Exhibit 10.2
INDEMNIFICATION AGREEMENT
     This Indemnification Agreement (this “Agreement”) is made and entered into
as of the ___day of ___, ___, by and between Back Yard Burgers, Inc., a Delaware
corporation (the “Company”), and the undersigned (the “Indemnitee”).
RECITALS
     WHEREAS, it is essential to the Company that it attract and retain as
directors and officers the most capable persons available; and
     WHEREAS, both the Company and the Indemnitee recognize the increased risk
of litigation and other claims being asserted against directors and officers of
public companies in the current environment; and
     WHEREAS, the Indemnitee currently is serving as a director or officer of
the Company, and the Company desires that the Indemnitee continue to serve in
such capacity. The Indemnitee is willing to continue to serve in such capacity
if the Indemnitee is adequately protected against the risks associated with such
service; and
     WHEREAS, Section 145 of the General Corporation Law of the State of
Delaware (the “DGCL”), under which law the Company is organized, empowers a
corporation to indemnify a person serving as a director or officer of the
Company and a person who serves at the request of the company as a director,
officer, employee or agent of another corporation, partnership, joint venture,
trust, or other enterprise, and Section 145 of the DGCL and the Certificate of
Incorporation of the Company specify that the indemnification set forth in
Section 145 and in the Certificate of Incorporation, respectively, shall not be
deemed exclusive of any other rights to which those seeking indemnification may
be entitled under any law (common or statutory), agreement, vote of stockholders
or disinterested Directors or otherwise; and
     WHEREAS, the Company and the Indemnitee have concluded that the indemnities
available under the Company’s Certificate of Incorporation, Bylaws and any
insurance now or hereafter in effect need to be supplemented to provide the
Indemnitee, as permitted by law, with the maximum protection against the risks
associated with the Indemnitee’s service to the Company; and
     WHEREAS, in recognition of the Indemnitee’s need for additional protection
against personal liability in order to enhance the Indemnitee’s continued
service to the Company in an effective manner, and in order to induce the
Indemnitee to continue to provide services to the Company as a director or
officer thereof, the Company wishes to provide in this Agreement for the
indemnification of Indemnitee to the fullest extent permitted by law and as set
forth in this Agreement.
     NOW THEREFORE, in consideration of the foregoing, the covenants contained
herein and the Indemnitee’s continued service to the Company, the Company and
the Indemnitee, intending to be legally bound, hereby agree as follows:

 

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Section 1. Definitions.
     The following terms, as used herein, shall have the respective meanings set
forth below:
     “Affiliate” of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
“control” when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms “controlling” and “controlled” have meanings relative to the
foregoing.
     “Change in Control” shall be deemed to have taken place if: (i) any person
or entity, including a “group” as defined in Section 13(d)(3) of the Securities
Exchange Act of 1934, as amended, other than the Company or a wholly-owned
subsidiary thereof or any employee benefit plan of the Company or any of its
subsidiaries, becomes the beneficial owner of the Company securities having 50%
or more of the combined voting power of the then outstanding securities of the
Company that may be cast for the election of directors of the Company (other
than as a result of an issuance of securities initiated by Company in the
ordinary course of business); or (ii) as the result of, or in connection with,
any cash tender or exchange offer, merger or other business combination, sale of
substantially all of the assets or contested election, or any combination of the
foregoing transactions less than a majority of the combined voting power of the
then-outstanding securities of the Company or any successor corporation or
entity entitled to vote generally in the election of the directors of the
Company or such other corporation or entity after such transaction is held in
the aggregate by the holders of the Company securities entitled to vote
generally in the election of directors of the Company immediately prior to such
transaction; or (iii) during any period of two consecutive years, individuals
who at the beginning of any such period constitute the Board of Directors of the
Company cease for any reason to constitute at least a majority thereof, unless
the election, or the nomination for election by the Company’s stockholders, of
each director of the Company first elected during such period was approved by a
vote of at least two-thirds of the directors of the Company then still in office
who were directors of the Company at the beginning of any such period.
     “Claim” means (a) any threatened, pending or completed action, suit,
proceeding or arbitration, court-ordered mediation or other formal alternative
dispute resolution mechanism, or (b) any inquiry, hearing or government
investigation, whether conducted by the Company or any other Person, that the
Indemnitee in good faith believes might lead to the institution of any such
action, suit, proceeding or arbitration or other alternative dispute resolution
mechanism, in each case whether civil, criminal, administrative or other
(whether or not the claims or allegations therein are groundless, false or
fraudulent) and includes, without limitation, those brought by or in the name of
the Company or any director or officer of the Company.
     “Company Agent” means any director, officer, manager or in-house counsel of
the Company, any Subsidiary or any Other Enterprise.
     “Covered Event” means any event or occurrence on or after the date of this
Agreement related to the fact that the Indemnitee is or was a Company Agent or
related to anything done or not done by the Indemnitee in any such capacity, and
includes, without limitation, any such event

