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§15.205 To amend an Employment Agreement between a corporation and its Chief Executive Officer to reduce the option price of shares covered by a stock option that is part of that Agreement (with a copy of the amended Employment Agreement) AMENDMENT TO SECTION 5(c) OF THE EMPLOYMENT AGREEMENT BETWEEN THE COMPANY AND JOSEPH G. FLANIGAN At the Company’s 1988 annual meeting, the shareholders ratified a five year employment agreement with Mr. Flanigan, effective January 1, 1986 (“Employment Agreement”). Pursuant to section 5(c) of the Employment Agreement, the Company granted Mr. Flanigan stock options t o acquire up to 93,092 shares of the Company’s stock at $4.00 and $4.125 per share. The Company is seeking shareholder approval of a proposed amendment to section 5(c) of the Employment Agreement to reduce the amount of the option price to $0.875 per share, which reflects the per share price of the Company’s stock as of the close of business on December 12, 1989. The proposed amendment is underlined on page 3 of the Employment Agreement attached hereto a s Exhibit ‘A’. The Employment Agreement will remain fully enforceable in its present form (without this proposed amendment) in the event this proposed amendment is not approved. The Company recommends shareholders vote “For” approval of the proposed amendment to section 5(c) of the Employment Agreement and as one of its reasons refers the shareholder to Mr. Flanigan’s personal guarantee of the prepaid rent ($248,040) on the sublease of one of the Company’s units. (See the section titled “Operation of Units by Unaffiliated Third Parti es” on page 6 of the Company’s 10-K.) EXHIBIT A TO FLANIGAN’S ENTERPRISES, INC. 1990 PROXY STATEMENT EMPLOYMENT AGREEMENT THIS EMPLOYMENT AGREEMENT (the “Agreement”), by and between FLANIGAN’S ENTERPRISES, INC., a Florida corporation (the “Company”), and Joseph G. Flanigan (the “Executive”), is dated this 3rd day of June, 1987. PRELIMINARY STATEMENT In order to prosper as a significant member of the financial, business, and civic community of South Florida, the Company needs to retain capable and experienced senior executi ve personnel. The Executive has been an employee of the Company for over twenty (20) years and has been Chairman of the Board and Chief Executive Officer of the Company during the la st five (5) years. The Executive has successfully developed the Company’s business plan and guided the Company and its employees through various financial difficulties encountered by the Company, including its recent filing for protection under Chapter 11 of the United States Bankruptcy Code.Over the last three (3) years, the Executive has been employed by the Company pursuant to an employment agreement dated January l, 1983 providing for an annual salary of $250,000.00. The Company desires to amend the terms of the January 1, 1983 employment agreement to provide for options to acquire approximately 93,000 shares of the Company’s common stock, par value $.10 per share (the “Common Stock”), in return for a $100,000.00 per year reduction in the Executive’s salary. The Company and the Executive believe the annual cash savings to, and cash infusion in, the Company upon the Executive’s exercise of the options are in the Company’s best interest. The Company also desires to encourage the Executive to strive for the profitabi lity and success of the Company and desires to assure both itself and the Executive of the cont inuity of management in the event of any actual or threatened change in control of the Company. TERMS NOW THEREFORE, in consideration of the mutual promises and covenants contained herein, the receipt and adequacy of which are hereby acknowledged, the parties hereto, int ending to be legally bound, agree as follows: 1. EMPLOYMENT The Company hereby agrees to continue to employ the Executive, and the Executive hereby agrees to continue to serve the Company, on the terms and conditions set forth herein 2. TERM The employment of the Executive by the Company as provided in Section 1 will commence on the date hereof and end on December 31, 1988, unless further extended or sooner terminated as hereinafter provided. On December 31, 1988 and annually thereafter (the “Renewal Date”), the term of the Executive’s employment shall automaticall y be extended one (1) additional year, unless prior to such Renewal Date, the Company shall have delivere d to the Executive, or the Executive shall have delivered to the Company, written notice that the term of the Executive’s employment hereunder will not be extended. 3. POSITION AND DUTIES The Executive shall serve as Chairman of the Board and Chief Executive Officer of the Company and shall have such responsibilities and authority as may from time to t ime be assigned to the Executive by the Board of Directors of the Company. The Executive shall devote substantially all his working time and efforts to the business and affairs of the Company. 