SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of report (date of earliest event reported):
APRIL 3, 1996
CARROLS CORPORATION (Exact
name of Registrant as specified in its charter)
DELAWARE (State
or other jurisdiction of incorporation)
1-6553 16-0958146
(Commission File No.) (I.R.S. Employer
Identification No.)
968 JAMES STREET, SYRACUSE, NEW YORK 13203 (Address
of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code:
(315) 424-0513
NOT APPLICABLE
(Former Name or Former Address, if Changed Since Last Report)
<PAGE>
ITEM 1. CHANGE IN CONTROL.
On April 3, 1996, pursuant to that certain Securities Purchase
Agreement, dated as of March 6, 1996, among the Registrant, Carrols
Holdings Corporation, a Delaware corporation and the sole shareholder of
the Registrant ("Holdings"), Atlantic Restaurants, Inc., a Delaware
corporation ("ARI"), and certain selling shareholders listed on Schedule I
thereto (the "Selling Shareholders"), the Selling Shareholders sold to ARI
approximately 97% of all of the issued and outstanding shares of common
stock, and securities that were convertible into or exercisable or
exchangeable for shares of common stock, of Holdings (the "Acquisition")
for an aggregate purchase price of approximately $84 million. ARI is an
indirect wholly-owned subsidiary of Bahrain International Bank (E.C.), a
Bahrain exempt joint stock company ("BIB"). The source of funds for the
Acquisition was debt and equity investments by wholly-owned subsidiaries of
BIB.
Consummation of the Acquisition constitutes a "change of control"
under the Indenture, dated as of August 17, 1993 (the "Indenture"), among
the Registrant, Holdings and Marine Midland Bank, N.A., as trustee,
governing the Registrant's $110 million aggregate principal amount
(currently $108.5 million outstanding) of 11-1/2% Senior Notes Due 2003
(the "Notes"). In accordance with the terms and conditions of the
Indenture, upon a "change of control", each holder of the Notes will have
the right to require the Registrant to repurchase all or any part of such
holder's Notes at a repurchase price in cash equal to 101% of the principal
amount of the Notes being repurchased (plus accrued and unpaid interest, if
any).
The Registrant hereby incorporates by reference the description
of the Acquisition included in (i) the press release of the Registrant
dated April 4, 1996 (attached hereto as Exhibit 99.1) and (ii) the Notice
of Change of Control and Offer to Repurchase Notes delivered to holders of
the Notes (attached hereto as Exhibit 99.2).
In connection with the Acquisition, the Registrant entered into
an Amended and Restated Employment Agreement with the Registrant's Chairman
and Chief Executive Officer, Alan Vituli, (attached hereto as Exhibit
10.23) and an Amended and Restated Employment Agreement with the
Registrant's President and Chief Operating Officer, Daniel T. Accordino,
(attached hereto as Exhibit 10.24), upon terms and conditions substantially
similar to their previous employment agreements except that, in lieu of the
current stock option plans maintained by Holdings (all of which will be
terminated in connection with the Acquisition) a new stock option plan will
be developed pursuant to which employees of the Registrant will be eligible
to be awarded options to purchase up to 9.09% of the outstanding common
stock of Holdings on a fully-diluted basis. Messrs. Vituli and Accordino
will receive 36% and 24%, respectively, of the options available in such
pool. The Registrant also entered into an Amended and Restated Split
Dollar Life Insurance Agreement for the benefit of Mr. Vituli (attached
hereto as Exhibit 10.25) and an Amended and Restated Split Dollar Life
Insurance Agreement for the benefit of Mr. Accordino (attached hereto as
Exhibit 10.26) upon terms and conditions substantially similar to the
previous insurance agreements except that the Registrant does not have the
right to unilaterally terminate such agreements.
In addition, in connection with the Acquisition, each of M. Bruce
Adelberg, Richard V. Cross and Franklin Glasgall resigned from the Board of
Directors of the Registrant and of Holdings. Immediately following
completion of the Acquisition, Robin McIlvenny, David J. Mathies, Jr. and
Paul W. Durrant, each an officer of ARI or one of its affiliates, were each
elected to the five-person Board of Directors of the Registrant and of
Holdings.
In connection with the Acquisition, the Registrant also entered
into a Seventh Amendment to Third Amended and Restated Loan and Security
Agreement, dated as of April 3, 1996, among Heller Financial, Inc.,
Holdings and the Registrant (attached hereto as Exhibit 10.27), which
provides, among other things, for the expansion of the portion of the
Registrant's senior secured revolving credit facility that may be used to
repurchase Notes.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) EXHIBITS.
Exhibit 10.23 - Amended and Restated Employment Agreement
between Carrols Corporation and Alan Vituli,
dated as of April 3, 1996.
Exhibit 10.24 - Amended and Restated Employment Agreement
between Carrols Corporation and Daniel T.
Accordino, dated as of April 3, 1996.
Exhibit 10.25 - Amended and Restated Split Dollar Life
Insurance Agreement for the benefit of Alan
Vituli, dated as of April 3, 1996.
Exhibit 10.26 - Amended and Restated Split Dollar Life
Insurance Agreement for the benefit of Daniel
T. Accordino, dated as of April 3, 1996.
Exhibit 10.27 - Seventh Amendment to Third Amended and
Restated Loan and Security Agreement, dated
as of April 3, 1996, by and among Carrols
Corporation and Carrols Holdings Corporation,
as "Borrower", and Heller Financial, Inc., as
"Lender".
Exhibit 99.1 - Press Release issued by the Registrant
on April 4, 1996.
Exhibit 99.2 - Notice of Change of Control and Offer to
Repurchase Notes dated April 8, 1996.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
Dated: April 10, 1996
CARROLS CORPORATION
By: /s/Alan Vituli
Name: Alan Vituli
Title: Chief Executive Officer
<PAGE>
EXHIBIT INDEX
EXHIBIT NUMBER EXHIBIT TITLE PAGE NUMBER
Exhibit 10.23 - Amended and Restated 6
Employment Agreement between
Carrols Corporation and
Alan Vituli, dated as of
April 3, 1996.
Exhibit 10.24 - Amended and Restated 20
Employment Agreement between
Carrols Corporation and
Daniel T. Accordino, dated
as of April 3, 1996.
Exhibit 10.25 - Amended and Restated 33
Split Dollar Life Insurance
Agreement for the benefit
of Alan Vituli, dated as
of April 3, 1996.
Exhibit 10.26 - Amended and Restated 41
Split Dollar Life Insurance
Agreement for the benefit
of Daniel T. Accordino,
dated as of April 3, 1996.
Exhibit 10.27 - Seventh Amendment to Third 49
Amended and Restated Loan
and Security Agreement,
dated as of April 3, 1996,
by and among Carrols
Corporation and Carrols
Holdings Corporation, as
"Borrower", and Heller
Financial, Inc., as "Lender".
Exhibit 99.1 - Press Release issued by the 57
Registrant on April 4, 1996.
Exhibit 99.2 - Notice of Change of Control 59
and Offer to Repurchase
Notes dated April 8, 1996.
This Amended and Restated Employment Agreement ("Agreement")
effective as of the closing of the Securities Purchase Agreement, as
defined below (the "Effective Date"), by and between CARROLS CORPORATION
("Employer"), a corporation organized under the laws of Delaware and whose
address for the purposes of this agreement is 968 James Street, Syracuse,
New York, 13217 and Alan Vituli whose principal residence is Old Road,
Windham, New York 12496 ("Employee"):
W I T N E S S E T H:
WHEREAS, pursuant to the terms of an employment agreement dated
January 1, 1995 between Employer and Employee (the "Prior Employment
Agreement"), Employee has been and is presently employed by the Employer as
its Chairman of the Board and Chief Executive Officer;
WHEREAS, concurrently with the execution and delivery hereof,
pursuant to a certain Securities Purchase Agreement (the "Securities
Purchase Agreement") dated as of March 6, 1996, among Employer, Carrols
Holdings Corporation ("Holdings"), Atlantic Restaurants, Inc. ("ARI"),
Bahrain International Bank (E.C.) for the limited purposes set forth
therein, and the selling securityholders of Holdings as listed on Schedule
I thereof (the "Selling Securityholders"), ARI has acquired substantially
all of the outstanding common stock of Holdings; and
WHEREAS, as part of the transactions contemplated by the
Securities Purchase Agreement, the parties thereto have agreed that
Employer and Employee shall enter into this Amended and Restated Employment
Agreement which shall supersede in its entirety the Prior Agreement upon
the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the mutual covenants and
agreements herein set forth and other good and valuable consideration, the
receipt and adequacy of which is mutually acknowledged, it is agreed by and
between the parties as follows:
1. DEFINITIONS
For purposes of this Agreement, unless the context requires
otherwise, the following words and phrases shall have the meanings
indicated below:
"Change of Control" shall mean:
(a) The acquisition (other than from the Employer) by any
person, entity or "group", within the meaning of Section 13(d)(3) or
14(d)(2) of the Securities Exchange Act of 1934 (the "Exchange Act"),
excluding for this purpose any employee benefit plan of the Employer or its
subsidiaries which acquires beneficial ownership of voting securities of
the Employer, of beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act), of 50% or more of either the then
outstanding shares of common stock or the combined voting power of the
Employer's then outstanding voting securities entitled to vote generally in
the election of directors;
(b) Individuals who, as of the close of business on the
date as of or immediately following the closing of the Securities Purchase
Agreement on which the new Board of Directors of the Employer is elected
(the "Incumbent Board") cease for any reason to constitute at least a
majority of the Board of Directors; provided that any person becoming a
director subsequent to the date hereof whose election, or nomination for
election by the Employer's shareholders, was approved by a vote of at least
a majority of the directors then comprising the Incumbent Board (other than
an election or nomination of an individual whose initial assumption of
office is in connection with an actual or threatened election contest
relating to the election of Directors of the Employer, as such terms are
used in Rule 14a-11 of Regulation 14A promulgated under the Exchange Act)
shall be for purposes of this Agreement, considered as though such person
were a member of the Incumbent Board, or
(c) Approval by the stockholders of the Employer of a
reorganization, merger, or consolidation, in each case, with respect to
which persons who were the stockholders of the Employer immediately prior
to such reorganization, merger or consolidation do not, immediately
thereafter, own more than 50% of the combined voting power entitled to vote
generally in the election of directors of the reorganized, merged or
consolidated company's then outstanding voting securities, or a liquidation
or dissolution of the Employer or of the sale of all or substantially all
of the assets of the Employer.
"Cause" shall mean: (1) a felony conviction of the Employee (or a
plea of no lo contendere in lieu thereof); (2) the unauthorized disclosure
of confidential proprietary information of the Employer which disclosure
the Employee knows or reasonably should have known would be reasonably
likely to result in material damage to the Employer; (3) the breach by the
Employee of any material provision of this Agreement, which breach, if
curable, is not remedied within thirty (30) days after the Employee's
receipt of written notice thereof provided, however, that the Employer need
not permit the Employee to cure any breach which has been the subject of a
prior written notice; (4) the engagement in self dealing in breach of
fiduciary duties with respect to the Employer's assets or properties unless
disclosed to and approved by the Board of Directors; (5) an act of gross
misconduct in connection with the Employee's duties hereunder; or
(6) habitual or material neglect of the Employee's duties to the Employer
(as determined in good faith by the Board of Directors, continuing after
prior written notice to the Employee).
"Good Reason" shall mean (i) the material failure of the Employer
to comply with the provisions of this Agreement which failure shall not
cease promptly and in no event more than ten (10) days after the Employer's
receipt of written notice from the Employee objecting to such conduct; (ii)
any purported termination by the Employer of the Employee's employment
other than as expressly permitted in this Agreement; or (iii) the
assignment to Employee of duties and responsibilities inconsistent with
those duties and responsibilities customarily assigned to individuals
holding the position of Chairman and Chief Executive Officer of a company
of comparable size or the substantial reduction by Employer of Employee's
duties and responsibilities.
2. REPRESENTATIONS AND WARRANTIES
Employee represents and warrants that he is not subject to
any restrictive covenants or other agreements or legal restrictions in
favor of any person which would in any way preclude, inhibit, impair or
limit his employment by the Employer or the performance of his duties, as
contemplated herein.
3. EMPLOYMENT
The Employer hereby employs Employee and Employee accepts
such employment as Chairman and Chief Executive Officer of the Employer.
As its Chairman and Chief Executive Officer, Employee shall render such
services to the Employer as are customarily rendered by the Chairman and
Chief Executive Officer of comparable companies and as required by the
articles and by-laws of the Employer. Employee accepts such employment
and, consistent with fiduciary standards which exist between an employer
and an employee shall perform and discharge the duties that may be assigned
to him from time to time by the Employer in an efficient, trustworthy and
businesslike manner. It is specifically agreed that nothing in this
Agreement shall prohibit Employee from (i) serving on corporate, civic or
charitable boards or committees; (ii) engaging directly or indirectly, in
activities with other public or private companies or ventures; or (iii)
making investments in any capacity whatsoever, provided only that such
activities or any of them do not significantly impair Employee's
performance of his duties for the Employer.
4. PLACE OF EMPLOYMENT
During the Term, the Employee shall render services where
and as reasonably required by the Employer. In conformance with the
foregoing and not in limitation thereof, Employee agrees to take such trips
as shall be consistent with or reasonably necessary in connection with his
duties. Employer will also maintain an office within ten (10) miles of the
Employee's abode determined as of the date hereof and shall furnish the
Employee both at the Employer's principal office and at such other location
with an office and secretarial help and such other assistance, facilities
and services consistent with Employee's position and necessary for the
adequate performance of his duties.
