on the fifth business day following his termination of employment;

     (iii) All options granted to the Employee that had not vested as of the date of such termination shall vest concurrently with such termination;

     (iv) All restricted stock awards, restricted stock unit awards, and other forms of equity compensation awards granted to the Employee, which had not vested as of the date of such termination, shall vest concurrently with such termination;

     (v) All Restricted Shares provided for in Amendment No. 3 to this Agreement to be granted after the date of such termination shall, if the Company is a reporting company under the Exchange Act at the time of termination, be granted on the date of such termination; provided, however, if, in doing so, such grant shall exceed the limitations imposed under the Company Equity Plans, such excess shall be spread back to Dates of Grant within the period from the date of such Amendment No. 3 through the date of such termination in a manner that would result in the maximum number of Restricted Shares permitted to be granted to Employee under the Company Equity Plans during such period, and shall vest concurrently with such termination;

     (vi) All Restricted Shares provided for in Amendment No. 3 to this Agreement to be granted after the date of such termination shall, if the Company is not a reporting company under the Exchange Act at the time of termination, be granted on the date of such termination either under a Company Equity Plan, or, if for some reason such Restricted Shares cannot be so granted, otherwise outside a Company Equity Plan as necessary to effect the grant, by the Company, and shall vest concurrently with such termination; and

     (vii) The Company shall maintain in full force and effect for the continued benefit of the Employee during the period commencing on the date of termination and ending on the December 31 of the second calendar year following the calendar year in which the termination occurred, all employee benefit plans (except for the company’s stock incentive plans) and programs in which the Employee was entitled to participate immediately prior to the date of termination, provided that the Employee’s continued participation is not prohibited under the general terms and provisions of such plans and programs, but, if prohibited, the Company shall, at the Company’s expense, arrange for substantially equivalent benefits; provided, however, that notwithstanding the foregoing, there shall only be included, and Employee shall only be entitled to, those benefit plans or programs that are exempt from the term “nonqualified deferred compensation plan” under Section 409A of the Code.

Notwithstanding any other provision in this Agreement, under no circumstances, will the Employee be permitted to exercise any discretion to modify the vesting of an award or the amount, timing or form of payment described in this Section 8.

6


 

     (c) The Employee shall not be required to mitigate the amount of any payment provided for in this Section 8 by seeking other employment or otherwise, nor shall any compensation or other payments received by the Employee after the date of termination reduce any payments due under this Section 8.

     (d) Notwithstanding anything to the contrary herein, if and to the extent any payment made under this Agreement, either alone or in conjunction with other payments Employee has the right to receive either directly or indirectly from the Company, which would constitute an “excess parachute payment” under Section 280G of the Internal Revenue Code of 1986, as amended, then Employee shall be entitled to receive an excise tax gross-up payment not exceeding one million dollars ($1,000,000) in accordance with Appendix A. In the event that the Company is obligated to pay the “excise tax gross up payment” set forth in this Section 8(d) due to the Employee’s termination of employment for Good Reason following a Change in Control, as described in Section 8(a), then, notwithstanding any term or provision of the Agreement to the contrary, the Company shall pay the initial “excise tax gross up payment” to the Employee on the later of: (i) the time prescribed in Appendix A to this Agreement, or (ii) the first business day that occurs after 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 Employee terminates his employment for Good Reason following a Change in Control on March 15, 2007, the earliest date on which the Company will pay any applicable “excise tax gross up payment” to the Employee will be the first business day following September 30, 2007).”

     6. Taxes. There is hereby added as new Section 22 to the Agreement, the following:

     “22. Taxes. Any payroll, withholding or other taxes owed by the Employee to the Company upon the vesting of Restricted Shares, or other non-cash equity award granted to the Employee by the Company, may be satisfied, in whole or in part, by the Employee delivering to the Company Restricted Shares, or other equity instrument. For purposes hereof, the Restricted Shares, or other equity instrument, shall be valued at the same value as is used for purposes of determining the Employee’s taxable income on the vesting of such Restricted Shares, or other equity instrument.”

     7. Definitions. Terms used but not defined in this Amendment shall have the respective meanings assigned to them in the Agreement.

     8. 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.

     9. 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.

[See Next Page for Signatures]

7


 

     IN WITNESS WHEREOF, this Amendment is executed by the undersigned as of the date first above written.

 

 

 

 

 

 

 

 

 

/s/ Andrew F. Puzder 

 

 

Andrew F. Puzder
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CKE Restaurants, Inc.
 

 

 

By:  

/s/ Peter Churm 

 

 

 

Peter Churm, 

 

 

 

Director and Chairman of the Compensation
Committee of the Board of Directors 

 

8


 

 

 

 

 

 

Exhibit A

Time-Based Shares

     1. Time-Based Shares shall be granted at the times and in the amounts, as follows:

 

 

 

 

 

Date of Grant:

 

Number of Time-Based Shares:

 

Date Hereof:

 

 

60,000

 

October 12, 2007:

 

 

60,000

 

October 12, 2008:

 

 

60,000

 

October 12, 2009

 

 

60,000

 

October 12, 2010:

 

 

60,000

 

 

 

 

 

Total:

 

 

300,000

 

 

 

 

 

     2. Each number of Time-Based Shares referenced above shall vest over 4 years from the Date of Grant, with 25% of such Time-Based Shares vesting on each of the 4 anniversary dates immediately following the respective Date of Grant. For example, the grants on the “Date Hereof” shall vest 25% on each of October 11, 2007, 2008, 2009 and 2010, the grants on October 12, 2007 shall vest 25% on each of October 11, 2008, 2009, 2010 and 2011, and so forth.

