Exhibit 10.21

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Corporate Office

Employee Bonus Program

2010

 

 

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SBARRO

Corporate Office Employee Bonus Plan

Purpose – The purpose of this Bonus Plan (the “Plan”) is to allow all eligible
Sbarro corporate office employees to share in the EBITDA, (as defined in
accordance with the company’s credit agreement without accrued corporate bonus)
improvements achieved in 2010. EBITDA is an accounting term which stands for
“Earnings Before Interest, Taxes, Depreciation and Amortization”. This Bonus
Plan covers the fiscal 2010 year (53 weeks).

Eligibility – Eligibility for participation in the Plan is limited to corporate
office employees, including Corporate Officers, Senior Vice Presidents of
Operations, Vice Presidents, Directors, Field Trainers, Department Managers,
Other Salaried Employees and Hourly-Paid Employees and such other persons that
the company shall incorporate into the plan. The effective date of this Plan is
December 28, 2009. All corporate office employees employed or hired after
December 28, 2009 become participants in the Plan on a pro-rata basis computed
on the number of weeks worked during the plan year. Participation in the Plan
ends January 2, 2011, unless extended by the Company. Participation also ends if
the Plan is terminated for any reason or if the participant’s employment is
terminated for any reason prior to payment unless such payment is covered by a
separate employment agreement.

How The Plan Works –

 

  •  

The EBITDA target for this plan is $44,500,000.

  •  

The EBITDA target has been made known to all plan participants pursuant to this
plan.

  •  

Each Bonus Plan participant has been told their Personal Bonus as defined below.

How Do I Earn a Bonus?

 

  •  

During the year 2010, all plan participants will work toward exceeding the
EBITDA target (as defined in the Company’s Credit Agreement without accrued
bonus) of $44,500,000.

  •  

Each participant shall receive a portion of their Personal Bonus based upon
meeting the 2010 EBITDA target (as defined in the Company’s Credit Agreement
without accrued bonus) of $44,500,000.

  •  

Your personal bonus is determined by taking your base salary and multiplying by
your bonus percentage as set forth for your job description or title on Exhibit
A (“Personal Bonus”).

  •  

For each dollar of EBITDA, (as defined in the Company’s Credit Agreement without
accrued bonus) exceeding $44,500,000 the Company will contribute $.44 (“Pool”).
You will receive the percentage of your Personal Bonus as set forth on Exhibit B
from the Pool. The 2010 Pool will be allocated to each participant on a pro rata
basis based upon

 

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their Personal Bonus as it relates to the Personal Bonus as set forth on Exhibit
A of all others in the Pool. Note that the maximum payout under the Bonus Plan
is two times an Employees Personal Bonus. If at any quarter in 2010 or the first
quarter of 2011 the Bonus Plan causes the Company to be non-compliant with its
Bank EBITDA Covenants either by payment or accrual (in accordance with generally
accepted accounting principles) the Bonus Plan will be terminated and no amounts
will be deemed earned or payable.

When Will The Bonus Be Paid?

Bonuses will be paid (15) days after the 1st Quarter 2011 financial statements
of Company performance are filed with the SEC, but no later than May 30, 2011.
You must be an active employee at the time of the bonus plan payout to remain
eligible for a bonus.

Conclusion

This is a great opportunity for all of us to work together to share in improved
EBITDA performance. We anticipate an exciting and productive 2010 for our
guests, employees, vendors and shareholders.

New Hires – If an individual becomes a new participant during the plan year, the
bonus award will be pro-rated based on the number of completed weeks of
participation.

Leaves of Absence – Employees on an approved leave of absence during the bonus
period will receive a pro-rated portion of the bonus that constitutes the time
that the employee has been physically at work.

Death and Disability – In the event of involuntary termination of employment for
reasons of death or continuing inability to perform job duties due to a medical
condition (despite reasonable accommodation) any unpaid, earned incentive awards
applicable to the bonus period shall be paid on pro-rata basis as soon as
possible after the death or disability. In the event of the death of a
participant in the Plan, any bonus award shall be paid to the estate or
designated beneficiary.

Other Plan Provisions – Promotions and other intra and inter-company movement of
employees shall be administered as specified by accepted company compensation
administration practices. Where there is conflict between this Plan and other
practices previously set forth, the Company, in its sole and absolute
discretion, shall make a determination of Plan eligibility.

Company Standards and Legal Regulations – Awards distributed under this Plan are
based on the understanding and condition that each participant will act, and
will conduct the company’s business, in accordance with proper business
practices, policies and procedures, in strict compliance with all applicable
laws and company policies, and according to the highest ethical standards. The
Company, in its sole discretion, retains the right to modify, suspend,
discontinue and deny bonus awards to participants who fail to comply with
established company policies and business ethics, or who fail to comply with
applicable federal, state and local laws.

 

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Amendment or Termination of the Plan – The Company may terminate, amend,
discontinue or modify this Plan at any time without prior notice to
participants. The Bonus Plan may be discontinued or changed by the Company at
any time for any reason or no reason, and should not be regarded as a condition
or agreement of employment. Nothing in this Plan alters the at will status of
employment, pursuant to which the company or a Plan participant can terminate
their employment relationship without cause, notice or liability.

Financial Statements and Books and Records Conclusive – All determinations under
this Plan shall be made in accordance with the Company’s internal methods of
accounting and shall be based upon the financial statements prepared by, as
applicable, the Company’s finance department. For this purpose, the Company’s
books and records will be conclusive.

 

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Exhibit A 2010 Personal Bonus

 

Category

   Percent of Salary

Corporate Officer

   50%

Senior Vice President Operations

   50%

Vice Presidents

   30%

Senior Director

   30%

Directors

   25%

Chief Operating Officer-Int’l Franchise

   25%

Senior Manager

   20%

Department Manager

   15%

Other Salaried Employees

   10%

Non-Exempt Supervisors

   10%

Executive Administration

   10%

Hourly-Paid Employees

     5%

 

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EXHIBIT B

 

EBITDA TARGET

Before bonus

  

Estimated Percent of

Personal Bonus          

$44,500

     31%

  45,000

     45%

  46,000

     73%

  47,000

   100%

  48,000

   128%

  49,000

   155%

  50,000

   183%

  50,650

   200%

 

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