EX-10.2 AMENDED AND RESTATED EMPLOYMENT AGREEMENT



 





Exhibit 10.2




AMENDED AND RESTATED EMPLOYMENT AGREEMENT

dated as of June 28, 2004 between

AFC Enterprises, Inc. (The “Company”) And

Hala G. Moddelmog (“Employee”)




     WHEREAS, Employee and the Company are parties to an Employment Agreement,
dated as of December 8, 2000 (the “Employment Agreement”), the First Amendment
to the Employment Agreement dated as of January 1, 2001 (the “First
Amendment”), and the Second Amendment to the Employment Agreement dated as of
August 31, 2001 (the “Second Amendment”) (the Employment Agreement, the First
Amendment and the Second Amendment, collectively the “Prior Agreement”),
pursuant to which Employee is employed as President of Church’s Chicken



     WHEREAS, the parties hereto have agreed to amend and restate the Prior
Agreement in its entirety and substitute the following in its place as set
forth herein;.



     NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein and for other good and valuable consideration, the parties
agree as follows:



     1. Term of Agreement.



     This Agreement shall be effective as of the date hereof and, unless
earlier terminated pursuant to Section 8 or Section 9.01 hereof, shall be for
an initial term of two (2) years (the “Term”). The Term of this Agreement and
Employee’s employment hereunder will automatically be extended for an
additional one-year period following the expiration of each year of employment
hereunder (the “Renewal Date”), without further action by Employee or the
Company. Such automatic one-year renewal shall continue from year to year
unless and until either the Company or Employee gives to the other written
notice not less than thirty (30) days prior to the applicable Renewal Date of
its decision not to renew for an additional one year. For purposes of this
Section 1 only, the first “year” of the Term shall be deemed to begin as of the
date hereof and end on December 31, 2004, and each one (1) year period
thereafter shall coincide with the calendar year.



     2. Employment.



     2.01 Position. Employee shall serve as President of Church’s Chicken, a
division of the Company, and shall perform such duties consistent with her
position as may be assigned to her from time to time by the Chief Executive
Officer or the Board of Directors of the Company.



     2.02 Time and Efforts. Employee, so long as she is employed hereunder,
shall devote her full business time and attention to the services required of
her hereunder, except as otherwise agreed and for vacation time and reasonable
periods of absence due to sickness or personal



 









 





injury, and shall use her best efforts, judgment and energy to perform,
improve and advance the business and interests of the Company in a manner
consistent with the duties of her position.




     3. Base Salary.



     Beginning on January 1, 2004 and continuing during the term hereof, the
Company shall pay Employee, in equal installments no less frequently than
monthly, a base salary at the rate of no less than Three Hundred Fifty Thousand
Two Hundred Dollars (U.S. $350,200) per annum (the “Base Salary”). The
Employee’s Base Salary shall be reviewed by the Chief Executive Officer or the
Board of Directors of the Company on an annual basis.



     4. Incentive Pay.



     4.01 Annual Plan. The Board of Directors of the Company, acting in its
sole discretion, shall annually, at or prior to the beginning of each fiscal
year of the Company, approve an annual incentive plan (the “Annual Incentive
Plan”) for the senior officers of the Company, including Employee, which Plan
shall contain such terms and provisions as the Board of Directors shall
determine. Any amounts payable to Employee pursuant to the Annual Incentive
Plan is hereinafter referred to as “Incentive Pay”.



     4.02 Target Incentive Pay. The target Incentive Pay (the “Target
Incentive Pay”) for Employee will be set by the Chief Executive Officer or the
Board of Directors of the Company for each fiscal year and will be included in
the Annual Incentive Plan for such year.



     4.03 Payment of Incentive Pay. If Employee is entitled to payment of any
Incentive Pay for any fiscal year, an accounting will be furnished and payment
will be made to Employee as set forth in the Annual Incentive Plan, but in no
event later than 105 days following the end of each fiscal year.



     4.04 Termination of Employment. If Employee’s employment hereunder shall
terminate other than pursuant to Sections 8.03 or 8.04, the Employee shall
receive, at the time contemplated by the Annual Incentive Plan, such Incentive
Pay, if any, to which she would have been entitled under the terms of the
Annual Incentive Plan had Employee remained in the employ of the Company for
the entire fiscal year in which such termination occurs. If Employee’s
employment hereunder shall terminate pursuant to (a) Section 8.03, the
provisions of Section 8.03 shall determine the amount of Incentive Pay payable
to Employee; or (b) Section 8.04, no Incentive Pay shall be payable to Employee
after such termination.



     5. Stock Options.



     5.01 Stock Options. The Company has heretofore granted to Employee
certain nonqualified stock options to purchase shares of the Company’s common
stock. As part of the Company’s compensation strategy, the Company intends to
grant additional stock options in the future based upon Employee’s performance
as determined in the sole discretion of the Board of Directors of the Company.