A-1


 

CONFIDENTIAL PORTIONS HAVE BEEN OMITTED BASED UPON A REQUEST FOR
CONFIDENTIAL TREATMENT PURSUANT TO RULE 24b-2 OF THE SECURITIES
EXCHANGE ACT OF 1934 AND HAVE BEEN SEPARATELY FILED WITH THE
COMMISSION.

Exhibit B

Performance Shares

     1. Performance Shares shall be granted at the times and in the amounts, and have the respective performance periods (each a “Performance Period”), as follows:

 

 

 

 

 

 

 

 

 

 

 

Number of Performance

 

 

 

 

Date of Grant:

 

Shares:

 

 

Performance Period:

Date Hereof:

 

 

240,000

 

 

Fiscal 2007, 2008 and 2009

October 12, 2007:

 

 

240,000

 

 

Fiscal 2008, 2009 and 2010

October 12, 2008:

 

 

240,000

 

 

Fiscal 2009, 2010 and 2011

October 12, 2009:

 

 

240,000

 

 

Fiscal 2010, 2011 and 2012

October 12, 2010:

 

 

240,000

 

 

Fiscal 2011, 2012 and 2013

 

 

 

 

 

 

 

 

Total:

 

 

1,200,000

 

 

 

 

 

 

 

 

 

 

 

 

 

The reference to “Fiscal” under Performance Period, and hereafter, is to the Company’s fiscal year ending in the referenced calendar year.

     2. Performance Shares can vest in one of three ways:

     (1) One-third of each grant can vest, based upon the performance criteria set forth below, for each of the three Fiscal years referenced under the column “Performance Period” for such grant. The measurement for determining whether Performance Shares vest for each Fiscal year shall be a comparison of the Company’s “operating income” for the respective Fiscal year to the “operating income” of the Company for Fiscal 2006, which was $77.9 million (the “Base Year Operating Income”). Based upon this comparison, Performance Shares shall vest for the respective Fiscal year indicated for each grant under the “Performance Period” column if the “operating income” for such Fiscal year equals or exceeds the target “operating income” set forth opposite such Fiscal year below (the “Target Operating Income”):

*CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH
COMMISSION.

     For purposes hereof, “operating income” shall be determined in accordance with generally accepted accounting principles and as reflected in the Company’s audited financial statements for the respective Fiscal year, excluding, therefrom (if otherwise included in

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     “operating income”), however, any expense arising from the Performance Shares, any gains or losses on the sale of Company owned restaurants to franchisees and costs and fees associated with the purchase or sale of equity securities of the Company or the borrowing of, or reduction in, debt financing (“Operating Income”).

     If the Company’s Operating Income for any Fiscal year does not equal or exceed the Target Operating Income indicated above, a percentage of the Performance Shares that would have vested had such Target Operating Income been equaled or exceeded can, nevertheless, still vest as follows:

 

 

 

If the Company’s Operating Income is
within the following percentages
(rounded to the nearest whole number)
of the Target Operating Income:

 

The following percentage of
Performance Shares subject to full
vesting for such Fiscal year shall
vest:

 

 

 

80%:

 

50%

For every 1% over 80%,
up to 99%:

 

An additional 2.58%

     Notwithstanding the foregoing, if there is a change (a “Change”) to generally accepted accounting principles that affects the computation of “operating income” for Fiscal years within a Performance Period, (i) the Base Year Operating Income will be recomputed to reflect the impact of any such Change as if the Change had occurred in Fiscal 2006, and (ii) if such Change would have affected Base Year Operating Income, Target Operating Income will also be recomputed using the same methodology that was used to derive the Target Operating Income listed in the table above, which methodology was provided in writing to the Compensation Committee of the Board, and its tax and legal advisors, at the time of approval of this Amendment.

     (2) If not all Performance Shares for any Performance Period vest pursuant to item (1) above, such Performance Shares that do not so vest may, nevertheless, vest as follows

     (a) For the three Fiscal years included within such Performance Period, add the Operating Income for each such year (the “Cumulative Actual Operating Income”).

     (b) For the same three Fiscal years, add the Target Operating Income for each such year (the “Cumulative Target Operating Income”).

     (c) If the Cumulative Actual Operating Income equals or exceeds the Cumulative Target Operating Income, the remaining Performance Shares for such Performance Period shall vest.

