**Exhibit 10.24**

 

AGREEMENT OF SETTLEMENT OF CLASS ACTIONS

 

This Agreement of Settlement of Class Actions (“Agreement”) is enteredinto between plaintiffs Deanna O’Neill, Victoria Sordelet, and Frederick Trunik(“plaintiffs”), individually and as class representatives on behalf of allmembers 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 AngelesCounty 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.                                   Vicorpshall pay a maximum of Six Million Five Hundred Fifty Thousand Dollars($6,550,000) (the “Settlement Fund”) in settlement of the O’Neill Action andthe Sordelet Action.

 

B.                                     Withinfive (5) business days after the “Effective Date,” as defined below, and aschecks are presented for payment, Vicorp shall wire transfer amounts payablefrom 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 interestedparties.

 

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

 

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II.

 

CERTIFICATION OF “THE CLASS” FOR SETTLEMENTPURPOSESONLY, CLAIMS SETTLED AND CLAIMS PERIODS COVERED

 

A.                                   ThisAgreement is contingent upon the approval and certification by the Los AngelesCounty Superior Court (the “Court”), for settlement purposes only, of the Classconsisting 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 ofservers, hosts or hostesses, cashiers, cooks, bussers, supervisors and/ordishwashers at any California Bakers Square restaurant and who were allegedlydeprived 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, workedfor Vicorp Restaurants, Inc. as hourly, non-exempt in-restaurant employees,including servers, hosts or hostesses, cashiers, cooks, bussers, supervisorsand/or dishwashers at any California Bakers Square restaurant and who wereallegedly deprived of rest periods (the “Hourly Rest Period Subclass”);

 

3.                                       All restaurantmanagers and associate managers employed by Vicorp in California at any timeduring the period October 16, 1999, to January 31, 2005, whosebonuses were allegedly reduced due to store losses or operational expensesbeyond their control, including without limitation workers’ compensationexpenses, workers’ compensation claims, cash 

 

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

 

4.                                       All restaurantgeneral managers, associate managers, and assistant managers employed by Vicorpin 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, infact, they were entitled to overtime and rest and meal periods that otherwiseshould have been available to hourly non-exempt employees (the “MisclassificationSubclass”).

 

B.                                     Vicorpexpressly reserves its right to continue to assert that this case is notappropriate for certification as a class action if, for any reason, thisAgreement is not consummated.

 

III.

 

APPOINTMENT OF CLASS COUNSEL

 

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

 

IV.

 

CLASS NOTICE AND CLAIM FORM

 

A.                                   Classmembers may be members of one or all Subclasses, and will be entitled to theirshare of the amount allocated to each applicable Subclass if they submit atimely and valid claim form.

 

B.                                     Withinten (10) days of entry of the Order for Preliminary Approval, Vicorp shallprovide the Claims Administrator and Class Counsel, in electronic form, adatabase 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 SettlementFund.  Vicorp shall cooperate and provideany additional information the Claims Administrator may reasonably request togive notice and administer the Settlement Fund.

 

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

 

V.

 

SETTLEMENT APPROVAL PROCEDURES

 

The Court, pursuant to California Rule of Court 1859(c), mustpreliminarily approve the settlement (the “Order for Preliminary Approval”), insubstantially 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.                                   Entryof the Order for Preliminary Approval.

 

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

 

C.                                     Entryof the Final Judgment and Order of Dismissal (“Judgment”) attached hereto asExhibit “C.”

 

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

 

VII.

 

EFFECT OF NON-APPROVAL OR FAILURE OF THEEFFECTIVE DATE TO OCCUR

 

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

 

VIII.