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     5.02 Shareholders’ Agreement. The Employee has agreed to be bound by the
terms of the shareholders’ agreements (the “Shareholders’ Agreements”)
heretofore executed by Employee or identified in the stock option agreements
heretofore granted to Employee, copies of which are on file in the records of
the Company, which Shareholders’ Agreements shall be applicable to all shares
of common stock issued to Employee upon the exercise of any stock options
granted to Employee before or after the date hereof.



     6. Employee Benefits.



     6.01 Executive Flex Perk. Employee shall be entitled to participate in the
Company’s Executive Flex Perk Plan subject to the terms, conditions and
limitations thereof. Subject to Section 6.07 below and the terms of the Plan,
the Company will pay to, or for the benefit of Employee, an amount equal to
$15,000 per year payable in the same manner as Employee’s Base Salary is paid.



     6.02 Life Insurance. Subject to Section 6.07 below, in the event of the
death of Employee during the term of her employment with the Company, the
Employee’s named beneficiary shall be entitled to receive an amount equal (the
“Death Benefit”) payable solely from, and to the extent of, the death benefit
proceeds payable under the Life Insurance Policy described herein; provided,
however, that the amount of such Death Benefit shall not exceed $1,700,000.



     (a) The Company shall maintain and/or reimburse Employee the premium cost
of maintaining, at the Company’s election, on the life of Employee life
insurance protection in an amount not less than $1,700,000 (any and all such
policies are referred to herein, collectively, as the “Life Insurance Policy”).
The Company may, at its option, purchase or reimburse Employee the premium cost
of term or permanent life insurance protection on Employee. Notwithstanding the
foregoing, if the premiums for the Life Insurance Policy on Employee shall
exceed regular, non-rated premiums, the Company may, but shall have no
obligation to, fund such excess premium payments, whether in the form of direct
payment or reimbursement. In the event the Company determines not to fund such
excess it shall promptly notify Employee and Employee may, at her option, elect
to pay the excess. If Employee fails to pay such excess or if for any other
reason the Company, after reasonable efforts, is not able to obtain the Life
Insurance Policy required herein for Employee, then Employee shall not be
entitled to any benefits whatsoever under this Section 6.02 except as may
otherwise be determined in the discretion of the Company and set forth in
writing.



     (b) Except as otherwise provided in this Agreement, the obligations of
the Company and Employee under this Section 6.02 shall automatically terminate
upon Employee’s termination of employment for any reason prior to her death.



     6.03 Disability Insurance.



     (a) The Company shall maintain in full force and effect during the Term a
Supplemental



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Disability Policy which will supplement the benefits payable under any
disability benefit provided to Employee by the Company under its basic employee
health care benefit program, so that, subject to Section 6.07 below, with
respect to a disability as defined in the Supplemental Disability Policy
occurring after the Company has obtained the Supplemental Disability Policy,
the total monthly disability benefit (the “Disability Benefit”) payable to
Employee under all disability policies maintained by the Company, after a
maximum elimination period of ninety (90) days, shall equal 70% of the sum of
Employee’s Base Compensation and Incentive Pay for the year immediately
preceding the year in which the termination for Disability occurs.




     (b) Notwithstanding anything herein to the contrary, if the premiums for
the Supplemental Disability Income Policy for Employee shall exceed regular,
non-rated premiums, the Company may, but shall have no obligation to, fund such
excess. In the event the Company determines not to fund such excess it shall
promptly notify Employee and Employee may, at her option, elect to pay the
excess. If Employee fails to pay such excess or if for any other reason the
Company, after reasonable efforts, is not able to obtain the Supplemental
Disability Income Policy required herein, then Employee shall not be entitled
to any Disability Benefit hereunder except as may otherwise be determined in
the discretion of the Company and set forth in writing.



     6.04 Executive Medical Benefit. Subject to Section 6.07, the Company, at
its expense, shall provide Employee with an annual physical examination to be
conducted by a physician or physicians as determined by the Company, or by
Employee with the approval of the Company.



     6.05 Other Benefits. Employee shall be provided additional employee
benefits, including health, accident and disability insurance under the
Company’s regular and ongoing plans, policies and programs available, from time
to time, to senior officers of the Company, in accordance with the provisions
of such plans, policies and programs governing eligibility and participation;
provided, however, that such benefits may be modified, amended or rescinded by
the Board of Directors of the Company in its sole discretion.



     6.06 Vacation. Employee shall be entitled to four (4) weeks paid vacation
each year during the term hereof. Any vacation not used in any year shall not
accrue for use in subsequent years and shall be forfeited as of the end of such
year.



