INDEMNIFICATION
AGREEMENT
INDEMNIFICATION AGREEMENT , made and executed effective as
of the 20th day of October, 2006, by and between CARMIKE CINEMAS,
INC., a Delaware corporation (the “Company”), and Kevin
D. Katari, an individual resident of California (the
“Indemnitee”).
WHEREAS, the
Company is aware that, in order to induce highly competent persons
to serve the Company as directors or officers or in other
capacities, the Company must provide such persons with adequate
protection through insurance and indemnification against inordinate
risks of claims and actions against them arising out of their
service to and activities on behalf of the Company;
WHEREAS, the
Company recognizes that the increasing difficulty in obtaining
directors’ and officers’ liability insurance, the
increases in the cost of such insurance and the general reductions
in the coverage of such insurance have increased the difficulty of
attracting and retaining such persons;
WHEREAS, the Board
of Directors of the Company has determined that it is essential to
the best interests of the Company’s stockholders that the
Company act to assure such persons that there will be increased
certainty of such protection in the future;
WHEREAS, it is
reasonable, prudent and necessary for the Company contractually to
obligate itself to indemnify such persons to the fullest extent
permitted by applicable law so that they will continue to serve the
Company free from undue concern that they will not be so
indemnified; and
WHEREAS, the
Indemnitee is willing to serve, continue to serve, and take on
additional service for or on behalf of the Company on the condition
that he/she be so indemnified.
NOW, THEREFORE, in
consideration of the premises and the mutual promises and covenants
contained herein, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the
Company and Indemnitee do hereby agree as follows:
1.
Service by the Indemnitee . The Indemnitee agrees to serve
and/or continue to serve as a director or officer of the Company
faithfully and will discharge his/her duties and responsibilities
to the best of his/her ability so long as the Indemnitee is duly
elected or qualified in accordance with the provisions of the
Amended and Restated Certificate of Incorporation, as amended (the
“Certificate”), and Amended and Restated By-laws, as
amended (the “By-laws”) of the Company and the General
Corporation Law of the State of Delaware, as amended (the
“DGCL”), or until his/her earlier death, resignation or
removal. The Indemnitee may at any time and for any reason resign
from such position (subject to any other contractual obligation or
other obligation imposed by operation by law), in which event the
Company shall have no obligation under this Agreement to continue
the Indemnitee in any such position. Nothing in this Agreement
shall confer upon the Indemnitee the right to continue in the
employ of the Company or as a director of the Company or affect the
right of the Company to terminate the Indemnitee’s
employment at
any time in the sole discretion of the Company, with or without
cause, subject to any contract rights of the Indemnitee created or
existing otherwise than under this Agreement.
2.
Indemnification . The Company shall indemnify the Indemnitee
against all Expenses (as defined below), judgments, fines and
amounts paid in settlement actually and reasonably incurred by the
Indemnitee as provided in this Agreement to the fullest extent
permitted by the Certificate, By-laws and DGCL or other applicable
law in effect on the date of this Agreement and to any greater
extent that applicable law may in the future from time to time
permit. Without diminishing the scope of the indemnification
provided by this Section 2, the rights of indemnification of
the Indemnitee provided hereunder shall include, but shall not be
limited to, those rights hereinafter set forth, except that no
indemnification shall be paid to the Indemnitee:
(a) on account of
any suit in which judgment is rendered against the Indemnitee for
disgorgement of profits made from the purchase or sale by the
Indemnitee of securities of the Company pursuant to the provisions
of Section 16(b) of the Securities Exchange Act of 1934, as amended
(the “Act”), or similar provisions of any federal,
state or local statutory law;
(b) on account of
conduct of the Indemnitee which is finally adjudged by a court of
competent jurisdiction to have been knowingly fraudulent or to
constitute willful misconduct;
(c) in any
circumstance where such indemnification is expressly prohibited by
applicable law;
(d) with respect
to liability for which payment is actually made to the Indemnitee
under a valid and collectible insurance policy or under a valid and
enforceable indemnity clause, By-law or agreement (other than this
Agreement), except in respect of any liability in excess of payment
under such insurance, clause, By-law or agreement;
(e) if a final
decision by a court having jurisdiction in the matter shall
determine that such indemnification is not lawful (and, in this
respect, both the Company and the Indemnitee have been advised that
it is the position of the Securities and Exchange Commission that
indemnification for liabilities arising under the federal
securities laws is against public policy and is, therefore,
unenforceable, and that claims for indemnification should be
submitted to the appropriate court for adjudication); or
(f) in connection
with any proceeding by the Indemnitee against the Company or its
directors, officers, employees or other Indemnitees,
(i) unless such indemnification is expressly required to be
made by law, (ii) unless the proceeding was authorized by the
Board of Directors of the Company, (iii) unless such
indemnification is provided by the Company, in its sole discretion,
pursuant to the powers vested in the Company under applicable law,
or (iv) except as provided in Sections 11 and 13
hereof.