5. TERM
Subject to the provisions of Section 10 hereof, the term of
this Agreement shall be deemed to have commenced on January 1, 1995 and
shall expire on December 31, 1997 (the "Initial Term"). This Agreement
shall be automatically renewed for successive twelve (12) month periods on
all the remaining terms and conditions set forth herein, unless either
party elects not to renew this Agreement by giving written notice to the
other at least ninety (90) days before a scheduled expiration date. The
Initial Term of this Agreement together with all renewals and extensions
thereof are collectively referred to herein as the "Term."
6. COMPENSATION
(a) As compensation for all services rendered and to be
rendered by Employee hereunder and the fulfillment by Employee of all of
his obligations herein, the Employer shall pay Employee a base salary (the
"Base Salary") at the rate of $350,000 for the first year of the Term
payable in accordance with the Employer's customary payroll practices. The
Base Salary for the second year of the Term ("Adjusted Base Salary") shall
be sum of the Base Salary and the product of $350,000 multiplied by the
percentage increase in the consumer price index (as defined below,
hereinafter "CPI Index") from December, 1994 to December, 1995 which
percentage increase shall be calculated as follows: [(x minus y) divided
by y] where (x) equals the CPI Index for December, 1995 and (y) equals the
CPI Index for December, 1994. The Base Salary for the third year of the
term shall be the sum of the Adjusted Base Salary and the product of the
Adjusted Base Salary multiplied by the percentage increase in the CPI Index
from December, 1995 to December, 1996 as calculated above substituting 1996
for 1995 in (x) and 1995 for 1994 in (y). The Employee's Base Salary as of
January 1, 1996 is $360,150.
By way of illustration, if the CPI Index for December,
1995 is 120 and the CPI Index for December, 1994 is 115, the percentage
increase in the CPI Index is 4.35% and the Base Salary is increased by
$15,225 to $365,225 for 1996. If the CPI Index for December, 1996 is 122,
the percentage increase (over the 1995 CPI Index) is 1.67% and the Adjusted
Base Salary is increased by $6,087 to $371,312.
The CPI Index shall be the Consumer Price Index as
prepared by the Bureau of Labor Statistics of the United States Department
of Labor for All Urban Wage Earners and Clerical Workers, All items (1982-
84=100) for New York City (the
"Consumer Price Index") or an equivalent measure of increase in the cost of
living if such Consumer Price Index is not then being issued.
(b) The Base Salary for the twelve (12) month period
commencing January 1, 1998 and each successive twelve (12) month period of
the Term shall be increased in accordance with the recommendation of the
Compensation Committee of the Board of Directors of the Employer.
(c) Employee will participate in the Executive Bonus Plan
of the Employer attached hereto as Exhibit A. Notwithstanding any
provision contained herein or in the Executive Bonus Plan to the contrary,
no amendment to the Executive Bonus Plan shall have a material adverse
impact on the Employee. If the Executive Bonus Plan is discontinued, the
Employer agrees to establish a plan which will provide similar potential
benefits to the Employee.
(d) Employee will also be eligible to participate in all
phantom and/or actual stock option programs applicable to executive
employees. Employee shall be granted options in accordance with the
provisions set forth on Exhibit 1 which is attached hereto and made part
hereof.
(e) The Employer shall deduct from the compensation
described in (a),(b),(c) and (d) above, any Federal, state or city
withholding taxes, social security contributions and any other amounts
which may be required to be deducted or withheld by the Employer pursuant
to any Federal, state or city laws, rules or regulations.
(f) Any compensation otherwise payable to the Employee
pursuant to this Section in respect of any period during which the Employee
is disabled (as contemplated in Section 10) shall be reduced by any amounts
payable to the Employee for loss of earnings or the like under any
insurance plan or policy the premiums for which are paid for in their
entirety by the Employer.
7. BUSINESS EXPENSES
(a) The Employer shall pay, on behalf of Employee, all dues
to professional societies and other organizations as are customarily joined
by individuals holding the position of Chairman and Chief Executive Officer
of businesses similar to the Employer. The Employer will require and shall
reimburse the Employee for his out of pocket cost of one complete physical
examination per fiscal year of the Term.
(b) The Employer agrees that the Employee is authorized to
incur reasonable expenses in the performance of his duties hereunder and
agrees that all reasonable expenses incurred by Employee in the discharge
and fulfillment of his duties for the Employer, as set forth in Section 3,
will be promptly reimbursed or paid by the Employer upon written
substantiation signed by Employee, itemizing said expenses and containing
all applicable vouchers. Employee shall be entitled to receive prompt
reimbursement for all reasonable travel and entertainment expenses and the
costs of attending conferences and seminars, so long as such expenses
relate to Employee's ability to serve the best interests of the Employer.
In addition, within 30 days of the rendition of the applicable invoices,
Employer shall reimburse Employee annually for the reasonable costs
incurred by Employee in tax planning and tax return preparation in an
annual amount not to exceed $5,000.
8. BENEFITS AND INSURANCE
(a) The Employer agrees that, during the Term, the Employee
shall be insured under all insurance policies and shall receive all
benefits under all pension and welfare benefit plans (including, without
limitation group life, medical, major medical and disability insurance)
that the Employer may maintain and keep in force during the Term of the
Agreement for the benefit of the Employer's employees, subject to the
terms, provisions and conditions of such pension and welfare benefit plans
or insurance and the agreements with underwriters relating to same. In
addition, Employer will provide medical and major medical insurance for
Employee and his spouse during the Term and for the remainder of their
respective lives, notwithstanding the termination of Employee's employment
hereunder, whether voluntary or involuntary, or his Disability or death,
consistent with the level and type of coverage provided to Employee by
Employer's policy at March 1, 1996, provided however, that the provisions
of this Section 8(a) will not require the Employer to continue post
retirement or post employment medical coverage for the Employee or his
spouse in the event the Employer terminates its post retirement and/or post
employment coverage on a company-wide basis. In the event of such
termination of coverage, the Employee shall be entitled to obtain a
replacement policy consistent with the level and type of coverage described
in the preceding sentence covering the Employee and his spouse and the
Employer shall reimburse the Employee on an annual basis with respect to
the cost of the same.
(b) ITT Hartford life insurance policy No. U01732239 (the
"Policy"), owned by Shirley Vituli and Arthur Kunofsky as Trustees under
the Alan Vituli Insurance Trust, dated June 22, 1989 (the "Owner"), which
provides a death benefit of One Million Five Hundred Thousand Dollars
($1,500,000), is presently maintained by Employer pursuant to a Split-
Dollar Insurance Agreement, dated July 1, 1995, as amended April __, 1996
(the "Split-Dollar Agreement"). Employer acknowledges such agreement and
agrees to be bound by its provisions, provided however, that the sum total
of the Employer's outstanding premium payments shall be returned to the
Employer from the proceeds of the cash value of the policy if surrendered
during the Employee's lifetime, and in the event of Employee's death, the
Employer shall be entitled to receive that portion of the death benefit in
excess of $1,500,000 up to but not exceeding the sum total of the
Employer's outstanding premium payments from the proceeds of the death
benefit.
(c) Pursuant to the Split-Dollar Agreement, until the
earlier to occur of Employee's 65th birthday or Employee's death, Employer
shall, on or before the due date of each premium, make the premium payments
on the Policy. Employer shall provide written proof of such payment to
Employee within fifteen (15) days of the due date of the premium. If
Employer shall fail to supply such proof, Employee shall be entitled to pay
the premium and be reimbursed by Employer.
9. VACATION
Employee shall be entitled to an aggregate of four (4) weeks
paid vacation during each year of the Term at time or times reasonably
agreeable to both the Employee and the Employer, it being understood that
any portion of such vacation not taken in such year shall not be available
to be taken during any other year.
10. TERMINATION; CHANGE OF CONTROL; DEATH; DISABILITY
(a) Subject to the provisions of this Agreement, either the
Employer or the Employee may terminate the employment of the Employee on
the thirtieth (30th) day after receipt of written notice by the other party
hereto.
(b) If within six (6) months following a Change of Control
occurring during the Term, the employment of the Employee hereunder is
terminated without Cause, the Employee shall be paid: (1) his accrued but
unpaid Base Salary and vacation as of the date of termination; (2) a cash
payment in an amount equal to 2.99 multiplied by the average of the sum of
the Base Salary and the Annual Bonus paid or deferred in accordance with
the Executive Bonus Plan in the five calendar years prior to the date of
termination (the "Five-Year Compensation Average"); and (3) all amounts
previously deferred under the Executive Bonus Plan (together with any
interest accrued thereon) and not yet paid by the Employer.
(c) If the Employer (1) during the Term enters into a
binding written agreement to engage in a transaction which, if consummated,
would result in a Change of Control; (2) such transaction is consummated
within six (6) months after the last date of the Term; and (3) subsequent
to entering into such agreement the Employer terminates employment of the
Employee without Cause, the Employer shall pay to the Employee an amount
equal to the payment set forth in Section 10(b) hereof.
(d) If the Employee terminates his employment pursuant to
Section 10(a) hereof without Good Reason or the Employer terminates the
employment of the Employee hereunder for Cause, the Employer's only
obligations hereunder shall be to pay to the Employee his accrued but
unpaid Base Salary and vacation pay as of the date of termination plus any
compensation or bonus payments previously deferred by the Employee under
the Executive Bonus Plan (together with any interest accrued thereon) and
not yet paid by the Employer and to continue any and all such benefits
and/or insurance policies as required by Section 8 hereof. The Employee
shall have no further obligation to perform services for the Employer.
(e) If the Employer terminates employment of the Employee
hereunder without Cause, or the Employee terminates for Good Reason, the
Employer shall pay to the Employee (1) his accrued but unpaid Base Salary
and vacation as of the date of termination; (2) a cash payment in an amount
equal to 2.99 multiplied by the Employee's Five Year Compensation Average;
(3) all amounts previously deferred by the Employee under the Executive
Bonus Plan (together with any interest accrued thereon) and not yet paid by
the Employer; (4) fully vest the Employee in any stock option which has
been granted previously to the Employee; and (5) continue any and all such
benefit and insurance policies as required by Section 8 hereof.
(f) If the Employee becomes physically or mentally disabled
during the Term so that he is unable to perform the services required of
him pursuant to this Agreement for a period of six (6) successive months,
or an aggregate of six (6) months in any twelve (12) month period, the
Employer may give the Employee written notice of its intention to terminate
the services of the Employee hereunder. In such event, the Employee's
employment with the Employer shall terminate effective on the thirtieth
(30th) day after receipt of such notice by the Employee (the "Disability
Effective Date") provided the Employee shall not have returned to the
performance of the Employee's duties. Subject to the provisions of Section
6(f), in the event the Employee's employment is terminated by reason of
disability, the Employer's only obligations hereunder shall be (1) to
continue the Base Salary (at the rate in effect on the Disability Effective
Date) for a period of three (3) years from the Disability Effective Date;
(2) to pay a pro rata portion of the Annual Bonus for the year in which the
Employee's employment is terminated as and when such amounts are due and
payable under the term of the Executive Bonus Plan; (3) to pay all amounts
previously deferred under the Executive Bonus Plan together with any
interest accrued thereon) as prescribed by the Employee; (4) to fully vest
the Employee in any stock option which has been granted previously to the
Employee; and (5) to continue any and all such benefits and insurance
policies as required by Section 8 hereof.
(g) In the event of the Employee's death during the Term,
the Employer shall pay to his spouse, if he is survived by a spouse, or if
not, to the estate of the Employee, (1) the Employee's accrued and unpaid
Base Salary (at the rate in effect on the date of death) as of the date of
death; (2) a pro rata share of the Annual Bonus for the year of his death
as and when such amounts are due and payable under the term of the
Executive Bonus Plan; (3) all amounts previously deferred under the
Executive Bonus Plan (together with any interest accrued thereon) and not
yet paid by the Employer in the manner prescribed by the executor of the
Employee's estate and (4) continue any and all such benefits and insurance
policies as required by Section 8 hereof. In the event of the Employee's
death during the Term, the Employee shall fully vest in any stock option
which has been granted previously to the Employee.
(h) If the Employer does not continue the Employee's
employment upon expiration of the Initial Term, the only obligations of the
Employer hereunder shall be to pay the Employee in a cash lump sum an
amount equal to the Base Salary actually paid to the Employee for the prior
twelve (12) month period and any amounts payable under the Executive Bonus
Plan, as and when such amounts are due and payable under the terms of the
Executive Bonus Plan, and (5) to continue any and all such benefits and
insurance policies as required by Section 8 hereof.
(i) Notwithstanding anything contained in this Agreement to
the contrary, to the extent that the payments and benefits provided under
this Agreement or provided for the benefit of the Employee under any other
plan or agreement of or with the Employer (each such payment or benefit, a
"Payment," and such payments and benefits collectively, the "Payments"),
would be subject to the excise tax imposed under Section 4999 of the Code
or any interest or penalties with respect to such excise tax (such excise
tax, together with any such interest and penalties are hereinafter
collectively referred to as the "Excise Tax"), the Payments shall be
reduced if and to the extent necessary so that no Payment shall be subject
to the Excise Tax. The Employer shall reduce or eliminate the Payments by
first reducing or eliminating the payments due under Sections 10(b), 10(c)
or 10(e) hereof, then by reducing or eliminating any other amounts payable
in cash, and then by reducing or eliminating benefits which are not payable
in cash, in each case in reverse order beginning with payments or benefits
which are to be paid the farthest in time from the date of the
determination.