 

ATTORNEYS’ FEES AND REIMBURSEMENT OF COSTSAND EXPENSES

 

A.                                   Vicorpagrees that counsel for the Class are entitled to an award of attorneys’ fees,costs, and expenses.  Vicorp acknowledgesthat plaintiffs and the Class have a claim for attorneys’ fees, costs andexpenses pursuant to California Labor Code Sections 218.5 and 1194 andCalifornia 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.                                     Vicorpagrees 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 anundisputed and mathematically ascertainable part of a lump-sum judgmentrecovered on his or her behalf.  Vicorp understandsthat Class Counsel will apply to 

 

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the Court for an award of attorneys’ fees, costs, and expenses to bescheduled for determination at the hearing for final approval of thissettlement.  Vicorp will not oppose ClassCounsel’s application for attorneys’ fees of up to and including thirty-threeand one-third percent (33.33%) of the Settlement Fund, or Two Million, OneHundred Sixty-Six Thousand, Four Hundred and Fifty Dollars ($2,166,450) and forreimbursement of costs up to Thirty-Six Thousand Dollars ($36,000).

 

C.                                     ClassCounsel’s application for attorneys’ fees, costs, and expenses is not part ofthis Agreement and is to be considered separately from the Court’sconsideration of the fairness, reasonableness, adequacy, and good faith of thesettlement.  Any proceedings related toClass Counsel’s application for attorneys’ fees, costs, and/or expenses shallnot terminate or cancel the Agreement, or affect the finality of the Judgmentapproving the Agreement and the settlement of the O’Neill Action and theSordelet Action.  Any reduction by theCourt of the attorneys’ fees, costs, and expenses sought by Class Counsel willnot serve to enlarge the Settlement Fund, but will simply revert back to Vicorp.

 

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

 

IX.

 

PLAN OF ALLOCATION AND DISTRIBUTION OF THESETTLEMENT FUND

 

A.                                   TheSettlement Fund shall be allocated as follows:

 

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

 

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

 

2.                                       Ten ThousandDollars ($10,000) each to Class representatives Deanna O’Neill, VictoriaSordelet, and Frederick Trunik, as reasonable compensation in recognition oftheir time and effort in initiating and prosecuting the case against Vicorp, asmay be approved by the Court.  Thepayment to each Class representative is in addition to any amount each mayreceive as a member of the Class.

 

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

 

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

 

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

 

B.                                     Allocationof 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 ClaimsAdministrator, 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 NetDistributable 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 MealPeriod Subclass.

 

a.                                       23% of the NetDistributable Amount (the “Hourly Meal Period Subclass Payout”) will beallocated to the Hourly Meal Period Subclass.

 

b.                                      Each member ofthe Hourly Meal Period Subclass shall be eligible for that portion of theHourly Meal Period Subclass Payout calculated by the total number of weeksworked 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 MealPeriod Subclass from October 16, 1999, to January 31, 2005 (beforeany opt-outs).  The resulting fractionshall then be multiplied by the Hourly Meal Period Subclass Payout to determinethe amount to be paid to that person.

 

2.                                       The Hourly RestPeriod Subclass.

 

a.                                       7% of the NetDistributable Amount (the “Hourly Rest Period Subclass Payout”) will beallocated to the Hourly Rest Period Subclass.

 

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

 

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

 

3.                                       The BonusSubclass.

 

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

 

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

 

4.                                       TheMisclassification Subclass:

 

a.                                       57% of the NetDistributable Amount (the “Misclassification Subclass Payout”) will beallocated to the Misclassification Subclass as follows: 1) 40% to therestaurant general managers; 2) 

 

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

 

b.                                      Each restaurantmanager member of the Misclassification Subclass shall be eligible for thatportion of the Misclassification Subclass payout allocated to restaurantmanagers calculated by the total number of weeks worked by that member from May10, 2001, to January 31, 2005, divided by the total number of weeks workedby all restaurant managers from May 2001, to January 31, 2005 (before anyopt-outs).  The resulting fraction shallthen be multiplied by the Misclassification Subclass Payout allocated to therestaurant managers to determine the amount to be paid to that person.

 

c.                                       Each associatemanager member of the Misclassification Subclass shall be eligible for thatportion of the Misclassification Subclass payout allocated to associatemanagers calculated by the total number of weeks worked by that member from May10, 2001, to January 31, 2005, divided by the total number of weeks workedby all associate managers from May 10, 2001, to January 31, 2005 (beforeany opt-outs).  The resulting fractionshall then be multiplied by the Misclassification Subclass Payout allocated tothe associate managers to determine the amount to be paid to that person.