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or occurrence (a) arising from performance of the responsibilities, obligations
or duties imposed by ERISA or any similar applicable provisions of state or
common law, or (b) arising from any merger, consolidation or other business
combination involving the Company, any Subsidiary or any Other Enterprise,
including without limitation any sale or other transfer of all or substantially
all of the business or assets of the Company, any Subsidiary or any Other
Enterprise; provided, however, that in any such case, the Indemnitee acted in
good faith and in a manner which such Indemnitee reasonably believed to be in or
not opposed to the best interests of the Company, and in the case of a criminal
proceeding, in addition had no reasonable cause to believe that such
Indemnitee’s conduct was unlawful.
     “D&O Insurance” means the directors’ and officers’ liability insurance
maintained by or for the benefit of the Company, its directors or officers and
any replacement or substitute policies.
     “Determination” means a determination made by (a) a majority vote of
Disinterested Directors even if less than a quorum; (b) Independent Legal
Counsel, in a written opinion addressed to the Company and the Indemnitee;
(c) the stockholders of the Company; or (d) a decision by a court of competent
jurisdiction not subject to further appeal.
     “Disinterested Director” shall be a director of the Company who is not or
was not a party to the Claim giving rise to the subject matter of a
Determination.
     “Expenses” includes attorneys’ fees and all other costs, travel expenses,
fees of experts, transcript costs, filing fees, witness fees, telephone charges,
postage, copying costs, delivery service fees and other expenses and obligations
of any nature whatsoever paid or incurred in connection with investigating,
prosecuting or defending, being a witness in or participating in (including on
appeal), or preparing to prosecute or defend, be a witness in or participate in
any Claim, for which the Indemnitee is or becomes legally obligated to pay (not
otherwise prohibited under Delaware law).
     “Independent Legal Counsel” shall mean a law firm or a member of a law firm
that (a) neither is nor in the past five years has been retained to represent in
any material matter the Company, any Subsidiary, the Indemnitee or any other
party to the Claim, (b) under applicable standards of professional conduct then
prevailing would not have a conflict of interest in representing either the
Company or the Indemnitee in an action to determine the Indemnitee’s rights to
indemnification under this Agreement and (c) is reasonably acceptable to the
Company and the Indemnitee.
     “Loss” means any amount which the Indemnitee is legally obligated to pay as
a result of any Claim (and not otherwise prohibited under Delaware law),
including, without limitation (a) all judgments, penalties and fines, and
amounts paid or to be paid in settlement, (b) all interest, assessments and
other charges paid or payable in connection therewith and (c) any federal,
state, local or foreign taxes imposed (net of the value to the Indemnitee of any
tax benefits resulting from tax deductions or otherwise as a result of the
actual or deemed receipt of any payments under this Agreement).