     6.07 Paramount Provisions.



     (a) Notwithstanding anything in Sections 6.02 and 6.03 above or any other
provision of this Agreement to the contrary, if the Company has met all of its
obligations under this Agreement with respect to obtaining and maintaining in
force (i) the Life Insurance Policy described in Section 6.02 hereof on the
life of Employee to fund the Death Benefit or (ii) the Supplemental Disability
Policy maintained for Employee pursuant to Section 6.03 hereof to fund such
Employee’s Disability Benefit, but all or any portion of the proceeds under any
such policy are not actually received by the Employee for any reason
whatsoever, including without limitation the insolvency of the insurer or any
misrepresentation made by Employee in the application for such insurance, then
the right of Employee or her designated beneficiary to receive a Disability
Benefit or a Death Benefit, as the case may be, shall be reduced (but not



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below zero) by the amount by which the Disability Benefit or Death Benefit
otherwise payable exceeds the insurance proceeds actually received.




     (b) Anything in Sections 6.01, 6.02, 6.03, and 6.04 to the contrary
notwithstanding, the amount of the benefits provided for in this Section 6 are
subject to adjustment as shall be provided for in the plan or insurance
contract, as the case may be, pursuant to which such benefit is being paid and
the Employee will be given written notice of any such change. Anything in this
Agreement to the contrary notwithstanding, the Chief Executive Officer or the
Board of Directors shall have full authority to make all determinations deemed
necessary or advisable for the administration of the benefits described in this
Section 6. Subject to Section 12.04, the good faith interpretation and
construction by the Chief Executive Officer or the Board of Directors of the
terms of this Section 6 or the benefit programs described herein shall be
final, conclusive and binding on Employee.



     (c) The terms of this Section 6 supercede and replace any other
supplemental benefit agreements previously entered into between Employee and
the Company.



     7. Business Expenses.



     All reasonable and customary business expenses incurred by Employee in the
performance of her duties hereunder shall be paid or reimbursed by the Company
in accordance with the Company’s policies in effect, from time to time.



     8. Termination of Employment.



     8.01 Definitions. For purposes of this Section 8, the following terms
shall have the following meanings:



     (a) Cause. The term “Cause” shall mean (i) Employee commits fraud or is
convicted of a crime involving moral turpitude, (ii) Employee, in carrying out
her duties hereunder, has been guilty of gross neglect or gross misconduct
resulting in harm to the Company or any of its subsidiaries or affiliates,
(iii) Employee shall have failed to materially comply with the policies of the
Company or shall have refused to follow or comply with the duly promulgated
directives of the Chief Executive Officer or the Board of Directors of the
Company, (iv) Employee has breached any of the provisions of Section 10.02
through and including 10.04 or (v) Employee otherwise materially breaches this
Agreement.



     (b) Disability. The term “Disability” shall mean the good faith
determination by the Chief Executive Officer or the Board of Directors of the
Company that Employee has failed to or has been unable to perform her duties as
the result of any physical or mental disability for a period of ninety (90)
consecutive days during any one period of Disability.



     8.02 Termination upon Death or Disability. If Employee’s employment is
terminated due to her death or Disability, the Company shall pay to the estate
of the Employee or to the



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Employee, as the case may be, within fifteen (15) days following
Employee’s death or upon her termination in the event of Disability, all
amounts then payable to Employee pro rated through the date of termination
pursuant to Sections 3, 6.01, and 7, any amount due and payable to Employee
under Section 9.02 and Section 9.03, and the amount of any accrued but unused
vacation under Section 6.06 for the year in which such termination occurs. In
addition, the Company shall pay to Employee any Incentive Pay payable pursuant
to Section 4.04 hereof in accordance with the terms thereof.




     8.03 Termination by the Company for other than Death or Disability or for
Cause. The Company may terminate Employee’s employment hereunder without cause
at any time, upon written notice. If upon expiration of the term of this
Agreement or if Employee’s employment is terminated by the Company prior to the
expiration of the term of this Agreement without cause or other than (i) by
reason of Employee’s death or Disability or (ii) for Cause, the Company shall
pay or provide to Employee, in lieu of all other amounts payable hereunder or
benefits to be provided hereunder the following:



     (a) a payment equal to the sum of one (1) times Employee’s Base Salary at
the time of termination;



     (b) a payment equal to one (1) times Employee’s Target Incentive Pay for
the year in which such termination occurs (or, if no Target Incentive Pay has
been designated for such year, then the Target Incentive Pay for the last year
in which it was designated prior to such termination); and (c) the acceleration
of any unvested rights of Employee under any stock options or other equity
incentive programs such that they shall immediately vest under the terms of
such plans.



     As a condition precedent to the requirement of Company to make such
payments or grant such accelerated vesting, Employee shall not be in breach of
her obligations under Section 10 hereof and Employee shall execute and deliver
to Company a general release in favor of the Company in substantially the same
form as the general release then contained in the latest Severance Agreement
being used by the Company.



     Any payments required to be made under this Section 8.03 shall be made to
Employee, at the election of the Company, either within thirty (30) days after
the date of Employee’s termination of employment or, at the Company’s election,
in fifty-two (52) equal installments, payable at the same time and on the same
basis as was the payment of Employee’s Base Salary prior to such termination.