 

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d.                                      Each assistantmanager member of the Misclassification Subclass shall be eligible for thatportion of the Misclassification Subclass payout allocated to assistantmanagers calculated by the total number of weeks worked by that member from May10, 2001, to January 31, 2005, divided by the total number of weeks workedby all assistant managers from May 10, 2001, to January 31, 2005 (beforeany opt-outs).  The resulting fractionshall then be multiplied by the Misclassification Subclass Payout allocated tothe assistant managers to determine the amount to be paid to that person.

 

C.                                     Timefor Payment by Claims Administrator.

 

1.                                       The ClaimsAdministrator shall make the settlement payments described in ParagraphsIX(A)(l)-(4) as soon as practicable after the Effective Date and as checks arepresented for payment or other demand for payment properly is made, but nolater than five (5) business days after presentment or proper demand.

 

2.                                       The ClaimsAdministrator shall remit all payroll taxes deducted from each Allowed and paidClass Member Claim, along with appropriate documentation, to the applicabletaxing agencies in accordance with applicable laws and regulations.

 

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

 

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X.

 

REQUEST FOR EXCLUSION

 

A.                                   Noperson who has timely elected to be excluded from the Class, as provided for inthe Notice, shall share in the distribution of the Settlement Fund.

 

B.                                     Nolater than fourteen (14) days prior to the hearing for final approval as setforth in the Notice, the Claims Administrator shall provide Class Counsel andVicorp’s counsel with a declaration identifying those persons who have timelyelected to be excluded from the Class.

 

XI.

 

PROCESSING AND PAYMENT OF ALLOWED CLASS MEMBERCLAIMS

 

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

 

B.                                     EachClass Member who has timely submitted a Claim Form and who has not timelyrequested to be excluded from the Class, shall have an allowed Class memberclaim, in such amount as the Claims Administrator shall calculate (the “AllowedClass Member Claim”).

 

C.                                     Thecheck in payment of each Allowed Class Member Claim shall contain the followingendorsement which will document the release by every Class member of allReleased Claims against Vicorp.

 

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

 

D.                                    Counselshall work with the Claims Administrator to resolve any questions concerningthe weeks worked by any Class member and the amount of his or her Allowed ClassMember 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 provideClass Settlement counsel and Vicorp’s counsel with an accounting in an InterimReport.

 

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

 

XIII.

 

GENERAL RELEASE OF VICORP

 

A.                                   HourlyMeal Period Subclass.

 

In exchange for the consideration recited in this Agreement, allmembers of the Hourly Meal Period Subclass (excluding any who may have optedout), on behalf of themselves and on behalf of all who claim by or through themor in their stead, do hereby and forever release, acquit, discharge andcovenant not to sue Vicorp (which is defined to include its past, present andfuture 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, causesof action, suits, claims, liens, demands, damages, controversies andliabilities 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 theHourly 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 theclaims, actions or causes of action, or facts, which were alleged, or mighthave been alleged, by the Hourly Meal Period Subclass in the O’Neill Action dueto alleged failure to provide meal periods between 

 

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October 16, 1999, and January 31, 2005.  Such released claims include withoutlimitation, for the specified time period, all claims for violation of anystate or federal statute, regulation, rule or California Industrial WelfareCommission Wage Order concerning failure to provide meal periods and all claimsfor unpaid wages, damages, penalties, and payments of any other amounts due tosuch failure (including but not limited to California Labor Code Sections 201,202, 204, 226, 512, 1174, and 1194, California Industrial Welfare CommissionWage Order 5-1989, 5-1998, 5-2000, and 5-2001, as amended, and the Fair LaborStandards Act; unfair business practices under California Business and ProfessionsCode Section 17200, et seq.; claims for overtime relating to failure toprovide meal periods; penalties under California Labor Code Sections 226.7 and2699, and California Industrial Welfare Commission Wage Order 5-1989, 5-1998,5-2000, and 5-2001, as amended; waiting time penalties under California LaborCode Section 203; attorneys’ fees, costs, and expenses, and interest underCalifornia Labor Code Sections 218.5, 218.6, 1194, California Code of CivilProcedure Sections 1021.5 and 1032, and California Civil Code Sections 3287 and3289; claims for punitive or exemplary damages; and all other claims fordamages, penalties, restitution, attorneys’ fees, costs, expenses and interestrelating in any way to meal period violations). This release does not cover claims after January 31, 2005.

 

B.                                     HourlyRest Period Subclass.

 

In exchange for the consideration recited in this Agreement, allmembers of the Hourly Rest Period Subclass (excluding any who may have optedout), on behalf of themselves and on behalf of all who claim by or through themor in their stead, do hereby and forever release, acquit, discharge andcovenant not to sue Vicorp (which is defined to include its past, present andfuture 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 kindwhatsoever (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 Subclasshas, ever had, or hereafter may claim to have, against Vicorp which werealleged, or which arise out of or relate to the claims, actions or causes ofaction, or facts, which were alleged, or might have been alleged, by the HourlyRest Period Subclass in the O’Neill Action due to alleged failure to providerest periods between May 10, 2001, and January 31, 2005.  Such released claims include withoutlimitation, for the specified time period, all claims for violation of anystate or federal statute, regulation, rule or California Industrial WelfareCommission Wage Order concerning failure to provide rest periods and all claimsfor unpaid wages, damages, penalties, and payments of any other amounts due tosuch failure (including but not limited to California Labor Code Sections 201,202, 204, 226, 512, 1174, and 1194, California Industrial Welfare CommissionWage Order 5-1989, 5-1998, 5-2000, and 5-2001, as amended, and the Fair LaborStandards Act; unfair business practices under California Business andProfessions Code Section 17200, et seq.; claims for overtime relating tofailure to provide rest periods; penalties under California Labor Code Sections226.7 and 2699, and California Industrial Welfare Commission Wage Order 5-1989,5-1998, 5-2000, and 5-2001, as amended; waiting time penalties under CaliforniaLabor Code Section 203; attorneys’ fees, costs and interest underCalifornia Labor Code Sections 218.5, 218.6, 1194, California Code of CivilProcedure Sections 1021.5 and 1032, and California Civil Code Sections 3287 and3289; claims for punitive or exemplary damages; and all other claims fordamages, penalties, 

 

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

 

C.                                     BonusSubclass.

 

In exchange for the consideration recited in this Agreement, all membersof the Bonus Subclass (excluding any who may have opted out), on behalf ofthemselves 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 (basedupon any legal or equitable theory, whether contractual, common law, statutory,federal, state or otherwise) whether known or unknown, suspected, anticipatedor unanticipated, which the Bonus Subclass has, ever had, or hereafter mayclaim to have, against Vicorp which were alleged, or which arise out of orrelate to the claims, actions or causes of action, or facts, which werealleged, or might have been alleged, by the Bonus Subclass in the O’NeillAction due to alleged reductions in or deductions from bonuses due to storelosses 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, andlosses caused by negligence.  Suchreleased claims include without limitation, for the specified time period, allclaims for violation of any state or federal statute, regulation, rule orCalifornia Industrial Welfare Commission Wage Order concerning reductions in ordeductions from bonuses for 

 

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workers’ compensation expenses and all other losses and expenses beyondthe 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 Order5-1989, 5-1998, 5-2000, and 5-2001, as amended, and the Fair Labor StandardsAct; unfair business practices under California Business and Professions Code Section 17200,et seq.; penalties under California Labor Code Sections 2699 and CaliforniaIndustrial Welfare Commission Wage Order 5-1989, 5-1998, 5-2000, and 5-2001, asamended; waiting time penalties under California Labor Code Section 203;attorneys’ fees, costs, expenses, and interest under California Labor CodeSections 218.5, 218.6, 1194, California Code of Civil Procedure Sections 1021.5and 1032, and California Civil Code Sections 3287 and 3289; claims for punitiveor exemplary damages; and all other claims for damages, penalties, restitution,attorneys’ fees, costs, expenses and interest relating in any way to reductionsin or deductions from bonuses for workers’ compensation expenses and all otherlosses and expenses beyond the claimant’s control).  This release does not cover claims after January 31,2005.