11. RESTRICTIVE COVENANTS
(a) During the Term of this Agreement and for a period of
two years following termination of this Agreement, the Employee (i) will
not violate or cause the Employer to violate the terms of any agreement,
including any franchise agreement, which the Employer is obligated under,
except with the express written consent of the duly empowered officer of
the Employer or pursuant to an order of a court of competent jurisdiction;
and (ii) divulge or use any confidential information the effect of which
would be injurious to the Employer without the prior written consent of a
duly empowered officer of the Employer. Employee shall have the right to
approve the provisions of any such franchise agreement which restricts
Employee's future employment or business interests. During the Term of
this Agreement and for a period of two years following termination of
Employee's employment hereunder, the Employee will not solicit or employ
any person, who was employed by the Employer within six months prior to the
termination of Employee's employment, in any business in which Employee has
a material interest, direct or indirect, as an officer, partner,
shareholder or beneficial owner. The preceding sentence shall not prohibit
the Employee from hiring (i) the individual who is the general counsel of
the Employer as of the date of the closing of the Securities Purchase
Agreement at any time, or (ii) any person whose employment is terminated
involuntarily by the Employer during the Term or at any time thereafter
provided that such hiring shall not occur until after the Employee's
termination of employment hereunder.
(b) During the Term of employment and for a period of two
(2) years after the termination of the Employee's employment hereunder,
Employee will not in the Area (as defined in Section 11(c) below) either
directly or indirectly engage in one or more of the following with any
Burger King franchisee: the acquisition, financing, providing of advice or
consulting services, or ownership of the operations of a franchised Burger
King restaurant, as an employee, officer, consultant, independent
contractor, partner or shareholder. This shall not prevent Employee from
engaging in any activity related to the acquisition or ownership of the
business of Burger King Corporation or any other business activity other
than that described in this Section 11(b).
(c) For purposes of this Agreement, Area shall mean the
continental United States, Puerto Rico and Canada.
(d) The parties hereto, recognizing that irreparable injury
will result to the Employer, its business and property in the event of the
Employee's breach of this Employee covenant and non-competition provision,
agree that in the event of any such breach by the Employee, the Employer
will be entitled, in addition to any other remedies and damages available,
to an injunction to restrain the violation hereof by the Employee, the
Employee's partners, agents, servants, employers, employees, and all
persons acting for or with the Employee. Employee represents and admits
that (i) in the event of termination of this Agreement, Employee's
experience and capabilities are such that Employee can obtain employment in
a business engaged in other lines and/or of a different nature than the
business of the Employer, and that the enforcement of a remedy by way of
injunction will not prevent the Employee from earning a livelihood, and
(ii) this Employee covenant and non-competition provision is being entered
into in connection with the Employee's sale of his ownership interest in
the Employer and in the absence of this provision the sale would not be
consummated.
12. INDEMNIFICATION
To the fullest extent permitted by Section 145 of the General
Corporation Law of Delaware, as the same may be amended and supplemented
("Section 145") and Article Ninth of the Employer's certificate of
incorporation, Employer shall indemnify Employee and hold him harmless from
and against any and all of the expenses, liabilities or other matters
referred to or covered in said section and certificate of incorporation
(collectively, "Liabilities") if any of such Liabilities are incurred or
suffered by Employee as a result of, arising out of or in connection with
his employment by the Employer provided however, that the Employee
acknowledges that he is not entitled to the indemnity referred to above
(either as set forth in the Employer's By-laws or in this Agreement), to
the extent a dispute arises between the Employer and the Employee with
respect to his conduct as an Employee, or any claim that may arise either
directly or indirectly with respect to the breach of any terms and
conditions of this Agreement. In addition to the indemnification, as
provided in Section 145, the Employer shall advance expenses, including
reasonable attorneys' fees, of Employee. The indemnification and
advancement of expenses provided for herein shall continue after Employee
has ceased to be a director, officer, employee or agent and shall inure to
the benefit of the heirs, executors and administrators of Employee.
13. BINDING EFFECT
This Agreement shall inure to the benefit of and be binding
upon the Employer and its successors. The Employer will require any
successor (whether direct or indirect, by purchase, merger, consolidation
or otherwise) to all or substantially all of its assets to expressly assume
and agree to perform this Agreement in the same manner and to the same
extent that the Employer would be required to perform it if no such
succession had taken place or with or into which the Employer may
consolidate or merge. Employee agrees that this Agreement is personal to
him and may not be assigned by him otherwise than by will or laws of
descent and distribution. This Agreement shall inure to the benefit of and
be enforceable by the Employee's legal representatives.
14. MISCELLANEOUS
(a) If any provision of this Agreement, or portion thereof,
shall be held invalid or unenforceable by a court of competent
jurisdiction, such invalidity or unenforceability shall attach only to such
provision or portion thereof, and this Agreement shall be carried out as if
any such invalid or unenforceable provision or portion thereof were not
contained herein. In addition, any such invalid or unenforceable provision
or portion thereof shall be deemed, without further action on the part of
the parties hereto, modified, amended or limited to the extent necessary to
render the same valid and enforceable.
(b) This Agreement, and all of the rights and obligations
of the parties in connection with the employment relationship established
hereby shall be construed and enforced in accordance with the laws of New
York applicable to contracts made and fully to be performed therein, and
without giving effect to any rules of conflicts of law.
(c) All notices, requests, demands, and other
communications provided for hereunder shall be in writing and shall be
given or made when (i) delivered personally; (ii) three (3) business days
following mailing by first class postage prepaid, registered or certified
mail, return receipt requested, to the party to be notified at its or his
address set forth herein; or (iii) on the date sent by telecopier, if the
addressee has compatible receiving equipment and provided the transmittal
is made on a business day during the hours of 9:00 a.m. to 6:00 p.m. of the
receiving party and if sent at other times, on the immediately succeeding
business day, or (iv) on the first business day immediately succeeding
delivery to an express overnight carrier for the next business day
delivery.
(d) This Agreement may be executed simultaneously in two or
more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument. Each party
shall deliver such further instruments and take such further action as may
be reasonably requested by the other in order to carry out the provisions
and purposes of this Agreement. This Agreement represents the entire
understanding of the parties with reference to the subject matter hereof,
supersedes in its entirety the provisions of the Prior Employment
Agreement, and neither this Agreement nor any provisions hereof may be
modified, discharged or terminated except by an agreement in writing signed
by the party against whom the enforcement of any waiver, charge, discharge
or termination is sought. Any waiver by either party of a breach of any
provision of this Agreement must be in writing and no waiver of a
particular breach shall operate as or be construed as waiver of any
subsequent breach thereof.
IN WITNESSETH WHEREOF, the parties hereto have executed and have
caused this Amended and Restated Employment Agreement to be executed as of
April 3, 1996.
CARROLS CORPORATION
By: /S/ JOSEPH ZIRKMAN
Name: Joseph Zirkman
Title: Vice President
/S/ ALAN VITULI
ALAN VITULI
EXHIBIT 10.24
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
This Amended and Restated Employment Agreement ("Agreement")
effective as of the closing of the Securities Purchase Agreement, as
defined below (the "Effective Date"), by and between CARROLS CORPORATION
("Employer"), a corporation organized under the laws of Delaware and whose
address for the purposes of this agreement is 968 James Street, Syracuse,
New York, 13217 and Daniel T. Accordino whose principal residence is 4617
Ridge Road, Cazenovia, New York 13235 ("Employee"):
W I T N E S S E T H:
WHEREAS, pursuant to the terms of an employment agreement dated
January 1, 1995 between Employer and Employee (the "Prior Employment
Agreement"), Employee has been and is presently employed by the Employer as
its President and Chief Operating Officer;
WHEREAS, concurrently with the execution and delivery hereof,
pursuant to a certain Securities Purchase Agreement (the "Securities
Purchase Agreement") dated as of March 6, 1996, among Employer, Carrols
Holdings Corporation ("Holdings"), Atlantic Restaurants, Inc. ("ARI"),
Bahrain International Bank (E.C.) for the limited purposes set forth
therein, and the selling securityholders of Holdings as listed on Schedule
I thereof (the "Selling Securityholders"), ARI has acquired substantially
all of the outstanding common stock of Holdings; and
WHEREAS, as part of the transactions contemplated by the
Securities Purchase Agreement, the parties thereto have agreed that
Employer and Employee shall enter into this Amended and Restated Employment
Agreement which shall supersede in its entirety the Prior Agreement upon
the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the mutual covenants and
agreements herein set forth and other good and valuable consideration, the
receipt and adequacy of which is mutually acknowledged, it is agreed by and
between the parties as follows:
1. DEFINITIONS
For purposes of this Agreement, unless the context requires
otherwise, the following words and phrases shall have the meanings
indicated below:
"Change of Control" shall mean:
(a) The acquisition (other than from the Employer) by any
person, entity or "group", within the meaning of Section 13(d)(3) or
14(d)(2) of the Securities Exchange Act of 1934 (the "Exchange Act"),
excluding for this purpose any employee benefit plan of the Employer or its
subsidiaries which acquires beneficial ownership of voting securities of
the Employer, of beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act), of 50% or more of either the then
outstanding shares of common stock or the combined voting power of the
Employer's then outstanding voting securities entitled to vote generally in
the election of directors;
(b) Individuals who, as of the close of business on the
date as of or immediately following the closing of the Securities Purchase
Agreement on which the new Board of Directors of the Employer is elected
(the "Incumbent Board") cease for any reason to constitute at least a
majority of the Board of Directors; provided that any person becoming a
director subsequent to the date hereof whose election, or nomination for
election by the Employer's shareholders, was approved by a vote of at least
a majority of the directors then comprising the Incumbent Board (other than
an election or nomination of an individual whose initial assumption of
office is in connection with an actual or threatened election contest
relating to the election of Directors of the Employer, as such terms are
used in Rule 14a-11 of Regulation 14A promulgated under the Exchange Act)
shall be for purposes of this Agreement, considered as though such person
were a member of the Incumbent Board, or
(c) Approval by the stockholders of the Employer of a
reorganization, merger, or consolidation, in each case, with respect to
which persons who were the stockholders of the Employer immediately prior
to such reorganization, merger or consolidation do not, immediately
thereafter, own more than 50% of the combined voting power entitled to vote
generally in the election of directors of the reorganized, merged or
consolidated company's then outstanding voting securities, or a liquidation
or dissolution of the Employer or of the sale of all or substantially all
of the assets of the Employer.
"Cause" shall mean: (1) a felony conviction of the Employee (or a
plea of no lo contendere in lieu thereof); (2) the unauthorized disclosure
of confidential proprietary information of the Employer which disclosure
the Employee knows or reasonably should have known would be reasonably
likely to result in material damage to the Employer; (3) the breach by the
Employee of any material provision of this Agreement, which breach, if
curable, is not remedied within thirty (30) days after the Employee's
receipt of written notice thereof provided, however, that the Employer need
not permit the Employee to cure any breach which has been the subject of a
prior written notice; (4) the engagement in self dealing in breach of
fiduciary duties with respect to the Employer's assets or properties unless
disclosed to and approved by the Board of Directors; (5) an act of gross
misconduct in connection with the Employee's duties hereunder; or
(6) habitual or material neglect of the Employee's duties to the Employer
(as determined in good faith by the Board of Directors, continuing after
prior written notice to the Employee).
"Good Reason" shall mean (i) the material failure of the Employer
to comply with the provisions of this Agreement which failure shall not
cease promptly and in no event more than ten (10) days after the Employer's
receipt of written notice from the Employee objecting to such conduct; (ii)
any purported termination by the Employer of the Employee's employment
other than as expressly permitted in this Agreement; or (iii) the
assignment to Employee of duties and responsibilities inconsistent with
those duties and responsibilities customarily assigned to individuals
holding the position of President and Chief Operating Officer of a company
of comparable size or the substantial reduction by Employer of Employee's
duties and responsibilities.
2. REPRESENTATIONS AND WARRANTIES
Employee represents and warrants that he is not subject to
any restrictive covenants or other agreements or legal restrictions in
favor of any person which would in any way preclude, inhibit, impair or
limit his employment by the Employer or the performance of his duties, as
contemplated herein.
3. EMPLOYMENT
The Employer hereby employs Employee and Employee accepts
such employment as President and Chief Operating Officer of the Employer.
As its President and Chief Operating Officer, Employee shall render such
services to the Employer as are customarily rendered by the President and
Chief Operating Officer of comparable companies and as required by the
articles and by-laws of the Employer. Employee accepts such employment
and, consistent with fiduciary standards which exist between an employer
and an employee shall perform and discharge the duties that may be assigned
to him from time to time by the Employer in an efficient, trustworthy and
businesslike manner. It is specifically agreed that nothing in this
Agreement shall prohibit Employee from (i) serving on corporate, civic or
charitable boards or committees; (ii) engaging directly or indirectly, in
activities with other public or private companies or ventures; or (iii)
making investments in any capacity whatsoever, provided only that such
activities or any of them do not significantly impair Employee's
performance of his duties for the Employer.
4. PLACE OF EMPLOYMENT
During the Term, the Employee shall render services where
and as reasonably required by the Employer. In conformance with the
foregoing and not in limitation thereof, Employee agrees to take such trips
as shall be consistent with or reasonably necessary in connection with his
duties. During the Term, the Employee shall be entitled to an office and
secretarial help and such other assistance, facilities and services
consistent with Employee's position and necessary for the adequate
performance of his duties.
5. TERM
Subject to the provisions of Section 10 hereof, the term of
this Agreement shall be deemed to have commenced on January 1, 1995 and
shall expire on December 31, 1997 (the "Initial Term"). This Agreement
shall be automatically renewed for successive twelve (12) month periods on
all the remaining terms and conditions set forth herein, unless either
party elects not to renew this Agreement by giving written notice to the
other at least ninety (90) days before a scheduled expiration date. The
Initial Term of this Agreement together with all renewals and extensions
thereof are collectively referred to herein as the "Term."