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3.
Actions or Proceedings Other Than an Action by or in the Right
of the Company . The Indemnitee shall be entitled to the
indemnification rights provided in this Section 3 if the
Indemnitee was or is a party or is threatened to be a party to any
threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative in nature,
other than an action by or in the right of the Company, by reason
of the fact that the Indemnitee is or was a director, officer,
employee, agent or fiduciary of the Company, or is or was serving
at the request of the Company as a director, officer, employee,
agent or fiduciary of any other entity, including, but not limited
to, another corporation, partnership, limited liability company,
employee benefit plan, joint venture, trust or other enterprise, or
by reason of any act or omission by him/her in such capacity.
Pursuant to this Section 3, the Indemnitee shall be
indemnified against all Expenses, judgments, penalties (including
excise and similar taxes), fines and amounts paid in settlement
which were actually and reasonably incurred by the Indemnitee in
connection with such action, suit or proceeding (including, but not
limited to, the investigation, defense or appeal thereof), if the
Indemnitee acted in good faith and in a manner the Indemnitee
reasonably believed to be in or not opposed to the best interests
of the Company, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his/her conduct was
unlawful.
4.
Actions by or in the Right of the Company . The Indemnitee
shall be entitled to the indemnification rights provided in this
Section 4 if the Indemnitee was or is a party or is threatened
to be made a party to any threatened, pending or completed action,
suit or proceeding brought by or in the right of the Company to
procure a judgment in its favor by reason of the fact that the
Indemnitee is or was a director, officer, employee, agent or
fiduciary of the Company, or is or was serving at the request of
the Company as a director, officer, employee, agent or fiduciary of
another entity, including, but not limited to, another corporation,
partnership, limited liability company, employee benefit plan,
joint venture, trust or other enterprise, or by reason of any act
or omission by him/her in any such capacity. Pursuant to this
Section 4, the Indemnitee shall be indemnified against all
Expenses actually and reasonably incurred by him/her in connection
with the defense or settlement of such action, suit or proceeding
(including, but not limited to the investigation, defense or appeal
thereof), if the Indemnitee acted in good faith and in a manner the
Indemnitee reasonably believed to be in or not opposed to the best
interests of the Company; provided however, that no such
indemnification shall be made in respect of any claim, issue, or
matter as to which the Indemnitee shall have been adjudged to be
liable to the Company, unless and only to the extent that the Court
of Chancery of the State of Delaware or the court in which such
action, suit or proceeding was brought shall determine upon
application that, despite the adjudication of liability but in view
of all the circumstances of the case, the Indemnitee is fairly and
reasonably entitled to be indemnified against such Expenses
actually and reasonably incurred by him/her which such court shall
deem proper.
5. Good
Faith Definition . For purposes of this Agreement, the
Indemnitee shall be deemed to have acted in good faith and in a
manner the Indemnitee reasonably believed to be in or not opposed
to the best interests of the Company, or, with respect to any
criminal action or proceeding to have had no reasonable cause to
believe the Indemnitee’s conduct was unlawful, if such action
was based on (i) the records or books of the accounts of the
Company or other enterprise, including financial statements;
(ii) information supplied to the Indemnitee by the officers of
the Company or other enterprise in the course of their duties;
(iii) the advice of legal counsel for the Company or other
enterprise; or (iv) information or records given in reports
made
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to the Company
or other enterprise by an independent certified public accountant
or by an appraiser or other expert selected with reasonable care by
the Company or other enterprise.
6.
Indemnification for Expenses of Successful Party .
