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Exhibit 13
[Director Form]
AGREEMENT
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This Agreement, made and entered into as of the ____ day of __________,
1997 (this "Agreement"), by and between Unique Casual Restaurants, Inc., a
Delaware corporation (the "Company"), and __________________________ (the
"Indemnitee").
WHEREAS, the Board of Directors of Compass Group, plc, a public limited
company incorporated in England and Wales ("Compass"), has approved a tender
offer pursuant to which Compass Holdings, Inc., a Delaware corporation and
wholly owned subsidiary of Compass ("Compass Holdings"), will offer to purchase
for cash (the "Offer") any and all of the shares of common stock, par value $.01
per share (the "International Common Stock"), of DAKA International, Inc., a
Delaware corporation and the parent corporation of the Company
("International"), subject to the terms and conditions contained in that certain
Agreement and Plan of Merger dated as of May __, 1997 (the "Merger Agreement")
by and among Compass, Compass Holdings, Compass Interim, Inc., a Delaware
corporation and wholly owned subsidiary of Compass Holdings ("Compass Interim"),
and International; and
WHEREAS, the Board of Directors of International has approved a plan of
contribution and distribution as described in that certain Reorganization
Agreement dated as of May __, 1997 (the "Reorganization Agreement") by and among
International, Daka, Inc., a Massachusetts corporation and wholly owned
subsidiary of International ("Daka"), the Company, Compass and Compass Holdings,
pursuant to which, prior to consummation of the Offer, (a) all of the assets and
liabilities of the restaurant business currently operated by International and
certain other assets and liabilities of International, together with the shares
of its subsidiaries not engaged in the food catering, contract catering and
vending business, will be contributed (all such assets and liabilities being
referred to herein collectively as the "Restaurant Business") to the Company
(the "Contribution"), and (b) all of the Common Stock, par value $.01 per share,
of the Company (the "Company Common Stock") will be distributed on a pro rata
basis to the holders of International Common Stock (the "Distribution"); and
WHEREAS, the directors (including the Independent Directors (as defined
in the Merger Agreement)) and officers of International are entitled to
indemnification and advancement of expenses pursuant to and in accordance with
the terms and conditions of International's Certificate of Incorporation, as
amended, as in effect on the date hereof (the "International Certificate
Indemnification Provisions"), and International's Bylaws, as amended, as in
effect on the date hereof (the "International Bylaws Indemnification Provisions"
and, together with the International Certificate Indemnification Provisions, the
"International Indemnification Provisions"); and
WHEREAS, the directors and officers of Daka are entitled to
indemnification and advancement of expenses pursuant to and in accordance with
the terms and conditions of the International Indemnification Provisions by
virtue of their serving as directors and officers of Daka at the request of
International; and
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WHEREAS, certain of the directors and officers of International and
Daka prior to consummation of the Offer and the Independent Directors are or
will be directors and officers of the Company following consummation of the
Offer (the "Company Directors and Officers"); and
WHEREAS, International is a party in the action entitled XXXXXXXXX ET
AL. X. XXXX INTERNATIONAL, INC. AND XXXXXXX X. XXXXXXXXX in the United States
District Court for the District of Massachusetts, Civil Action No. 96-12109-GAO
(the "District Court Action"), which District Court Action relates to facts and
circumstances that occurred prior to the date of the Reorganization Agreement
and the Merger Agreement and does not relate to the Contribution, Distribution
or Merger or any of the other transactions contemplated thereby; and
WHEREAS, the Board of Directors of International has determined that
the District Court Action is without merit and that it is in the best interests
of International and its stockholders that International vigorously defend
itself in the District Court Action; and
WHEREAS, in connection with the District Court Action, the Company
Directors and Officers who are or were directors or officers of International
and/or Daka prior to consummation of the Offer may incur expenses in connection
with their defense, if required, in the District Court Action or with serving as
a witness in the District Court Action, or for other reasons arising in
connection with or resulting from their service as a director or officer of
International and/or Daka; and
WHEREAS, as a condition to the willingness of Compass to enter into the
Merger Agreement and make the Offer, Compass has required the Company Directors
and Officers to first seek indemnification from the Company for any losses or
expenses incurred by any of them arising out of their service to and activities
on behalf of International and Daka; and
WHEREAS, the Boards of Directors of Compass, Compass Holdings, Compass
Interim, International, the Company and Daka have determined that, following the
Contribution and Distribution, the merger of Compass Interim with and into
International (the "Merger") with International as the surviving corporation
(the "Surviving Corporation") would be advantageous and beneficial to and in the
best interests of their respective corporations and stockholders; and
WHEREAS, highly competent persons justifiably are reluctant to serve
publicly-held corporations as directors or in other capacities unless they are
provided with adequate protection through insurance and adequate indemnification
against inordinate risks of claims and actions against them arising out of their
service to and activities on behalf of the corporation; and
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WHEREAS, the Company Directors and Officers are reluctant to serve the
Company as directors, officers or in other capacities unless they are provided
with adequate protection through adequate indemnification against inordinate
risks of claims and actions against them arising out of their service to and
activities on behalf of International (as the parent corporation to the Company,
and as the corporation from whom all of the assets of the Company will be
contributed pursuant to the Contribution) prior to consummation of the Offer
and, in the case of the Company Directors and Officers who also are or were
Independent Directors, prior to the effective time of the Merger; and
WHEREAS, Section 145 of the Delaware General Corporation Law (the
"DGCL") provides that for purposes of said Section, references to "the
corporation" shall include, in addition to the resulting corporation, any
constituent corporation absorbed in a consolidation or merger which, if its
separate existence had continued, would have had the power and authority to
indemnify its directors and officers, so that any person who is or was a
director or officer of such constituent corporation, or is or was serving at the
request of such constituent corporation as a director or officer of another
corporation, shall stand in the same position under said Section with respect to
the resulting or surviving corporation as he or she would have with respect to
such constituent corporation if its separate existence had continued; and
WHEREAS, Section 145 of the DGCL and the International Indemnification
Provisions provide that a person shall be entitled to indemnification and
advancement of expenses by reason of the fact that he is or was serving as a
director or officer of International or is or was serving at the request of
International as a director or officer of another corporation, including Daka;
and
WHEREAS, as of the date hereof, International is the parent of the
Company and the Company is a wholly owned subsidiary of International, and
International will be a predecessor corporation to the Company and the Company
will be a successor corporation to International by virtue of the Contribution,
pursuant to which all of the assets and liabilities of the Restaurant Business
of International will be contributed to the Company pursuant to the
Contribution; and
WHEREAS, in connection with the Distribution, all of the Company Common
Stock will be distributed on a pro rata basis to the holders of International
Common Stock such that, immediately following the Distribution, all of the
stockholders of International will also be stockholders of the Company; and
WHEREAS, prior to consummation of the Offer, the Company Directors and
Officers were serving as directors and/or officers of the Company at the request
of International; and
WHEREAS, the Board of Directors of the Company (the "Board") has
determined that, if necessary to attract and retain qualified individuals, the
Company may from time to time attempt to maintain, at its sole expense,
directors and officers liability insurance to protect persons serving the
Company and its subsidiaries from certain liabilities. Although the
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furnishing of such insurance has been a customary and widespread practice among
United States-based corporations and other business enterprises, the Company
believes that, given current market conditions and trends, such insurance may be
available to it in the future only at higher premiums and with more exclusions
and as such, the procurement and maintenance of such insurance may or may not be
in the best interests of the Company. At the same time, directors, officers, and
other persons in service to corporations and other business enterprises are
frequently subjected to expensive and time-consuming litigation relating to,
among other things, matters that traditionally would have been brought only
against the corporation or business enterprise itself; and
WHEREAS, directors and officers liability insurance, even when in
effect, is not always sufficient in and of itself to provide adequate
indemnification to directors and officers; and
WHEREAS, the expense and burden of defending against claims made
against directors and officers may be so prohibitive as to render it practically
impossible or unfairly burdensome for directors and officers to wholly or even
partially fund the defense of such claims even if the director or officer is
wholly innocent of any wrongdoing and acted properly and prudently in his or her
service to and activities on behalf of the corporation, thereby making mandatory
advancement of expenses in such litigation an essential element of
indemnification; and
WHEREAS, highly competent persons justifiably are reluctant to serve as
directors and officers without assurance that adequate indemnification,
including advancement of expenses, will continue to be available in the event of
a change in control of the corporation; and
WHEREAS, the uncertainties relating to such insurance and to
indemnification have increased the difficulty of attracting and retaining
qualified persons; and
WHEREAS, the Board has determined that the increased difficulty in
attracting and retaining qualified persons is detrimental to the best interests
of the Company's stockholders and the Company should act to assure such
qualified persons that there will be increased certainty of protection in the
future; and
WHEREAS, the Company's By-laws require the Company to indemnify its
directors and officers to the fullest extent permitted by law and permits it to
make other indemnification arrangements and agreements; and
WHEREAS, the Company desires to provide Indemnitee with specific
contractual assurance of Indemnitee's rights to indemnification against
litigation risks and expenses (regardless, among other things, of any amendment
to or revocation of the Company's By-laws or any change in the ownership of the
Company or the composition of the Board), which indemnification is intended to
supplement that which is afforded by the Company's By-laws and, to the extent
insurance is available, the coverage of Indemnitee under the Company's directors
and officers liability insurance policy; and
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WHEREAS, for all of the foregoing reasons, it is reasonable, prudent
and necessary for the Company to obligate itself contractually to indemnify its
directors and officers to the fullest extent permitted by applicable law so that
they will serve or continue to serve the Company free from undue concern that
they will not be so indemnified, whether claims against such directors and
officers may arise from or relate to service as a director or officer of the
Company from and after consummation of the Offer or as a director or officer of
International prior to consummation of the Offer or as an Independent Director;
and
WHEREAS, Indemnitee is willing to serve, to continue to serve and to
take on additional service for or on behalf of the Company on the condition that
Indemnitee be so indemnified.
NOW, THEREFORE, in consideration of the premises and the covenants
contained herein, the Company and Indemnitee do hereby covenant and agree as
follows:
Section 1. SERVICES BY INDEMNITEE. In consideration of the Company's
covenants and commitments hereunder, Indemnitee agrees to serve or to continue
to serve as a director of the Company. Notwithstanding the foregoing, this
Agreement shall not impose any obligation on Indemnitee or the Company to
continue Indemnitee's service to the Company beyond any period otherwise
required by law or by other agreements or commitments of the parties, if any.
The foregoing notwithstanding, this Agreement shall continue in force after
Indemnitee has ceased to serve as a director of the Company.
Section 2. INDEMNIFICATION - GENERAL. The Company shall advance
Expenses (as hereinafter defined) to and indemnify Indemnitee as provided in
this Agreement and (subject to the provisions of this Agreement) to the fullest
extent permitted by applicable law in effect on the Effective Date (as
hereinafter defined) and to such greater extent as applicable law may thereafter
from time to time permit. In the event that a change in applicable law after the
Effective Date permits such broader indemnification, this Agreement shall be
deemed to be amended to such extent.
Section 3. PROCEEDINGS OTHER THAN PROCEEDINGS BY OR IN THE RIGHT OF THE
COMPANY OR INTERNATIONAL. Indemnitee shall be entitled to the rights of
indemnification provided in this Section 3 if, by reason of Indemnitee's
Corporate Status (as hereinafter defined), Indemnitee is, or is threatened to be
made, a party to or participant in any threatened, pending or completed
Proceeding (as hereinafter defined), other than a Proceeding by or in the right
of the Company (or International, in connection with any Proceeding or any
claim, issue or matter therein relating to Indemnitee's Corporate Status as a
person who was an Independent Director or a director, officer, employee or agent
of International prior to consummation of the Offer or of any other corporation,
partnership, joint venture, trust, employee benefit plan or other enterprise
which such person was serving at the request of International prior to
consummation of the Offer and, in the case of the Independent Directors, prior
to the effective time of the Merger). Pursuant to this Section 3, Indemnitee
shall be indemnified against Expenses, judgments, penalties, fines and amounts
paid in settlement actually and reasonably incurred by
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Indemnitee or on Indemnitee's behalf in connection with such Proceeding or any
claim, issue or matter therein, if Indemnitee acted in good faith and in a
manner Indemnitee reasonably believed to be in or not opposed to the best
interests of the Company (or International, in connection with any Proceeding or
any claim, issue or matter therein relating to Indemnitee's Corporate Status as
a person who was an Independent Director or a director, officer, employee or
agent of International prior to consummation of the Offer or of any other
corporation, partnership, joint venture, trust, employee benefit plan or other
enterprise which such person was serving at the request of International prior
to consummation of the Offer and, in the case of the Independent Directors,
prior to the effective time of the Merger), and, with respect to any criminal
Proceeding, had no reasonable cause to believe Indemnitee's conduct was
unlawful.
Section 4. PROCEEDINGS BY OR IN THE RIGHT OF THE COMPANY OR
INTERNATIONAL. Indemnitee shall be entitled to the rights of indemnification
provided in this Section 4 if, by reason of Indemnitee's Corporate Status,
Indemnitee is, or is threatened to be made, a party to or participant in any
threatened, pending or completed Proceeding brought by or in the right of the
Company (or International, in connection with any Proceeding or any claim, issue
or matter therein relating to Indemnitee's Corporate Status as a person who was
an Independent Director or a director, officer, employee or agent of
International prior to consummation of the Offer or of any other corporation,
partnership, joint venture, trust, employee benefit plan or other enterprise
which such person was serving at the request of International prior to
consummation of the Offer and, in the case of the Independent Directors, prior
to the effective time of the Merger) to procure a judgment in its favor.
Pursuant to this Section 4, Indemnitee shall be indemnified against Expenses
actually and reasonably incurred by Indemnitee or on Indemnitee's behalf in
connection with such Proceeding if Indemnitee acted in good faith and in a
manner Indemnitee reasonably believed to be in or not opposed to the best
interests of the Company (or International, in connection with any Proceeding or
any claim, issue or matter therein relating to Indemnitee's Corporate Status as
a person who was an Independent Director or a director, officer, employee or
agent of International prior to consummation of the Offer or of any other
corporation, partnership, joint venture, trust, employee benefit plan or other
enterprise which such person was serving at the request of International prior
to consummation of the Offer and, in the case of the Independent Directors,
prior to the effective time of the Merger). Notwithstanding the foregoing, no
indemnification against such Expenses shall be made in respect of any claim,
issue or matter in such Proceeding as to which Indemnitee shall have been
adjudged to be liable to the Company (or International, in connection with any
Proceeding or any claim, issue or matter therein relating to Indemnitee's
Corporate Status as a person who was an Independent Director or a director,
officer, employee or agent of International prior to consummation of the Offer
or of any other corporation, partnership, joint venture, trust, employee benefit
plan or other enterprise which such person was serving at the request of
International prior to consummation of the Offer and, in the case of the
Independent Directors, prior to the effective time of the Merger) if applicable
law prohibits such indemnification; PROVIDED, HOWEVER, that, if applicable law
so permits, indemnification against Expenses shall nevertheless be made by the
Company in such event if and only to the extent
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that the Court of Chancery of the State of Delaware (the "Delaware Court"), or
another court in which such Proceeding shall have been brought or is pending,
shall determine.
Section 5. INDEMNIFICATION FOR EXPENSES OF A PARTY WHO IS WHOLLY OR
PARTLY SUCCESSFUL. Notwithstanding any other provision of this Agreement, to the
extent that Indemnitee is successful, on the merits or otherwise, in (a)
defending any Proceeding brought against Indemnitee by reason of Indemnitee's
Corporate Status or (b) prosecuting any Proceeding described in the second
sentence of Section 14 hereof, Indemnitee shall be indemnified against all
Expenses actually and reasonably incurred by Indemnitee or on Indemnitee's
behalf in connection therewith. If Indemnitee is not wholly successful in any
such Proceeding but is successful, on the merits or otherwise, as to one or more
but less than all claims, issues or matters in any such Proceeding, the Company
shall indemnify Indemnitee against all Expenses actually and reasonably incurred
by Indemnitee or on Indemnitee's behalf in connection with each successfully
resolved claim, issue or matter. For purposes of this Section 5 and without
limitation, the termination of any claim, issue or matter in such a Proceeding
by dismissal, with or without prejudice, shall be deemed to be a successful
result as to such claim, issue or matter.
Section 6. INDEMNIFICATION FOR EXPENSES OF A WITNESS. Notwithstanding
any other provision of this Agreement, to the extent that Indemnitee is, by
reason of Indemnitee's Corporate Status, a witness in any Proceeding, Indemnitee
shall be indemnified against all Expenses actually and reasonably incurred by
Indemnitee or on Indemnitee's behalf in connection therewith.
Section 7. ADVANCEMENT OF EXPENSES. The Company shall advance all
reasonable Expenses incurred by or on behalf of Indemnitee in connection with
any Proceeding in which Indemnitee is involved by reason of Indemnitee's
Corporate Status within ten days after the receipt by the Company of a statement
or statements from Indemnitee requesting such advance or advances from time to
time, whether prior to or after final disposition of such Proceeding. Such
statement or statements shall reasonably evidence the Expenses incurred by
Indemnitee and shall include or be preceded or accompanied by an undertaking by
or on behalf of Indemnitee to repay any Expenses so advanced if it shall
ultimately be determined that Indemnitee is not entitled to be indemnified
against such Expenses. Such undertaking shall be an unlimited general obligation
of Indemnitee, shall be accepted by the Company without regard to the financial
ability of Indemnitee to make repayment, and in no event shall be required to be
secured.
Section 8. PROCEDURE FOR DETERMINATION OF ENTITLEMENT TO
INDEMNIFICATION.
a. To obtain indemnification under this Agreement,
Indemnitee shall submit to the Company a written request, including therein or
therewith such documentation and information as is reasonably available to
Indemnitee and is reasonably necessary to determine whether and to what extent
Indemnitee is entitled to indemnification. The Secretary of the
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Company shall, promptly upon receipt of such a request for indemnification,
advise the Board in writing that Indemnitee has requested indemnification.
b. Upon written request by Indemnitee for
indemnification pursuant to the first sentence of Section 8(a) above, a
determination, if required by applicable law, with respect to Indemnitee's
entitlement thereto shall be made in the specific case:
(i) if a Change in Control (as hereinafter defined) shall
have occurred, by Independent Counsel (as hereinafter defined) in a
written opinion to the Board, a copy of which shall be delivered to
Indemnitee (unless Indemnitee shall request that such determination be
made by a majority vote of the Disinterested Directors (as hereinafter
defined) even though less than a quorum of the Board or by the
stockholders, in which case by the person or persons or in the manner
provided for in clause (ii) or (iii) of this Section 8(b));
(ii) if a Change of Control shall not have occurred or if
Indemnitee shall make the request referred to in clause (i) above, (A)
by a majority vote of the Disinterested Directors even though less than
a quorum of the Board, or (B) if there are no such Disinterested
Directors or if such Disinterested Directors so direct, by Independent
Counsel in a written opinion to the Board, a copy of which shall be
delivered to Indemnitee, or (C) by the stockholders of the Company; or
(iii) as provided in Section 9(b) of this Agreement;
and, if it is so determined that Indemnitee is entitled to indemnification,
payment to Indemnitee shall be made within ten (10) days after such
determination. Indemnitee shall cooperate with the person, persons or entity
making such determination with respect to Indemnitee's entitlement to
indemnification, and shall provide to such person, persons or entity upon
reasonable advance request any documentation or information which is not
privileged or otherwise protected from disclosure and which is reasonably
available to Indemnitee and reasonably necessary to such determination. Any
Expenses incurred by Indemnitee in so cooperating with the person, persons or
entity making such determination shall be borne by the Company (irrespective of
the determination as to Indemnitee's entitlement to indemnification) and the
Company hereby indemnifies and agrees to hold Indemnitee harmless therefrom.
c. In the event that, pursuant to Section 8(b) hereof,
the determination of entitlement to indemnification is to be made by Independent
Counsel, the Independent Counsel shall be selected as provided in this Section
8(c). If a Change of Control shall not have occurred, the Independent Counsel
shall be selected by the Board, and the Company shall give written notice to
Indemnitee advising Indemnitee of the identity of the Independent Counsel so
selected. If a Change of Control shall have occurred, the Independent Counsel
shall be selected by Indemnitee and Indemnitee shall give written notice to the
Company advising it of the identity of the Independent Counsel so selected
(unless Indemnitee shall request that such selection be made by the Board, in
which event the preceding sentence shall apply). In either
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event, Indemnitee or the Company, as the case may be, may, within 7 days after
such written notice of selection shall have been given, deliver to the Company
or to Indemnitee, as the case may be, a written objection to such selection.
Such objection may be asserted only on the ground that the Independent Counsel
so selected does not meet the requirements of "Independent Counsel" as defined
in Section 17 of this Agreement, and the objection shall set forth with
particularity the factual basis of such assertion. If such written objection is
made, the Independent Counsel so selected may not serve as Independent Counsel
unless and until a court of competent jurisdiction has determined that such
objection is without merit. If a determination of entitlement to indemnification
is to be made by Independent Counsel and, 20 days after submission by Indemnitee
of a written request for indemnification pursuant to Section 8(a) hereof, no
Independent Counsel shall have been selected and not objected to, either the
Company or Indemnitee may petition the Delaware Court or another court of
competent jurisdiction for resolution of any objection which shall have been
made by the Company or Indemnitee to the other's selection of Independent
Counsel and/or for the appointment as Independent Counsel of a person selected
by such court or by such other person as such court shall designate, and the
person with respect to whom an objection is so resolved or the person so
appointed shall act as Independent Counsel under Section 8(b) hereof. The
Company shall pay any and all reasonable fees and expenses of Independent
Counsel incurred by such Independent Counsel in connection with determining
entitlement to indemnification pursuant to Section 8(b) hereof. In addition, the
Company shall pay all reasonable Expenses incurred by Indemnitee in connection
with the procedures of this Section 8(c) (regardless of the manner in which such
Independent Counsel was selected or appointed and irrespective of the
determination as to Indemnitee's entitlement to indemnification) and the Company
hereby indemnifies and agrees to hold Indemnitee harmless therefrom. Upon the
due commencement of any judicial proceeding or arbitration pursuant to Section
10(a)(iii) of this Agreement, Independent Counsel shall be discharged and
relieved of any further responsibility in such capacity (subject to the
applicable standards of professional conduct then prevailing).
Section 9. PRESUMPTION AND EFFECT OF CERTAIN PROCEEDINGS.
a. If a Change of Control shall have occurred, in making
a determination with respect to entitlement to indemnification hereunder, the
person or persons or entity making such determination shall presume that
Indemnitee is entitled to indemnification under this Agreement if Indemnitee has
submitted a request for indemnification in accordance with Section 8(a) of this
Agreement, and the Company shall have the burden of proof to overcome that
presumption in connection with the making by any person, persons or entity of
any determination contrary to that presumption.
b. If the person, persons or entity empowered or
selected under Section 8 of this Agreement to determine whether Indemnitee is
entitled to indemnification shall not have made a determination within 60 days
after receipt by the Company of Indemnitee's request therefor, the requisite
determination of entitlement to indemnification shall be deemed to have been
made and Indemnitee shall be entitled to such indemnification, absent (i) a
misstatement by Indemnitee of a material fact, or an omission of a material fact
necessary to make
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Indemnitee's statements not materially misleading, in connection with the
request for indemnification, or (ii) a prohibition of such indemnification under
applicable law; PROVIDED, HOWEVER, that such 60-day period may be extended for a
reasonable time, not to exceed an additional 30 days, if the person, persons or
entity making the determination with respect to entitlement to indemnification
in good faith requires such additional time for the obtaining or evaluating of
documentation and/or information relating thereto and gives notice to Indemnitee
thereof; and PROVIDED, FURTHER, that the foregoing provisions of this Section
9(b) shall not apply if (i) the determination of entitlement to indemnification
is to be made by the stockholders pursuant to Section 8(b) of this Agreement and
(A) within 15 days after receipt by the Company of the request for such
determination the Board has resolved to submit such determination to the
stockholders for their consideration at an annual meeting thereof to be held
within 75 days after such receipt and such determination is made thereat, or (B)
a special meeting of stockholders is called within 15 days after such receipt
for the purpose of making such determination, such meeting is held for such
purpose within 60 days after having been so called and such determination is
made thereat, or (ii) the determination of entitlement to indemnification is to
be made by Independent Counsel pursuant to Section 8(b) of this Agreement.
c. The settlement or termination of any Proceeding or of
any claim, issue or matter therein, by judgment, order, settlement or
conviction, or upon a plea of NOLO CONTENDERE or its equivalent, shall not
(except as otherwise expressly provided in this Agreement) of itself adversely
affect the right of Indemnitee to indemnification or create a presumption that
Indemnitee did not act in good faith and in a manner which Indemnitee reasonably
believed to be in or not opposed to the best interests of the Company (or
International, in connection with any Proceeding or any claim, issue or matter
therein relating to Indemnitee's Corporate Status as a person who was an
Independent Director or a director, officer, employee or agent of International
prior to consummation of the Offer or of any other corporation, partnership,
joint venture, trust, employee benefit plan or other enterprise which such
person was serving at the request of International prior to consummation of the
Offer and, in the case of the Independent Directors, prior to the effective time
of the Merger) or, with respect to any criminal Proceeding, that Indemnitee had
reasonable cause to believe that Indemnitee's conduct was unlawful.
Section 10. REMEDIES OF INDEMNITEE.
a. In the event that:
(i) a determination is made pursuant to Section 8 of this
Agreement that Indemnitee is not entitled to indemnification under this
Agreement;
(ii) advancement of Expenses pursuant to Section 7 of this
Agreement is not made on a timely basis;
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(iii) a determination of entitlement to indemnification is
to be made by Independent Counsel pursuant to Section 8(b) of this
Agreement and such determination shall not have been made and delivered
in a written opinion within 90 days after receipt by the Company of
Indemnitee's request for indemnification;
(iv) payment of indemnification pursuant to Section 5,
Section 6, the last sentence of Section 8(b) or the penultimate
sentence of Section 8(c) is not made within ten (10) days after receipt
by the Company of a written request therefor; or
(v) payment of indemnification pursuant to Section 3 or
Section 4 of this Agreement is not made within ten (10) days after a
determination has been made that Indemnitee is entitled to
indemnification pursuant to Section 8 of this Agreement or such
determination is deemed to have been made pursuant to Section 9(b) of
this Agreement;
Indemnitee shall be entitled to an adjudication in the Delaware Court of
Indemnitee's entitlement to such advancement of Expenses or indemnification.
Alternatively, Indemnitee, at Indemnitee's option, may seek an award in
arbitration to be conducted by a single arbitrator pursuant to the rules of the
American Arbitration Association. Indemnitee shall commence such proceeding
seeking an adjudication or an award in arbitration within 180 days following the
date on which Indemnitee first has the right to commence such proceeding
pursuant to this Section 10(a); PROVIDED, HOWEVER, that the foregoing clause
shall not apply in respect of a proceeding brought by Indemnitee to enforce
Indemnitee's rights under Section 5 of this Agreement. The Company shall not
oppose Indemnitee's right to seek any such adjudication or award in arbitration.
b. In the event that a determination shall have been
made pursuant to Section 8 of this Agreement that Indemnitee is not entitled to
indemnification, any judicial proceeding or arbitration commenced pursuant to
this Section 10 shall be conducted in all respects as a DE NOVO trial, or
arbitration, on the merits and Indemnitee shall not be prejudiced by reason of
that adverse determination. If a Change of Control shall have occurred, in any
judicial proceeding or arbitration commenced pursuant to this Section 10, the
Company shall have the burden of proving that Indemnitee is not entitled to
advancement of Expenses or indemnification, as the case may be.
c. If a determination that Indemnitee is entitled to
indemnification shall have been made or shall have been deemed to have been made
pursuant to Section 8 or Section 9 of this Agreement, the Company shall be bound
by such determination in any judicial proceeding or arbitration commenced
pursuant to this Section 10, absent (i) a misstatement by Indemnitee of a
material fact, or an omission of a material fact necessary to make Indemnitee's
statements not materially misleading, in connection with the request for
indemnification, or (ii) a prohibition of such indemnification under applicable
law.
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d. The Company shall be precluded from asserting in any
judicial proceeding or arbitration commenced pursuant to this Section 10 that
the procedures and presumptions of this Agreement are not valid, binding and
enforceable and shall stipulate in any such court or before any such arbitrator
that the Company is bound by all the provisions of this Agreement.
e. In the event that Indemnitee, pursuant to this
Section 10, seeks a judicial adjudication of or an award in arbitration to
enforce Indemnitee's rights under, or to recover damages for breach of, this
Agreement, Indemnitee shall be entitled to recover from the Company, and shall
be indemnified by the Company against, any and all expenses (of the types
described in the definition of Expenses in Section 17 of this Agreement)
actually and reasonably incurred by Indemnitee in such judicial adjudication or
arbitration, but only if and to the extent Indemnitee prevails therein. If it
shall be determined in such judicial adjudication or arbitration that Indemnitee
is entitled to receive part but not all of the advancement of Expenses or
indemnification sought, the expenses incurred by Indemnitee in connection with
such judicial adjudication or arbitration shall be appropriately prorated.
Section 11. NON-EXCLUSIVITY; INSURANCE; SUBROGATION.
a. The rights of indemnification and to receive
advancement of Expenses provided by this Agreement shall not be deemed exclusive
of any other rights to which Indemnitee may at any time be entitled under
applicable law, the Company's Certificate of Incorporation or By-laws, any
agreement, any vote of stockholders or resolution of directors, or otherwise.
b. To the extent that the Company maintains an insurance
policy or policies providing liability insurance for directors, officers,
employees, agents or fiduciaries of the Company or of any other corporation,
partnership, joint venture, trust, employee benefit plan or other enterprise
which such person serves at the request of the Company (or for any person who
was an Independent Director or a director, officer, employee or agent of
International prior to consummation of the Offer or of any other corporation,
partnership, joint venture, trust, employee benefit plan or other enterprise
which such person was serving at the request of International prior to
consummation of the Offer and, in the case of the Independent Directors, prior
to the effective time of the Merger), 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 such director, officer, employee or agent under such
policy or policies.
c. In the event of any payment to Indemnitee under this
Agreement, the Company shall be subrogated to the extent of such payment to all
of the rights of recovery of Indemnitee, who, at the written request of the
Company, shall take all reasonable action necessary to secure such rights,
including the execution of such documents as are necessary to enable the Company
to bring suit to enforce such rights.
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d. The Company shall not be liable under this Agreement
to make any payment of amounts otherwise indemnifiable hereunder or for which
advancement is provided hereunder if and to the extent that Indemnitee has
otherwise actually received such amounts from another source under an insurance
policy, contract, agreement or otherwise.
e. The Company's obligation hereunder to advance
Expenses to or indemnify Indemnitee as a result of Indemnitee's service at the
request of the Company as a director, officer, employee or agent of any other
corporation, partnership, joint venture, trust, employee benefit plan or other
enterprise (or, prior to consummation of the Offer, at the request of
International and, in the case of the Independent Directors, at the request of
International prior to the effective time of the Merger) shall be reduced by any
amount Indemnitee actually collects as advancement of Expenses or
indemnification from such other corporation, partnership, joint venture, trust,
employee benefit plan or other enterprise.
Section 12. DURATION OF AGREEMENT; SUCCESSORS. This Agreement shall be
effective as of the Effective Date and shall continue until and terminate upon
the later of (a) the date that is 10 years after the date that Indemnitee shall
have ceased to serve as a director, or (b) the date of the final termination
(including all appeals) of all pending Proceedings in respect of which
Indemnitee may be entitled to advancement of Expenses or indemnification
hereunder and of any proceeding commenced by Indemnitee pursuant to Section 10
of this Agreement relating thereto. This Agreement shall be binding upon the
Company and its successors and assigns (including any transferee of all or a
substantial portion of the business, stock and/or assets of the Company and any
direct or indirect successor by merger or consolidation or otherwise by
operation of law ) and shall insure to the benefit of Indemnitee and
Indemnitee's heirs, executors, personal representatives and administrators. This
Agreement shall continue for the benefit of Indemnitee and such heirs, personal
representatives, executors and administrators after Indemnitee has ceased to
have Corporate Status.
Section 13. SEVERABILITY. If any provision of this Agreement shall be
held by a court of competent jurisdiction to be invalid, illegal or
unenforceable for any reason whatsoever, (a) the validity, legality and
enforceability of the remaining provisions of this Agreement (including, without
limitation, each portion of any Section of this Agreement containing any such
provision held to be invalid, illegal or unenforceable, that is not itself
invalid, illegal or unenforceable) shall not in any way be affected or impaired
thereby, (b) such invalid, illegal or unenforceable provision shall be deemed
reformed to the extent necessary to conform to applicable law and to give
maximum effect to the intent of the parties hereto, and (c) to the fullest
extent possible, the provisions of this Agreement (including, without
limitation, each portion of any Section of this Agreement containing any such
provision held to be invalid, illegal or unenforceable, that is not itself
invalid, illegal or unenforceable) shall be construed so as to give effect to
the intent manifested by the provision held invalid, illegal or unenforceable.
Section 14. EXCEPTION TO RIGHT TO ADVANCEMENT OF EXPENSES AND
INDEMNIFICATION. Notwithstanding any other provision of this Agreement (but
without limiting the operation of
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Section 10(e) and subject to the next sentence), and except as otherwise
prohibited by law or by the Company's Certificate of Incorporation or By-laws,
Indemnitee shall not be entitled to advancement of Expenses or indemnification
under this Agreement with respect to any Proceeding, or any claim therein,
brought or made by Indemnitee against the Company unless such Proceeding, or
claim therein, shall have been approved in writing in advance of the filing of
such Proceeding, or claim therein, by or at the direction of the Board.
Notwithstanding the preceding sentence, Indemnitee shall be entitled to
advancement of Expenses and indemnification under this Agreement with respect to
any Proceeding, or any claim therein, brought or made by Indemnitee against the
Company to recover and receive any amounts or benefits due to Indemnitee
pursuant to (a) the Company's Certificate of Incorporation or By-laws, (b) any
agreement, arrangement or understanding between Indemnitee and the Company, or
(c) any agreement, arrangement or understanding between the Company and any
third party for Indemnitee's benefit to the extent Indemnitee is successful
therein. The limitation contained in the first sentence of this Section 14 shall
not apply to counterclaims or affirmative defenses asserted by Indemnitee in an
action brought against Indemnitee.
Section 15. PRIORITY OF INDEMNIFICATION RIGHTS AGAINST INTERNATIONAL.
Notwithstanding anything to the contrary contained in this Agreement, Indemnitee
agrees to pursue Indemnitee's rights to indemnification and advancement of
Expenses under this Agreement before pursuing or seeking to enforce any other
rights to indemnification or advancement of Expenses against or from
International or any of its successors, assigns or affiliates (excluding the
Company), as to which Indemnitee may be entitled under applicable law, the
Company's Certificate of Incorporation or Bylaws, any other agreement, any vote
of stockholders or resolution of directors, or otherwise.
Section 16. IDENTICAL COUNTERPARTS. This Agreement may be executed in
one or more counterparts, each of which shall for all purposes be deemed to be
an original but all of which together shall constitute one and the same
Agreement. Only one such counterpart signed by the party against whom
enforceability is sought needs to be produced to evidence the existence of this
Agreement.
Section 17. HEADINGS. The headings of the paragraphs of this Agreement
are inserted for convenience only and shall not be deemed to constitute part of
this Agreement or to affect the construction thereof.
Section 18. DEFINITIONS. For purposes of this Agreement:
a. "Change in Control" means a change in control of the
Company occurring after the Effective Date of a nature that would be required to
be reported in response to Item 6(e) of Schedule 14A of Regulation 14A (or in
response to any similar item on any similar schedule or form) promulgated under
the Securities Exchange Act of 1934 (the "Act"), whether or not the Company is
then subject to such reporting requirement; PROVIDED, HOWEVER, that, without
limitation, such a Change in Control shall be deemed to have occurred if after
the Effective Date (i) any "person" (as such term is used in Sections 13(d) and
14(d) of the Act) is
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or becomes the "beneficial owner" (as defined in Rule 13d-3 under the 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 without
the prior approval of at least two-thirds of the members of the Board in office
immediately prior to such person attaining such percentage interest, (ii) the
Company is a party to a merger, consolidation, sale of assets or other
reorganization, or a proxy contest, as a consequence of which members of the
Board in office immediately prior to such transaction or event constitute less
than a majority of the Board thereafter, or (iii) during any period of two
consecutive years, individuals who at the beginning of such period constituted
the Board (including for this purpose any new director whose election or
nomination for election by the Company's stockholders was approved by a vote of
at least two-thirds of the directors then still in office who were directors at
the beginning of such period) cease for any reason to constitute at least a
majority of the Board.
b. "Corporate Status" describes the status of a person
who is or was a director, officer, employee or agent of the Company (or, prior
to consummation of the Offer, of International) or of any other corporation,
partnership, joint venture, trust, employee benefit plan or other enterprise
which such person is or was serving at the request of the Company (or who was,
prior to consummation of the Offer, serving at the request of International,
and, in the case of the Independent Directors, serving at the request of
International prior to the effective time of the Merger) or who is or was an
Independent Director.
c. "Disinterested Director" means a director of the
Company who is not and was not a party to the Proceeding in respect of which
indemnification is sought by Indemnitee.
d. "Effective Date" means _______ __, 199_.
e. "Expenses" shall include all reasonable attorneys'
fees, retainers, court costs, transcript costs, fees of expert witnesses,
private investigators and professional advisors (including, without limitation,
accountants and investment bankers), travel expenses, duplicating costs,
printing and binding costs, costs of preparation of demonstrative evidence and
other courtroom presentation aids and devices, costs incurred in connection with
document review, organization, imaging and computerization, telephone charges,
postage, delivery service fees, and all other disbursements, costs or expenses
of the type customarily incurred in connection with prosecuting, defending,
preparing to prosecute or defend, investigating, being or preparing to be a
witness in, or otherwise participating in, a Proceeding.
f. "Independent Counsel" means a law firm, or a member
of a law firm, that is experienced in matters of corporation law and neither
presently is, nor in the past five years has been, retained to represent (i) the
Company, International (in the case of an Indemnitee who was an Independent
Director or a director, officer, employee or agent of International prior to
consummation of the Offer or of any other corporation, partnership, joint
venture, trust, employee benefit plan or other enterprise which such person was
serving at the request of International prior to consummation of the Offer and,
in the case of the Independent Directors, prior to the effective time of the
Merger) or Indemnitee in any matter material to
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either such party, or (ii) any other party to the Proceeding giving rise to a
claim for indemnification hereunder. Notwithstanding the foregoing, the term
"Independent Counsel" shall not include any person who, under the applicable
standards of professional conduct then prevailing, would have a conflict of
interest in representing either the Company, International (in the case of an
Indemnitee who was an Independent Director or a director, officer, employee or
agent of International prior to consummation of the Offer or of any other
corporation, partnership, joint venture, trust, employee benefit plan or other
enterprise which such person was serving at the request of International prior
to consummation of the Offer and, in the case of the Independent Directors,
prior to the effective time of the Merger) or Indemnitee in an action to
determine Indemnitee's rights under this Agreement.
g. "Proceeding" includes any action, suit, arbitration,
alternate dispute resolution mechanism, investigation, administrative hearing or
any other proceeding, whether civil, criminal, administrative or investigative,
except one initiated by Indemnitee pursuant to Section 10 of this Agreement to
enforce Indemnitee's rights under this Agreement.
Section 19. MODIFICATION AND WAIVER. Except as specifically provided in
Section 2 of this Agreement with respect to changes in applicable law, no
supplement, modification or amendment of this Agreement shall be binding unless
executed in writing by both of the parties hereto. No waiver of any provision of
this Agreement shall be deemed or shall constitute a waiver of any other
provision hereof (whether or not similar), nor shall such waiver constitute a
continuing waiver. No amendment, alteration or termination of this Agreement or
any provision hereof shall be effective as to Indemnitee with respect to any
action taken or omitted by Indemnitee in Indemnitee's Corporate Status prior to
such amendment, alteration or termination.
Section 20. NOTICE BY INDEMNITEE. Indemnitee agrees to notify the
Company in writing promptly upon being served with any summons, citation,
subpoena, complaint, indictment, information or other document relating to any
Proceeding or matter which may result in advancement of Expenses or
indemnification hereunder; PROVIDED, HOWEVER, that the failure to give any such
notice shall not disqualify Indemnitee from the right to receive advancements of
Expenses or to be indemnified hereunder unless the Company's ability to defend
in such Proceeding is materially and adversely prejudiced.
Section 21. NOTICES IN GENERAL. All notices, requests, demands and
other communications hereunder shall be in writing and shall be deemed to have
been duly given if (a) delivered by hand and receipted for by the party to whom
such notice or other communication shall have been directed, (b) transmitted by
facsimile and receipt is acknowledged, or (c) mailed by certified or registered
mail with postage prepaid, on the third business day after the date on which it
is so mailed:
If to Indemnitee, to:
---------------------
---------------------
---------------------
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Attn:
----------------
If to the Company to:
---------------------
---------------------
---------------------
Attn:
----------------
or such other address as may have been furnished in the manner provided in this
Section 20 to Indemnitee by the Company or to the Company by Indemnitee, as the
case may be.
Section 22. CONTRIBUTION. If the indemnification provided for in this
Agreement is unavailable to Indemnitee for any reason whatsoever, the Company,
in lieu of indemnifying Indemnitee, shall contribute to the amount incurred by
Indemnitee to the fullest extent permissible under applicable law, whether for
judgments, fines, penalties, excise taxes, amounts paid or to be paid in
settlement and/or for Expenses, in connection with any claim relating to an
indemnifiable event under this Agreement, in such proportion as is deemed fair
and reasonable in light of all of the circumstances of such Proceeding in order
to reflect (a) the relative benefits received by the Company and Indemnitee as a
result of the events and transactions giving rise to such Proceeding, and (b)
the relative fault of the Company (and its directors, officers, employees and
agents) and Indemnitee in connection with such events and transactions.
Section 23. GOVERNING LAW; SUBMISSION TO JURISDICTION; APPOINTMENT OF
AGENT FOR SERVICE OF PROCESS. This Agreement and the legal relations among the
parties shall be governed by, and construed and enforced in accordance with, the
laws of the State of Delaware, without regard to its conflict of laws rules.
Except with respect to any arbitration commenced by Indemnitee pursuant to
Section 10(a) of this Agreement, each of the Company and Indemnitee hereby
irrevocably and unconditionally (a) agrees that any action or proceeding arising
out of or in connection with this Agreement shall be brought only in the
Delaware Court and not in any other state or federal court in the United States
of America or any court in any other country, (b) consents to submit to the
exclusive jurisdiction of the Delaware Court for purposes of any action or
proceeding arising out of or in connection with this Agreement, irrevocably
appoints, to the extent such party is not a resident of the State of Delaware,
___________________________________ as its agent in the State of Delaware as
such party's agent for acceptance of legal process in connection with any such
action or proceeding against such party, with the same legal force and validity
as if served upon such party personally within the State of Delaware, (d) waives
any objection to the laying of venue of any such action or proceeding in the
Delaware Court, and (e) waives, and agrees not to plead or to make, any claim
that any such action or proceeding brought in the Delaware Court has been
brought in an improper or otherwise inconvenience forum.
Section 24. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
hereby represents and warrants to Indemnitee that (a) the Company has all
necessary power and authority to enter into, and be bound by the terms of, this
Agreement, and the execution,
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delivery and performance of the undertakings contemplated by this Agreement have
been duly authorized by the Company, and (b) this Agreement, when executed and
delivered by the Company in accordance with the provisions hereof, shall be a
legal, valid and binding obligation of the Company, enforceable against the
Company in accordance with its terms, except as such enforceability may be
limited by applicable bankruptcy, insolvency, moratorium, reorganization or
similar laws affecting the enforcement of creditors' rights generally.
Section 25. DEFENSE OF UNDERLYING PROCEEDINGS.
a. NOTICE BY INDEMNITEE. Indemnitee agrees to notify the
Company promptly upon being served with any summons, citation, subpoena,
complaint, indictment, information, or other document relating to any Proceeding
which may result in the Company being obligated to indemnify Indemnitee or
advance Indemnitee Expenses as provided in this Agreement; provided, however,
that the failure to give any such notice shall not disqualify Indemnitee from
the right to receive such indemnification or advancement of Expenses unless the
Company's ability to defend in such Proceeding is materially and adversely
prejudiced.
b. DEFENSE BY COMPANY. Subject to the provisions of the
last sentence of this Section 24(b) and of Section 24(c) hereof, the Company
shall have the right to defend Indemnitee in any Proceeding which may result in
the Company being obligated to indemnify Indemnitee or advance Indemnitee
Expenses as provided in this Agreement; provided, however that the Company shall
notify Indemnitee of any such decision to defend within ten (10) days of receipt
of notice of any such Proceeding under Section 24(a) hereof. The Company shall
not, without the prior written consent of Indemnitee, consent to the entry of
any judgment against Indemnitee or enter into any settlement or compromise which
does not include, as an unconditional term thereof, the full release of
Indemnitee from all liability in respect of such Proceeding, which release shall
be in form and substance satisfactory to Indemnitee. This Section 24(b) shall
not apply to a Proceeding brought by Indemnitee under Sections 10 or 14 hereof.
c. INDEMNITEE'S RIGHT TO COUNSEL. Notwithstanding the
provisions of Section 24(b) hereof, if in a Proceeding to which Indemnitee is a
party by reason of Indemnitee's Corporate Status, Indemnitee has separate
defenses or counterclaims to assert with respect to any issue which may not be
consistent with the position of other defendants in such Proceeding, Indemnitee
shall be entitled to be represented by separate legal counsel of Indemnitee's
choice at the expense of the Company. In addition, if the Company fails to
comply with any of its obligations under this Agreement or in the event that the
Company or any other person takes any action to declare this Agreement void or
unenforceable, or institutes any action, suit or proceeding to deny or to
recover from Indemnitee the benefits intended to be provided to Indemnitee
hereunder, Indemnitee shall have the right to retain counsel of Indemnitee's
choice, at the expense of the Company, to represent Indemnitee in connection
with any such matter.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
ATTEST: UNIQUE CASUAL RESTAURANTS, INC.
By: By:
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Name:
Title:
INDEMNITEE
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Name:
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