     8.04 Voluntary Termination by Employee or Termination for Cause.



     Employee may terminate her employment hereunder at any time whatsoever,
with or without cause, upon thirty (30) days prior written notice to the
Company. The Company may terminate Employee’s employment hereunder at any time
without notice for Cause. In the event Employee’s employment is terminated
voluntarily by Employee or by the Company for Cause:



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     (a) The Company shall pay to Employee upon such termination all amounts
then due under sections 3, 4 (but only to the extent of earned but unpaid
Incentive Pay), 6, and 7, prorated, through the date of termination for the
year in which she is terminated; and



     (b) The Company shall be under no obligation to make severance payments
to Employee or continue any benefits being provided to Employee beyond the date
of such termination.



     9.01 Change of Control, Change in Responsibilities.



     Upon the occurrence of both of the following events:



     (a) The dissolution or liquidation of the Company, or a reorganization,
merger or consolidation of the Company with one or more corporations as a
result of which the owners of all of the outstanding shares of Common Stock
immediately prior to such reorganization, merger or consolidation own in the
aggregate, directly and indirectly, less than 50% of the outstanding shares of
Common Stock of the Company or any other entity into which the Company shall be
merged or consolidated immediately following the consummation thereof, or the
sale, transfer or other disposition of all or substantially all of the assets
or more than 50% of the then outstanding shares of Common Stock of the Company
in a single transaction or series of related transactions (a “Change in
Control”); and



     (b) Within one (1) year of such Change in Control there is a termination
of employment without cause or a material diminution of or change in Employee’s
responsibilities or duties,



     Employee may elect, in writing, within ninety (90) days following the
occurrence of such events, to terminate this Agreement and her employment with
the Company will terminate, effective thirty (30) days after the Company’s
receipt of such notice. In such event Employee shall be deemed to have been
terminated by the Company other than for Cause and all amounts payable to
Employee pursuant to Section 8.03 shall become immediately due and payable.



     A Change in Control of the Company shall not be deemed to occur by reason
of any public offering of the Common Stock of the Company.



     Notwithstanding any other provision contained in this Agreement, if the
aggregate of the payments provided for in this Agreement which result from
Employee’s election to terminate her employment under this Section 9.01 and the
other payments and benefits which the Employee has the right to receive from
the Company as a result thereof (the “Total Payments”) would constitute a
“parachute payment,” as defined in Section 280G(b)(2) of the Internal Revenue
Code of 1986, as amended (the “Code”), the Employee shall receive, instead of
the Total Payments, an increased amount (the “Gross Up Total”) equal to the
product of (x) the Total Payments and (y) a fraction, the numerator of which is
1 and the denominator of which is 1 minus the maximum effective combined tax
rate with respect to all federal, state, and local income taxes payable by the
Employee under Code Section 4999 (the “Excise Taxes”). It is the intention of
this provision that the Gross Up Total minus the Excise Taxes shall equal the
Total Payments and this provision shall be read and interpreted accordingly.



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     Except as expressly contemplated by this Agreement, or in any other
agreement referred to in Section 5 hereof, no merger, reorganization,
recapitalization, sale of stock, sale of assets or other change in the capital
structure of the Company or in the identity of the legal or beneficial owners
of the Company shall affect the rights or obligations of the Company or
Employee hereunder.



     9.02 Sale of Church’s Chicken.



     (a) For purposes of this Section 9, “Sale of Church’s” shall mean the
consummation of any transaction or series of related transactions pursuant to
which, directly or indirectly, all or substantially all of the stock or assets
of the Church’s Chicken business unit of the Company is sold, transferred,
exchanged or otherwise disposed of by the Company, including without limitation
through (1) any sale, transfer, exchange or other disposition of stock or
assets, (2) any lease or license of assets with or without a purchase option or
(3) any merger, consolidation, amalgamation, reorganization, reclassification,
recapitalization or share exchange.



     (b) In the event of a Sale of Church’s and Employee’s termination of
employment with the Company within six (6) months following the Sale of
Church’s, Employee shall be deemed to have been terminated by the Company other
than for Cause and all amounts payable to Employee pursuant to Section 8.03
shall become immediately due and payable; provided, however, that no payment
shall be due under this Section 9.02 if Employee and the Company expressly
agree in writing to continue Employee’s employment with the Company beyond six
(6) months following a Sale of Church’s.



     9.03 Stay Bonus, Transaction Bonus.



     (a) In the event of a Sale of Church’s, the Company shall pay to Employee:



     (i) a stay bonus equal to (A) fifty percent (50%) of Employee’s Base
Salary as in effect on the date on which the Sale of Church’s is consummated
and (B) a payment equal to fifty percent (50%) of Employee’s Target Incentive
pay for the year in which the Sale of Church’s is consummated (or, if no Target
Incentive Pay has been designated for such year, then the Target Incentive Pay
for the last year in which it was designated prior to the time the Sale of
Church’s is consummated); and



     (ii) a transaction bonus equal to (A) fifty percent (50%) of Employee’s
Base Salary as in effect on the date on which the Sale of Church’s is
consummated and (B) a payment equal to fifty percent (50%) of Employee’s Target
Incentive pay for the year in which the Sale of Church’s is consummated (or, if
no Target Incentive Pay has been designated for such year, then the Target
Incentive Pay for the last year in which it was designated prior to the time
the Sale of Church’s is consummated).