4. PLACE OF PERFORMANCE In connection with the Executive’s employment by the Company, the Executive shall be based at the principal executive offices of the Company, which shall remain in Dade or Broward County, Florida, except for required travel on the Company’s business to an extent substantially consistent with present travel obligations. 5. COMPENSATION AND RELATED MATTERS (a) Base Salary. During the period of the Executive’s employment hereunder, the Company shall pay to the Executive a base salary of not more than $150,000.00 per annum in 26 equal installments as nearly as practicable on every other Thursday in arrears. This base salary may be increased or decreased from time to time in accordance with the norm al business practices of the Company. The base salary compensation of the Executive shall neithe r be deemed exclusive nor shall it prevent the Executive from participating in any other compensation or benefit plan of the Company. The term “Base Salary” shall be deemed to include any and all amounts rec eived by the Executive from either the Company or any of its Subsidiaries and Affiliates. The base salary payments (including any increased base salary payments) hereunder shall not in any way lim it or reduce any other obligation of the Company nor any other compensation benefit or payment hereunder shall in any way limit or reduce the obligation of the Company to pay the Executive’s base salary. (b) Profit Sharing. In an attempt to increase the Company’s projected annual profits, the Company will allow the Executive to participate and share in a profit shari ng program. During the period of the Executive’s employment hereunder, the Company shall pay the Executive, in addition to the base salary set forth in subparagraph (a) above, the lesse r of: (i) the excess cash remaining (as set forth in Tables 4 or 5 to the Debtor’s Amended Disclosure Statement), or, (ii) 10% percent of the total cash remaining, provided: (1) The cash remaining exceeds the projected cash remaining for each particular year, which amounts are more particularly set forth in Tables 4 or 5 to the Debtor’s Amended Disclosure Statement; and (2) To the extent the amount of profit sharing compensation to which the Executive may be entitled to does not reduce the cash remaining below the proje cted amounts for each particular year. (c) Stock Options. The Company hereby grants the Executive options to acquire the following amounts of the Company’s common stock in the years indicated: Exercisable on or after January 1, 1986 4.99% of the amount of common Stock outstanding as of the date of exercise, but not less than 46,546 shares, at the option price of $.875 per share. Exercisable on or after January 1, 1987 4.99% of the amount of common Stock outstanding as of the date of exercise but not less than 46,546 shares, at the option price of $.875 per share. Such option price shall be adjusted pro rata to reflect any stock splits, stock dividends, or other stock issuances. The sale shall be completed by delivery of the shares against full pa yment in cash therefore on such date not later than December 31, 1995. These options are not subjec t to any forffeiture by the Executive and may be exercised by the Executive before or subsequent to the termination of this Agreement. If a “change in Control of the Company” as defined i n Section 7(g) occurs, the entire amounts can be immediately exercisable. (d) Expenses. During the tern of the Executive’s employment hereunder, the Executive shall be entitled to receive prompt reimbursement for all reasona ble expenses incurred by the Executive in performing services hereunder, including all travel and living expenses while away from home and on business or at the request of and in the service of the Company, provided that such expenses are incurred and accounted for in accordance with the policies and procedures established by the Company. (e) Other Benefits. The Company shall maintain in full force and effect, and the Executive shall be entitled to continue to participate in, all of i ts benefit plans and arrangements in effect on the date hereof in which the Executive participates, inc luding without limitation each pension and retirement plan and arrangement, supplemental pension a nd retirement plans and arrangements, stock option plans, employee stock ownership plans, life insurance and health-and-accident plans and arrangement, medical insurance plans, disabili ty plans, survivor income plans, and relocation and vacation plans. The Company shall not make any changes in such plans or arrangements which will adversely affect the Executive’s right s or benefits thereunder. The Executive shall also be entitled to particpate in or receive benefits under any employee benefit plan or arrangement made available by the Company in the fut ure to its executives and key management employees, subject to, and on a basis consistent wit h, the terms, conditions, and overall administration of such plans and arrangements. Nothing paid to the Executive under any plan or arrangment which is presently in effect, or made available in the future, shall he deemed to be in lieu of the base salary