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     “Other Enterprise” means any not-for-profit organization to which the
Indemnitee renders service at the request of the Company or any Subsidiary.
     “Parent” shall have the meaning set forth in the regulations of the
Securities and Exchange Commission under the Securities Act of 1933, as amended;
provided the term “Parent” shall not include the board of directors of a
corporation in its capacity as a board of directors.
     “Person” means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization or
government (or any subdivision, department, commission or agency thereof), and
includes without limitation any “person”, as such term is used in Sections 13(d)
and 14(d) of the Securities Exchange Act of 1934, as amended.
     “Subsidiary” means any corporation of which more than 50% of the
outstanding stock having ordinary voting power to elect a majority of the board
of directors of such corporation is now or hereafter owned, directly or
indirectly, by the Company.
     “Voting Securities” means any securities of the Company which vote
generally in the election of directors.
Section 2. Indemnification
     2.1. General Indemnity Obligation.
          2.1.1. Subject to the remaining provisions of this Agreement, the
Company hereby indemnifies and holds the Indemnitee harmless for any Losses or
Expenses arising from any Claims relating to (or arising in whole or in part out
of) any Covered Event, including without limitation, any Claim the basis of
which is any actual or alleged breach of duty, neglect, error, misstatement,
misleading statement, omission or other act done or attempted by the Indemnitee
in the capacity as a Company Agent, whether or not the Indemnitee is acting or
serving in such capacity at the date of this Agreement or at the time the Claim
is initiated.
          2.1.2. Notwithstanding any other provision of this Agreement, the
Company hereby agrees to indemnify the Indemnitee to the fullest extent
permitted by law, whether by statute or judicial decision. In the event of any
change in any applicable law, statute or rule which narrows the right of a
Delaware corporation to indemnify a member of its board of directors or an
officer, such changes, to the extent not otherwise required by such law, statute
or rule to be applied to this Agreement shall have no effect on this Agreement
or the parties’ rights and obligations hereunder. However, to the extent that
such change in law permits the Company to provide broader indemnification than
permitted prior to giving effect thereto, then such provision shall be applied
to this Agreement and the parties’ corresponding rights and obligations
hereunder.
          2.1.3. The Indemnitee shall not be entitled to indemnification
pursuant to this Agreement in connection with any Claim voluntarily initiated by
the Indemnitee, and not by way of defense, against the Company or any director
or officer of the Company, unless the Company has joined in or consented to the
initiation of such Claim; provided, the provisions of this Section 2.1.3 shall
not apply (i) following a Change in Control to Claims seeking enforcement of
this

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Agreement, the Certificate of Incorporation or Bylaws of the Company or
(ii) absent a Change in Control, to Claims seeking enforcement of this
Agreement, the Certificate of Incorporation or Bylaws of the Company, but in the
case of (i) or (ii) only if the Indemnitee is ultimately determined to be
entitled to indemnification.
          2.1.4. If the Indemnitee is entitled under any provision of this
Agreement to indemnification by the Company for some or a portion of the Losses
or Expenses paid with respect to a Claim but not, however, for the total amount
thereof, the Company shall nevertheless indemnify and hold the Indemnitee
harmless against the portion thereof to which the Indemnitee is entitled.
          2.1.5. Notwithstanding any other provision of this Agreement, to the
extent that the Indemnitee has been successful on the merits or otherwise in
defense of any or all Claims relating to (or arising in whole or in part out of)
a Covered Event or in defense of any issue or matter therein, including
dismissal without prejudice, the Company shall indemnify and hold the Indemnitee
harmless against all Expenses incurred in connection therewith.
     2.2. Indemnification for Serving as Witness and Certain Other Claims.
Notwithstanding any other provision of this Agreement, the Company hereby
indemnifies and holds the Indemnitee harmless for all Expenses in connection
with (a) the preparation to serve or service as a witness in any Claim in which
the Indemnitee is not a party, if such actual or proposed service as a witness
arose by reason of the Indemnitee having served as a Company Agent on or after
the date of this Agreement and (b) any Claim initiated by the Indemnitee on or
after the date of this Agreement (i) for recovery under any D&O Insurance; or
(ii) for enforcement of this Agreement, the Certificate of Incorporation or
Bylaws of the Company, but, in the case of (i), only if the Indemnitee is
ultimately determined to be entitled to recovery under any D&O Insurance and, in
the case of (ii), only if the Indemnitee is ultimately determined to be entitled
to indemnification.
Section 3. Limitation on Indemnification.
     3.1. Coverage Limitations. No indemnification is available pursuant to the
provisions of this Agreement:
          3.1.1. If such indemnification is not lawful;
          3.1.2. If the Indemnitee’s conduct giving rise to the Claim with
respect to which indemnification is requested was knowingly fraudulent, a
knowing violation of law, deliberately dishonest or in bad faith or constituted
willful misconduct;
          3.1.3. In respect of any Claim based upon or attributable to the
Indemnitee gaining in fact any personal profit or advantage to which the
Indemnitee was not legally entitled;
          3.1.4. In respect of any Claim based upon or in connection with a
proceeding by or in the right of the Company in which the Indemnitee was
adjudged liable to the Company unless and only to the extent that the Court of
Chancery of Delaware shall determine upon application that, despite the
adjudication of such liability but in view of all circumstances of the

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case, the Indemnitee is fairly and reasonably entitled to indemnity for such
expenses (including attorney’s fees) which the Court of Chancery of Delaware
shall deem proper; or
          3.1.5. In respect of any Claim for an accounting of profits made from
the purchase or sale by the Indemnitee of securities of the Company within the
meaning of Section 16(b) of the Securities Exchange Act of 1934, as amended.
     3.2. No Duplication of Payments. The Company shall not be liable under this
Agreement to make any payment otherwise due and payable to the extent the
Indemnitee has otherwise actually received payment (whether under the
Certificate of Incorporation or the Bylaws of the Company, the D&O Insurance or
otherwise) of any amounts otherwise due and payable under this Agreement.
Section 4. Payments and Determinations.
     4.1. Advancement and Reimbursement of Expenses. If requested by the
Indemnitee, the Company shall advance or reimburse, as the case may be, to the
Indemnitee, no later than five business days following any such request, any and
all Expenses for which indemnification is available under Section 2. In order to
obtain such advancement or reimbursement, the Indemnitee must also furnish to
the Company a written affirmation of his good faith belief that he has conducted
himself in good faith and that he reasonably believed that: (1) in the case of
conduct in his official capacity with the corporation, that his conduct was in
its best interest; (2) in all other cases, that his conduct was at least not
opposed to its best interests; and (3) in the case of any criminal proceeding,
he had no reasonable cause to believe his conduct was unlawful. In addition, the
Indemnitee must furnish to the Company a written undertaking, executed
personally or on his behalf, to repay the advance if it is ultimately determined
that he is not entitled to indemnification. Upon any Determination that the
Indemnitee is not permitted to be indemnified for any Expenses so advanced, the
Indemnitee hereby agrees to reimburse the Company for all such amounts
previously paid. Such obligation of reimbursement shall be unsecured and no
interest shall be charged thereon.
     4.2. Payment and Determination Procedures.
          4.2.1. To obtain indemnification under this Agreement, the Indemnitee
shall submit to the Company a written request, together with such documentation
and information as is reasonably available to the Indemnitee and is reasonably
necessary to determine whether and to what extent the Indemnitee is entitled to
indemnification. The Secretary of the Company shall, promptly upon receipt of
such a request for indemnification, advise the Board of Directors in writing
that the Indemnitee has requested indemnification.
          4.2.2. Any such indemnification of expenses shall be made promptly,
and in any event within 60 days after receipt by the Company of the written
request of the Indemnitee, unless with respect to requests submitted pursuant to
this Agreement the Company makes a Determination within the 60 day period that
the Indemnitee did not meet the applicable standard of conduct as set forth in
this Agreement. Such determination shall be made in the specific case (a) if a
Change in Control shall have occurred, as provided in Section 4,3; and (b) if a
Change in Control shall not have occurred, by (i) the Board of Directors by a
majority vote of Disinterested