     (b) Any payments required to be made under this Section 9.03 shall be made
(less any applicable withholdings) to Employee in cash, at the election of the
Company, either (i) in a



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lump sum payment on the date a Sale of Church’s is consummated or (ii) in
substantially equal installments, payable in accordance with the Company’s
standard practices for paying base salary to executives with the last payment
to be made on or before the second anniversary of the consummation of the Sale
of Church’s.




     (c) Unless Employee’s employment shall have been terminated by the Company
other than for Cause, Payments shall be made under this Section 9.03 solely if
Employee remains continuously employed pursuant to the terms of this Agreement
until the date on which the Sale of Church’s is consummated, and Employee’s
failure for any reason to remain continuously employed through such
consummation date shall relieve the Company of all obligations to make payment
under this Section 9.03. If Employee’s employment shall have been terminated
by the Company other than for Cause, Employee shall continue to be entitled to
receive the payments provided for in this Section 9.03.



     (d) Nothing in this Section 9.03 shall preclude Employee from receiving a
payment under Section 9.01 or Section 9.02 if the conditions for such payment
are satisfied.



     10. Confidentiality and Non-Competition.



     10.01 Definitions. For purposes of this Section 10, the following terms
shall have the following meanings:



          “Affiliate” means any corporation, limited liability company, partnership
or other entity of which the Company owns at least fifty percent (50%) of the
outstanding equity and voting rights, directly or indirectly, through any other
corporation, limited liability company, partnership or other entity.



          “Businesses” means the businesses engaged in by the Company directly or
through its Affiliates immediately prior to termination of employment.



          “Confidential Information” means information which does not rise to the
level of a Trade Secret, but is valuable to the Company or any Affiliate and
provided in confidence to Employee.



          “Proprietary Information” means, collectively, Trade Secrets and
Confidential Information.



          “Restricted Period” means the period commencing as of the date hereof and
ending on that date two years (2) year after the termination of Employee’s
employment with the Company for any reason, whether voluntary or involuntary.



          “Trade Secrets” means information which derives economic value, actual or
potential, from not being generally known to, and not being readily
ascertainable by proper means by, other persons who can obtain economic value
from its disclosure or use, and is the subject of efforts that are reasonable
under the circumstances to maintain its secrecy.



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     10.02 Covenant Not-To-Disclose. The Company and Employee recognize that,
during the course of Employee’s employment with the Company, the Company has
disclosed and will continue to disclose to Employee Proprietary Information
concerning the Company and the Affiliates, their products, their franchisees,
their services and other matters concerning their Businesses, all of which
constitute valuable assets of the Company and the Affiliates. The Company and
Employee further acknowledge that the Company has, and will, invest
considerable amounts of time, effort and corporate resources in developing such
valuable assets and that disclosure by Employee of such assets to the public
shall cause irreparable harm, damage and loss to the Company and the
Affiliates. Accordingly, Employee acknowledges and agrees:



     (a) that the Proprietary Information is and shall remain the exclusive
property of the Company (or the applicable Affiliate);



     (b) to use the Proprietary Information exclusively for the purpose of
fulfilling the obligations under this Agreement;



     (c) to return the Proprietary Information, and any copies thereof, in her
possession or under her control, to the Company (or the applicable Affiliate)
upon request of the Company (or the Affiliate), or expiration or termination of
Employee’s employment hereunder for any reason; and



     (d) to hold the Proprietary Information in confidence and not copy,
publish or disclose to others or allow any other party to copy, publish or
disclose to others in any form, any Proprietary Information without the prior
written approval of an authorized representative of the Company.



     The obligations and restrictions set forth in this Section 10.02 shall survive
the expiration or termination of this Agreement, for any reason, and shall
remain in full force and effect as follows:



     (x) as to Trade Secrets, indefinitely, and



     (y) as to Confidential Information, for a period of two (2) years after
the expiration or termination of this Agreement for any reason.



     The confidentiality, property, and proprietary rights protections
available in this Agreement are in addition to, and not exclusive of, any and
all other corporate rights, including those provided under copyright, corporate
officer or director fiduciary duties, and trade secret and confidential
information laws. The obligations set forth in this Section 10.02 shall not
apply or shall terminate with respect to any particular portion of the
Proprietary Information which (i) was in Employee’s possession, free of any
obligation of confidence, prior to her receipt from the Company or its
Affiliate, (ii) Employee establishes the Proprietary Information is already in
the public domain at the time the Company or the Affiliate communicates it to
Employee, or becomes available to the public through no breach of this
Agreement by Employee, or (iii)



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Employee establishes that she received the Proprietary Information
independently and in good faith from a third party lawfully in possession
thereof and having no obligation to keep such information confidential.