6. COMPENSATION
(a) As compensation for all services rendered and to be
rendered by Employee hereunder and the fulfillment by Employee of all of
his obligations herein, the Employer shall pay Employee a base salary (the
"Base Salary") at the rate of $250,000 for the first year of the Term
payable in accordance with the Employer's customary payroll practices. The
Base Salary for the second year of the Term ("Adjusted Base Salary") shall
be sum of the Base Salary and the product of $250,000 multiplied by the
percentage increase in the consumer price index (as defined below,
hereinafter "CPI Index") from December, 1994 to December, 1995 which
percentage increase shall be calculated as follows: [(x minus y) divided
by y] where (x) equals the CPI Index for December, 1995 and (y) equals the
CPI Index for December, 1994. The Base Salary for the third year of the
term shall be the sum of the Adjusted Base Salary and the product of the
Adjusted Base Salary multiplied by the percentage increase in the CPI Index
from December, 1995 to December, 1996 as calculated above substituting 1996
for 1995 in (x) and 1995 for 1994 in (y). The Employee's Base Salary as of
January 1, 1996 is $257,250.
By way of illustration, if the CPI Index for December,
1995 is 120 and the CPI Index for December, 1994 is 115, the percentage
increase in the CPI Index is 4.35% and the Base Salary is increased by
$10,875 to $260,875 for 1996. If the CPI Index for December, 1996 is 122,
the percentage increase (over the 1995 CPI Index) is 1.67% and the Adjusted
Base Salary is increased by $4,357 to $265,232.
The CPI Index shall be the Consumer Price Index as
prepared by the Bureau of Labor Statistics of the United States Department
of Labor for All Urban Wage Earners and Clerical Workers, All items (1982-
84=100) for New York City (the "Consumer Price Index") or an equivalent
measure of increase in the cost of living if such Consumer Price Index is
not then being issued.
(b) The Base Salary for the twelve (12) month period
commencing January 1, 1998 and each successive twelve (12) month period of
the Term shall be increased in accordance with the recommendation of the
Compensation Committee of the Board of Directors of the Employer.
(c) Employee will participate in the Executive Bonus Plan
of the Employer attached hereto as Exhibit A. Notwithstanding any
provision contained herein or in the Executive Bonus Plan to the contrary,
no amendment to the Executive Bonus Plan shall have a material adverse
impact on the Employee. If the Executive Bonus Plan is discontinued, the
Employer agrees to establish a plan which will provide similar potential
benefits to the Employee.
(d) Employee will also be eligible to participate in all
phantom and/or actual stock option programs applicable to executive
employees. Employee shall be granted options in accordance with the
provisions set forth on Exhibit 1 which is attached hereto and made part
hereof.
(e) The Employer shall deduct from the compensation
described in (a),(b),(c) and (d) above, any Federal, state or city
withholding taxes, social security contributions and any other amounts
which may be required to be deducted or withheld by the Employer pursuant
to any Federal, state or city laws, rules or regulations.
(f) Any compensation otherwise payable to the Employee
pursuant to this Section in respect of any period during which the Employee
is disabled (as contemplated in Section 10) shall be reduced by any amounts
payable to the Employee for loss of earnings or the like under any
insurance plan or policy the premiums for which are paid for in their
entirety by the Employer.
7. BUSINESS EXPENSES
(a) The Employer shall pay, on behalf of Employee, all dues
to professional societies and other organizations as are customarily joined
by individuals holding the position of President and Chief Operating
Officer of businesses similar to the Employer. The Employer will require
and shall reimburse the Employee for his out of pocket cost of one complete
physical examination per fiscal year of the Term.
(b) The Employer agrees that the Employee is authorized to
incur reasonable expenses in the performance of his duties hereunder and
agrees that all reasonable expenses incurred by Employee in the discharge
and fulfillment of his duties for the Employer, as set forth in Section 3,
will be promptly reimbursed or paid by the Employer upon written
substantiation signed by Employee, itemizing said expenses and containing
all applicable vouchers. Employee shall be entitled to receive prompt
reimbursement for all reasonable travel and entertainment expenses and the
costs of attending conferences and seminars, so long as such expenses
relate to Employee's ability to serve the best interests of the Employer.
In addition, within 30 days of the rendition of the applicable invoices,
Employer shall reimburse Employee annually for the reasonable costs
incurred by Employee in tax planning and tax return preparation in an
annual amount not to exceed $5,000.
8. BENEFITS AND INSURANCE
(a) The Employer agrees that, during the Term, the Employee
shall be insured under all insurance policies and shall receive all
benefits under all pension and welfare benefit plans (including, without
limitation group life, medical, major medical and disability insurance)
that the Employer may maintain and keep in force during the Term of the
Agreement for the benefit of the Employer's employees, subject to the
terms, provisions and conditions of such pension and welfare benefit plans
or insurance and the agreements with underwriters relating to same. In
addition, Employer will provide medical and major medical insurance for
Employee and his spouse during the Term and for the remainder of their
respective lives and such benefit shall also provide coverage to the
Employee's eligible dependents, notwithstanding the termination of
Employee's employment hereunder, whether voluntary or involuntary, or his
Disability or death, consistent with the level and type of coverage
provided to Employee by Employer's policy at March 1, 1996, provided
however, that the provisions of this Section 8(a) will not require the
Employer to continue post retirement or post employment medical coverage
for the Employee, his spouse, and eligible dependents in the event the
Employer terminates its post retirement and/or post employment coverage on
a company-wide basis. In the event of such termination of coverage, the
Employee shall be entitled to obtain a replacement policy consistent with
the level and type of coverage described in the preceding sentence covering
the Employee, his spouse, and eligible dependents and the Employer shall
reimburse the Employee on an annual basis with respect to the cost of the
same.
(b) ITT Hartford life insurance policy No. U01731692 (the
"Policy"), owned by Lucinda Accordino and Lawrence Accordino as Trustees
under the Daniel T. Accordino Insurance Trust, dated February 20, 1995 (the
"Owner"), which provides a death benefit of One Million Dollars
($1,000,000), is presently maintained by Employer pursuant to a Split-
Dollar Insurance Agreement, dated July 1, 1995, as amended April __, 1996
(the "Split-Dollar Agreement"). Employer acknowledges such agreement and
agrees to be bound by its provisions, provided however, that the sum total
of the Employer's outstanding premium payments shall be returned to the
Employer from the proceeds of the cash value of the policy if surrendered
during the Employee's lifetime, and in the event of Employee's death, the
Employer shall be entitled to receive that portion of the death benefit in
excess of $1,000,000 up to but not exceeding the sum total of the
Employer's outstanding premium payments from the proceeds of the death
benefit.
(c) Pursuant to the Split-Dollar Agreement, until the
earlier to occur of Employee's 65th birthday or Employee's death, Employer
shall, on or before the due date of each premium, make the premium payments
on the Policy. Employer shall provide written proof of such payment to
Employee within fifteen (15) days of the due date of the premium. If
Employer shall fail to supply such proof, Employee shall be entitled to pay
the premium and be reimbursed by Employer.
9. VACATION
Employee shall be entitled to an aggregate of four (4) weeks
paid vacation during each year of the Term at time or times reasonably
agreeable to both the Employee and the Employer, it being understood that
any portion of such vacation not taken in such year shall not be available
to be taken during any other year.
10. TERMINATION; CHANGE OF CONTROL; DEATH; DISABILITY
(a) Subject to the provisions of this Agreement, either the
Employer or the Employee may terminate the employment of the Employee on
the thirtieth (30th) day after receipt of written notice by the other party
hereto.
(b) If within six (6) months following a Change of Control
occurring during the Term, the employment of the Employee hereunder is
terminated without Cause, the Employee shall be paid: (1) his accrued but
unpaid Base Salary and vacation as of the date of termination; (2) a cash
payment in an amount equal to 2.99 multiplied by the average of the sum of
the Base Salary and the Annual Bonus paid or deferred in accordance with
the Executive Bonus Plan in the five calendar years prior to the date of
termination (the "Five-Year Compensation Average"); and (3) all amounts
previously deferred under the Executive Bonus Plan (together with any
interest accrued thereon) and not yet paid by the Employer.
(c) If the Employer (1) during the Term enters into a
binding written agreement to engage in a transaction which, if consummated,
would result in a Change of Control; (2) such transaction is consummated
within six (6) months after the last date of the Term; and (3) subsequent
to entering into such agreement the Employer terminates employment of the
Employee without Cause, the Employer shall pay to the Employee an amount
equal to the payment set forth in Section 10(b) hereof.
(d) If the Employee terminates his employment pursuant to
Section 10(a) hereof without Good Reason or the Employer terminates the
employment of the Employee hereunder for Cause, the Employer's only
obligations hereunder shall be to pay to the Employee his accrued but
unpaid Base Salary and vacation pay as of the date of termination plus any
compensation or bonus payments previously deferred by the Employee under
the Executive Bonus Plan (together with any interest accrued thereon) and
not yet paid by the Employer and to continue any and all such benefits
and/or insurance policies as required by Section 8 hereof. The Employee
shall have no further obligation to perform services for the Employer.
(e) If the Employer terminates employment of the Employee
hereunder without Cause, or the Employee terminates for Good Reason, the
Employer shall pay to the Employee (1) his accrued but unpaid Base Salary
and vacation as of the date of termination; (2) a cash payment in an amount
equal to 2.99 multiplied by the Employee's Five Year Compensation Average;
(3) all amounts previously deferred by the Employee under the Executive
Bonus Plan (together with any interest accrued thereon) and not yet paid by
the Employer; (4) fully vest the Employee in any stock option which has
been granted previously to the Employee; and (5) continue any and all such
benefits and insurance policies as required by Section 8 hereof.
(f) If the Employee becomes physically or mentally disabled
during the Term so that he is unable to perform the services required of
him pursuant to this Agreement for a period of six (6) successive months,
or an aggregate of six (6) months in any twelve (12) month period, the
Employer may give the Employee written notice of its intention to terminate
the services of the Employee hereunder. In such event, the Employee's
employment with the Employer shall terminate effective on the thirtieth
(30th) day after receipt of such notice by the Employee (the "Disability
Effective Date") provided the Employee shall not have returned to the
performance of the Employee's duties. Subject to the provisions of Section
6(f), in the event the Employee's employment is terminated by reason of
disability, the Employer's only obligations hereunder shall be (1) to
continue the Base Salary (at the rate in effect on the Disability Effective
Date) for a period of three (3) years from the Disability Effective Date;
(2) to pay a pro rata portion of the Annual Bonus for the year in which the
Employee's employment is terminated as and when such amounts are due and
payable under the term of the Executive Bonus Plan; (3) to pay all amounts
previously deferred under the Executive Bonus Plan together with any
interest accrued thereon) as prescribed by the Employee; (4) to fully vest
the Employee in any stock option which has been granted previously to the
Employee; and (5) to continue any and all such benefits and insurance
policies as required by Section 8 hereof.
(g) In the event of the Employee's death during the Term,
the Employer shall pay to his spouse, if he is survived by a spouse, or if
not, to the estate of the Employee, (1) the Employee's accrued and unpaid
Base Salary (at the rate in effect on the date of death) as of the date of
death; (2) a pro rata share of the Annual Bonus for the year of his death
as and when such amounts are due and payable under the term of the
Executive Bonus Plan; (3) all amounts previously deferred under the
Executive Bonus Plan (together with any interest accrued thereon) and not
yet paid by the Employer in the manner prescribed by the executor of the
Employee's estate and (4) continue any and all such benefits and insurance
policies as required by Section 8 hereof. In the event of the Employee's
death during the Term, the Employee shall fully vest in any stock option
which has been granted previously to the Employee.
(h) If the Employer does not continue the Employee's
employment upon expiration of the Initial Term, the only obligations of the
Employer hereunder shall be to pay the Employee in a cash lump sum an
amount equal to the Base Salary actually paid to the Employee for the prior
twelve (12) month period and any amounts payable under the Executive Bonus
Plan, as and when such amounts are due and payable under the terms of the
Executive Bonus Plan, and (5) to continue any and all such benefits and
insurance policies as required by Section 8 hereof.
(i) Notwithstanding anything contained in this Agreement to
the contrary, to the extent that the payments and benefits provided under
this Agreement or provided for the benefit of the Employee under any other
plan or agreement of or with the Employer (each such payment or benefit, a
"Payment," and such payments and benefits collectively, the "Payments"),
would be subject to the excise tax imposed under Section 4999 of the Code
or any interest or penalties with respect to such excise tax (such excise
tax, together with any such interest and penalties are hereinafter
collectively referred to as the "Excise Tax"), the Payments shall be
reduced if and to the extent necessary so that no Payment shall be subject
to the Excise Tax. The Employer shall reduce or eliminate the Payments by
first reducing or eliminating the payments due under Sections 10(b), 10(c)
or 10(e) hereof, then by reducing or eliminating any other amounts payable
in cash, and then by reducing or eliminating benefits which are not payable
in cash, in each case in reverse order beginning with payments or benefits
which are to be paid the farthest in time from the date of the
determination.
11. RESTRICTIVE COVENANTS
(a) During the Term of this Agreement and for a period of
two years following termination of this Agreement, the Employee (i) will
not violate or cause the Employer to violate the terms of any agreement,
including any franchise agreement, which the Employer is obligated under,
except with the express written consent of the duly empowered officer of
the Employer or pursuant to an order of a court of competent jurisdiction;
and (ii) divulge or use any confidential information the effect of which
would be injurious to the Employer without the prior written consent of a
duly empowered officer of the Employer. Employee shall have the right to
approve the provisions of any such franchise agreement which restricts
Employee's future employment or business interests. During the Term of
this Agreement and for a period of two years following termination of
Employee's employment hereunder, the Employee will not solicit or employ
any person, who was employed by the Employer within six months prior to the
termination of Employee's employment, in any business in which Employee has
a material interest, direct or indirect, as an officer, partner,
shareholder or beneficial owner. The preceding sentence shall not prohibit
the Employee from hiring any person whose employment is terminated
involuntarily by the Employer during the Term or at any time thereafter
provided that such hiring shall not occur until after the Employee's
termination of employment hereunder.