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Directors, (ii) Independent Legal Counsel, if either (A) there are no
Disinterested Directors or (B) a majority vote of Disinterested Directors
otherwise so directs or (iii) the stockholders of the Company (if submitted by
the Board of Directors) but shares of stock owned by or voted under the control
of any Indemnitee who is at the time party to the proceeding may not be voted.
          4.2.3. If no Determination is made within 60 days after receipt by the
Company of a request for indemnification by the Indemnitee pursuant to
Section 4.2.1, a Determination shall be deemed to have been made that the
Indemnitee is entitled to the requested indemnification (and the Company shall
promptly pay the related Losses and Expenses), except where such indemnification
is not lawful; provided, however, that (a) such 60-day period may be extended
for a reasonable time, not to exceed an additional 30 days, if the Person or
Persons making the Determination in good faith require such additional time for
obtaining or evaluating the documentation and information relating thereto; and
(b) the foregoing provisions of this Section 4.2.3 shall not apply (i) if the
Determination is to be made by the stockholders of the Company and if (A) within
15 days after receipt by the Company of the request by the Indemnitee pursuant
to Section 4.2.1 the Board of Directors has resolved to submit such
Determination to the stockholders at an annual meeting of the stockholders to be
held within 75 days after such receipt, and such Determination is made at such
annual meeting, 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 at such special meeting, or (ii) if the Determination
is to be made by Independent Legal Counsel.
     4.3. Determinations by Independent Legal Counsel. If there is a Change in
Control, any Determination to be made under Section 4 shall be made by
Independent Legal Counsel selected by the Indemnitee and approved by the Company
(which approval shall not be unreasonably withheld). The Company shall pay the
reasonable fees and expenses of the Independent Legal Counsel.
Section 5. D&O Insurance. The Company shall maintain, to the extent practicable,
the D&O Insurance for so long as this Agreement remains in effect. However,
should the Company ever fail to maintain D&O Insurance, such failure shall not
affect in any way its obligations to indemnify the Indemnitee under this
Agreement or otherwise.
Section 6. Subrogation. In the event of any payment under this Agreement to or
on behalf of the Indemnitee, the Company shall be subrogated to the extent of
such payment to all of the rights of recovery of the Indemnitee against any
Person other than the Company or the Indemnitee in respect of the Claim giving
rise to such payment. The Indemnitee shall execute all papers reasonably
required and shall do everything reasonably necessary to secure such rights,
including the execution of such documents reasonably necessary to enable the
Company effectively to bring suit to enforce such rights.
Section 7. Notification and Defense of Claims.
     7.1. Notice by the Indemnitee. The Indemnitee shall give notice in writing
to the Company as soon as practicable after the Indemnitee becomes aware of any
Claim with respect to which indemnification will or could be sought under this
Agreement; provided the failure of

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the Indemnitee to give such notice, or any delay in giving such notice, shall
not relieve the Company of its obligations under this Agreement except to the
extent the Company is actually prejudiced to any such failure or delay.
     7.2. Insurance. The Company shall give prompt notice of the commencement of
any Claim relating to Covered Events to the insurers on the D&O Insurance, if
any, in accordance with the procedures set forth in the respective policies in
favor of the Indemnitee. The Company shall execute all papers reasonably
required and shall do everything reasonably necessary to cause such insurers to
pay, on behalf of the Indemnitee, all amounts payable as a result of such Claims
in accordance with the terms of such policies.
     7.3. Defense.
          7.3.1. In the event any Claim relating to Covered Events is by or in
the right of the Company, the Company may, at the option of the Company, either
control the defense thereof or accept the defense provided under the D&O
Insurance; provided, however, that the Company may not control the defense if
such decision would jeopardize the coverage provided by the D&O Insurance, if
any, to the Company, the Indemnitee or the other directors and officers covered
thereby.
          7.3.2. In the event any Claim relating to Covered Events is other than
by or in the right of the Company, the Indemnitee may, at the option of the
Indemnitee, either control the defense thereof, require the Company to defend or
accept the defense provided under the D&O Insurance; provided, however, that the
Indemnitee may not control the defense or require the Company to defend if such
decision would jeopardize the coverage provided by the D&O Insurance to the
Company or the other directors and officers covered thereby. In the event that
the Indemnitee requires the Company to so defend, or in the event that the
Indemnitee proceeds under the D&O Insurance but the Indemnitee determines that
such insurers under the D&O Insurance are unable or unwilling to adequately
defend the Indemnitee against any such Claim, the Company shall promptly
undertake to defend any such Claim, at the Company’s sole cost and expense,
utilizing counsel of the Indemnitee’s choice who has been approved by the
Company. If appropriate, the Company shall have the right to participate in the
defense of any such Claim.
          7.3.3. In the event the Company shall fail, as required by any
election by the Indemnitee pursuant to Section 7.3.2, timely to defend the
Indemnitee against any such Claim, the Indemnitee shall have the right to do so,
including without limitation, the right (notwithstanding Section 7.3.4) to make
any settlement thereof, and to recover from the Company, to the extent otherwise
permitted by this Agreement, all Expenses and Losses paid as a result thereof.
          7.3.4. The Company shall have no obligation under this Agreement with
respect to any amounts paid or to be paid in settlement of any Claim without the
express prior written consent of the Company to any related settlement. In no
event shall the Company authorize any settlement imposing any liability or other
obligations on the Indemnitee without the express prior written consent of the
Indemnitee. Neither the Company nor the Indemnitee shall unreasonably withhold
consent to any proposed settlement.

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Section 8. Determinations and Related Matters.
     8.1. Presumptions.
          8.1.1. The Indemnitee shall be entitled to a rebuttable presumption
that the Indemnitee is entitled to indemnification under this Agreement and the
Company shall have the burden of proof in rebutting such presumption.
          8.1.2. Neither the failure to have made a Determination prior to the
commencement of an action that the Indemnitee is entitled to indemnification or
advancement under the circumstances, nor an actual Determination that the
Indemnitee is not entitled to indemnification or advancement, shall create a
presumption that the Indemnitee is not entitled to indemnification or
advancement in the event the Indemnitee seeks to enforce a claim for
indemnification or advancement in any court of competent jurisdiction.
     8.2. Appeals; Enforcement.
          8.2.1. In the event that (a) a Determination is made that the
Indemnitee shall not be entitled to indemnification under this Agreement,
(b) any Determination to be made by Independent Legal Counsel is not made within
90 days of receipt by the Company of a request for indemnification pursuant to
Section 4.2.1 or (c) the Company fails to otherwise perform any of its
obligations under this Agreement (including, without limitation, its obligation
to advance or reimburse Expenses pursuant to Section 4.1 and its obligation to
make payments to the Indemnitee following any Determination made or deemed to
have been made that such payments are appropriate), the Indemnitee shall have
the right to commence a Claim in any court of competent jurisdiction, as
appropriate, to seek a Determination by the court, to challenge or appeal any
Determination which has been made, or to otherwise enforce this Agreement.
Regarding any such Claim, if the Indemnitee is successful, in whole or in part,
challenging or appealing any Determination which has been made or in otherwise
enforcing this Agreement, then the Indemnitee shall also be entitled to the
expense of prosecuting such Claim. If a Change of Control shall have occurred,
the Indemnitee shall have the option to have any such Claim conducted by a
single arbitrator pursuant to the rules of the American Arbitration Association.
Any such judicial proceeding challenging or appealing any Determination shall be
deemed to be conducted de novo and without prejudice by reason of any prior
Determination to the effect that the Indemnitee is not entitled to
indemnification under this Agreement.
          8.2.2. If a Determination shall have been made or deemed to have been
made pursuant to this Agreement that the Indemnitee is entitled to
indemnification, the Company shall be bound by such Determination in any
judicial proceeding or arbitration commenced pursuant to this Section 8.2,
except if such indemnification is unlawful.
          8.2.3. The Company shall be precluded from asserting in any judicial
proceeding or arbitration commenced pursuant to this Section 8.2 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. The Company
hereby consents to service of process and to appear in any judicial or
arbitration proceedings and shall not oppose the Indemnitee’s right to commence
any such proceedings.

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     8.3. Procedures. The Indemnitee shall cooperate with the Company and with
any Person making any Determination with respect to any Claim for which a claim
for indemnification under this Agreement has been made, as the Company may
reasonably require. the Indemnitee shall provide to the Company or the Person
making any Determination, upon reasonable advance request, any documentation or
information reasonably available to the Indemnitee and necessary to (a) the
Company with respect to any such Claim or (b) the Person making any
Determination with respect thereto.
Section 9. 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, any Subsidiary,
any Other Enterprise or any Affiliate of the Company against the Indemnitee or
the Indemnitee’s spouse, heirs, executors, administrators or personal or legal
representatives after the expiration of two years from the date of accrual of
such cause of action, and any claim or cause of action of the Company, any
Subsidiary, any Other Enterprise or any Affiliate of the Company shall be
extinguished and deemed released unless asserted by the timely filing of a legal
action within such two-year period; provided, however, that if any shorter
period of limitations, whether established by statute or judicial decision, is
otherwise applicable to any such cause of action such shorter period shall
govern.
Section 10. Contribution. In order to provide for just and equitable
contribution in circumstances in which the indemnification provided for herein
is held by a court of competent jurisdiction to be unavailable to Indemnitee in
whole or in part, it is agreed that, in such event, the Company shall, to the
fullest extent permitted by law, contribute to the payment of Indemnitee’s
costs, charges and expenses (including attorneys’ fees), judgments, fines and
amounts paid in settlement with respect to any action, suit or proceeding,
whether civil, criminal, administrative or investigative, in an amount that is
just and equitable in the circumstances, taking into account, among other
things, contributions by other directors and officers of the Company or others
pursuant to indemnification agreements or otherwise; provided, that, without
limiting the generality of the foregoing, such contribution shall not be
required where such holding by the court is due to (i) the failure of Indemnitee
to meet the standard of conduct set forth in the definition of Covered Event in
Section 1 hereof, or (ii) any limitation on indemnification set forth in
Section 2.1.3, 3 or 7.3.4 hereof.
Section 11. Miscellaneous Provisions.
     11.1. Successors and Assigns, Etc. This Agreement shall be binding upon and
inure to the benefit of (a) the Company, its successors and assigns (including
any direct or indirect successor by merger, consolidation or operation of law or
by transfer of all or substantially all of its assets) and (b) the Indemnitee
and the heirs, personal and legal representatives, executors, administrators or
assigns of the Indemnitee.
     11.2. Severability. Nothing in this Agreement is intended to require or
shall be construed as requiring the Company to do or fail to do any act in
violation of applicable law. The Company’s inability, pursuant to court order,
to perform its obligations under this Agreement shall not constitute a breach of
this Agreement. The provisions of this Agreement are severable. If any provision
of this Agreement shall be held by any court of competent jurisdiction to be
invalid, void or unenforceable, such provision shall be deemed to be modified to
the minimum

