EXHIBIT 10.1

 

AGREEMENT OF SETTLEMENT OF CLASS ACTIONS

 

This Agreement of Settlement of Class Actions (“Agreement”) is entered into
between plaintiffs Deanna O’Neill, Victoria Sordelet, and Frederick Trunik
(“plaintiffs”), individually and as class representatives on behalf of all
members of the classes in Deanna O’Neill, et al. v. Vicorp Restaurants, Inc.,
Los Angeles County Superior Court Case No. BC 304 354 (the “O’Neill Action”) and
Victoria Sordelet, et al. v. Vicorp Restaurants Inc., Los Angeles County
Superior Court Case No. 315 905 (the “Sordelet Action”) (collectively, the
“Class”), on the one hand, and defendant Vicorp Restaurants, Inc. (“Vicorp”), on
the other hand.

 

I.

 

SETTLEMENT FUND

 

A.            Vicorp shall pay a maximum of Six Million Five Hundred Fifty
Thousand Dollars ($6,550,000) (the “Settlement Fund”) in settlement of the
O’Neill Action and the Sordelet Action.

 

B.            Within five (5) business days after the “Effective Date,” as
defined below, and as checks are presented for payment, Vicorp shall wire
transfer amounts payable from the Settlement Fund, less any advances made by
Vicorp pursuant to Section IX(A)(1), to Rust Consulting, Inc. (“Claims
Administrator”) as trustee for the interested parties.

 

C.            Payments to the Class shall be disbursed on a claims-made basis
and shall be allocated according to (1) workers’ compensation deductions made on
the bonus claim and/or (2) the number of weeks worked by each employee over the
entire number of weeks in the applicable class period.

 

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II.

 

CERTIFICATION OF “THE CLASS” FOR SETTLEMENT PURPOSES

ONLY, CLAIMS SETTLED AND CLAIMS PERIODS COVERED

 

A.            This Agreement is contingent upon the approval and certification
by the Los Angeles County Superior Court (the “Court”), for settlement purposes
only, of the Class consisting of the following subclasses:

 

1.                                       All persons who, at any time during the
period October 16, 1999, to January 31, 2005, worked for Vicorp as hourly,
non-exempt in-restaurant employees, including of servers, hosts or hostesses,
cashiers, cooks, bussers, supervisors and/or dishwashers at any California
Bakers Square restaurant and who were allegedly deprived of meal periods (the
“Hourly Meal Period Subclass”);

 

2.                                       All persons who, at any time during the
period May 10, 2001, to January 31, 2005, worked for Vicorp Restaurants, Inc. as
hourly, non-exempt in-restaurant employees, including servers, hosts or
hostesses, cashiers, cooks, bussers, supervisors and/or dishwashers at any
California Bakers Square restaurant and who were allegedly deprived of rest
periods (the “Hourly Rest Period Subclass”);

 

3.                                       All restaurant managers and associate
managers employed by Vicorp in California at any time during the period October
16, 1999, to January 31, 2005, whose bonuses were allegedly reduced due to store
losses or operational expenses beyond their control, including without
limitation workers’ compensation expenses, workers’ compensation claims, cash

 

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shortages, merchandise shortages, tort claims by non-employees, store
remodeling, and other losses or expenses (“the Bonus Subclass”); and

 

4.                                       All restaurant general managers,
associate managers, and assistant managers employed by Vicorp in California at
any time during the period May 10, 2001, to January 31, 2005, who claim that
their job status was misclassified as exempt when, in fact, they were entitled
to overtime and rest and meal periods that otherwise should have been available
to hourly non-exempt employees (the “Misclassification Subclass”).

 

B.            Vicorp expressly reserves its right to continue to assert that
this case is not appropriate for certification as a class action if, for any
reason, this Agreement is not consummated.

 

III.

 

APPOINTMENT OF CLASS COUNSEL

 

The Court shall appoint Thomas A. Kearney, Esq., Paul Alvarez, Esq. and Kearney
Alvarez LLP as Class Counsel.

 

IV.

 

CLASS NOTICE AND CLAIM FORM

 

A.            Class members may be members of one or all Subclasses, and will be
entitled to their share of the amount allocated to each applicable Subclass if
they submit a timely and valid claim form.

 

B.            Within ten (10) days of entry of the Order for Preliminary
Approval, Vicorp shall provide the Claims Administrator and Class Counsel, in
electronic form, a database that contains the last known name, address, social
security number, job code, and employment dates for all

 

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Class members, for notification and to distribute the Settlement Fund.  Vicorp
shall cooperate and provide any additional information the Claims Administrator
may reasonably request to give notice and administer the Settlement Fund.