(b) During the Term of employment and for a period of two
(2) years after the termination of the Employee's employment hereunder,
Employee will not in the Area (as defined in Section 11(c) below) either
directly or indirectly engage in one or more of the following with any
Burger King franchisee: the acquisition, financing, providing of advice or
consulting services, or ownership of the operations of a franchised Burger
King restaurant, as an employee, officer, consultant, independent
contractor, partner or shareholder.
(c) For purposes of this Agreement, Area shall mean the
continental United States, Puerto Rico and Canada.
(d) The parties hereto, recognizing that irreparable injury
will result to the Employer, its business and property in the event of the
Employee's breach of this Employee covenant and non-competition provision,
agree that in the event of any such breach by the Employee, the Employer
will be entitled, in addition to any other remedies and damages available,
to an injunction to restrain the violation hereof by the Employee, the
Employee's partners, agents, servants, employers, employees, and all
persons acting for or with the Employee. Employee represents and admits
that (i) in the event of termination of this Agreement, Employee's
experience and capabilities are such that Employee can obtain employment in
a business engaged in other lines and/or of a different nature than the
business of the Employer, and that the enforcement of a remedy by way of
injunction will not prevent the Employee from earning a livelihood, and
(ii) this Employee covenant and non-competition provision is being entered
into in connection with the Employee's sale of his ownership interest in
the Employer and in the absence of this provision the sale would not be
consummated.
12. INDEMNIFICATION
To the fullest extent permitted by Section 145 of the General
Corporation Law of Delaware, as the same may be amended and supplemented
("Section 145") and Article Ninth of Employers certificate of
incorporation, Employer shall indemnify Employee and hold him harmless from
and against any and all of the expenses, liabilities or other matters
referred to or covered in said section and certificate of incorporation
(collectively, "Liabilities") if any of such Liabilities are incurred or
suffered by Employee as a result of, arising out of or in connection with
his employment by the Employer provided however, that the Employee
acknowledges that he is not entitled to the indemnity referred to above
(either as set forth in the Employer's By-laws or in this Agreement), to
the extent a dispute arises between the Employer and the Employee with
respect to his conduct as an Employee, or any claim that may arise either
directly or indirectly with respect to the breach of any terms and
conditions of this Agreement. In addition to the indemnification, as
provided in Section 145, the Employer shall advance expenses, including
reasonable attorneys' fees, of Employee. The indemnification and
advancement of expenses provided for herein shall continue after Employee
has ceased to be a director, officer, employee or agent and shall inure to
the benefit of the heirs, executors and administrators of Employee.
13. BINDING EFFECT
This Agreement shall inure to the benefit of and be binding
upon the Employer and its successors. The Employer will require any
successor (whether direct or indirect, by purchase, merger, consolidation
or otherwise) to all or substantially all of its assets to expressly assume
and agree to perform this Agreement in the same manner and to the same
extent that the Employer would be required to perform it if no such
succession had taken place or with or into which the Employer may
consolidate or merge. Employee agrees that this Agreement is personal to
him and may not be assigned by him otherwise than by will or laws of
descent and distribution. This Agreement shall inure to the benefit of and
be enforceable by the Employee's legal representatives.
14. MISCELLANEOUS
(a) If any provision of this Agreement, or portion thereof,
shall be held invalid or unenforceable by a court of competent
jurisdiction, such invalidity or unenforceability shall attach only to such
provision or portion thereof, and this Agreement shall be carried out as if
any such invalid or unenforceable provision or portion thereof were not
contained herein. In addition, any such invalid or unenforceable provision
or portion thereof shall be deemed, without further action on the part of
the parties hereto, modified, amended or limited to the extent necessary to
render the same valid and enforceable.
(b) This Agreement, and all of the rights and obligations
of the parties in connection with the employment relationship established
hereby shall be construed and enforced in accordance with the laws of New
York applicable to contracts made and fully to be performed therein, and
without giving effect to any rules of conflicts of law.
(c) All notices, requests, demands, and other
communications provided for hereunder shall be in writing and shall be
given or made when (i) delivered personally; (ii) three (3) business days
following mailing by first class postage prepaid, registered or certified
mail, return receipt requested, to the party to be notified at its or his
address set forth herein; or (iii) on the date sent by telecopier, if the
addressee has compatible receiving equipment and provided the transmittal
is made on a business day during the hours of 9:00 a.m. to 6:00 p.m. of the
receiving party and if sent at other times, on the immediately succeeding
business day, or (iv) on the first business day immediately succeeding
delivery to an express overnight carrier for the next business day
delivery.
(d) This Agreement may be executed simultaneously in two or
more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument. Each party
shall deliver such further instruments and take such further action as may
be reasonably requested by the other in order to carry out the provisions
and purposes of this Agreement. This Agreement represents the entire
understanding of the parties with reference to the subject matter hereof,
supersedes in its entirety the provisions of the Prior Employment
Agreement, and neither this Agreement nor any provisions hereof may be
modified, discharged or terminated except by an agreement in writing signed
by the party against whom the enforcement of any waiver, charge, discharge
or termination is sought. Any waiver by either party of a breach of any
provision of this Agreement must be in writing and no waiver of a
particular breach shall operate as or be construed as waiver of any
subsequent breach thereof.
IN WITNESSETH WHEREOF, the parties hereto have executed and have
caused this Amended and Restated Employment Agreement to be executed as of
April 3, 1996.
CARROLS CORPORATION
By: /S/ ALAN VITULI
Name: Alan Vituli
Title: Chief Executive Officer
/S/ DANIEL T. ACCORDINO DANIEL T. ACCORDINO
EXHIBIT 10.25
AMENDMENT, IN TOTO, OF
SPLIT DOLLAR INSURANCE AGREEMENT
THIS AMENDMENT, IN TOTO, to the Split Dollar Insurance Agreement,
dated July 1, 1995, by and between Carrols Corporation (the "Employer") and
Shirley Vituli and Arthur Kunofsky, as Trustees under the Alan Vituli
Insurance Trust dated June 22, 1989 (the "Owner"), is made as of the 3rd
day of April, 1996.
Recitals:
A. The Employer is a corporation duly organized and validly existing
under the laws of the State of New York.
B. Alan Vituli (the "Employee") is a valued and trusted employee of
the Employer.
C. In consideration of the faithful performance of services by the
Employee for the Employer, the Employer wishes to benefit the Employee by
providing life insurance benefits to the Employee under a split dollar
arrangement in accordance with the terms and conditions of this Agreement.
D. The Employer and the Owner have agreed that life insurance policy
no. UO1732239 on the life of the Employee, issued by ITT Hartford (the
"Insurance Company"), with a death benefit of $1,500,000 (the "Policy"),
shall be owned by the Owner subject to the terms and conditions of this
Agreement.
E. The parties intend that this arrangement shall constitute a split
dollar arrangement as described in Rev. Rul. 64-328, 1964-2 C.B. 11.
NOW, THEREFORE, the parties mutually agree as follows:
1. OWNERSHIP OF POLICY.
The Policy has been issued to the Owner as Owner, and the
Owner shall be the sole and exclusive Owner of the Policy.
2. PAYMENT OF PREMIUMS.
The Owner shall pay, either directly to the Insurance Company, or
by annual or more frequent reimbursement to the Employer if the Employer
shall have paid that part of the premium which the Owner is required to pay
hereunder, that portion of the annual gross premium due on the Policy, up
to but not exceeding the entire amount thereof, equal to the economic
benefit (including any economic benefit attributable to the use of the
Policy dividends, if any) provided to the Employee. The economic benefit
shall be defined as the P.S. 58 rates or the Insurance Company's standard
yearly renewable term rate in accordance with the principles set forth in
Rev. Rul. 64-328, 1964-2 C.B. 11 and Rev. Rul. 66-110, 1966-1 C.B. 12.
The Employer shall pay no less than the balance of the premium, if any.
3. RIGHTS IN THE POLICY.
(A) The Owner shall have all of the rights of the Owner under
the Policy and the Owner shall be entitled to exercise all of such rights,
options and privileges (other than those specifically enumerated for the
Employer in Paragraph B of Article 7) without the consent of the Employer.
(B) In consideration of the Employer's agreement to contribute
to the payment of the premiums on the Policy in the manner set forth in
this Agreement, in the event of a termination of this Agreement by the
Owner, pursuant to Subparagraph (i) of Paragraph A of Article 5, the Owner
agrees to repay to the Employer, and the Employer shall be entitled to
receive, at the time and in the manner provided below, the lesser of
"Aggregate Employer Premiums Paid" or the then "Cash Surrender Value" of
the Policy, computed without regard to any outstanding Policy loans.
(C) For purposes of this Agreement, the following definitions
shall apply:
i. "Aggregate Employer Premiums Paid" means the total
premiums paid for the Policy by the Employer and not reimbursed to the
Employer by the Owner, as of the termination date, except premiums for
any extra benefit riders or agreements under the Policy other than
riders providing additional paid-up insurance.
ii. "Cash Surrender Value" means the guaranteed cash value
of the Policy, plus the cash value of any dividend additions as of the
date to which premiums have been paid, plus any dividend credits
outstanding, without regard to any outstanding Policy loans.
4. APPLICATION OF POLICY DIVIDENDS.
Any annual dividend attributable to the Policy shall be applied
as determined by the Owner for each year of the Policy, except that:
(A) No dividends that would constitute income to the Owner
(under applicable federal income tax or trust accounting rules) shall be
used or applied toward, or contributed to the payment of, premiums on the
Policy; and
(B) No portion of the cash value of the Policy shall be used or
applied toward, or contributed to, the payment of premiums on the Policy or
for the purchase of paid-up insurance if any of such cash value would
thereby constitute income to the Owner under applicable federal income tax
or trust accounting rules.
5. TERMINATION OF AGREEMENT.
(A) Subject to fulfillment of the obligations arising upon
termination as hereinafter set forth, this Agreement shall terminate on the
first to occur of the following events:
i. Delivery of written notice of termination by the Owner to
the Employer, whereupon the Owner, in the Owner's sole discretion,
shall take one of the following actions:
a. Surrender the Policy and pay to the Employer the
amount to which the Employer is entitled under Paragraph B of Article
3.
b. Retain all or a portion of the Policy and pay to
the Employer the amount to which the Employer is entitled under
Paragraph B of Article 3.
ii. The Employee's death, whereupon the Employer shall be
entitled to receive that portion of the death benefit in excess of
$1,500,000, up to, but not exceeding, the Aggregate Employer Premiums
Paid as of the date of death of the Employee and not previously
reimbursed to the Employer.
(B) Notwithstanding the foregoing, in no event shall the
Employer have any ownership or security interest in any assets of the
Owner, including, but not limited to, the Policy.
6. PROVISION REGARDING THE INSURANCE COMPANY.
The parties acknowledge and agree as follows:
(A) The Insurance Company shall be bound only by the provisions
of the Policy and any endorsement thereto.
(B) Any payment made or actions taken by the Insurance Company
in accordance with the provisions of the Policy and any endorsement thereto
shall fully discharge the Insurance Company from all claims, suits and
demands of all persons whatsoever.
(C) The Insurance Company shall not be deemed a party to, or to
have notice of, this Agreement or the provisions hereof and shall have no
obligation to see to the performance of the obligations of the parties
hereunder.
7. RIGHTS OF PARTIES.
(A) The Owner retains all rights in the Policy not specifically
assigned to the Employer including, but not limited to, the following
rights:
i. Subject to Paragraph B of Article 3, the right to surrender
the Policy and receive the surrender value.
ii. The right to collect from the Insurance Company any
disability benefit payable in cash that does not reduce the amount of
insurance.
iii. Subject to Subparagraph (ii) of Paragraph A of Article 5, the
right to designate and change the beneficiary.
iv. The right to elect any optional mode of settlement permitted
by the Policy or allowed by the Insurance Company.
v. The right to exercise all non-forfeiture rights permitted by
the terms of the Policy or allowed by the Insurance Company and to
receive all benefits and advantages derived therefrom.
vi. All other rights contained in the Policy except those of the
Employer, as provided in Paragraph B of this Article 7.
(B) The Employer shall have the following rights:
i. The right to borrow upon the cash value of the Policy to pay
premiums.
ii. The right to obtain one or more loans or advances on the
Policy, either from the Insurance Company or from other persons, and
to pledge or assign the Policy as security for such loans or advances,
to the extent of its interest in the Policy.
8. AMENDMENT.
This Agreement may be altered, amended or modified, including the
addition of any extra Policy provisions, but only by a written instrument
signed by all of the parties.
9. ASSIGNMENT.
A party may assign such party's interests and obligations under
this Agreement at any time subject to the terms and conditions of this
Agreement.
10. GOVERNING LAW.
This Agreement shall be governed by the laws of the State of New
York.
<PAGE>
11. ENTIRE AGREEMENT.
This Agreement sets forth the entire agreement of the parties
with respect to the subject matter hereof. Any and all prior agreements or
understandings with respect to such matters are hereby superseded.
IN WITNESS WHEREOF, the parties have signed and sealed this Agreement
this 3rd day of April, 1996.