payable to the Executive pursuant to Paragraphs (a) and (b) of this Section. (f) Vacations. The Executive shall be entitled to the number of vacation days i n each calendar year, and to compensation, in accordance with the Company’s vacation plan, but not more than six weeks Per year. The Executive shall also be entitled to al l paid holidays given by the Company to its executives. (g) Services Furnished. The Company shall furnish the Executive with office space, secretarial assistance, and such other facilities and services at the Com pany’s executive offices in Dads or Broward County, Florida, as shall be suitable to the Executive’s position and adequa te for the performance of his duties as set forth in Section 3 hereof. (h) Subsidiaries and Affiliates. When used in this Agreement, the term “Company” shall be deemed to include any and all Subsidiaries and Affiliates of the Company.6. OFFICES The Executive agrees to serve, if elected or appointed thereto, as a Director of the Company and any of its Subsidiaries and Affiliates provided that the Executive is inde mnified for serving in any and all such capacities on a basis no less favorable than is currentl y provided for under the Company’s By-laws. 7. TERMINATION The Executive’s employment hereunder may be terminated without any breach of this Agreement only under the following circumstances: (a) Death. The Executive’s employment hereunder shall terminate immediately upon his death.(b) Disability. The Company my terminate the Executive’s employment hereunder if, due to physical or mental illness, the Executive shall have been abse nt from his duties on a full-the basis for an entire period of six consecutive months, and, if within thirty (30) days after written notice of termination is given (which my occur before or afte r the end of such six-month period), the Executive fails to return and perform his duties on a full time basis. (c) Cause. The Company may terminate the Executive’s employment hereunder for Cause. For purposes of this Agreement, the Company shall have “Cause” to terminate the Executive’s employment hereunder upon the willful commission of an act of dishonesty or fraud by the Executive. For purposes of this Paragraph, no act, or failure to act, on the Executive’s part shall be considered “willful” unless done, or omitted to be done, by him not in good faith and without reasonable belief that his action or omission was in the best interest of the Company. Notwithstanding the foregoing, the Executive shall not be deemed to have be en terminated for Cause without (i) reasonable notice to the Executive setting forth t he reasons for the Company’s intention to terminate for Cause, (ii) an opportunity for the Executive, together with his counsel, to be heard before the full Board of Directors of the Company, and (iii) delivery to the Executive of a Notice of Termination as defined in subsection (e) hereof finding that in the good faith opinion of such Directors the Executive was guilty of conduct set forth above in the preceding sentence, and specifying the particulars thereof in detail. (d) Termination by the Executive. The Executive may terminate his employment hereunder for Good Reason. For purposes of this Agreement, “Good Reason” shall mean (A) a failure by the Company to comply with any material provision of this Agree ment which has not been cured within ten (10) days after notice of such noncompliance has been given by the Executive; (B) any purported termination of the Executive’s employment which is not effected pursuant to a Notice of Termination satisfying the requirements of paragrpah (e) he reof (for purposes of this Agreement no such purported termination by the Company shall be effective); (C) an assignment to the Executive of any duties inconsistent with, or a significant change in the nature or scope of this Executive’s authorities or duties from those authoriti es and duties held by the Executive as of the date hereof and as increased from time to time; (D) failure by the Company to obtain the assumption of the commitment to perform this Agreement by any successor corporation; or (E) relocation of the Company’s executive offices outside of Dade or Broward Counties, provided said relocation is not at the Executive’s direction. (e) Any termination of the Executive’s employment by the Company or by the Executive (other than termination pursuant to subsection (a) above) shall be communicat ed by written Notice of Termination to the other party. For purposes of this Agreement, a “Not ice of Termination” shall mean a notice which shall indicate the specific termi nation provision in this Agreement relied upon and shall set forth in reasonable detail the facts and circumst ances claimed to provide a basis for the termination of the Executive’s employment under the provision so indicated. (f) “Date of Termination” shall mean (i) if the Executive’s employment is terminated by his death, the date of his death, (ii) if the Executive’s employm ent is terminated pursuant to subsection (b) above, thirty (30) days after Notice of Termination is given (provided that the Executive shall not have returned to the performance of his duties on a full-t ime basis), (iii) if the Executive’s employment is terminated pursuant to subsections (b), (c), or (e) above, the date specified in the Not ice of Termination; (iv) if the Executive’s employm ent is terminated for any other reason, the date on which a Notice of Termination is given, provided that if within (30) day after any Notice of Termination is given, the party receiving such Notice of T ermination notifies the other party that no dispute exists concerning the termination, or if there is a dispute concerning the termination, the Date of Termination shall be the date on which the dispute is finally determined by a mutual, written agreement of the parties, by a binding and fina l arbitration award, or by a final judgment, order, or decree of a court of competent jurisdic tion (the time for appeal therefrom having expired and no appeal having been perfected). (g) For purposes of this Agreement, a “Change in Control of the Company” shall mean a change in control of a nature that would be required to be reported in response to It em 5(f) of Schedule 14A or Regulation 14A promulgated under the Securities and Exchange Act of 1934 (the “1934 Act”), provided that without limitation, such s change in control shall be deemed to have occurred if (i) any “person” or “group” (as such terms ·are used in Sections 13(d) and 14(d) of the 1934 Act), other than the Company or the Executive, is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the 1934 Act), directly or indirectly, of securities of the Company representing 25% or more of the combined voting power of the Company’s then outstanding securities, or (ii) individuals who at the beginning of such period constitute the Board of Directors cease for any reason to constitute at least ma jority thereof, unless the election of each Director who yes not a Director at the beginning of such period has been approved in advance by Directors representing at least two thirds of the Directors t hen in office who were Directors at the beginning of the period. 8. COMPENSATION UPON TERMINATION (a) If the Executive’s employment is terminated due to Death, Disability, or Good Reason, the Executive, at his election, shall receive (i) the amount to be paid under Section 5(a) hereof for the remaining term of this Agreement; or (ii) a lump sum payment equal to the present value, based on a discount rate equal to the prime rate of Citibank, N.A. then in effect, of the total of the amount specified in Section 8(a)(i) hereof. Except that if a “Change in Control of the Company” as defined in Section 7(g) of this Agreement has occurred prior to the time the Executive’s employment is terminated, the remaining term of this Agreement shall be assumed to be three (3) years from the Date of Termination for the purposes of determining the amounts payable under this Section 8(a). Notwithstanding anything contained herein to the contrary, the Executive acknowledges and agrees that any payment due hereunder shall be subordinate to any payments due the Cl ass 6 Unsecured Creditors in the Company’s Plan of Reorganization due to the acceleration of the promissory notes of the Class 6 Unsecured Creditors as a result of a “Change in Control of t he Company.” (b) Unless the Executive is terminated for Cause, the Company shall maintain in full force and effect, for the continued benefit of the Executive for the greater of the number of years (including partial years) remaining in the term of employment hereunder, all e mployee benfit plans and programs in which the Executive was entitled to participate immediately prior to the Date of Termination, provided that the Executive’s continued participation is possible under the general term and provisions of such plans and programs. In the event that the Executi ve’s participation in the Company’s group health plan and/or life insurance program is barred, the Company shall be required to provide the Executive with benefits substantially simila r to those which the Executive would otherwise have been entitled to receive under such plan and program from which his continued participation is barred. In the event that the Executive’s pa rticipation in any plan or program, other than the group health plan and/or life insurance program is barred, the Company shall not be required to provide the Executive with benefits substantially similar to those which the Executive would otherwise have been entitled to receive under such pl ans and programs from which his continued participation is barred. Notwithstanding the foregoing and subject to all other limitations set forth in this Agreement, should the Executive elect to receive a lump sum payout as speci fied in Section 8(a)(ii) hereof, the benefits payable to the Executive hereunder shall be paid in the form of a cash payment equal to 20% of the lump sum payable to the Executive under Section 8(a)(ii). (c) Notwithstanding the foregoing, in no event shall the total amount of payments made under this Agreement on account of any termination occurring as a result of a “cha nge in control of the Company” exceed the aggregate present value of three times the “ Base Salary Amount” minus one dollar. “Base Salary Amount” means the average annualized compensat ion income from the Company in the Executive’s gross income for Federal income tax purposes over the five years preceding the year in which control of the Company occurred. This paragraph, and the language therein, shall be interpreted consistently with Section 280g of the Inte rnal Revenue Code of 1954, as amended, and any regulations thereunder. 9. SUCCESSORS; BINDING AGREEMENT (a) The Company will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company, by Agreement in form and substance satisfactory to the Executive, to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken pla ce, Failure of the Company to obtain such agreement prior to the effectiveness of any suc h succession shall be a breach of this Agreement and shall entitle the Executive t o compensation from the Company in the same amount and on the same terms as he would be entitl ed to hereunder if he terminated his employment for Good Reason, except that for purposes of implementing the foregoing, the date on which any such succession becomes effective shall be deemed the Date of Termination, As used in this Agreement, the term “Company” also means the Company as hereinbefore defined and any successor to its business and/or assets as aforesa id which executed and delivers the agreement provided for in this Section (a) or which otherwise becomes bound by all of the terms and provisions of this Agreement by operation of law. (b) This Agreement and all rights of the Executive hereunder, including but not limited to stock options, shall inure to the benefit of and be enforceable by, the E xecutive’s personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees, and legatees. If the Executive should die while any amounts would still be payable to him hereunder if he had continued to live, all such amounts, unless otherwise provided herein, shall be paid in accordance with the terms of this Agreement to the Executive’s devisee, legatee or other designee or, if there be no such designee, to the Executive’s estate. If the E xecutive should die prior to exercising the stock options granted herein, his personal or legal representative, executor or administrator may exercise the same for a period of six (6) m onths following the date of the Executive’s death. 10. NOTICE For purposes of this Agreement, notices, demands, and all other communications provided for under the terms of this Agreement shall be in writing and shall be deemed to have been duly given when delivered or (unless otherwise specified) mailed by United States registered mail, return receipt requested, postage prepaid, addressed as follows: If to the Executive: Joseph G. Flanigan 29 Cayuga Road Sea Ranch Lakes, Florida 33308 If to the Company: Flanigan’s Enterprises, Inc. 2841 Cypress Creek Road Ft. Lauderdale, Florida 33309 11. MISCELLANEOUS No Provisions of this Agreement may be modified, waived or discharged unless such waiver, modification, or discharge is agreed to in writing and signed by the Executive and a duly authorized officer of the Company as may be specifically designated by the Board. No waiver by either party hereto at any time, or compliance with any condition or provision of t his Agreement to be performed by such other party, shall be deemed a waiver of similar or dissiml ar provisions or conditions at the same or at any prior or subsequent time. The Company and Executive agree that no agreements or representations, oral or otherwise, express or implied, with respect to the subject matter hereof, have been ma de by either party which are not expressly set forth in this Agreement. The validity, inte rpretation, construction, and performance of this Agreement shall be governed by the laws of the State of Florida. 12. VALIDITY The validity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, which shall rema in in full force and effect. 13. COUNTERPARTS This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original, but all of which together will constitute one and the same instrument. 14. ARBITRATION Any dispute or controversy arising under, or in connection with this Agreement, shall be settled exclusively by arbitration to be conducted before a panel of three arbitra tors, in Miami, Florida, in accordance with the rules of the American Arbitration Association then in e ffect. Judgment may be entered on the arbitrator’s award in any court having jurisdiction. The e xpense of such arbitration shall be borne by the Company. IN WITNESS WHEREOF, the parties have executed this Agreement on the date and year first above written. FLANIGAN’S ENTERPRISES, INC. Attest: By: Mary C. Reymann MARY C. REYMANN By: Stephen L. BoberskySTEPHEN L. BOBERSKY, PRESIDENT FLANIGAN’S ENTERPRISES, INC. EXECUTIVE By: Germaine M. Bell GERMAINE M. BELL By: Joseph G. FlaniganJOSEPH G. FLANIGAN Flanigan’s Enterprises, Inc. 1/24/90