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extent necessary to avoid a violation of law and, as so modified, such provision
and the remaining provisions shall remain valid and enforceable in accordance
with their terms to the fullest extent permitted by law.
     11.3 Mutual Acknowledgment. Both the Company and the Indemnitee acknowledge
that in certain instances, federal law or applicable public policy may prohibit
the Company from indemnifying its directors and officers under this Agreement or
otherwise. The Indemnitee understands and acknowledges that the Company has
undertaken or may be required in the future to undertake with the Securities and
Exchange Commission to submit the question of indemnification to a court in
certain circumstances for a determination of the Company’s right under public
policy to indemnify the Indemnitee.
     11.4. Rights Not Exclusive; Continuation of Right of Indemnification.
Nothing in this Agreement shall be deemed to diminish or otherwise restrict the
Indemnitee’s right to indemnification pursuant to any provision of the
Certificate of Incorporation or Bylaws of the Company, any agreement, vote of
stockholders or Disinterested Directors, applicable law or otherwise. , both as
to action in the Indemnitee’s official capacity and as to action in another
capacity while holding such office. This Agreement shall be effective as of the
date first above written and continue in effect until no Claims relating to any
Covered Event may be asserted against the Indemnitee and until any Claims
commenced prior thereto are finally terminated and resolved, regardless of
whether the Indemnitee continues to serve as a director of the Company, any
Subsidiary or any Other Enterprise.
     11.5. Agreement to Serve. The Indemnitee agrees to serve or continue to
serve the Company Agent, at the Company’s will (or under separate agreement, if
such agreement exists), in the capacity the Indemnitee currently serves as
Company Agent, so long as he is duly appointed or elected and qualified in
accordance with the applicable provisions of the Bylaws of the Company or any
subsidiary of the Company or until such time as he tenders his resignation in
writing; provided, however, that nothing contained in this Agreement shall be
construed as giving the Indemnitee any right to be retained in the employ of the
Company, any Subsidiary or any Other Enterprise.
     11.6 Interpretation of Agreement. It is understood that the parties hereto
intend this Agreement to be interpreted and enforced so as to provide
indemnification to the Indemnitee to the fullest extent permitted by law
including those circumstances in which indemnification would otherwise be
discretionary.
     11.7. Subsequent Amendment. No amendment, termination or repeal of any
provision of the Certificate of Incorporation or Bylaws of the Company, or any
respective successors thereto, or of any relevant provision of any applicable
law, shall affect or diminish in any way the rights of the Indemnitee to
indemnification, or the obligations of the Company, arising under this
Agreement, whether the alleged actions or conduct of the Indemnitee giving rise
to the necessity of such indemnification arose before or after any such
amendment, termination or repeal.
     11.8. Notices. Notices required under this Agreement shall be given in
writing and shall be deemed given when delivered in person or sent by certified
or registered mail, return receipt

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requested, postage prepaid. Notices shall be directed to the Company at Back
Yard Burgers, Inc., 1657 N. Shelby Oaks Drive, Memphis, TN 38134, Attention:
Chief Executive Officer, and to the Indemnitee at the address set forth on the
signature page hereto (or such other address as either party may designate in
writing to the other).
     11.9 Consent to Jurisdiction. The Company and the Indemnitee each hereby
irrevocably consent to the jurisdiction of the courts of either the State of
Tennessee or the State of Delaware for all purposes in connection with any
action or proceeding which arises out of or relates to this Agreement and agree
that any action instituted under this Agreement shall be brought only in the
state courts of either the State of Tennessee or the State of Delaware.
     11.10. Governing Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Delaware applicable to
contracts made and performed in such state without giving effect to the
principles of conflict of laws.
     11.11. Headings. The headings of the Sections of this Agreement are
inserted for convenience only and shall not be deemed to discriminate part of
this Agreement or to affect the construction thereof.
     11.12. Counterparts. This Agreement may be executed in any number of
counterparts all of which taken together shall constitute one instrument.
     11.13. Modification and Waiver. This Agreement constitutes the entire
agreement between the parties hereto with respect to the subject matter hereof.
All prior negotiations, agreements and understandings between parties with
respect thereto are superseded hereby. 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 of the provisions of this Agreement shall
constitute, or be deemed to constitute, a waiver of any other provisions hereof
(whether or not similar) nor shall any such waiver constitute a continuing
waiver.
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     The parties hereto have caused this Agreement to be duly executed as of the
day and year first above written.

            BACK YARD BURGERS, INC.
      By:         Title:                        

            INDEMNITEE
      Name:      

                  Address:                                          

[SIGNATURE PAGE TO INDEMNIFICATION AGREEMENT]