 

D.                                    MisclassificationSubclass.

 

In exchange for the consideration recited in this Agreement, allmembers of the Misclassification Subclass (excluding any who may have optedout), on behalf of themselves and on behalf of all who claim by or through themor in their stead, do hereby and forever release, acquit, discharge andcovenant not to sue Vicorp (which is defined to include its past, present andfuture 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, controversiesand liabilities of any kind whatsoever (based upon any legal or equitabletheory, whether contractual, common law, statutory, federal, state orotherwise) whether known or unknown, suspected, anticipated or unanticipated,which the Misclassification Subclass has, ever had, or hereafter may claim tohave, against Vicorp which were alleged, or which arise out of or relate to theclaims, actions or causes of action, or facts, which were alleged, or mighthave been alleged, by the Misclassification Subclass in the Sordelet Action dueto alleged misclassification of their job status as exempt when, in fact, theywere entitled to overtime, and meal periods and rest periods, that otherwiseshould have been available to hourly non-exempt employees, between May 10,2001, and January 31, 2005.  Suchreleased claims include without limitation, for the specified time period, allclaims for violation of any state or federal statute, regulation, rule orCalifornia Industrial Welfare Commission Wage Order concerning failure to payovertime, and failure to provide meal periods and rest periods, and all claimsfor unpaid wages, damages, penalties, and payments of any other amounts due tosuch failures (including but not limited to California Labor Code Sections 201,202, 204, 226, 512, 1174, and 1194, California Industrial Welfare CommissionWage Order 5-1989, 5-1998, 5-2000, and 5-2001, as amended, and the Fair LaborStandards Act; unfair business practices under California Business andProfessions Code Section 17200, et seq.; penalties under California LaborCode Sections 226.7 and 2699, and California Industrial Welfare Commission WageOrder 5-1989, 5-1998, 5-2000, and 5-2001, as amended; waiting time penaltiesunder California Labor Code Section 203; attorneys’ fees, costs, expensesand interest under California Labor Code Sections 218.5, 218.6, 1194,California Code of Civil Procedure Sections 1021.5 and 1032, and CaliforniaCivil 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 toovertime, meal period, and rest period violations).  This release does not cover claims after January 31,2005.

 

E.                                      Waiverof 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 provisionsof section 1542 of the California Civil Code, which provides as follows:

 

“A general release does not extend to claims which the creditor doesnot 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 thedebtor.”

 

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

 

XIV.

 

ADDITIONAL TERMS AND CONDITIONS

 

A.                                   Settlementthe Result of Arms-Length Bargaining.

 

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

 

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

 

B.                                     Notices.

 

All notices, requests, demands and other communications required orpermitted to be given pursuant to this Agreement shall be in writing and shallbe 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.                                     NoAdmission of Liability.

 

The parties agree that the lawsuit was filed, prosecuted and resolvedin good faith following substantial formal and informal discovery, motionpractice, and arms-length bargaining, and is in the best interest of Plaintiffsand the Class members.  Nothing hereinshall constitute any admission of wrongdoing or liability by Vicorp.  Vicorp agrees that the Settlement Fund andthe other terms of the Agreement reflect a good faith settlement of the claimsasserted in this lawsuit, and were reached voluntarily after consultation withexperienced legal counsel.  The Agreementand the settlement and all acts performed or documents executed pursuant to orin furtherance of the Agreement or the settlement: (1) are not and shall not bedeemed to be and may not be used as an admission of, or evidence of anywrongdoing or liability on the part of Vicorp; and (ii) are not and shall notbe deemed to be and may not be used as an admission of, or evidence of anyfault or omission of Vicorp in any civil, criminal or administrative proceedingin 

 