 

C.            Within twenty-five (25) days after entry of the Order for
Preliminary Approval, the Claims Administrator shall mail notice to the Class,
using the applicable notice(s) attached hereto as Exhibit “A” (“Notice”).

 

V.

 

SETTLEMENT APPROVAL PROCEDURES

 

The Court, pursuant to California Rule of Court 1859(c), must preliminarily
approve the settlement (the “Order for Preliminary Approval”), in substantially
the form and content of Exhibit “B” hereto, on or before March 14, 2005.

 

VI.

 

THE EFFECTIVE DATE

 

This Agreement will become final and effective (the “Effective Date”) on the
occurrence of all of the following events:

 

A.            Entry of the Order for Preliminary Approval.

 

B.            Class Counsel filing, at or before the hearing for final approval
of the settlement, a declaration from the Claims Administrator testifying that
(1) Notice to the Class has been sent in accordance with the Order for
Preliminary Approval; (2) reporting on the number of returned initial Notices;
(3) reporting on additional efforts to trace undeliverable Notices; and (4)
providing the result of the follow-up.

 

C.            Entry of the Final Judgment and Order of Dismissal (“Judgment”)
attached hereto as Exhibit “C.”

 

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D.            The Judgment becomes final, which shall mean: (1) if a timely
notice of appeal is not filed, the expiration of the time for appeal after
service of notice of entry of judgment on the Class representative and all Class
members who filed objections and who did not opt-out; or (2) if a timely notice
of appeal is filed, the day after the Judgment is affirmed, or the appeal or
review is dismissed or denied, and the Judgment is no longer subject to judicial
review or other challenge.

 

VII.

 

EFFECT OF NON-APPROVAL OR FAILURE OF THE EFFECTIVE DATE TO OCCUR

 

If the events specified in Sections V and VI do not occur, this Agreement shall
be void.  In that event, nothing in this Agreement shall be construed as a
determination, admission, or concession of any issue in the litigation; the
Settling Parties expressly reserve their rights with respect to the prosecution
and defense of the litigation as if this Agreement never existed.

 

VIII.

 

ATTORNEYS’ FEES AND REIMBURSEMENT OF COSTS AND EXPENSES

 

A.            Vicorp agrees that counsel for the Class are entitled to an award
of attorneys’ fees, costs, and expenses.  Vicorp acknowledges that plaintiffs
and the Class have a claim for attorneys’ fees, costs and expenses pursuant to
California Labor Code Sections 218.5 and 1194 and California Code of Civil
Procedure Sections 1021.5 and 1032.  However, the claim for attorneys’ fees,
costs, and expenses has been settled in this Agreement.

 

B.            Vicorp agrees not to dispute that the Settlement Fund is a “Common
Fund” as defined in The Boeing Company v. Van Gemert (1980) 444 U.S. 472,
inasmuch as each member of the Class will have an undisputed and mathematically
ascertainable part of a lump-sum judgment recovered on his or her behalf. 
Vicorp understands that Class Counsel will apply to

 

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the Court for an award of attorneys’ fees, costs, and expenses to be scheduled
for determination at the hearing for final approval of this settlement.  Vicorp
will not oppose Class Counsel’s application for attorneys’ fees of up to and
including thirty-three and one-third percent (33.33%) of the Settlement Fund, or
Two Million, One Hundred Sixty-Six Thousand, Four Hundred and Fifty Dollars
($2,166,450) and for reimbursement of costs up to Thirty-Six Thousand Dollars
($36,000).

 

C.            Class Counsel’s application for attorneys’ fees, costs, and
expenses is not part of this Agreement and is to be considered separately from
the Court’s consideration of the fairness, reasonableness, adequacy, and good
faith of the settlement.  Any proceedings related to Class Counsel’s application
for attorneys’ fees, costs, and/or expenses shall not terminate or cancel the
Agreement, or affect the finality of the Judgment approving the Agreement and
the settlement of the O’Neill Action and the Sordelet Action.  Any reduction by
the Court of the attorneys’ fees, costs, and expenses sought by Class Counsel
will not serve to enlarge the Settlement Fund, but will simply revert back to
Vicorp.

 

D.            Within five (5) business days after the “Effective Date,” Vicorp
shall wire transfer to a bank account directed by Class Counsel all attorneys’
fees, costs and expenses approved by the Court pursuant to this Agreement.

 

IX.

 

PLAN OF ALLOCATION AND DISTRIBUTION OF THE SETTLEMENT FUND

 

A.            The Settlement Fund shall be allocated as follows:

 

1.                                       The costs and expenses of claims
administration.  Vicorp shall advance any costs of notice and administration
reasonably requested by the Claims Administrator.  All such advances shall be
deemed a deposit to the

 

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Settlement Fund.  If the settlement is not consummated, Vicorp shall not be
entitled to reimbursement of advances from plaintiffs, the Class, or Class
Counsel.

 

2.                                       Ten Thousand Dollars ($10,000) each to
Class representatives Deanna O’Neill, Victoria Sordelet, and Frederick Trunik,
as reasonable compensation in recognition of their time and effort in initiating
and prosecuting the case against Vicorp, as may be approved by the Court.  The
payment to each Class representative is in addition to any amount each may
receive as a member of the Class.

 

3.                                       Attorneys’ fees of one-third (33.33%)
and costs and expenses of Class Counsel, as may be approved by the Court.

 

4.                                       The Net Distributable Amount, as
explained in Section IX (B) below.

 

5.                                       Any part of the Settlement Fund that
remains unclaimed or returned twelve (12) months after the date Notice is first
mailed to the Class, shall be paid to Vicorp.  Neither plaintiffs, the Class,
nor any government or public entity shall have any right to such unclaimed or
returned amounts under the unclaimed property laws of California or Colorado or
any other legal or equitable theory.

 

B.            Allocation of the Net Distributable Amount.

 

The Net Distributable Amount shall be defined as the Settlement Fund, less the
costs and expenses of administration and any advances to the Claims
Administrator, the separate compensation of Class representatives, attorneys’
fees (33.33%), costs, and expenses of Class Counsel, all as set forth in Section
IX(A)(1)-(3), and all employers payroll taxes attributable to

 

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the amounts claimed.  The Net Distributable Amount shall be allocated and
disbursed on a claims-made basis, for all Allowed Class Member Claims (as
defined in Section XI(B) below), to the Class as follows:

 

1.                                       The Hourly Meal Period Subclass.

 

a.                                       23% of the Net Distributable Amount
(the “Hourly Meal Period Subclass Payout”) will be allocated to the Hourly Meal
Period Subclass.

 

b.                                      Each member of the Hourly Meal Period
Subclass shall be eligible for that portion of the Hourly Meal Period Subclass
Payout calculated by the total number of weeks worked by that member from
October 16, 1999, to January 31, 2005, divided by the total number of weeks
worked by all members of the Hourly Meal Period Subclass from October 16, 1999,
to January 31, 2005 (before any opt-outs).  The resulting fraction shall then be
multiplied by the Hourly Meal Period Subclass Payout to determine the amount to
be paid to that person.

 

2.                                       The Hourly Rest Period Subclass.

 

a.                                       7% of the Net Distributable Amount (the
“Hourly Rest Period Subclass Payout”) will be allocated to the Hourly Rest
Period Subclass.

 

b.                                      Each member of the Hourly Rest Period
Subclass shall be eligible for that portion of the Hourly Rest Period Subclass
Payout calculated by the total number of weeks worked by that member

 

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from May 10, 2001, to January 31, 2005, divided by the total number of weeks
worked by all members of the Hourly Rest Period Subclass from May 10, 2001, to
January 31, 2005 (before any opt-outs).  The resulting fraction shall then be
multiplied by the Hourly Rest Period Subclass Payout to determine the amount to
be paid to that person.

 

3.                                       The Bonus Subclass.

 

a.                                       13% of the Net Distributable Amount
(the “Bonus Subclass Payout”) will be allocated to the Bonus Subclass.

 

b.                                      Each member of the Bonus Subclass shall
be eligible for that portion of the Bonus Subclass Payout that is based on
Vicorp’s recalculation of the bonus to which the member would have been
entitled, had workers’ compensation expenses previously deducted in determining
the member’s bonus from October 16, 1999, to January 31, 2005, not been
deducted.  Vicorp’s recalculation will identify an outstanding bonus amount for
each member.  The member’s outstanding bonus amount shall be divided by
$553,000.  The resulting percentage shall then be multiplied by the Bonus
Subclass Payout to determine the amount to be paid to that person.

 

4.                                       The Misclassification Subclass:

 

a.                                       57% of the Net Distributable Amount
(the “Misclassification Subclass Payout”) will be allocated to the
Misclassification Subclass as follows: 1) 40% to the restaurant general
managers; 2)

 

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47% to the associate managers; and 3) 13% to the assistant managers.

 

b.                                      Each restaurant manager member of the
Misclassification Subclass shall be eligible for that portion of the
Misclassification Subclass payout allocated to restaurant managers calculated by
the total number of weeks worked by that member from May 10, 2001, to January
31, 2005, divided by the total number of weeks worked by all restaurant managers
from May 2001, to January 31, 2005 (before any opt-outs).  The resulting
fraction shall then be multiplied by the Misclassification Subclass Payout
allocated to the restaurant managers to determine the amount to be paid to that
person.

 

c.                                       Each associate manager member of the
Misclassification Subclass shall be eligible for that portion of the
Misclassification Subclass payout allocated to associate managers calculated by
the total number of weeks worked by that member from May 10, 2001, to January
31, 2005, divided by the total number of weeks worked by all associate managers
from May 10, 2001, to January 31, 2005 (before any opt-outs).  The resulting
fraction shall then be multiplied by the Misclassification Subclass Payout
allocated to the associate managers to determine the amount to be paid to that
person.

 

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d.                                      Each assistant manager member of the
Misclassification Subclass shall be eligible for that portion of the
Misclassification Subclass payout allocated to assistant managers calculated by
the total number of weeks worked by that member from May 10, 2001, to January
31, 2005, divided by the total number of weeks worked by all assistant managers
from May 10, 2001, to January 31, 2005 (before any opt-outs).  The resulting
fraction shall then be multiplied by the Misclassification Subclass Payout
allocated to the assistant managers to determine the amount to be paid to that
person.

 

C.            Time for Payment by Claims Administrator.

 

1.                                       The Claims Administrator shall make the
settlement payments described in Paragraphs IX(A)(l)-(4) as soon as practicable
after the Effective Date and as checks are presented for payment or other demand
for payment properly is made, but no later than five (5) business days after
presentment or proper demand.

 

2.                                       The Claims Administrator shall remit
all payroll taxes deducted from each Allowed and paid Class Member Claim, along
with appropriate documentation, to the applicable taxing agencies in accordance
with applicable laws and regulations.

 

3.                                       The Claims Administrator shall make the
payment provided for in Section IX(A)(5) as soon as reasonably practicable
following the passage of twelve (12) months from the date Notice is first mailed
to the Class.

 

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X.

 

REQUEST FOR EXCLUSION

 

A.            No person who has timely elected to be excluded from the Class, as
provided for in the Notice, shall share in the distribution of the Settlement
Fund.

 

B.            No later than fourteen (14) days prior to the hearing for final
approval as set forth in the Notice, the Claims Administrator shall provide
Class Counsel and Vicorp’s counsel with a declaration identifying those persons
who have timely elected to be excluded from the Class.

 

XI.

 

PROCESSING AND PAYMENT OF ALLOWED CLASS MEMBER CLAIMS

 

A.            The Notice sent to each Class member shall be accompanied by a
separate Claim Form and Request for Information (“Claim Form”) attached hereto
as Exhibit “D”.

 

B.            Each Class Member who has timely submitted a Claim Form and who
has not timely requested to be excluded from the Class, shall have an allowed
Class member claim, in such amount as the Claims Administrator shall calculate
(the “Allowed Class Member Claim”).

 

C.            The check in payment of each Allowed Class Member Claim shall
contain the following endorsement which will document the release by every Class
member of all Released Claims against Vicorp.

 

“Negotiation of this check shall confirm that the payee has released Vicorp
according to the Release contained in the Agreement of Settlement of Class
Actions made as of March 3, 2005.”

 

D.            Counsel shall work with the Claims Administrator to resolve any
questions concerning the weeks worked by any Class member and the amount of his
or her Allowed Class Member Claim.

 

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XII.

 

ACCOUNTING AND FINAL REPORT TO THE COURT

 

A.            Three (3) months after the Effective Date, the Claims
Administrator shall provide Class Settlement counsel and Vicorp’s counsel with
an accounting in an Interim Report.

 

B.            Fifteen (15) months after Notice is first mailed to the Class, the
Claims Administrator shall make a Final Accounting and Report to Class Counsel
and Vicorp’s counsel.

 

XIII.

 

GENERAL RELEASE OF VICORP

 

A.            Hourly Meal Period Subclass.

 

In exchange for the consideration recited in this Agreement, all members of the
Hourly Meal Period Subclass (excluding any who may have opted out), on behalf of
themselves and on behalf of all who claim by or through them or in their stead,
do hereby and forever release, acquit, discharge and covenant not to sue Vicorp
(which is defined to include its past, present and future attorneys, divisions,
affiliates, predecessors, successors, owners, shareholders, officers, directors,
employees, agents, trustees, representatives, administrators, fiduciaries,
assigns, subrogees, executors, partners, parents, subsidiaries, and privies) for
any and all actions, causes of action, suits, claims, liens, demands, damages,
controversies and liabilities of any kind whatsoever (based upon any legal or
equitable theory, whether contractual, common law, statutory, federal, state or
otherwise) whether known or unknown, suspected, anticipated or unanticipated,
which the Hourly Meal Period Subclass has, ever had, or hereafter may claim to
have, against Vicorp which were alleged, or which arise out of or relate to the
claims, actions or causes of action, or facts, which were alleged, or might have
been alleged, by the Hourly Meal Period Subclass in the O’Neill Action due to
alleged failure to provide meal periods between

 

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October 16, 1999, and January 31, 2005.  Such released claims include without
limitation, for the specified time period, all claims for violation of any state
or federal statute, regulation, rule or California Industrial Welfare Commission
Wage Order concerning failure to provide meal periods and all claims for unpaid
wages, damages, penalties, and payments of any other amounts due to such failure
(including but not limited to California Labor Code Sections 201, 202, 204, 226,
512, 1174, and 1194, California Industrial Welfare Commission Wage Order 5-1989,
5-1998, 5-2000, and 5-2001, as amended, and the Fair Labor Standards Act; unfair
business practices under California Business and Professions Code Section 17200,
et seq.; claims for overtime relating to failure to provide meal periods;
penalties under California Labor Code Sections 226.7 and 2699, and California
Industrial Welfare Commission Wage Order 5-1989, 5-1998, 5-2000, and 5-2001, as
amended; waiting time penalties under California Labor Code Section 203;
attorneys’ fees, costs, and expenses, and interest under California Labor Code
Sections 218.5, 218.6, 1194, California Code of Civil Procedure Sections 1021.5
and 1032, and California Civil Code Sections 3287 and 3289; claims for punitive
or exemplary damages; and all other claims for damages, penalties, restitution,
attorneys’ fees, costs, expenses and interest relating in any way to meal period
violations).  This release does not cover claims after January 31, 2005.

 

B.            Hourly Rest Period Subclass.

 

In exchange for the consideration recited in this Agreement, all members of the
Hourly Rest Period Subclass (excluding any who may have opted out), on behalf of
themselves and on behalf of all who claim by or through them or in their stead,
do hereby and forever release, acquit, discharge and covenant not to sue Vicorp
(which is defined to include its past, present and future attorneys, divisions,
affiliates, predecessors, successors, owners, shareholders,

 

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officers, directors, employees, agents, trustees, representatives,
administrators, fiduciaries, assigns, subrogees, executors, partners, parents,
subsidiaries, and privies) for any and all actions, causes of action, suits,
claims, liens, demands, damages, controversies and liabilities of any kind
whatsoever (based upon any legal or equitable theory, whether contractual,
common law, statutory, federal, state or otherwise) whether known or unknown,
suspected, anticipated or unanticipated, which the Hourly Rest Period Subclass
has, ever had, or hereafter may claim to have, against Vicorp which were
alleged, or which arise out of or relate to the claims, actions or causes of
action, or facts, which were alleged, or might have been alleged, by the Hourly
Rest Period Subclass in the O’Neill Action due to alleged failure to provide
rest periods between May 10, 2001, and January 31, 2005.  Such released claims
include without limitation, for the specified time period, all claims for
violation of any state or federal statute, regulation, rule or California
Industrial Welfare Commission Wage Order concerning failure to provide rest
periods and all claims for unpaid wages, damages, penalties, and payments of any
other amounts due to such failure (including but not limited to California Labor
Code Sections 201, 202, 204, 226, 512, 1174, and 1194, California Industrial
Welfare Commission Wage Order 5-1989, 5-1998, 5-2000, and 5-2001, as amended,
and the Fair Labor Standards Act; unfair business practices under California
Business and Professions Code Section 17200, et seq.; claims for overtime
relating to failure to provide rest periods; penalties under California Labor
Code Sections 226.7 and 2699, and California Industrial Welfare Commission Wage
Order 5-1989, 5-1998, 5-2000, and 5-2001, as amended; waiting time penalties
under California Labor Code Section 203; attorneys’ fees, costs and interest
under California Labor Code Sections 218.5, 218.6, 1194, California Code of
Civil Procedure Sections 1021.5 and 1032, and California Civil Code Sections
3287 and 3289; claims for punitive or exemplary damages; and all other claims
for damages, penalties,

 

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restitution, attorneys’ fees, costs, expenses and interest relating in any way
to rest period violations).  This release does not cover claims after January
31, 2005.

 

C.            Bonus Subclass.

 

In exchange for the consideration recited in this Agreement, all members of the
Bonus Subclass (excluding any who may have opted out), on behalf of themselves
and on behalf of all who claim by or through them or in their stead, do hereby
and forever release, acquit, discharge and covenant not to sue Vicorp (which is
defined to include its past, present and future attorneys, divisions,
affiliates, predecessors, successors, owners, shareholders, officers, directors,
employees, agents, trustees, representatives, administrators, fiduciaries,
assigns, subrogees, executors, partners, parents, subsidiaries, and privies) for
any and all actions, causes of action, suits, claims, liens, demands, damages,
controversies and liabilities of any kind whatsoever (based upon any legal or
equitable theory, whether contractual, common law, statutory, federal, state or
otherwise) whether known or unknown, suspected, anticipated or unanticipated,
which the Bonus Subclass has, ever had, or hereafter may claim to have, against
Vicorp which were alleged, or which arise out of or relate to the claims,
actions or causes of action, or facts, which were alleged, or might have been
alleged, by the Bonus Subclass in the O’Neill Action due to alleged reductions
in or deductions from bonuses due to store losses or operational expenses beyond
their control between October 16, 1999, and January 31, 2005, including without
limitation workers’ compensation expenses, workers’ compensation claims, cash
shortages, merchandise shortages, tort claims by non-employees, store
remodeling, and losses caused by negligence.  Such released claims include
without limitation, for the specified time period, all claims for violation of
any state or federal statute, regulation, rule or California Industrial Welfare
Commission Wage Order concerning reductions in or deductions from bonuses for

 

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workers’ compensation expenses and all other losses and expenses beyond the
claimant’s control, and all claims for unpaid wages, damages, penalties, and
payments of any other amounts due to such reductions or deductions (including
but not limited to California Labor Code Sections 201, 202, 204, 226, 1174,
1194, and 3751, California Industrial Welfare Commission Wage Order 5-1989,
5-1998, 5-2000, and 5-2001, as amended, and the Fair Labor Standards Act; unfair
business practices under California Business and Professions Code Section 17200,
et seq.; penalties under California Labor Code Sections 2699 and California
Industrial Welfare Commission Wage Order 5-1989, 5-1998, 5-2000, and 5-2001, as
amended; waiting time penalties under California Labor Code Section 203;
attorneys’ fees, costs, expenses, and interest under California Labor Code
Sections 218.5, 218.6, 1194, California Code of Civil Procedure Sections 1021.5
and 1032, and California Civil Code Sections 3287 and 3289; claims for punitive
or exemplary damages; and all other claims for damages, penalties, restitution,
attorneys’ fees, costs, expenses and interest relating in any way to reductions
in or deductions from bonuses for workers’ compensation expenses and all other
losses and expenses beyond the claimant’s control).  This release does not cover
claims after January 31, 2005.

 

D.            Misclassification Subclass.

 

In exchange for the consideration recited in this Agreement, all members of the
Misclassification Subclass (excluding any who may have opted out), on behalf of
themselves and on behalf of all who claim by or through them or in their stead,
do hereby and forever release, acquit, discharge and covenant not to sue Vicorp
(which is defined to include its past, present and future attorneys, divisions,
affiliates, predecessors, successors, owners, shareholders, officers, directors,
employees, agents, trustees, representatives, administrators, fiduciaries,
assigns, subrogees, executors, partners, parents, subsidiaries, and privies) for
any and all actions,

 

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causes of action, suits, claims, liens, demands, damages, controversies and
liabilities of any kind whatsoever (based upon any legal or equitable theory,
whether contractual, common law, statutory, federal, state or otherwise) whether
known or unknown, suspected, anticipated or unanticipated, which the
Misclassification Subclass has, ever had, or hereafter may claim to have,
against Vicorp which were alleged, or which arise out of or relate to the
claims, actions or causes of action, or facts, which were alleged, or might have
been alleged, by the Misclassification Subclass in the Sordelet Action due to
alleged misclassification of their job status as exempt when, in fact, they were
entitled to overtime, and meal periods and rest periods, that otherwise should
have been available to hourly non-exempt employees, between May 10, 2001, and
January 31, 2005.  Such released claims include without limitation, for the
specified time period, all claims for violation of any state or federal statute,
regulation, rule or California Industrial Welfare Commission Wage Order
concerning failure to pay overtime, and failure to provide meal periods and rest
periods, and all claims for unpaid wages, damages, penalties, and payments of
any other amounts due to such failures (including but not limited to California
Labor Code Sections 201, 202, 204, 226, 512, 1174, and 1194, California
Industrial Welfare Commission Wage Order 5-1989, 5-1998, 5-2000, and 5-2001, as
amended, and the Fair Labor Standards Act; unfair business practices under
California Business and Professions Code Section 17200, et seq.; penalties under
California Labor Code Sections 226.7 and 2699, and California Industrial Welfare
Commission Wage Order 5-1989, 5-1998, 5-2000, and 5-2001, as amended; waiting
time penalties under California Labor Code Section 203; attorneys’ fees, costs,
expenses and interest under California Labor Code Sections 218.5, 218.6, 1194,
California Code of Civil Procedure Sections 1021.5 and 1032, and California
Civil Code Sections 3287 and 3289; claims for punitive or exemplary damages; and
all other claims for damages, penalties, restitution,

 

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attorneys’ fees, costs, expenses and interest relating in any way to overtime,
meal period, and rest period violations).  This release does not cover claims
after January 31, 2005.

 

E.             Waiver of California Civil Code Section 1542.

 

All members of the Class (excluding any who may have opted out) expressly waive
any rights or benefits available to them under the provisions of section 1542 of
the California Civil Code, which provides as follows:

 

“A general release does not extend to claims which the creditor does not know or
suspect to exist in his favor at the time of executing the release, which if
known by him must have materially affected his settlement with the debtor.”

 

All members of the Class understand fully the statutory language of Civil Code
Section 1542, and with this understanding, nevertheless elect to, and do, assume
all risks for claims that have arisen or that may arise in the future, whether
known or unknown, from the subject of this release, and specifically waive all
rights they may have under California Civil Code Section 1542.  Plaintiffs and
the Class fully understand that if the facts relating in any manner to this
release and dismissal are found hereafter to be other than or different from the
facts now believed to be true, they expressly accept and assume the risk and
agree that this Agreement and the release of claims contained herein shall
remain effective.

 

XIV.

 

ADDITIONAL TERMS AND CONDITIONS

 

A.            Settlement the Result of Arms-Length Bargaining.

 

The terms of settlement have resulted from arms-length negotiations over more
than six weeks, including a Mediation before the Honorable Edward Infante
(Magistrate Judge, Retired)

 

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on October 6, 2004, culminating in an agreement in principle on the major points
of the settlement on November 19, 2004.

 

B.            Notices.

 

All notices, requests, demands and other communications required or permitted to
be given pursuant to this Agreement shall be in writing and shall be provided by
appropriate method such as personal delivery, telecopy, overnight delivery, or
First Class U.S. Mail, depending on the urgency, to:

 

TO THE CLASS:

 

TO VICORP RESTAURANTS, INC.:

 

 

 

Thomas A. Kearney, Esq.

 

Mark Riera, Esq.

Paul Alvarez, Esq.

 

Sheppard, Mullin, Richter & Hampton LLP

633 W. 5th Street, 28th floor

 

333 So. Hope St., 48th Floor

Los Angeles, CA  90071-3125

 

Los Angeles, CA  90071-1448

Telephone:  (213) 473-1900

 

Telephone:  (213)617-4214

Facsimile:  (213) 473-1919

 

Facsimile:  (213)620-1398

 

C.            No Admission of Liability.

 

The parties agree that the lawsuit was filed, prosecuted and resolved in good
faith following substantial formal and informal discovery, motion practice, and
arms-length bargaining, and is in the best interest of Plaintiffs and the Class
members.  Nothing herein shall constitute any admission of wrongdoing or
liability by Vicorp.  Vicorp agrees that the Settlement Fund and the other terms
of the Agreement reflect a good faith settlement of the claims asserted in this
lawsuit, and were reached voluntarily after consultation with experienced legal
counsel.  The Agreement and the settlement and all acts performed or documents
executed pursuant to or in furtherance of the Agreement or the settlement: (1)
are not and shall not be deemed to be and may not be used as an admission of, or
evidence of any wrongdoing or liability on the part of Vicorp; and (ii) are not
and shall not be deemed to be and may not be used as an admission of, or
evidence of any fault or omission of Vicorp in any civil, criminal or
administrative proceeding in

 

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any court, administrative agency or other tribunal.  However, the Agreement may
be used in such proceedings as may be necessary to conclude the settlement or to
enforce the Agreement or the Judgment, and Vicorp may file the Agreement and/or
the Judgment in any action that may be brought against it to support a defense
or counterclaim based on principles of res judicata, collateral estoppel,
release, good faith settlement, judgment bar or reduction or any other theory of
claim preclusion or issue preclusion or similar defense or counterclaim.  Vicorp
has denied and continues to deny each and all of the alleged claims.  The
settlement is a compromise and shall not be construed as an admission of
liability at any time or for any purpose, under any circumstances, by the
parties to this Agreement.  This Agreement and the settlement shall not be used
to suggest an admission of liability in any dispute between the parties that may
now exist or that may arise in the future with respect to any person or entity. 
Neither this Agreement nor anything included herein, nor any part of the
negotiations in connection herewith, shall constitute evidence with respect to
any issue or dispute.

 

D.            Modification by Writing Only.

 

This Agreement, and its terms, and Exhibits, may be modified or amended only in
a writing signed by all counsel of record for the parties that will not become
effective unless and until approved by the Court, or otherwise ordered by the
Court.

 

E.             Representations of Counsel.

 

1.                                  Plaintiffs and their counsel represent that,
to the best of their knowledge, there is no other litigation pending in any
other court or in any other jurisdiction raising any of the claims asserted by
plaintiffs in the within captioned matter.

 

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2.                                  Plaintiffs have expressly authorized their
counsel to take all appropriate action required or permitted to be taken
pursuant to the Agreement to effectuate its terms.

 

3.                                  Each attorney executing the Agreement or any
of its Exhibits on behalf of any party hereto hereby warrants that they have
full authority to do so.

 

F.             Further Cooperation.

 

The parties and their respective counsel of record shall proceed diligently to
prepare and execute all documents, to seek the necessary Court approvals, and to
do all other things reasonably necessary or convenient to conclude the
settlement as expeditiously as possible.

 

G.            Construction and Interpretation.

 

This Agreement and the Exhibits “A” through “D” (the Notice, [Proposed] Order
for Preliminary Approval, [Proposed] Final Judgment and Order of Dismissal and
Claim Form and Request for Information attached hereto, constitute the entire
agreement among the parties hereto and no representations, warranties or
inducements have been made to any party concerning the Agreement or its Exhibits
other than the representations, warranties and covenants contained and
memorialized in such documents.  The parties explicitly recognize California
Civil Code Section 1625 and California Code of Civil Procedure Section 1856(a),
which provide that a written agreement is to be construed according to its terms
and may not be varied or contradicted by extrinsic evidence.  This Agreement and
all other documents shall be construed each as a whole, and with reference to
one another according to their fair meaning and intent, and not strictly for or
against any party, regardless of who drafted or who was principally responsible
for drafting any document or part thereof.

 

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H.            Governing Law.

 

This Agreement and the Exhibits hereto shall be deemed to have been negotiated,
executed and delivered, and to be wholly performed, in the State of California,
and the rights and obligations of the parties to the Agreement and to the
Exhibits shall be construed and enforced in accordance with, and governed by,
the internal, substantive and procedural laws of the State of California without
giving effect to that State’s choice of law principles.

 

I.              Counterparts.

 

The Agreement may be executed in one or more telecopied counterparts which may
be filed with the Court.  All executed counterparts and each of them shall be
deemed to be one and the same instrument.  A complete set of original executed
counterparts shall be filed with the Court, when available.

 

J.             Binding Effect.

 

This Agreement is binding upon and shall inure to the benefit of the parties to
the settlement, and their respective attorneys, and past, present and future
subsidiaries, divisions, predecessors, successors, shareholders, officers,
directors, employees, agents, trustee, representatives, administrators,
fiduciaries, assigns, subrogees, executors, partners, parents, and privies. 
Without limiting the foregoing, this Agreement shall be binding upon the spouse
or domestic partner, children, heirs, assigns, successors and offspring of all
members of the Class.

 

K.            Attorneys’ Fees and Costs and Expenses.

 

Except as otherwise specifically provided for herein, each party shall bear its
own attorneys’ fees, costs and expenses, taxable or otherwise, incurred by them
or arising out of this litigation and shall not seek reimbursement thereof from
any other party to this Agreement.

 

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L.             No Retaliation.

 

Vicorp shall not take any adverse action against any Class member because of the
existence, and participation in the lawsuit, including because any Class member
chooses to take the benefit of the settlement, requests to be excluded from the
Class, or objects to the settlement.

 

M.           Continuing Jurisdiction.

 

The Court shall have continuing jurisdiction to construe, interpret and enforce
this Agreement and the settlement, to supervise notices sent, the administration
and distribution of the settlement and the Settlement Fund, and to hear and
adjudicate any dispute or litigation arising from the settlement,

 

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APPROVED AS TO FORM:

 

Sheppard, Mullin, Richter & Hampton LLP

 

 

 

 

Kearney Alvarez LLP

 

By:

/s/ Mark Riera

Thomas A. Kearney, Esq.

 

 

Mark Riera

Paul Alvarez, Esq.

 

 

Attorneys for Vicorp Restaurants, Inc.

 

 

 

 

/s/ Thomas A. Kearney

 

 

 

Class Counsel

 

 

 

 

 

AGREED AS OF February 28, 2005

 

 

 

 

 

Vicorp Restaurants, Inc.

AGREED AS OF February 28, 2005

 

 

 

 

 

 

 

/s/ Deanna O’Neill

 

By:

/s/ Debra Koenig

Individually and on behalf of the Class

 

 

Its Chief Executive Officer

Deanna O’Neill

 

 

 

 

 

 

 

/s/ Victoria E. Sordelet

 

 

 

Individually and on behalf of the Class

 

 

 

Victoria E. Sordelet

 

 

 

 

 

 

 

/s/ Frederick Trunik

 

 

 

Individually and on behalf of the Class
Frederick Trunik

 

 

 

 

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