Notwithstanding the other provisions of this Agreement, to the
extent that the Indemnitee has served on behalf of the Company as a
witness or other participant in any class action or proceeding, or
has been successful, on the merits or otherwise, in defense of any
action, suit or proceeding referred to in Section 3 and 4
hereof, or in defense of any claim, issue or matter therein,
including, but not limited to, the dismissal of any action without
prejudice, the Indemnitee shall be indemnified against all Expenses
actually and reasonably incurred by the Indemnitee in connection
therewith, regardless of whether or not the Indemnitee has met the
applicable standards of Section 3 or 4 and without any
determination pursuant to Section 8.
7.
Partial Indemnification . If the Indemnitee is entitled
under any provision of this Agreement to indemnification by the
Company for some or a portion of the Expenses, judgments, fines and
amounts paid in settlement actually and reasonably incurred by the
Indemnitee in connection with the investigation, defense, appeal or
settlement of such suit, action, investigation or proceeding
described in Section 3 or 4 hereof, but is not entitled to
indemnification for the total amount thereof, the Company shall
nevertheless indemnify the Indemnitee for the portion of such
Expenses, judgments, penalties, fines and amounts paid in
settlement actually and reasonably incurred by the Indemnitee to
which the Indemnitee is entitled.
8.
Procedure for Determination of Entitlement to
Indemnification . (a) To obtain indemnification under this
Agreement, Indemnitee shall submit to the Company a written
request, including documentation and information which is
reasonably available to Indemnitee and is reasonably necessary to
determine whether and to what extent Indemnitee is entitled to
indemnification. The Secretary of the Company shall, promptly upon
receipt of a request for indemnification, advise the Board of
Directors in writing that Indemnitee has requested indemnification.
Any Expenses incurred by the Indemnitee in connection with the
Indemnitee’s request for indemnification hereunder shall be
borne by the Company. The Company hereby indemnifies and agrees to
hold the Indemnitee harmless for any Expenses incurred by
Indemnitee under the immediately preceding sentence irrespective of
the outcome of the determination of the Indemnitee’s
entitlement to indemnification.
(b) Upon
written request by the Indemnitee for indemnification pursuant to
Section 3 or 4 hereof, the entitlement of the Indemnitee to
indemnification pursuant to the terms of this Agreement shall be
determined by the following person or persons, who shall be
empowered to make such determination: (i) if a Change in
Control (as hereinafter defined) shall have occurred, by
Independent Counsel (as hereinafter defined) (unless the Indemnitee
shall request in writing that such determination be made by the
Board of Directors (or a committee thereof) in the manner provided
for in clause (ii) of this Section 8(b)) in a written
opinion to the Board of Directors, a copy of which shall be
delivered to the Indemnitee; or (ii) if a Change in Control
shall not have occurred, (A)(1) by the Board of Directors of the
Company, by a majority vote of Disinterested Directors (as
hereinafter defined) even though less than a quorum, or (2) by
a committee of Disinterested Directors designated by majority vote
of Disinterested Directors, even though less than a quorum, or
(B) if there are no such Disinterested Directors or, even
if
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there are such
Disinterested Directors, if the Board of Directors, by the majority
vote of Disinterested Directors, so directs, by Independent Counsel
in a written opinion to the Board of Directors, a copy of which
shall be delivered to the Indemnitee. Such Independent Counsel
shall be selected by the Board of Directors and approved by the
Indemnitee. Upon failure of the Board of Directors to so select, or
upon failure of the Indemnitee to so approve, such Independent
Counsel shall be selected by the Chancellor of the State of
Delaware or such other person as the Chancellor shall designate to
make such selection. Such determination of entitlement to
indemnification shall be made not later than 45 days after
receipt by the Company of a written request for indemnification. If
the person making such determination shall determine that the
Indemnitee is entitled to indemnification as to part (but not all)
of the application for indemnification, such person shall
reasonably prorate such part of indemnification among such claims,
issues or matters. If it is so determined that Indemnitee is
entitled to indemnification, payment to Indemnitee shall be made
within ten days after such determination.
9.
Presumptions and Effect of Certain Proceedings . (a) In
making a determination with respect to entitlement to
indemnification, the Indemnitee shall be presumed to be entitled to
indemnification hereunder and the Company shall have the burden of
proof in the making of any determination contrary to such
presumption.
(b) If the
Board of Directors, or such other person or persons empowered
pursuant to Section 8 to make the determination of whether
Indemnitee is entitled to indemnification, shall have failed to
make a determination as to entitlement to indemnification within
45 days after receipt by the Company of such request, the
requisite d
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