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Item 9A. Controls and Procedures

2022-03-11 compared with 2021-03-15 · 63 added, 22 removed, 148 unchanged (36% of the section changed)

1 unchanged sentence

Disclosure Controls and Procedures

We maintain disclosure controls and procedures (as defined in Rules 13a-15 (e) of the Exchange Act) that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the required time periods, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

We maintain disclosure controls and procedures (as defined in Rules 13a-15 (e) of the Exchange Act) that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the required time periods, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Interim Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

Our disclosure controls and procedures are based on assumptions about the likelihood of future events, and even effective disclosure controls and procedures can only provide reasonable assurance of achieving their objectives.

Because of their inherent limitations, we cannot guarantee that our disclosure controls and procedures will succeed in achieving their stated objectives in all cases, that they will be complied with in all cases, or that they will prevent or detect all misstatements.

Our management has evaluated, with the participation of our Chief Executive Officer and Chief Financial Officer, the effectiveness of our disclosure controls and procedures, as of the end of the period covered by this report.

Based on this evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures were effective at the reasonable assurance level as of December 30, 2020.

Management Report on Internal Control over Financial Reporting

Our management has evaluated, with the participation of our Chief Executive Officer and Interim Chief Financial Officer, the effectiveness of our disclosure controls and procedures, as of the end of the period covered by this report.

Based on this evaluation, our Chief Executive Officer and Interim Chief Financial Officer has concluded that our disclosure controls and procedures were effective at the reasonable assurance level as of December 29, 2021.

Management’s Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting.

6 unchanged sentences

Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we carried out an evaluation of the effectiveness of our internal control over financial reporting as of December 30, 2020 based on the criteria in Internal Control — Integrated Framework (“2013 Framework”) issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”).

Under the supervision and with the participation of our management, including our Chief Executive Officer and Interim Chief Financial Officer, we carried out an evaluation of the effectiveness of our internal control over financial reporting as of December 29, 2021 based on the criteria in Internal Control — Integrated Framework (“2013 Framework”) issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”).

Based on this evaluation, our management concluded that our internal control over financial reporting was effective as of December 29, 2021 based on the criteria established in the 2013 Framework.

9 unchanged sentences

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 29, 2021, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated balance sheets of the Company as of December 30, 2020 and December 25, 2019, the related consolidated statements of operations, comprehensive income (loss), stockholders’ equity, and cash flows for each of the three years in the period ended December 30, 2020, and the related notes and our report dated March 15, 2021, expressed an unqualified opinion thereon.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated balance sheets of the Company as of December 29, 2021 and December 30, 2020, the related consolidated statements of income, comprehensive income, stockholders’ equity, and cash flows for each of the three years in the period ended December 29, 2021, and the related notes and our report dated March 11, 2022, expressed an unqualified opinion thereon.

Basis for Opinion

19 unchanged sentences

OTHER INFORMATION

As previously disclosed, Laurance Roberts was appointed Interim Chief Executive Officer of the Company, effective October 15, 2021.

On March 8, 2022, our Board of Directors appointed Mr.

Roberts as Chief Executive Officer, President and a Class III director on the Board of Directors of the Company, effective March 9, 2022 (the “Effective Date”).

Roberts will continue to serve as the Company’s interim Chief Financial Officer and as its principal executive officer, principal accounting officer and principal financial officer.

Biographical information regarding Mr.

Roberts is contained in our definitive proxy statement filed with the SEC on April 29, 2021, which information is incorporated by reference into this Item 9B.

In connection with Mr.

Roberts’ appointment as our Chief Executive Officer President, and a member of the Board of Directors, we entered into an employment agreement with Mr.

Roberts on March 9, 2022 (the “Employment Agreement”).

Pursuant to the Employment Agreement, the term of Mr.

Roberts’ employment as Chief Executive Officer and President will end on the 12 th month anniversary of the Effective Date and on such date and on each subsequent anniversary of such time, the term shall, without further action by Mr.

Roberts or the Company, be extended by an additional one-year period, subject to earlier termination as provided in the Employment Agreement.

Roberts’ annual base salary will increase to $600,000 and his target annual bonus will be 100% of his base salary during his tenure as Chief Executive Officer.

In addition, pursuant to the Employment Agreement and at the discretion of our Board of Directors, during the term of the Employment Agreement, starting in April 2022, Mr.

Roberts will be eligible to receive an annual discretionary equity grant, with the amount and terms thereof determined by the Board of Directors.

During the term of the Employment Agreement, Mr.

Roberts will be entitled to employee benefits on the same basis as those generally available to other senior executives.

