AMENDMENT TO
EMPLOYMENT AGREEMENT
THIS AMENDMENT TO EMPLOYMENT AGREEMENT ("Agreement") is made and entered
into effective the 20th day of April 2001, by and between C. JEFFREY ROGERS
(hereinafter referred to as "Rogers"), and PIZZA INN, INC. (hereinafter referred
to as the "Company").
W I T N E S S E T H:
WHEREAS, the Company and Rogers entered into that certain Employment
Agreement dated July 1, 1999 (the "Employment Agreement"); and
WHEREAS, pursuant to the Employment Agreement, the Company currently
employs Rogers as its Chief Executive Officer, and the Company and Rogers desire
to continue such employment and to amend the Employment Agreement pursuant to
the terms and conditions herein set forth; and
NOW, THEREFORE, for and in consideration of the premises and the mutual
covenants herein contained and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the Company and Rogers
hereby agree as follows:
1. Section 3.02.
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Section 3.02 of the Employment Agreement is hereby amended by deleting the
existing language in its entirety, and substituting in its place the following:
3.02 CASH BONUSES. The Company agrees to pay Rogers the cash bonuses
provided below during the term of this Agreement. The Compensation Committee
also has the authority, in its sole discretion, to authorize an additional bonus
to Rogers at each fiscal quarter end and fiscal year end if the Compensation
Committee deems such a bonus appropriate, including any amounts not paid under
these criteria.
(A) BONUS NO. 1
During the Term, the Company will pay to Rogers a cash incentive bonus (Bonus
No. 1), payable at the end of each fiscal year, in the amount of $100,000 if the
Company's operating results report pre-tax net income growth or earnings per
share growth of at least 10% more than the previous fiscal year.
(B) BONUS NO. 2
During the Term, the Company will pay Rogers a cash incentive bonus (Bonus No.
2), payable at the end of each fiscal year, based on the targets set forth below
for EBITDA cash flow. For the purposes of this Agreement, "EBITDA cash flow"
shall mean pre-tax earnings before interest, taxes, depreciation, and
amortization prior to this bonus accrual per Section 3.02. If EBITDA cash flow
equals or exceeds the target amount for an applicable year, then Bonus No. 2
shall equal $150,000. If EBITDA cash flow equals or exceeds 80% but is less
than 100% of the target amount for an applicable year, then Bonus No. 2 shall
equal 80% of Bonus No. 2. There shall be no Bonus No. 2 if EBITDA cash flow is
less than 80% of the target amount for an applicable year. If EBITDA cash flow
exceeds the target amount for an applicable year by $300,000 or more, then Bonus
No. 2 shall increase by an additional $50,000.
FISCAL YEAR ENDING EBITDA CASH FLOW TARGET
June 2001 $6,000,000
June 2002 $6,250,000
June 2003 $6,500,000
June 2004 $6,750,000
(C) BONUS NO. 3
During the Term and beginning with the quarter ended March 25, 2001, the Company
will pay Rogers a cash incentive bonus (Bonus No. 3), payable at the end of each
semi-annual period of the Company's fiscal year, in the amount of $3,000 for
each new store opening during each semi-annual period, provided that a minimum
of 18 units open during each semi-annual period of such fiscal year. To the
extent that 18 new units are not opened in either semi-annual period, the entire
unpaid amount of Bonus No. 3 shall be paid to Rogers at fiscal year end if 36
new units are opened by fiscal year end. In the event that an Area Development
or Master License Agreement is entered into during the fiscal year, the
Compensation Committee, in its sole discretion, shall determine the credit, if
any, of such agreement towards the payment of Bonus No. 3, based on, among other
relevant criteria, the sales price, the projected unit growth and the
development schedule of the territory.
(D) BONUS NO. 4
During the Term and beginning with the quarter ended March 25, 2001, the Company
will pay Rogers a cash incentive bonus (Bonus No. 4), payable quarterly, in the
amount of $25,000 for each fiscal quarter based on meeting or exceeding the
targets set forth below for Norco gross sales. For the purposes of this
Agreement, "Norco Gross Sales" shall mean all revenues generated by the
Company's distribution division (Norco), excluding the impact of cheese price
fluctuations (using fiscal year 2000 as the standard base). Bonus No. 4 shall
be payable if Norco gross sales equals or exceeds the target amount for the
respective quarter. To the extent that there is a shortfall from such goal in
any given quarter, the entire year-to-date unpaid amount of Bonus No. 4 shall be
paid to Rogers if the total Norco Gross Sales is equal to or greater than the
respective yearly Norco Gross Sales target.
QUARTERS WITH QUARTERLY
FISCAL YEAR ENDING NORCO GROSS SALES
June 2001 $13,000,000
June 2002 $13,500,000
June 2003 $14,000,000
June 2004 $14,500,000
(E) BONUS NO. 5
During the Term and beginning with the quarter ended March 25, 2001, the Company
will pay Rogers a cash incentive bonus (Bonus No. 5), payable quarterly, in the
amount of $25,000 for each fiscal quarter in which the Company's total general
and administrative expenses (G&A) do not exceed 8.5% of total revenues. To the
extent that there is a shortfall from such goal in any given quarter, the entire
year-to-date unpaid amount of Bonus No. 5 shall be paid to Rogers if the total
year-to-date G&A expenses do not exceed 8.5% of total revenues.
2. Miscellaneous. Except as expressly amended hereby, all of the
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representations, terms, covenants and conditions of the Employment Agreement (i)
are hereby ratified and confirmed, (ii) shall remain unamended and not waived
and (iii) shall continue to be in full force and effect.
EXECUTED as of the date and year first above written.
PIZZA INN, INC.
By: /s/Ronald W. Parker
Ronald W. Parker, President
/s/ C. Jeffrey Rogers
C. Jeffrey Rogers