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any court, administrative agency or other tribunal.  However, the Agreement may be used in suchproceedings as may be necessary to conclude the settlement or to enforce theAgreement or the Judgment, and Vicorp may file the Agreement and/or theJudgment in any action that may be brought against it to support a defense orcounterclaim based on principles of res judicata, collateral estoppel, release,good faith settlement, judgment bar or reduction or any other theory of claimpreclusion or issue preclusion or similar defense or counterclaim.  Vicorp has denied and continues to deny eachand all of the alleged claims.  Thesettlement is a compromise and shall not be construed as an admission ofliability at any time or for any purpose, under any circumstances, by theparties to this Agreement.  ThisAgreement and the settlement shall not be used to suggest an admission ofliability in any dispute between the parties that may now exist or that mayarise in the future with respect to any person or entity.  Neither this Agreement nor anything includedherein, nor any part of the negotiations in connection herewith, shallconstitute evidence with respect to any issue or dispute.

 

D.                                    Modificationby Writing Only.

 

This Agreement, and its terms, and Exhibits, may be modified or amendedonly in a writing signed by all counsel of record for the parties that will notbecome effective unless and until approved by the Court, or otherwise orderedby the Court.

 

E.                                      Representationsof Counsel.

 

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

 

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2.                                       Plaintiffs haveexpressly authorized their counsel to take all appropriate action required orpermitted to be taken pursuant to the Agreement to effectuate its terms.

 

3.                                       Each attorneyexecuting the Agreement or any of its Exhibits on behalf of any party heretohereby warrants that they have full authority to do so.

 

F.                                      FurtherCooperation.

 

The parties and their respective counsel of record shall proceeddiligently to prepare and execute all documents, to seek the necessary Courtapprovals, and to do all other things reasonably necessary or convenient toconclude the settlement as expeditiously as possible.

 

G.                                     Constructionand Interpretation.

 

This Agreement and the Exhibits “A” through “D” (the Notice, [Proposed]Order for Preliminary Approval, [Proposed] Final Judgment and Order ofDismissal and Claim Form and Request for Information attached hereto,constitute the entire agreement among the parties hereto and norepresentations, warranties or inducements have been made to any partyconcerning the Agreement or its Exhibits other than the representations,warranties and covenants contained and memorialized in such documents.  The parties explicitly recognize CaliforniaCivil Code Section 1625 and California Code of Civil Procedure Section 1856(a),which provide that a written agreement is to be construed according to itsterms and may not be varied or contradicted by extrinsic evidence.  This Agreement and all other documents shallbe construed each as a whole, and with reference to one another according totheir fair meaning and intent, and not strictly for or against any party,regardless of who drafted or who was principally responsible for drafting anydocument or part thereof.

 

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H.                                    GoverningLaw.

 

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

 

I.                                         Counterparts.

 

The Agreement may be executed in one or more telecopied counterpartswhich may be filed with the Court.  Allexecuted counterparts and each of them shall be deemed to be one and the sameinstrument.  A complete set of originalexecuted counterparts shall be filed with the Court, when available.

 

J.                                        BindingEffect.

 

This Agreement is binding upon and shall inure to the benefit of theparties to the settlement, and their respective attorneys, and past, presentand future subsidiaries, divisions, predecessors, successors, shareholders,officers, directors, employees, agents, trustee, representatives,administrators, fiduciaries, assigns, subrogees, executors, partners, parents,and privies.  Without limiting theforegoing, 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 shallbear its own attorneys’ fees, costs and expenses, taxable or otherwise,incurred by them or arising out of this litigation and shall not seekreimbursement thereof from any other party to this Agreement.

 

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L.                                      NoRetaliation.

 

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

 

M.                                 ContinuingJurisdiction.

 

The Court shall have continuing jurisdiction to construe, interpret andenforce this Agreement and the settlement, to supervise notices sent, theadministration and distribution of the settlement and the Settlement Fund, andto 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 |                                        |   |
| Deanna O’Neill                     |                                        | Its Chief Executive Officer |
|                                    |                                        |   |
| /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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