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     (3) If not all Performance Shares for any Performance Period vest pursuant to items (1) and (2) above, such Performance Shares that do not so vest may, nevertheless, vest as follows:

     (a) For each of the three Fiscal years included within such Performance Period:

     (i) Determine the Operating Income for each of the 12 companies set forth on Exhibit C (the “Peer Group Companies”) (for purposes hereof, since the Peer Group Companies will have different fiscal years, the fiscal years for each which most closely approximates the Company’s Fiscal years within this Performance Period should be used);

     (ii) For each Peer Group Company, calculate the percentage of each such Fiscal year’s Operating Income relative to the Operating Income of such Peer Group Company for its Fiscal year immediately preceding the first Fiscal year in such Performance Period;

     (iii) Add the three percentages determined under (ii) above and divide by 3 (the “Peer Company Average Percentage”);

     (iv) Determine the Operating Income for the Company, without any special exclusions specified, or recomputation of Target Operating Income provided for, in 2(1) above;

     (v) Calculate the percentage of each such Fiscal year’s Operating Income relative to the Operating Income of the Company for its Fiscal year immediately preceding the first Fiscal year in such Performance Period;

     (vi) Add the three percentages determined under (v) above and divide by 3 (the “Company Average Percentage”);

     (vii) If the Company Average Percentage is equal to or greater than eight of the Peer Company Average Percentages, the remaining Performance Shares for such Performance Period shall vest (if the Operating Income of any of the Peer Group Companies is not available for any Fiscal year of this determination, the Peer Company Average Percentage for such Peer Group Company shall be deemed to be less than the Company Average Percentage). For purposes hereof, the Company Average Percentage shall be equal to any Peer Company Average Percentage if it is within two-tenths of a percentage point of such Peer Company Average Percentage. For example, if a Peer Group Company’s average annual improvement in Operating Income over the relevant three-year period is 9.4%, i.e., the Peer Company Average Percentage, and the Company’s average annual improvement in Operating Income over the same three-year period is 9.2%, i.e., the Company Average Percentage, the Company will be deemed to have equaled the Peer Company Average Percentage for purposes of the foregoing.

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     3. Except as otherwise provided herein, the Employee must be employed by the Company (i) on the last day of any Fiscal year in order for any Performance Shares to vest for such Fiscal year under Section 2(1) above, and (ii) on the last day of the third Fiscal year in the Performance Period for any Performance Shares to vest under Sections 2(2) and (3) above; provided, however, if the Employee dies or becomes disabled (as provided in Section 7(c) of the Agreement) during any Fiscal year, any Performance Shares which meet the vesting criteria in Section 2(1) above for such Fiscal year shall vest in accordance with Section 2(1), and, if such Fiscal year is the third year of the Performance Period, any Performance Shares which meet the vesting criteria in Sections 2(2) or (3) above for such Performance Period shall vest in accordance with such Section.

     4. After each Fiscal year for which Performance Shares may vest, the Company’s Compensation Committee shall make a determination as to whether or not any Performance Shares have vested pursuant to the terms of this Exhibit B and shall certify as to its determination. This determination shall be made by the time that the Company files its Form 10-K with the Securities and Exchange Commission for such Fiscal year.

     5. All vesting of Performance Shares under Section 2(1) above shall be as of the last day of the Fiscal year for which the performance criteria was met, and all vesting of Performance Shares under Sections 2(2) and (3) above shall be as of the last day of the third Fiscal year of the Performance Period.

     6. If there is a “Change In Control,” as defined in Section 8 of the Agreement, all Performance Shares (including Performance Shares whose Date of Grant has not yet occurred) which have not vested as of the date of the Change In Control (the “Unvested Performance Shares”) shall thereafter not vest pursuant to the vesting criteria set forth above in this Exhibit B, but rather, shall vest based on time as follows:

     (1) All Unvested Performance Shares whose Date of Grant precedes a Change In Control shall vest monthly, in equal amounts, on the last day of each calendar month, commencing on the last day of the calendar month immediately following the month in which the Change In Control occurs, and ending on the last day of their respective three-year Performance Periods; and

     (2) All Unvested Performance Shares whose Date of Grant has not yet occurred shall vest monthly, in equal amounts, on the last day of each calendar month, commencing with the month immediately following the month in which the Date of Grant occurs, and ending on the last day of the respective three-year Performance Period.

Any Unvested Performance Shares remaining from the determination of an equal number of shares to vest monthly shall vest on the last day of the respective Performance Period. The foregoing is subject to any accelerations that may occur pursuant to this Agreement or otherwise.

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Exhibit C

Peer Group Companies

Applebee’s International, Inc.

Brinker International, Inc.

California Pizza Kitchen, Inc.

Cheesecake Factory Incorporated

Dominos Pizza, Inc.

Jack in the Box Inc.

Krispy Kreme Doughnuts, Inc.

Outback Steakhouse, Inc.

Panera Bread Company

Red Robin Gourmet Burgers, Inc.

Ruby Tuesday, Inc.

Wendy’s International, Inc.

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#Top of the Document


Exhibit 10.18

 

 

CKE RESTAURANTS, INC.

 

AMENDMENT NO. 4

TO

EMPLOYMENT AGREEMENT

 

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 Andrew F. Puzder (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/ Andrew F. Puzder          

Andrew F. Puzder



CKE Restaurants, Inc.



By:         

/s/ Peter Churm                                                   

     Peter Churm,

Director and Chairman of the Compensation

Committee of the Board of Directors