CARROLS CORPORATION
Attest:
By: /S/ RICHARD V. CROSS
/S/ JOSEPH ZIRKMAN
[SEAL]
ALAN VITULI INSURANCE TRUST,
DATED JULY 22, 1989
By:/S/ SHIRLEY VITULI
Shirley Vituli, Trustee
By:/S/ ARTHUR KUNOFSKY
Arthur Kunofsky, Trustee
EXHIBIT 10.26
AMENDMENT, IN TOTO, OF
SPLIT DOLLAR INSURANCE AGREEMENT
THIS AMENDMENT, IN TOTO, to the Split Dollar Insurance Agreement,
dated July 1, 1995, by and between Carrols Corporation (the "Employer") and
Lucinda Accordino and Lawrence Accordino, as Trustees under the Daniel T.
Accordino Insurance Trust dated February 20, 1995 (the "Owner"), is made as
of the 3rd day of April, 1996.
Recitals:
A. The Employer is a corporation duly organized and validly existing
under the laws of the State of New York.
B. Daniel T. Accordino (the "Employee") is a valued and trusted
employee of the Employer.
C. In consideration of the faithful performance of services by the
Employee for the Employer, the Employer wishes to benefit the Employee by
providing life insurance benefits to the Employee under a split dollar
arrangement in accordance with the terms and conditions of this Agreement.
D. The Employer and the Owner have agreed that life insurance policy
no. UO1731692 on the life of the Employee, issued by ITT Hartford (the
"Insurance Company"), with a death benefit of $1,000,000 (the "Policy"),
shall be owned by the Owner subject to the terms and conditions of this
Agreement.
E. The parties intend that this arrangement shall constitute a split
dollar arrangement as described in Rev. Rul. 64-328, 1964-2 C.B. 11.
NOW, THEREFORE, the parties mutually agree as follows:
1. OWNERSHIP OF POLICY.
The Policy has been issued to the Owner as Owner, and the
Owner shall be the sole and exclusive Owner of the Policy.
2. PAYMENT OF PREMIUMS.
The Owner shall pay, either directly to the Insurance Company, or
by annual or more frequent reimbursement to the Employer if the Employer
shall have paid that part of the premium which the Owner is required to pay
hereunder, that portion of the annual gross premium due on the Policy, up
to but not exceeding the entire amount thereof, equal to the economic
benefit (including any economic benefit attributable to the use of the
Policy dividends, if any) provided to the Employee. The economic benefit
shall be defined as the P.S. 58 rates or the Insurance Company's standard
yearly renewable term rate in accordance with the principles set forth in
Rev. Rul. 64-328, 1964-2 C.B. 11 and Rev. Rul. 66-110, 1966-1 C.B. 12.
The Employer shall pay no less than the balance of the premium, if any.
3. RIGHTS IN THE POLICY.
(A) The Owner shall have all of the rights of the Owner under
the Policy and the Owner shall be entitled to exercise all of such rights,
options and privileges (other than those specifically enumerated for the
Employer in Paragraph B of Article 7) without the consent of the Employer.
(B) In consideration of the Employer's agreement to contribute
to the payment of the premiums on the Policy in the manner set forth in
this Agreement, in the event of a termination of this Agreement by the
Owner, pursuant to Subparagraph (i) of Paragraph A of Article 5, the Owner
agrees to repay to the Employer, and the Employer shall be entitled to
receive, at the time and in the manner provided below, the lesser of
"Aggregate Employer Premiums Paid" or the then "Cash Surrender Value" of
the Policy, computed without regard to any outstanding Policy loans.
(C) For purposes of this Agreement, the following definitions
shall apply:
i. "Aggregate Employer Premiums Paid" means the total
premiums paid for the Policy by the Employer and not reimbursed to the
Employer by the Owner, as of the termination date, except premiums for
any extra benefit riders or agreements under the Policy other than
riders providing additional paid-up insurance.
ii. "Cash Surrender Value" means the guaranteed cash value
of the Policy, plus the cash value of any dividend additions as of the
date to which premiums have been paid, plus any dividend credits
outstanding, without regard to any outstanding Policy loans.
4. APPLICATION OF POLICY DIVIDENDS.
Any annual dividend attributable to the Policy shall be applied
as determined by the Owner for each year of the Policy, except that:
(A) No dividends that would constitute income to the Owner
(under applicable federal income tax or trust accounting rules) shall be
used or applied toward, or contributed to the payment of, premiums on the
Policy; and
(B) No portion of the cash value of the Policy shall be used or
applied toward, or contributed to, the payment of premiums on the Policy or
for the purchase of paid-up insurance if any of such cash value would
thereby constitute income to the Owner under applicable federal income tax
or trust accounting rules.
5. TERMINATION OF AGREEMENT.
(A) Subject to fulfillment of the obligations arising upon
termination as hereinafter set forth, this Agreement shall terminate on the
first to occur of the following events:
i. Delivery of written notice of termination by the Owner to
the Employer, whereupon the Owner, in the Owner's sole discretion,
shall take one of the following actions:
a. Surrender the Policy and pay to the Employer the
amount to which the Employer is entitled under Paragraph B of Article
3.
b. Retain all or a portion of the Policy and pay to
the Employer the amount to which the Employer is entitled under
Paragraph B of Article 3.
ii. The Employee's death, whereupon the Employer shall be
entitled to receive that portion of the death benefit in excess of
$1,000,000, up to, but not exceeding, the Aggregate Employer Premiums
Paid as of the date of death of the Employee and not previously
reimbursed to the Employer.
(B) Notwithstanding the foregoing, in no event shall the
Employer have any ownership or security interest in any assets of the
Owner, including, but not limited to, the Policy.
6. PROVISION REGARDING THE INSURANCE COMPANY.
The parties acknowledge and agree as follows:
(A) The Insurance Company shall be bound only by the provisions
of the Policy and any endorsement thereto.
(B) Any payment made or actions taken by the Insurance Company
in accordance with the provisions of the Policy and any endorsement thereto
shall fully discharge the Insurance Company from all claims, suits and
demands of all persons whatsoever.
(C) The Insurance Company shall not be deemed a party to, or to
have notice of, this Agreement or the provisions hereof and shall have no
obligation to see to the performance of the obligations of the parties
hereunder.
7. RIGHTS OF PARTIES.
(A) The Owner retains all rights in the Policy not specifically
assigned to the Employer including, but not limited to, the following
rights:
i. Subject to Paragraph B of Article 3, the right to surrender
the Policy and receive the surrender value.
ii. The right to collect from the Insurance Company any
disability benefit payable in cash that does not reduce the amount of
insurance.
iii. Subject to Subparagraph (ii) of Paragraph A of Article 5, the
right to designate and change the beneficiary.
iv. The right to elect any optional mode of settlement permitted
by the Policy or allowed by the Insurance Company.
v. The right to exercise all non-forfeiture rights permitted by
the terms of the Policy or allowed by the Insurance Company and to
receive all benefits and advantages derived therefrom.
vi. All other rights contained in the Policy except those of the
Employer, as provided in Paragraph B of this Article 7.
(B) The Employer shall have the following rights:
i. The right to borrow upon the cash value of the Policy to pay
premiums.
ii. The right to obtain one or more loans or advances on the
Policy, either from the Insurance Company or from other persons, and
to pledge or assign the Policy as security for such loans or advances,
to the extent of its interest in the Policy.
8. AMENDMENT.
This Agreement may be altered, amended or modified, including the
addition of any extra Policy provisions, but only by a written instrument
signed by all of the parties.
9. ASSIGNMENT.
A party may assign such party's interests and obligations under
this Agreement at any time subject to the terms and conditions of this
Agreement.
10. GOVERNING LAW.
This Agreement shall be governed by the laws of the State of New
York.
11. ENTIRE AGREEMENT.
This Agreement sets forth the entire agreement of the parties
with respect to the subject matter hereof. Any and all prior agreements or
understandings with respect to such matters are hereby superseded.
IN WITNESS WHEREOF, the parties have signed and
sealed this Agreement this 3rd day of April, 1996.
CARROLS CORPORATION
Attest:
By:/S/ RICHARD V. CROSS
/S/ JOSEPH ZIRKMAN
[SEAL]
DANIEL T. ACCORDINO
INSURANCE TRUST,
DATED FEBRUARY 20, 1995
By:/S/ LUCINDA ACCORDINO
Lucinda Accordino, Trustee
By:/S/ LAWRENCE ACCORDINO
Lawrence Accordino, Trustee
EXHIBIT 10.27
SEVENTH AMENDMENT TO THIRD AMENDED
AND RESTATED LOAN AND SECURITY AGREEMENT
THIS SEVENTH AMENDMENT TO THIRD AMENDED AND RESTATED LOAN AND SECURITY
AGREEMENT (this "Agreement"), dated as of April 3, 1996, by and among
HELLER FINANCIAL, INC., a Delaware corporation (the "Lender"), CARROLS
HOLDINGS CORPORATION, a Delaware corporation ("Holdings" or, either
individually or together with the Company, the "Borrower"), and CARROLS
CORPORATION, a Delaware corporation (the "Company" or, either individually
or together with Holdings, the "Borrower"), amends the Third Amended and
Restated Loan and Security Agreement, made as of the 9th day of August,
1993, as heretofore amended by the First through Sixth Amendments.
WITNESSETH:
WHEREAS, Holdings, Company and Lender are parties to that certain
Third Amended and Restated Loan and Security Agreement dated as of August
9, 1993, as heretofore amended by the First through Sixth Amendments
thereto ("Credit Agreement") and to other documents executed in connection
therewith; and
WHEREAS, there has been a Change of Control, as defined in the Credit
Agreement, by virtue of the purchase by Atlantic Restaurants, Inc., a
Delaware corporation, of all or substantially all of the issued and
outstanding common stock of Holdings ("Acquisition"); and,
WHEREAS, the Borrower has requested Lender to consent to further
amendments to the Credit Agreement and Lender is willing so to do upon the
terms and conditions hereinafter set forth;
NOW THEREFORE, the parties hereby agree as follows:
(1) CAPITALIZATIONS. Capitalized terms not defined herein have the
meanings given such terms in the Credit Agreement.
(2) WAIVER. Lender waives any right it may have under the Credit
Agreement to either require payment of all of the Loans or to declare an
Event of Default because of the Change of Control, the Acquisition or the
repurchase of Senior Notes otherwise permitted under the Credit Agreement.
By waiving its rights, Lender does not waive any future right to require
payment of all of the Loans or to declare an Event of Default upon any
further Change of Control.
(3) AMENDMENT TO ARTICLE I, SECTION 1.1 "DEFINITIONS." The
definition for "Change of Control" is hereby restated to read as follows:
CHANGE OF CONTROL. A Change in Control shall be deemed to have
occurred if at any time prior to the earlier of (i) the initial
public offering of the common stock of Holdings or (ii) the
initial public offering of the common stock of Company, Atlantic
Restaurants, Inc. ("Atlantic") fails to have the unrestricted
ownership of at least fifty-one percent (51%) of the outstanding
and issued common stock of Holdings, or if without the prior
written consent of Lender, fifty-one percent (51%) of the voting
stock of Atlantic is not owned by Bahrain International Bank
(E.C.) or any of its subsidiaries or any of its affiliates.
(4) AMENDMENT TO SECTION 9.2(G)(IV) OF THE CREDIT AGREEMENT. Section
9.2(g)(iv) is restated to read as follows:
(iv) regularly scheduled interest payments on the Senior
Notes and repurchases of up to an aggregate $15,000,000 in
principal amount of the Senior Notes from Revolving Loan
borrowings ($1,500,000 of which has been previously used);
PROVIDED that the following conditions are met:
(a) Each repurchase of Senior Notes is at a premium to
par of not greater than one percent (1%), except
that up to $3,500,000 of such repurchases may be
at a premium to par of not greater than five
percent (5%);
(b) After giving effect to the repurchase, the
Revolving Loan Commitment shall exceed the
Outstanding Amount by $5,000,000;
(c) After giving effect to the Revolving Loan advance,
No Event of Default or event which with the
passage of time or notice or both would become an
Event of Default shall have occurred and be
continuing;
(d) The following proforma ratios are met:
(1) the Pro Forma Fixed Charge Coverage Ratio is
at least 1.10:1 for the Reference Period;
(2) the Pro Forma Leverage Ratio is less than
5.0:1 after January 1, 1996, for the Reference Period;
and
(3) the pro forma ratios set forth in clauses (1)
and (2) above shall be determined on the date of the
Revolving Loan advance as shown on the pro forma income
statement of Borrower and its Subsidiaries, and for
purposes of calculating said ratios, pro forma Total
Indebtedness shall include all Indebtedness owed by
Borrower, including Indebtedness under the Senior
Notes, the Revolving Loan and Loan B at the average of
the highest outstanding principal balance of such loans
on any day during each Fiscal Quarter within the
Reference Period, and shall include all financed Growth
Capital Expenditures with respect to any acquisition of
Units or construction of Units in progress. The ratios
shall be determined after giving effect to (w) the
repurchase of the Senior Notes, (x) the incurrence of
the Revolving Loan advance, (y) the incurrence and
retirement of any other Indebtedness of Borrower and
its Subsidiaries since the first day of the Reference
Period as if such Indebtedness were issued or retired
at the beginning of the Reference Period, and (z) the
acquisition or disposition of any Units by the Company
or its Subsidiaries since the first day of the
Reference Period, including any acquisition or
disposition which will be contemporaneous with the
incurrence of such Revolving Loan advance, as if the
acquisition or disposition occurred at the beginning of
the Reference Period.
(5) AMENDMENT TO SECTION 9.2(G). Section 9.2(g) is further amended
by adding a subsection (vii) thereto:
(vii) Holdings may consummate a reverse stock split.