Roberts will also be entitled to at least four weeks of vacation per year and an automobile allowance substantially similar to that provided to other similarly situated senior executives.

The Employment Agreement provides that in the event that Mr.

Roberts’ employment is terminated due to death or disability he will be entitled to a prorated annual bonus for the year of termination based on actual performance.

The Employment Agreement also provides that in the event that Mr.

Roberts’ employment is terminated without cause or for good reason, then he will be entitled to receive a prorated annual bonus for the year of termination based on actual performance and continuation of payment of base salary for twelve months, subject, in each case, to the execution of a general release and compliance with applicable restrictive covenants.

The Employment Agreement contains a perpetual confidentiality covenant, a one-year post-termination non-interference covenant applicable to the Company’s relationships with suppliers, customers and partners and a one-year post-termination non-solicitation covenant applicable to Company employees.

The foregoing description of the Employment Agreement is qualified in its entirety by reference to the full text of the Employment Agreement, which is filed as Exhibit 10.32 to this Annual Report on Form 10-K and is incorporated herein by reference.

There are no arrangements or understandings between Mr.

Roberts and any other persons pursuant to which he was selected as our Chief Executive Officer, President and a member of our Board of Directors.

There are also no family relationships between Mr.

Roberts and any director or executive officer of the Company and Mr.

Roberts has no direct or indirect material interest in any related party transaction required to be disclosed pursuant to Item 404(a) of Regulation S-K.

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

Not applicable.

DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

48 unchanged sentences

Form of Franchise Development Agreement (2019)

Form of Franchise Agreement (2021)

Form of Franchise Development Agreement (2021)

Form of Indemnification Agreement between El Pollo Loco Holdings, Inc.

10 unchanged sentences

Form of Stock Option Awards Agreement under 2018 Omnibus Equity Incentive Plan

El Pollo Loco Holdings, Inc.

Equity Incentive Plan

Form of Stock Option Awards Agreement under 2021 Equity Incentive Plan

Form of Restricted Share Agreement under 2021 Equity Incentive Plan

Form of Restricted Stock Agreement under 2021 Equity Incentive Plan (Non-Employee Directors)

El Pollo Loco Holdings, Inc.

Equity Incentive Plan

Employment Agreement between Bernard Acoca and El Pollo Loco, Inc.

Employment Agreement between Laurance Roberts and El Pollo Loco, Inc.

Employment Agreement between Hector Munoz and El Pollo Loco, Inc.

Employment Agreement between Miguel Lozano and El Pollo Loco, Inc.

Form of Non-Qualified Stock Option Agreement between El

Pollo Loco Holdings, Inc.

Release and Consulting Agreement, dated October 14, 2021, between El Pollo Loco, Inc.

and Bernard Acoca

Employment Agreement, dated March 9, 2022, between El Pollo Loco, Inc.

and Laurance Roberts

Employment Agreement between Miguel Lozano and El Pollo Loco, Inc.

Form of Restricted Share Unit Award Agreement between El Pollo Loco Holdings, Inc.

5 unchanged sentences

Power of Attorney (included on signature page hereto)

Certification of Principal Executive Officer under section 302 of the Sarbanes–Oxley Act of 2002

Certification of Principal Financial Officer under section 302 of the Sarbanes–Oxley Act of 2002

Certification of Chief Executive Officer and Chief Financial Officer under 18 U.S.C.

Certification of Chief Executive Officer and Interim Chief Financial Officer under section 302 of the Sarbanes–Oxley Act of 2002

Certification of Chief Executive Officer and Interim Chief Financial Officer under 18 U.S.C.

section 1350, adopted by section 906 of the Sarbanes–Oxley Act of 2002

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EL POLLO LOCO HOLDINGS, INC.

/s/ Bernard Acoca

Bernard Acoca

President and Chief Executive Officer

/s/ Laurance Roberts

Laurance Roberts

Chief Executive Officer, President and Interim Chief Financial Officer

March 11, 2022

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

/s/ Bernard Acoca

Director, President and Chief Executive Officer (principal executive officer)

March 15, 2021

Bernard Acoca

/s/ Laurance Roberts

Chief Financial Officer (principal financial and accounting officer)

Chief Executive Officer, President, Interim Chief Financial Officer and Director (principal executive officer;

principal financial and accounting officer)

March 11, 2022

13 unchanged sentences

March 11, 2022

/s/ Nancy Faginas-Cody

March 11, 2022

Nancy Faginas-Cody

/s/ Deborah Gonzalez

March 11, 2022

Deborah Gonzalez

/s/ Carol Lynton

1 unchanged sentence

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures