EXHIBIT 10.1
INDEMNIFICATION AGREEMENT
This INDEMNIFICATION AGREEMENT (the "Indemnification Agreement") is
made and entered into as of the 12th day of January, 1993 by and between
CHECKERS DRIVE-IN RESTAURANTS, INC., a Delaware corporation (the "Company"), and
Xxxxx X. Xxxxx, Xx., an individual (the "Indemnitee").
WHEREAS, it is essential to the Company to retain and attract as
directors and officers the most capable persons available;
WHEREAS, Indemnitee is, or will be, a director and/or officer of the
Company;
WHEREAS, both the Company and Indemnitee recognize the increased
risk of litigation and other claims being asserted against directors and
officers of public companies in today's environment;
WHEREAS, the By-laws of the Company require the Company to indemnify
and advance expenses to its directors and officers to the full extent permitted
by law, and the Indemnitee has agreed to serve as a director and/or officer of
the Company in part in reliance of such By-laws; and,
WHEREAS, in recognition of Indemnitee's need for substantial
protection against personal liability in order to enhance Indemnitee's service
to the Company in an effective manner and Indemnitee's reliance on the aforesaid
By-laws, and in part to provide Indemnitee with specific contractual assurance
that the protection promised by such By-laws will be available to Indemnitee
(regardless of, among other things, any amendment to or revocation of such
By-laws or any changes in the composition of the Company's Board of Directors or
acquisition transaction relating to the Company), the Company wishes to provide
in this Indemnification Agreement for the indemnification of and the advancing
of expenses to Indemnitee to the fullest extent (whether partial or complete)
permitted by law and as set forth in this Indemnification Agreement and, to the
extent insurance is obtained, for the continued coverage of Indemnitee under the
Company's directors' and officers' liability insurance policies.
NOW, THEREFORE, in consideration of the premises, the mutual
promises, covenants and conditions herein contained and in the Employment
Agreement dated as of the date hereof between the Company and Indemnitee,
Indemnitee continuing to serve the Company directly, or at its request, another
enterprise and for other good and valuable considerations, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto intending to be
legally bound hereby agree as follows:
1. CERTAIN DEFINITIONS. In addition to the words and terms elsewhere
defined in this Indemnification Agreement, certain capitalized words and terms
used in this Indemnification Agreement shall have the meanings given to them by
the definitions and descriptions in this Section 1 unless the context or use
indicates another or different meaning or intent, and such definitions shall be
equally applicable to both the singular and plural forms of any of the
capitalized words and terms herein defined. The following words and terms are
defined terms under this Indemnification Agreement:
1.1 CHANGE IN CONTROL. "Change in Control" shall be deemed to have
occurred if (i) any "person" (as such term is used in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934, as amended), other than a
trustee or other fiduciary holding securities under an employee benefit
plan of the Company or a corporation owned directly or indirectly by the
stockholders of the Company in substantially the same proportions as their
ownership of stock of the Company, is or becomes the "beneficial owner"
(as defined in Rule 13-d-3 under said Act), directly or indirectly, of
securities of the Company representing 20% or more of the total voting
power represented by the Company's then outstanding Voting Securities;
(ii) during any period of two consecutive years, individuals who at the
beginning of such period constitute the Board of Directors of the Company
and any new director whose election by the Board of Directors or
nomination for election by the Company's stockholders was approved by a
vote of at least two-thirds (2/3) of the directors then still in office
who either were directors at the beginning of the period or whose election
or nomination for election was previously so approved, cease for any
reason to constitute a majority thereof; or (iii) the stockholders of the
Company approve a merger or consolidation of the Company with any other
corporation, other than a merger or consolidation which would result in
the Voting Securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being
converted into Voting Securities of the surviving entity) at least 80% of
the total voting power represented by the Voting Securities of the Company
or such surviving entity outstanding immediately after such merger or
consolidation, or the stockholders of the Company approve a plan of
complete liquidation of the Company or an agreement for the sale or
disposition by the Company of (in one transaction or a series of
transactions) all or substantially all the Company's assets.
1.2 CLAIM. "Claim" shall mean any threatened,
pending or completed action, suit or proceeding, or any inquiry or
investigation, whether instituted by the Company or any other party, that
Indemnitee in good faith believes might lead to the institution of any
such action, suit or proceeding, whether civil, criminal, administrative,
investigative or other.
1.3 EXPENSES. "Expenses" shall mean attorneys' fees and all other
costs, expenses and obligations paid or incurred in connection with
investigating, defending, being a witness in or participating in
(including on appeal), or preparing to defend, be a witness in or
participate in any Claim relating to any Indemnifiable Event.
1.4 INDEMNIFIABLE EVENT. "Indemnifiable Event" shall mean any event
or occurrence related to the fact that Indemnitee is or was a director,
officer, employee or agent of the Company, or is or was serving at the
request of the Company as a director, officer, employee, trustee, agent or
fiduciary of another corporation, partnership, joint venture, employee
benefit plan, trust or other enterprise, or by reason of any anything done
or not done by Indemnitee in any such capacity.
1.5 INDEPENDENT LEGAL COUNSEL. "Independent Legal Counsel" shall
mean an attorney or firm of attorneys, selected in accordance with the
provisions of Section 3, who shall not have otherwise been retained by or
performed services for the Company or Indemnitee within the last five
years (other than with respect to matters concerning the rights of
Indemnitee under this Indemnification Agreement or of other indemnities
under similar indemnity agreements).
1.6 REVIEWING PARTY. "Reviewing Party" shall mean (i) the Board of
Directors of the Company by a quorum consisting of directors who were not
parties to such Claim or (ii) if such a quorum is not obtainable, or, even
if obtainable, a quorum of disinterested directors so directs, by
Independent Legal Counsel.
1.7 VOTING SECURITIES. "Voting Securities" shall mean
any securities of the Company which vote generally in the
election of directors.
2. BASIC INDEMNIFICATION ARRANGEMENT. In the event Indemnitee was,
is or becomes a party to or witness or other participant in, or is threatened to
be made a party to or witness or other participant in, a Claim by reason of (or
arising in part out of) an Indemnifiable Event, the Company shall indemnify
Indemnitee to the fullest extent permitted by law as soon as practicable but in
any event no later than thirty days after
written demand is presented to the Company, against any and all Expenses,
judgments, fines, penalties and amounts paid in settlement (including all
interest, assessments and other charges paid or payable in connection with or in
respect of such Expenses, judgments, fines, penalties or amounts paid in
settlement) of such Claim. If so requested by Indemnitee, the Company shall
advance (within two business days of such request) any and all Expenses to
Indemnitee (an "Expense Advance"). Notwithstanding the foregoing, (i) the
obligations of the Company under this Section 2 shall be subject to the
condition that the Reviewing Party shall not have determined (in a written
opinion in any case in which the Independent Legal Counsel is involved) that
Indemnitee would not be permitted to be indemnified under applicable law and
(ii) the obligation of the Company to make an Expense Advance pursuant to this
Section 2 shall be subject to the condition that, if, when and to the extent
that the Reviewing Party determines that Indemnitee would not be permitted to be
so indemnified under applicable law, the Company shall be entitled to be
reimbursed by Indemnitee (who hereby agrees to reimburse the Company) for all
such amounts theretofore paid; PROVIDED, HOWEVER, that if Indemnitee has
commenced or thereafter commences legal proceedings in a court of competent
jurisdiction to secure a determination that, Indemnitee should be indemnified
under applicable law, any determination made by the Reviewing Party that
Indemnitee would not be permitted to be indemnified under applicable law shall
not be binding and Indemnitee shall not be required to reimburse the Company for
any Expense Advance until a final judicial determination is made with respect
thereto (as to which all rights of appeal therefrom have been exhausted or
lapsed). If there has not be a Change in Control, the Reviewing Party shall be
selected by the Board of Directors and if there has been such a Change in
Control (other than a Change in Control which has been approved by a majority of
the Company's Board of Directors who were directors immediately prior to such
Change in Control), the Reviewing Party shall be the Independent Legal Counsel
referred to in Section 3 hereof. If there has been no determination by the
Reviewing Party or if the Reviewing Party determines that Indemnitee
substantively would not be permitted to be indemnified in whole or in part under
applicable law, Indemnitee shall have the right to commence litigation in any
court in the State of Florida or Delaware having subject matter jurisdiction
thereof and in which venue is proper seeking an initial determination by the
court or challenging any such determination by the Reviewing Party or any aspect
thereof, including the legal or factual bases therefor, and the Company hereby
consents to service of process and to appear in any such proceeding. Any
determination by the Reviewing Party otherwise shall be conclusive and binding
on the Company and Indemnitee.
3. CHANGE IN CONTROL. The Company agrees that if there is a Change
in Control of the Company (other than a Change in Control which has been
approved by a majority of the Company's Board of Directors who were directors
immediately prior to such Change in Control) then with respect to all matters
thereafter
arising concerning the rights of Indemnitee to indemnity payments and Expense
Advances under this Agreement or any other agreement or Company By-law now or
hereafter in effect relating to Claims for Indemnifiable Events, the Company
shall seek legal advice only from Independent Legal Counsel selected by
Indemnitee and approved by the Company (which approval shall not be unreasonably
withheld). Such counsel, among other things, shall render its written opinion to
the Company and Indemnitee as to whether and to what extent the Indemnitee would
be permitted to be indemnified under applicable law. The Company agrees to pay
the reasonable fees of the Independent Legal Counsel referred to above and to
fully indemnify such counsel against any and all expenses (including attorneys'
fees), claims, liabilities and damages arising out of or relating to this
Agreement or its engagement pursuant hereto.
4. INDEMNIFICATION FOR ADDITIONAL EXPENSES. The Company shall
indemnify Indemnitee against any and all expenses (including attorneys' fees)
and, if requested by Indemnitee, shall (within two business days of such
request) advance such expenses to Indemnitee which are incurred by Indemnitee in
connection with any action brought by Indemnitee for (i) indemnification or
advance payment of Expenses by the Company under this Indemnification Agreement
or any other agreement or the Company's By-laws now or hereafter in effect
relating to Claims for Indemnifiable Events and/or (ii) recovery under any
directors' and officers' liability insurance policies maintained by the Company
regardless of whether Indemnitee ultimately is determined to be entitled to such
indemnification, advance expense payment or insurance recovery, as the case may
be.
5. PARTIAL INDEMNITY, ETC. If Indemnitee is entitled under any
provision of this Indemnification Agreement to indemnification by the Company
for some or a portion of the Expenses, judgments, fines, penalties and amounts
paid in settlement of a Claim but not, however, for all of the total amount
thereof, the Company shall nevertheless indemnify Indemnitee for the portion
thereof to which Indemnitee is entitled. Moreover, notwithstanding any other
provision of this Indemnification Agreement, to the extent that Indemnitee has
been successful on the merits or otherwise in defense of any or all Claims
relating in whole or in part to an Indemnifiable Event or in defense of any
issue or matter therein, including dismissal without prejudice, Indemnitee shall
be indemnified against all Expenses incurred in connection therewith.
6. BURDEN OF PROOF. In connection with any determination by the
Reviewing Party or otherwise as to whether Indemnitee is entitled to be
indemnified hereunder, the burden of proof shall be on the Company to establish
that Indemnitee is not so entitled.
7. NO PRESUMPTIONS. For purposes of this
Indemnification Agreement, the termination of any claim, action, suit or
proceeding, by judgment, order, settlement (whether with or without court
approval) or conviction, or upon a plea of nolo contendere, or its equivalent,
shall not create a presumption that Indemnitee did not meet any particular
standard of conduct or have any particular belief or that a court has determined
that indemnification is not permitted by applicable law. In addition, neither
the failure of the Reviewing Party to have made a determination as to whether
Indemnitee has met any particular standard of conduct or had any particular
belief, nor an actual determination by the Reviewing Party that Indemnitee has
not met such standard of conduct or did not have such belief, prior to the
commencement of legal proceedings by Indemnitee to secure a judicial
determination that Indemnitee should be indemnified under applicable law shall
be a defense to Indemnitee's claim or create a presumption that Indemnitee has
not met any particular standard of conduct or did not have any particular
belief.
8. NONEXCLUSIVITY, ETC. The rights of the Indemnitee hereunder shall
be in addition to any other rights Indemnitee may have under the Company's
By-laws or the Delaware General Corporation Law or otherwise. To the extent that
a change in the Delaware General Corporation Law (whether by statute or judicial
decision) permits greater indemnification by agreement than would be afforded
currently under the Company's By-laws and this Indemnification Agreement, it is
the intent of the parties hereto that Indemnitee shall enjoy by this
Indemnification Agreement the greater benefits so afforded by such change.
9. LIABILITY INSURANCE. To the extent the Company maintains an
insurance policy or policies providing directors' and officers' liability
insurance, Indemnitee shall be covered by such policy or policies, in accordance
with its or their terms, to the maximum extent of the coverage available for any
Company director or officer.
10. PERIOD OF LIMITATIONS. No legal action shall be brought and no
cause of action shall be asserted by or in the right of the Company against
Indemnitee or Indemnitee's spouse, heirs, executors or personal or legal
representatives after the expiration of two (2) years from the date of accrual
of such cause of action, and any claim or cause of action of the Company shall
be extinguished and deemed released unless asserted by the timely filing of a
legal action within such two (2) year period; PROVIDED, HOWEVER, that if any
shorter period of limitations is otherwise applicable to any such cause of
action, such shorter period shall govern.
11. AMENDMENTS, ETC. No supplement, modification or amendment of
this Indemnification Agreement shall be binding unless executed in writing by
both of the parties hereto. No waiver of any of the provisions of this
Indemnification Agreement shall be deemed or shall constitute a waiver of any
other
provisions hereof (whether or not similar) nor shall such waiver constitute a
continuing waiver.
12. SUBROGATION. In the event of payment under this Indemnification
Agreement, the Company shall be subrogated to the extent of such payment to all
of the rights of recovery of Indemnitee, who shall execute all papers required
and shall do everything that may be necessary to secure such rights, including
the execution of such documents necessary to enable the Company effectively to
bring suit to enforce such rights.
13. NO DUPLICATION OF PAYMENTS. The Company shall not be liable
under this Indemnification Agreement to make any payment in connection with any
Claim made against Indemnitee to the extent Indemnitee has otherwise actually
received payment (under any insurance policy, the Company's By-laws or
otherwise) of the amounts otherwise indemnifiable hereunder.
14. BINDING EFFECT, ETC. This Indemnification Agreement shall be
binding upon and inure to the benefit of and be enforceable by the parties
hereto and their respective successors; assigns, including any direct or
indirect successor by purchase, merger, consolidation or otherwise to all or
substantially all of the business and/or assets of the Company; spouses; heirs;
executors and personal and legal representatives. This Indemnification Agreement
shall continue in effect regardless of whether Indemnitee continues to serve as
an officer or director of the Company or of any other enterprise at the
Company's request.
15. SEVERABILITY. The provisions of this Indemnification Agreement
shall be severable in the event that any of the provisions hereof (including any
provision within a single section, paragraph or sentence) is held by a court of
competent jurisdiction to be invalid, void or otherwise unenforceable in any
respect, and the validity and enforceability of any such provision in every
other respect and of the remaining provisions hereof shall not be in any way
impaired and shall remain enforceable to the fullest extent permitted by law.
16. GOVERNING LAW. This Indemnification Agreement shall be governed
by and construed and enforced in accordance with the laws of the State of
Delaware applicable to contracts made and to be performed in such state without
giving effect to the principles of conflicts of laws.
IN WITNESS WHEREOF, the parties hereto have executed this
Indemnification Agreement as of the date first above written.
CHECKERS DRIVE-IN RESTAURANT, INC.
By /s/ XXXXX X. XXXXXX
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Xxxxx X. Xxxxxx, President
And Chief Executive Officer
/s/ XXXXX X. XXXXX, XX.
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Xxxxx X. Xxxxx, Xx.