     10.03 Covenant of Non-Disparagement and Cooperation. Employee agrees that
she shall not at any time during or following the term of this Agreement make
any remarks disparaging the conduct or character of the Company or the
Affiliates or any of the Company’s or the Affiliates’ current or former agents,
employees, officers, directors, successors or assigns (collectively the
“Related Parties”). In addition, Employee agrees to cooperate with the Related
Parties, at no extra cost, in any litigation or administrative proceedings
(e.g., EEOC charges) involving any matters with which Employee was involved
during Employee’s employment with the Company. The Company shall reimburse
Employee for travel expenses approved by the Company or the Affiliates incurred
in providing such assistance.



     10.04 Covenant Not-To-Induce. Employee covenants and agrees that during
the Restricted Period, she will not, directly or indirectly, on her own behalf
or in the service or on behalf of others, hire, solicit, take away or attempt
to hire, solicit or take away any person who is or was an employee of the
Company or any Affiliate during the one (1) year period preceding the
termination of Employee’s employment.



     10.05 Remedies. The Company and Employee expressly agree that a violation
of any of the covenants contained in subsections 10.02 through and including
10.04 of this Section 10, or any provision thereof, shall cause irreparable
injury to the Company and that, accordingly, the Company shall be entitled, in
addition to any other rights and remedies it may have at law or in equity, to
an injunction enjoining and restraining Employee from doing or continuing to do
any such act and any other violation or threatened violation of said Sections
10.02 through and including 10.04 hereof.



     10.06 Severability. In the event any provision of this Agreement shall be
found to be void, the remaining provisions of this Agreement shall nevertheless
be binding with the same effect as though the void part were deleted; provided,
however, if subsections 10.02 through and including 10.04 of this Section 10
shall be declared invalid, in whole or in part, Employee shall execute, as soon
as possible, a supplemental agreement with the Company, granting the Company,
to the extent legally possible, the protection afforded by said subsections. It
is expressly understood and agreed by the parties hereto that the Company shall
not be barred from enforcing the restrictive covenants contained in each of
subsections 10.02 through and including 10.04, as each are separate and
distinct, so that the invalidity of any one or more of said covenants shall not
affect the enforceability and validity of the other covenants.



     10.07 Ownership of Property. Employee agrees and acknowledges that all
works of authorship and inventions, including but not limited to products,
goods, know-how, Trade Secrets and Confidential Information, and any revisions
thereof, in any form and in whatever stage of creation or development, arising
out of or resulting from, or in connection with, the services provided by
Employee to the Company or any Affiliate under this Agreement are works made
for hire and shall be the sole and exclusive property of the Company or such
Affiliate.



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Employee agrees to execute such documents as the Company may reasonably
request for the purpose of effectuating the rights of the Company or the
Affiliate in any such property.




     10.08 No Defense. The existence of any claim, demand, action or cause of
action of the Employee against the Company shall not constitute a defense to
the enforcement by the Company of any of the covenants or agreements herein.



     11. Indemnification.



     11.01 Company Obligations. The Company hereby indemnifies and agrees to
hold harmless Employee, to the extent allowed by applicable law, against all
liabilities, obligations, claims, demands, actions, causes of action, lawsuits,
judgments, expenses and costs, including but not limited to the reasonable
costs of investigation and attorney’s fees, incurred by the Employee as a
result of any threat, demand, claim action or lawsuits, made, instituted or
initiated against the Employee, which arises out of, results from or relates to
this Agreement or any action taken by Employee in the course of performance of
Employee’s duties hereunder, except for Employee’s own gross negligence or
willful misconduct.



     11.02 Notice and Defense of Claim. If any claim suit or other legal
proceeding shall be commenced, or any claim or demand be asserted against the
Employee and Employee desires indemnification pursuant to this paragraph, the
Company shall be notified to such effect with reasonable promptness and shall
have the right to assume at its full cost and expense the entire control of any
legal proceeding, subject to the right of the Employee to participate at her
full cost and expense and with counsel of her choice in the defense, compromise
or settlement thereof. The Employee shall cooperate fully in all respects with
the Company in any such defense, compromise or settlement, including, without
limitation, making available to the Company all pertinent information under the
control of the Employee. The Company may compromise or settle any such action,
suit, proceeding, claim or demand without Employee’s approval so long as the
Company obtains for Employee’s benefit a release of liability with respect to
such claim from the claimant and the Company assumes and agrees to pay any
amounts due with respect to such settlement. In no event shall the Company be
liable for any settlement entered into by the Employee without the Company’s
prior written consent.



     11.03 Survival. The provisions of this paragraph 11 shall survive the
termination of this Agreement for a period of four (4) years, unless Employee
is terminated for Cause, in which event the provisions of this Section 11 shall
not survive termination of this Agreement.