(6) AMENDMENT TO SECTION 9.2(K)(VII). Section 9.2(k)(vii) is amended
and restated in its entirety to read as follows:
(vii) Indebtedness of the Borrower in respect of the Senior
Notes, except that Borrower may incur indebtedness to
refinance the Senior Notes only if such indebtedness is used
to retire Senior Notes which are "put" to Borrower; provided
further that the terms of such new indebtedness are first
approved by Lender in writing which approval will not be
unreasonably withheld and the terms of the new indebtedness
are the same or are less burdensome than the terms of the
Senior Notes which are replaced. Lender shall have four (4)
business days within which to approve or disapprove the
terms of such new indebtedness and its failure to respond
will be deemed approval.
(7) AMENDMENT TO SECTION 9.2(P). Section 9.2(p) is amended by adding
the following to the end thereof:
"; PROVIDED, FURTHER, that such aggregate compensation shall
not include any (i) stock options for the stock of Holdings
issued to such Senior Officers, and (ii) shares of capital
stock of Holdings issued to such Senior Officers upon the
exercise of such stock options."
(8) REPRESENTATIONS AND WARRANTIES.
The Borrower represents, warrants, covenants and agrees that as
of the date of this Seventh Amendment, after giving effect to the
consummation of the transactions contemplated by this Seventh Amendment:
a. AUTHORITY. The Borrower has full power, authority and legal
right to enter into this Seventh Amendment and the other documents executed
in connection therewith ("Amendment Documents"). The execution, delivery
and performance by the Borrower of the Amendment Documents: (a) have been
duly authorized by all necessary action on the part of each of the
Borrower; (b) do not and will not, by lapse of time, the giving of notice
or otherwise, contravene the terms of the Borrower's Certificate of
Incorporation or Bylaws or of any indenture, agreement or undertaking to
which either of them is a party or are bound; (c) do not and will not
require any governmental consent, registration or approval; (d) do not and
will not, by lapse of time, the giving of notice or otherwise, contravene
any material contractual or governmental restriction to which the Borrower
is subject; and (e) do not and will not, except as contemplated herein,
result in the imposition of any lien, charge, security interest or
encumbrance upon any property of the Borrower.
b. BINDING EFFECT. The Amendment Documents have been duly
executed and delivered by the Borrower and are the legal, valid and binding
obligation of the Borrower and are enforceable against the Borrower in
accordance with its terms, except as such enforceability may be limited by
bankruptcy, insolvency, moratorium or other similar laws affecting
creditors' rights generally and by general equitable principles.
c. LOAN AGREEMENT REPRESENTATIONS AND WARRANTIES. The
warranties and representations of Borrower contained in the Credit
Agreement and the Other Documents are true and correct as of the date of
this Seventh Amendment, with the same effect as though made on such date,
except to the extent that (i) such representations or warranties expressly
relate solely to an earlier date, in which case such representations or
warranties were true and correct on and as of such earlier date and (ii)
such changes in the representations and warranties as were permitted under
the Credit Agreement or any amendment or waiver thereto.
d. ENVIRONMENTAL COMPLIANCE. Borrower has no knowledge of or
any reason to believe that any of the representations and warranties of the
sellers under the New Acquisition Agreements concerning compliance with
Environmental Laws are untrue or contain any material misstatement.
e. NO ADVERSE CHANGE. There has been no material adverse
change in the assets, liabilities or financial condition of Borrower since
December 31, 1994.
(9) FEE. Borrower shall pay to Lender a closing fee for Lender's
entry into this Seventh Amendment of $100,000 upon execution hereof and
Borrower by its signature hereto authorizes an advance under the Credit
Agreement therefore. Borrower shall also pay all fees and expenses
incurred by Lender in connection with the execution of this Agreement and
the consummation of the transactions contemplated hereby, including, but
not limited to the fees and expenses of Jaffe, Raitt, Heuer & Weiss,
Professional Corporation, counsel to the Lender.
(10) CONDITIONS TO EFFECTIVENESS OF THIS SEVENTH AMENDMENT. The
obligations of Lender Under this Seventh Amendment are subject to the
following:
a. Except as waived under Paragraph 2 of this Agreement, no
Event of Default or event which, with the giving of notice or lapse of time
or both would constitute an Event of Default shall have occurred and be
continuing as of the date hereof.
b. The Acquisition shall be complete, except for execution of
this Agreement, in all respects and Lender shall have been furnished with
the following:
i. A certificate satisfactory to Lender evidencing
completion of the Securities Purchase Agreement between
Atlantic and Holdings dated March 6, 1996.
ii. Evidence that Atlantic Restaurants, Inc., is a
corporation duly qualified to do business in the State
of Delaware and in all other states where authority is
necessary for it to do business following completion of
the acquisition.
iii. The Borrower shall deliver to Lender a certificate
executed by the President or principal financial
officer of Borrower, stating that: (a) on the date of
this Seventh Amendment, and after giving effect to the
transactions contemplated hereby, no Default or Event
of Default has occurred and is continuing; (b) no
material adverse change in the Collateral or the
financial condition or operations of the business of
Borrower has occurred since December 31, 1994, taking
into account Borrower's reported financial performance
after such date through and including December 31,
1995; (c) the representations and warranties set forth
in SECTION 9.1 are true and correct in all material
respects on and as of the date of this Seventh
Amendment with the same effect as though made on and as
of such date; and (d) Borrower on the date of this
Seventh Amendment is in compliance with all the terms
and provisions set forth in the Credit Agreement, as
amended hereby, on its part to be observed and
performed.
<PAGE>
iv. The Borrower shall have delivered to the Lender the
following:
(A) Certificates of no change with respect to the
certificates of incorporation of Holdings and the
Company since the Effective Date.
(B) Certificate of no change with respect to the
bylaws of each of Holdings and the Company since
the Effective Date.
(C) Signature and incumbency certificates of the
officers of each of Holdings and the Company
executing the Amendment Documents to which any of
them is a party.
(D) Resolutions of the Boards of Directors of each of
Holdings and the Company each certified as of the
date of this Seventh Amendment by its corporate
secretary or an assistant secretary as being in
full force and effect without modification or
amendment, each authorizing and approving the
transactions contemplated hereby and the
execution, delivery and performance of the
Amendment Documents to which such Person is to be
a party.
v. The Borrower shall have delivered to the Lender an
agreement between Borrower and BKC regarding the BKC
consent to the Acquisition in form and substance
satisfactory to Lender.
vi. A chart showing the current ownership of Atlantic as of
date hereof.
(11) MISCELLANEOUS.
a. SECTION TITLES. The section titles contained in this
Agreement shall be without substantive meaning or content of any kind
whatsoever and are not a part of the agreement between the parties.
b. PARTIES. Whenever in this Seventh Amendment reference is
made to any of the parties hereto, such reference shall be deemed to
include, wherever applicable, a reference to the successors and assigns of
the Borrower and Lender.
c. REFERENCES. Any reference to the Credit Agreement contained
in any notice, request, certificate, or other document executed
concurrently with or after the execution and delivery of this Seventh
Amendment shall be deemed to include this Seventh Amendment unless the
context shall otherwise require.
d. CONTINUED EFFECTIVENESS. Except to the extent expressly
amended the Credit Agreement and all provisions thereof remain in full
force and effect and are applicable to this Seventh Amendment.
e. FUTURE AMENDMENTS. If Borrower requests any further
amendments to the Credit Agreement Lender reserves the right to require a
complete amendment to and restatement of the Credit Agreement at Borrower's
expense.
f. ENTIRE AGREEMENT. The Credit Agreement, the Notes, and the
Other Documents, including the Amendment Documents, referred to in the
Agreement and this Seventh Amendment, embody the final, entire agreement
among the parties hereto and supersede any and all prior commitments,
agreements, representations, and understandings, whether written or oral,
relating to the subject matter thereof or hereof and may not be
contradicted or varied by evidence of prior, contemporaneous or subsequent
oral agreements or discussions of the parties hereto. There are no oral
agreements among the parties hereto.
g. COUNTERPARTS. This Seventh Amendment may be executed in
counterparts, each of which when so executed and delivered shall be deemed
an original, but all such counterparts taken together shall constitute the
one and the same instrument.
IN WITNESS WHEREOF, this Seventh Amendment has been duly executed as
of the day and year first above written.
CARROLS CORPORATION
By: /S/ RICHARD V. CROSS
Title: Executive Vice President
CARROLS HOLDINGS CORPORATION
By: /S/ RICHARD V. CROSS
Title: Assistant Treasurer
HELLER FINANCIAL, INC.
By: /S/ K. CRAIG GALLEHUGH
Title: Vice President
<PAGE>
EXHIBIT 99.1
<PAGE>
For information contact:
Richard Cross
Chief Financial Officer
FOR IMMEDIATE RELEASE:
SYRACUSE, New York (April 4, 1996) - Alan Vituli, Chairman and CEO of
Carrols Holdings Corporation, the parent company of Carrols Corporation,
announced that the shareholders of the Company have completed the sale of
their securities to an investor group represented by Dilmun Investments,
Inc., a Connecticut-based merchant banking firm.
Vituli stated, "Growth within the Burger King system through new restaurant
construction and acquisition are critical components of Carrols' long-term
business plan. This transaction will greatly increase our ability to
achieve this plan."
The transaction constitutes a change of control under the indenture
governing the Company's 11 1/2% Senior Notes. Under the indenture, upon
the occurrence of a change of control, the noteholders have the right to
require the redemption of their notes. Given the current price at which
the Senior Notes are trading, the Company does not anticipate significant
redemption.
Carrols operates 220 Burger King restaurants in three geographic regions:
the Northeast, Great Lakes and North Carolina.
<PAGE>
EXHIBIT 99.2
<PAGE>
CARROLS CORPORATION
968 JAMES STREET
SYRACUSE, NEW YORK 13203
NOTICE OF CHANGE OF CONTROL
AND OFFER TO REPURCHASE NOTES
APRIL 8, 1996
Notice is hereby given pursuant to Section 4.10(b) of the Indenture, dated
as of August 17, 1993 (the "Indenture"), among Carrols Corporation, a Delaware
corporation (the "Company"), as Issuer, Carrols Holdings Corporation, a
Delaware corporation and sole shareholder of the Company ("Holdings"), and
Marine Midland Bank, N.A. ("Marine Midland Bank"), as Trustee, pursuant to
which $110 million aggregate principal amount of 11 1/2% Senior Notes Due 2003
(the "Notes") were issued, to each holder of record of Notes on April 5, 1996
(the "Record Date") that a Change of Control (as defined in Section 1.1 of the
Indenture) has occurred.
The Company, Holdings, Atlantic Restaurants, Inc. ("ARI"), a Delaware
corporation and an indirect wholly owned subsidiary of Bahrain International
Bank (E.C.) ("BIB"), and certain selling shareholders (the "Selling
Shareholders") entered into a Securities Purchase Agreement, dated as of March
6, 1996 (the "Securities Purchase Agreement") pursuant to which the Selling
Shareholders sold to ARI substantially all of the issued and outstanding shares
of common stock, and securities that were convertible into or exercisable or
exchangeable for shares of common stock, of Holdings for a purchase price of
approximately $86.5 million. Consummation of the transactions contemplated by
the Securities Purchase Agreement (the "Transaction") will have no effect on
the capital structure, financial position or the senior management organization
of the Company. In connection with the Transaction, the Company expanded the
portion of its senior secured revolving credit facility that may be used to
repurchase Notes. Mr. Alan Vituli continues in his capacity as Chairman of
the Board of Directors and Chief Executive Officer of the Company and Mr.
Daniel T. Accordino continues in his capacity as President and Chief Operating
Officer and as a member of the Board of Directors of the Company. The
operations of the Company will continue to be conducted out of its headquarters
in Syracuse, New York.
Pursuant to the terms of the Indenture, upon a Change of Control, each
holder of Notes (a "Holder") has the right to require the Company to repurchase
all or any part of such Holder's Notes (the "Offer to Repurchase") at a
repurchase price in cash equal to 101% of the principal amount of such Notes to
be repurchased, plus accrued and unpaid interest, if any, to the date of
repurchase (the "Repurchase Price").
If a Holder elects to have Notes repurchased, such Holder will be required
to surrender the Notes to the Company by no later than May 6, 1996 (the
"Election Date"). A Letter of Transmittal is enclosed for your use in making
the surrender of Notes. PLEASE READ CAREFULLY THE INSTRUCTIONS ON THE LETTER
OF TRANSMITTAL BEFORE ENTERING THE REQUIRED INFORMATION. Your completed Letter
of Transmittal and certificate(s) representing the Notes should be delivered to
the Company c/o Marine Midland Bank, as paying agent (the "Paying Agent") at
the address listed on the Letter of Transmittal. The method of delivery of all
documents is at the option and risk of the Holder,
<PAGE>
but if delivery is by mail, insured registered mail (return receipt requested)
is recommended. Any Notes not properly surrendered will be promptly returned by
the Paying Agent to the Holder thereof. Payment of the Repurchase Price will
be made by the Paying Agent on May 20, 1996 (the "Repurchase Date").
Holders will be entitled to withdraw their election if the Company
receives (at the address listed on the Letter of Transmittal) a telegram,
telex, facsimile transmission or letter not later than three business days
prior to the Repurchase Date setting forth the name of the Holder, the
principal amount of the Notes which were delivered for repurchase by the Holder
and a statement that such Holder is withdrawing its election to have such Notes
repurchased.
On or before the Repurchase Date, the Company will irrevocably deposit
with the Paying Agent in immediately available funds an amount sufficient to
pay the Repurchase Price of all the Notes or portions thereof to be
repurchased. On the Repurchase Date, the Paying Agent shall promptly mail to
the Holders of Notes so accepted payment in an amount equal to the Repurchase
Price of such Notes, and, if applicable, the Trustee shall promptly
authenticate and deliver by first class mail to each such Holder a new
certificate representing a Note equal in principal amount to the principal
amount of any unpurchased portion of the Notes surrendered.
Certain other subsidiaries of BIB currently hold approximately $5 million
aggregate principal amount of Notes in the ordinary course of their business,
and may actively buy and sell the Notes for their account and for the accounts
of their customers. Such subsidiaries have indicated that they will not
exercise their repurchase rights under the Indenture as provided hereunder.
Any Holder who holds Notes on the Record Date who elects to have the
Company repurchase such Holder's Notes should, prior to the Election Date, (i)
if such Holder is a registered holder of Notes (which, for purposes of this
Offer to Repurchase, shall include any person in whose name Notes are
registered in the register maintained by the Trustee and any participant in a
Book Entry Transfer Facility (as defined in the accompanying Letter of
Transmittal) whose name appears on a security position listing as the owner of
the Notes), (x) complete and sign the attached Letter of Transmittal or a
facsimile thereof and (y) fax (followed by hard copy), deliver (by hand or
overnight courier) or mail (by first class mail, return receipt requested) such
Letter of Transmittal and any other required documents to the Paying Agent or
(ii) if such Holder's Notes are registered in the name of a broker, dealer,
commercial bank, trust company or other nominee, instruct such broker, dealer,
commercial bank, trust company or other nominee to complete and deliver the
accompanying Letter of Transmittal to the Paying Agent pursuant to the
procedures established by such broker, dealer, commercial bank, trust company
or other nominee. The signature of any Holder who is neither an "Eligible
Institution" (as defined below) nor a registered holder (which, for purposes of
this Offer to Repurchase, shall include any person in whose name Notes are
registered in the register maintained by the Trustee and any participant in a
Book Entry Transfer Facility whose name appears on a security position listing
as the owner of the Notes) must be guaranteed by an Eligible Institution.
"Eligible Institution" shall mean a financial institution that is a member of
the Securities Transfer Agents Medallion Program, the Stock Exchange Medallion
Program or the NYSE Medallion Signature Program.
No person has been authorized to give any information or to make any
representation other than as contained in this Offer to Repurchase (and if
given or made, such information or representation must be authorized by the
Company or by the Paying Agent). Neither the delivery of this Offer to
Repurchase nor any delivery of the Letter of Transmittal made pursuant to this
Offer to Repurchase shall under any circumstances create any implication that
there has been no change in the information contained herein or in the affairs
of the Company since the date hereof or that information contained herein is
correct as of any time subsequent to such date.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The documents listed below have been filed by the Company under the
Securities and Exchange Act of 1934, as amended (the "Exchange Act"), with the
Securities and Exchange Commission (the "Commission") and are incorporated
herein by reference:
a. The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1995; and
b. The Company's Current Report on Form 8-K dated March 21, 1996.
Promptly after the date hereof, the Company intends to report the
consummation of the Transaction in a Current Report on Form 8-K filed with the
Commission. Such Current Report and all other documents filed by the Company
pursuant to the Exchange Act subsequent to the date of this Notice and prior to
the termination of this Offer to Repurchase shall be deemed to be incorporated
by reference in this Notice and to be part hereof from the date of filing such
documents.
Any statement contained herein or in a document incorporated or deemed to
be incorporated by reference herein shall be deemed to be modified or
superseded for purposes of this Notice to the extent that a statement contained
herein or in any other subsequently filed document which also is or is deemed
to be incorporated by reference herein modifies or supersedes such statement.
Any such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Notice.
Copies of all documents which are incorporated herein by reference (not
including the exhibits to such documents, unless such exhibits are specifically
incorporated by reference in such documents) will be provided without charge to
each person, including any beneficial owner of the Notes to whom this Notice is
delivered, upon written or oral request. Requests should be made to Carrols
Corporation, 968 James Street, Syracuse, New York 13203, Attention: Secretary
(315-424-0513).
Questions and requests for assistance or for additional copies of the
Letter of Transmittal should be directed to Peter Wolfrath at Marine Midland
Bank, 140 Broadway, New York, NY 10005 (212-658-6524).
HOLDERS MUST SURRENDER THEIR CERTIFICATES AND THE LETTER OF TRANSMITTAL TO
THE PAYING AGENT BY NO LATER THAN 5:00 P.M., NEW YORK CITY TIME, ON MAY 6,
1996.
EXHIBIT 99.1
For information contact:
Richard Cross
Chief Financial Officer
FOR IMMEDIATE RELEASE:
SYRACUSE, New York (April 4, 1996) - Alan Vituli, Chairman and CEO of
Carrols Holdings Corporation, the parent company of Carrols Corporation,
announced that the shareholders of the Company have completed the sale of
their securities to an investor group represented by Dilmun Investments,
Inc., a Connecticut-based merchant banking firm.
Vituli stated, "Growth within the Burger King system through new restaurant
construction and acquisition are critical components of Carrols' long-term
business plan. This transaction will greatly increase our ability to
achieve this plan."
The transaction constitutes a change of control under the indenture
governing the Company's 11 1/2% Senior Notes. Under the indenture, upon
the occurrence of a change of control, the noteholders have the right to
require the redemption of their notes. Given the current price at which
the Senior Notes are trading, the Company does not anticipate significant
redemption.
Carrols operates 220 Burger King restaurants in three geographic regions:
the Northeast, Great Lakes and North Carolina.
EXHIBIT 99.2
CARROLS CORPORATION
968 JAMES STREET
SYRACUSE, NEW YORK 13203
NOTICE OF CHANGE OF CONTROL
AND OFFER TO REPURCHASE NOTES
APRIL 8, 1996
Notice is hereby given pursuant to Section 4.10(b) of the Indenture, dated
as of August 17, 1993 (the "Indenture"), among Carrols Corporation, a Delaware
corporation (the "Company"), as Issuer, Carrols Holdings Corporation, a
Delaware corporation and sole shareholder of the Company ("Holdings"), and
Marine Midland Bank, N.A. ("Marine Midland Bank"), as Trustee, pursuant to
which $110 million aggregate principal amount of 11 1/2% Senior Notes Due 2003
(the "Notes") were issued, to each holder of record of Notes on April 5, 1996
(the "Record Date") that a Change of Control (as defined in Section 1.1 of the
Indenture) has occurred.
The Company, Holdings, Atlantic Restaurants, Inc. ("ARI"), a Delaware
corporation and an indirect wholly owned subsidiary of Bahrain International
Bank (E.C.) ("BIB"), and certain selling shareholders (the "Selling
Shareholders") entered into a Securities Purchase Agreement, dated as of March
6, 1996 (the "Securities Purchase Agreement") pursuant to which the Selling
Shareholders sold to ARI substantially all of the issued and outstanding shares
of common stock, and securities that were convertible into or exercisable or
exchangeable for shares of common stock, of Holdings for a purchase price of
approximately $86.5 million. Consummation of the transactions contemplated by
the Securities Purchase Agreement (the "Transaction") will have no effect on
the capital structure, financial position or the senior management organization
of the Company. In connection with the Transaction, the Company expanded the
portion of its senior secured revolving credit facility that may be used to
repurchase Notes. Mr. Alan Vituli continues in his capacity as Chairman of
the Board of Directors and Chief Executive Officer of the Company and Mr.
Daniel T. Accordino continues in his capacity as President and Chief Operating
Officer and as a member of the Board of Directors of the Company. The
operations of the Company will continue to be conducted out of its headquarters
in Syracuse, New York.
Pursuant to the terms of the Indenture, upon a Change of Control, each
holder of Notes (a "Holder") has the right to require the Company to repurchase
all or any part of such Holder's Notes (the "Offer to Repurchase") at a
repurchase price in cash equal to 101% of the principal amount of such Notes to
be repurchased, plus accrued and unpaid interest, if any, to the date of
repurchase (the "Repurchase Price").
If a Holder elects to have Notes repurchased, such Holder will be required
to surrender the Notes to the Company by no later than May 6, 1996 (the
"Election Date"). A Letter of Transmittal is enclosed for your use in making
the surrender of Notes. PLEASE READ CAREFULLY THE INSTRUCTIONS ON THE LETTER
OF TRANSMITTAL BEFORE ENTERING THE REQUIRED INFORMATION. Your completed Letter
of Transmittal and certificate(s) representing the Notes should be delivered to
the Company c/o Marine Midland Bank, as paying agent (the "Paying Agent") at
the address listed on the Letter of Transmittal. The method of delivery of all
documents is at the option and risk of the Holder,
<PAGE>
but if delivery is by mail, insured registered mail (return receipt requested)
is recommended. Any Notes not properly surrendered will be promptly returned by
the Paying Agent to the Holder thereof. Payment of the Repurchase Price will
be made by the Paying Agent on May 20, 1996 (the "Repurchase Date").
Holders will be entitled to withdraw their election if the Company
receives (at the address listed on the Letter of Transmittal) a telegram,
telex, facsimile transmission or letter not later than three business days
prior to the Repurchase Date setting forth the name of the Holder, the
principal amount of the Notes which were delivered for repurchase by the Holder
and a statement that such Holder is withdrawing its election to have such Notes
repurchased.
On or before the Repurchase Date, the Company will irrevocably deposit
with the Paying Agent in immediately available funds an amount sufficient to
pay the Repurchase Price of all the Notes or portions thereof to be
repurchased. On the Repurchase Date, the Paying Agent shall promptly mail to
the Holders of Notes so accepted payment in an amount equal to the Repurchase
Price of such Notes, and, if applicable, the Trustee shall promptly
authenticate and deliver by first class mail to each such Holder a new
certificate representing a Note equal in principal amount to the principal
amount of any unpurchased portion of the Notes surrendered.
Certain other subsidiaries of BIB currently hold approximately $5 million
aggregate principal amount of Notes in the ordinary course of their business,
and may actively buy and sell the Notes for their account and for the accounts
of their customers. Such subsidiaries have indicated that they will not
exercise their repurchase rights under the Indenture as provided hereunder.
Any Holder who holds Notes on the Record Date who elects to have the
Company repurchase such Holder's Notes should, prior to the Election Date, (i)
if such Holder is a registered holder of Notes (which, for purposes of this
Offer to Repurchase, shall include any person in whose name Notes are
registered in the register maintained by the Trustee and any participant in a
Book Entry Transfer Facility (as defined in the accompanying Letter of
Transmittal) whose name appears on a security position listing as the owner of
the Notes), (x) complete and sign the attached Letter of Transmittal or a
facsimile thereof and (y) fax (followed by hard copy), deliver (by hand or
overnight courier) or mail (by first class mail, return receipt requested) such
Letter of Transmittal and any other required documents to the Paying Agent or
(ii) if such Holder's Notes are registered in the name of a broker, dealer,
commercial bank, trust company or other nominee, instruct such broker, dealer,
commercial bank, trust company or other nominee to complete and deliver the
accompanying Letter of Transmittal to the Paying Agent pursuant to the
procedures established by such broker, dealer, commercial bank, trust company
or other nominee. The signature of any Holder who is neither an "Eligible
Institution" (as defined below) nor a registered holder (which, for purposes of
this Offer to Repurchase, shall include any person in whose name Notes are
registered in the register maintained by the Trustee and any participant in a
Book Entry Transfer Facility whose name appears on a security position listing
as the owner of the Notes) must be guaranteed by an Eligible Institution.
"Eligible Institution" shall mean a financial institution that is a member of
the Securities Transfer Agents Medallion Program, the Stock Exchange Medallion
Program or the NYSE Medallion Signature Program.
No person has been authorized to give any information or to make any
representation other than as contained in this Offer to Repurchase (and if
given or made, such information or representation must be authorized by the
Company or by the Paying Agent). Neither the delivery of this Offer to
Repurchase nor any delivery of the Letter of Transmittal made pursuant to this
Offer to Repurchase shall under any circumstances create any implication that
there has been no change in the information contained herein or in the affairs
of the Company since the date hereof or that information contained herein is
correct as of any time subsequent to such date.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The documents listed below have been filed by the Company under the
Securities and Exchange Act of 1934, as amended (the "Exchange Act"), with the
Securities and Exchange Commission (the "Commission") and are incorporated
herein by reference:
a. The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1995; and
b. The Company's Current Report on Form 8-K dated March 21, 1996.
Promptly after the date hereof, the Company intends to report the
consummation of the Transaction in a Current Report on Form 8-K filed with the
Commission. Such Current Report and all other documents filed by the Company
pursuant to the Exchange Act subsequent to the date of this Notice and prior to
the termination of this Offer to Repurchase shall be deemed to be incorporated
by reference in this Notice and to be part hereof from the date of filing such
documents.
Any statement contained herein or in a document incorporated or deemed to
be incorporated by reference herein shall be deemed to be modified or
superseded for purposes of this Notice to the extent that a statement contained
herein or in any other subsequently filed document which also is or is deemed
to be incorporated by reference herein modifies or supersedes such statement.
Any such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Notice.
Copies of all documents which are incorporated herein by reference (not
including the exhibits to such documents, unless such exhibits are specifically
incorporated by reference in such documents) will be provided without charge to
each person, including any beneficial owner of the Notes to whom this Notice is
delivered, upon written or oral request. Requests should be made to Carrols
Corporation, 968 James Street, Syracuse, New York 13203, Attention: Secretary
(315-424-0513).
Questions and requests for assistance or for additional copies of the
Letter of Transmittal should be directed to Peter Wolfrath at Marine Midland
Bank, 140 Broadway, New York, NY 10005 (212-658-6524).
HOLDERS MUST SURRENDER THEIR CERTIFICATES AND THE LETTER OF TRANSMITTAL TO
THE PAYING AGENT BY NO LATER THAN 5:00 P.M., NEW YORK CITY TIME, ON MAY 6,
1996.