     12. Dispute Resolution.



     12.01 Agreement to Arbitrate. In consideration for her continued
employment with the Company, and other consideration, the sufficiency of which
is hereby acknowledged, but subject to Section 6.07(b) above, Employee
acknowledges and agrees that any controversy or claim arising out of or
relating to Employees employment, termination of employment, or this Agreement
including, but not limited to, controversies and claims that are protected or
covered by any federal, state, or local statute, regulation or common law,
shall be settled by arbitration



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pursuant to the Federal Arbitration Act. This includes, but is not limited
to, violations or alleged violations of any federal or state statute or common
law (including, but not limited to, the laws of the United States or of any
state, or the Constitution of the United States or of any state), or of any
other law, statute, ordinance, including but not limited to, the Age
Discrimination in Employment Act, Title VII of the Civil Rights Act of 1964, as
amended, the Americans with Disabilities Act, the Equal Pay Act, the Employee
Retirement Income Security Act, the Rehabilitation Act of 1973, and any other
statute or common law. This provision shall not, however, preclude the Company
from seeking equitable relief as provided in Section 10.06 of this Agreement.




     12.02 Procedure. The arbitration shall be conducted in accordance with the
Employment Arbitration Rules of the American Arbitration Association: a single
arbitrator who is experienced in employment law shall be selected under those
Rules, and the arbitration shall be initiated in Atlanta, Georgia, unless the
parties agree in writing to a different location or the Arbitrator directs the
arbitration to be held at a different location. Except for filing fees, all
costs of the arbitrator shall be allocated by the arbitrator. The award
rendered by the arbitrator shall be final and binding on the parties hereto and
judgment thereon may be entered in any court having jurisdiction thereof. In
addition to that provided for in the Employment Arbitration Rules, the
arbitrator has sole discretion to permit discovery consistent with the Federal
Rules of Civil Procedure and the judicial interpretation of those rules upon
request by any party; provided, however, it is the intent of the parties that
the arbitrator limit the time and scope of any such discovery to the greatest
extent practicable and provide a decision as rapidly as possible given the
circumstances of the claims to be determined. The arbitrator also shall have
the power and authority to grant injunctive relief for any violation of
Sections 10.02 through and including 10.04 and the arbitrator’s order granting
such relief may be entered in any court of competent jurisdiction. The
agreement to arbitrate any claim arising out of the employment relationship or
termination of employment shall not apply to those claims which cannot be made
subject to this provision by statute, regulation or common law. These include,
but are not limited to, any claims relating to work related injuries and claims
for unemployment benefits under applicable state laws.



     12.03 Rights of Parties. Nothing in this clause shall be construed to
prevent the Company from asking a court of competent jurisdiction to enter
appropriate equitable relief to enjoin any violation of this Agreement by
Employee. The Company shall have the right to seek such relief in connection
with or apart from the parties’ rights under this clause to arbitrate all
disputes. With respect to disputes arising under this Agreement that are
submitted to a court rather than an arbitrator, including actions to compel
arbitration or for equitable relief in aid of arbitration, the parties agree
that venue and jurisdiction are proper in any state or federal court lying
within Atlanta, Georgia and specifically consent to the jurisdiction and venue
of such court for the purpose of any proceedings contemplated by this
paragraph. By entering into this Agreement the parties have waived any right
which may exist for a trial by jury and have expressly agreed to resolve any
disputes covered by this Agreement through the arbitration process described
herein.



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     12.04 Employee Benefit Plan Issues. With respect to any benefits provided
to Employee hereunder which may be subject to the provisions of the Employee
Retirement Income Security Act of 1974, as amended (the “Covered Plans”), and
notwithstanding Section 6.07(b) above, the adjudication of any claims under the
Covered Plans shall be administered in accordance with the terms and conditions
of such Covered Plan. If the Covered Plan does not contain a claims
adjudication provision then, if for any reason, a claim for benefits under a
Covered Plan is denied by the Company, the Company shall deliver to the
Employee or her representative (the “claimant”) a written explanation setting
forth the specific reasons for the denial, pertinent references to the
Agreement section or section of the Covered Plan on which the denial is based,
such other data as may be pertinent and information on the procedures to be
followed by the claimant in obtaining a review of her claim, all written in a
manner calculated to be understood by the claimant. For this purpose: (A)The
claimant’s claim shall be deemed filed when presented orally or in writing to
the individual at the Company then performing the duties currently being
performed by the individual in charge of the People Services and Development
Department (the “Claims Manager”). (B) The Claims Manager’s explanation shall
be in writing delivered to the claimant within 90 days of the date the claim is
filed. The claimant shall have 60 days following her receipt of the denial of
the claim to file with the Claim’s Manager a written request for review of the
denial. The claimant or her representative may review pertinent documents
related to this Agreement and in the Claim’s Manager’s possession in order to
prepare the request for review. The Claims Manager shall decide the issue on
review and furnish the claimant with a copy of its decision within 60 days of
receipt of the claimant’s request for review of her claim. The decision on
review shall be in writing and, if denied, shall include specific reasons for
the decision, written in a manner calculated to be understood by the claimant,
as well as specific references to the pertinent provisions on which the
decision is based. If a copy of the decision is not so furnished to the
claimant within such 60 days, the claim shall be deemed denied on review. Any
payment to a claimant shall to the extent thereof be in full satisfaction of
all claims hereunder against the Company and the Claims Manager, either of whom
may require such claimant, as a condition to such payment, to execute a receipt
and release therefor in such form as shall be determined by the Company and the
Claims Manager. If a receipt and release is required by the claimant and the
claimant does not provide such receipt and release in a timely enough manner to
permit a timely distribution in accordance with the general timing of
distribution provisions in this Agreement, the payment of any affected
distribution may be delayed until the Company and the Claims Manager receive a
proper receipt and release.



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     13. Employee Acknowledgment.



     By signing this Agreement, Employee acknowledges that the Company has
advised Employee of her right to consult with an attorney prior to executing
this Agreement; that she has the right to retain counsel of her own choosing
concerning the agreement to arbitrate or any waiver of rights or claims; that
she has read and fully understands the terms of this Agreement and/or has had
the right to have it reviewed and approved by counsel of choice, with adequate
opportunity and time for such review; and that she is fully aware of its
contents and of its legal effect. Accordingly, this Agreement shall not be
construed against any party on the grounds that the party drafted this
Agreement. Instead, this Agreement shall be interpreted as though drafted
equally by all parties.



     14. Amendments.



     This Agreement may not be altered, modified or amended except by a written
instrument signed by each of the parties hereto.



     15. Successors.



     As used in this Agreement, the term the Company shall include any
successors to all or substantially all of the business and/or assets of the
Company which assumes and agrees to perform this Agreement.



     16. Assignment.



     Neither this Agreement nor any of the rights or obligations of either
party hereunder shall be assigned or delegated by any party hereto without the
prior written consent of the other party, except that the Company may without
the consent of Employee assign its rights and delegate its duties hereunder to
any successor to the business of the Company. In the event of the assignment
by the Company of its rights and the delegation of its duties to a successor to
the business of the Company and the assumption of such rights and obligations
by such successor, the Company shall, effective upon such assumption, be
relieved from any and all obligations whatsoever to Employee hereunder.



     17. Waiver.



     Waiver by any party hereto of any breach or default by any other party of
any of the terms of this Agreement shall not operate as a waiver of any other
breach or default, whether similar to or different from the breach or default
waived.



     18. Severability.



     In the event that any one or more of the provisions of this Agreement
shall be or become invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein shall not be affected thereby.



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     19. Survival.



     Notwithstanding anything herein to the contrary, the provisions of
Sections 6.07, 7, 8.03, 9, 10, and 12 shall survive the termination of this
Agreement.



     20. Entire Terms.



     This Agreement contains the entire understanding of the parties with
respect to the employment of Employee by the Company. There are no
restrictions, agreements, promises, warranties, covenants or undertakings other
than those expressly set forth herein. This Agreement supersedes the Prior
Agreement and all other prior agreements, arrangements and understandings
between the parties, whether oral or written, with respect to the employment of
Employee.



     21. Notices.



     Notices and all other communications provided for in this Agreement shall
be in writing and shall be deemed to have been duly given when personally
delivered or when mailed by United States registered mail, return receipt
requested, postage prepaid, addressed as follows:



   If to Employee:




Hala G. Moddelmog

4484 East Conway Drive, N.W.

Atlanta, GA 30327




   If to the Company to:




AFC Enterprises, Inc.

Six Concourse Parkway

Suite 1700

Atlanta, Georgia 30328-5352

Attn: Legal Department




or to such other address or such other person as Employee or the Company shall
designate in writing in accordance with this Section 21 except that notices
regarding changes in notices shall be effective only upon receipt.




     22. Headings.



     Headings to Sections in this Agreement are for the convenience of the
parties only and are not intended to be a part of, or to affect the meaning or
interpretation of, this Agreement.



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     23. Governing Laws.



     The Agreement shall be governed by the laws of the State of Georgia
without reference to the principles of conflict of laws.



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     IN WITNESS WHEREOF, the Company has caused this Agreement to be executed
and Employee has hereunto set her hand as of the day and year first above
written.



	 	 	 	 	 	 	 
	 	 	COMPANY:
	 
	 	 	 	 	 	 
	 	 	AFC ENTERPRISES, INC.
	 
	 	 	 	 	 	 
	

	 	By:
	 	/s/ Frank J. Belatti

	 	 
	

	 	 	 	Frank J. Belatti	 	 
	

	 	 	 	Chairman & Chief Executive Officer	 	 
	 
	 	 	 	 	 	 
	 	 	EMPLOYEE:
	 
	 	 	 	 	 	 
	 	 	/s/ Hala G. Moddelmog


	 	 	Hala G. Moddelmog








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