Sample Business Contracts


Employment Agreement - Compass Group USA Inc., Daka International Inc., Daka Inc. and Allen R. Maxwell

Employment Forms

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                              EMPLOYMENT AGREEMENT


         THIS EMPLOYMENT AGREEMENT (the "Agreement"), is made as of the 23rd day
of May, 1997 by and among COMPASS GROUP USA, INC. ("Compass US"), DAKA
INTERNATIONAL, INC., a Delaware corporation ("International") and DAKA, INC., a
Massachusetts corporation ("Daka" and, collectively with International, the
"Employer"), and ALLEN R. MAXWELL (the "Executive") (collectively defined and
referred to as the "Parties");

                                   WITNESSETH:

         WHEREAS, Compass Holdings, Inc. ("Compass Holdings"), the parent of
Compass US has been engaged in extensive negotiations to acquire the foodservice
business, contracts, customers and certain other assets of International and its
wholly owned subsidiary, Daka (collectively defined and referred to as the
"Business"); and

         WHEREAS, the Executive has served as the President of Daka and
International for more than eight years and is highly knowledgeable about the
Business and, in particular, the educational segment of the foodservice
industry; and

         WHEREAS, the Executive currently holds a significant number of shares
of stock and options to acquire shares of stock in International and, as such,
will directly and substantially benefit from the acquisition by Compass Holdings
of the Business; and

         WHEREAS, Compass Holdings will not acquire the Business without
engaging the services of the Executive pursuant to this Agreement and the
Executive's agreement to the covenant not to compete and confidentiality
provisions contained herein; and

         WHEREAS, the Employer desires to employ the Executive and the Executive
desires to be employed to provide services to the Employer, all on the terms and
subject to the conditions as hereinafter set forth;

         NOW, THEREFORE, in consideration of the premises and the mutual
covenants and obligations hereinafter set forth, the Parties agree as follows:

         1.       EMPLOYMENT. The Employer agrees to employ the Executive during
the Employment Term (as defined in Section 4) and the Executive hereby accepts
such employment and agrees to serve the Employer subject to the general
supervision and direction of the Board of Directors of the Employer and the
Chief Executive Officer of Compass US (the "Compass CEO").


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         2.       DUTIES. During the Employment Term, the Executive shall be
elected as president of Daka and shall perform the services and duties required
of such position, or such other services, duties and positions as the Board of
Directors of the Employer or the Compass CEO may from time to time designate
commensurate with the position of president, shall devote the Executive's full
time and best efforts to the business affairs of the Employer, and shall not
become engaged as an employee or otherwise in any other business or commercial
activities, PROVIDED that the Executive may, if approved by the Board of
Directors of the Employer or the Compass CEO, devote reasonable time and
attention to serving as a member of the Board of Directors of New International,
Inc. In addition the Executive shall be an officer and a member of senior
management of Compass US.

         3.       THE ACQUISITION. This Agreement is contingent upon the
acquisition (the "Acquisition") by Compass Holdings of International and Daka
under the terms of an Agreement and Plan of Merger by and among Compass Group
PLC, Compass Holdings, Compass Interim, Inc. and International (the "Acquisition
Agreement"). If the Acquisition does not occur, this Agreement shall be void and
unenforceable by either party. If the Acquisition does occur, this Agreement
shall be binding upon the Executive and the Employer pursuant to the terms of
this Agreement. Moreover, except as set forth in this Agreement, neither party
may cancel or terminate this Agreement prior to the Acquisition without the
express written consent of the other party, Compass Group PLC, Compass Holdings
and Compass Interim, Inc, it being expressly understood that the Employer,
Compass Group PLC, Compass Holdings, Compass Interim, Inc. and International are
relying upon this Agreement, in significant part, to complete the Acquisition.

         4.       EMPLOYMENT TERM. Subject to the prior termination of the
Executive pursuant to Section 7 below, the Executive shall be employed by
Compass US and the Employer for an initial term beginning on the Effective Time
of the Acquisition (as defined in the Acquisition Agreement) and continuing for
a period of approximately 27 months after the Effective Time and ending
September 30, 1999 (the "Initial Period"). Thereafter, such employment will be
for a period beginning on the day after the Initial Period and continuing for a
term which does not end until the Agreement is terminated pursuant to Section 7
below (the "Final Period"). The Executive's total term of employment with the
Employer during the Initial Period and the Final Period, if and as applicable,
is collectively defined and referred to under this Agreement as the "Employment
Term."

         5.       COMPENSATION.
                  ------------

                  a.       BASE COMPENSATION. During the Employment Term, the
         Employer will pay the Executive an annual base salary as compensation
         for the Executive's services hereunder of $280,000 (the "Annual Base
         Salary"), payable in biweekly installments, less applicable deductions
         required by law. The Annual Base Salary may be reviewed from time to
         time by the Employer and may be increased at the Employer's discretion.


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                  b.       COMPANY CAR. During the Employment Term and at the
         election of the Executive at the outset of this Agreement, the Employer
         shall grant the Executive an $800 monthly car allowance for use as the
         Executive may deem appropriate, payable by the Employer to the
         Executive in biweekly installments, less applicable deductions required
         by law.

                  c.       OTHER BENEFITS. The Employer will provide to the
         Executive those benefits customarily provided by Compass US to other
         Compass US officers holding similar positions, including vacation,
         pension, profit sharing and other retirement plans, and all group
         health, hospitalization and permanent disability plans or other
         employee welfare benefit plans.

                  d.       BONUS. For his services rendered during the Initial
         Term, the Executive will also be eligible to receive a bonus as
         outlined in Schedule A.

         6.       REIMBURSEMENT OF EXPENSES INCURRED IN PERFORMANCE OF
EMPLOYMENT. Upon submission of proper vouchers, the Employer shall pay or
reimburse the Executive for all normal and reasonable business expenses,
including travel expenses, incurred by the Executive during the Employment Term
in accordance with the Employer's policy then in effect concerning the same. The
Employer shall also reimburse the Executive for necessary and reasonable moving
expenses incurred by the Executive during the Employment Term in accordance with
the Employer's relocation policy in effect, in the event the Employer requests
that the Executive relocate during the Employment Term.

         7.       TERMINATION.
                  -----------

                  a.       The Employment Term shall terminate immediately upon 
         the occurrence of any of the following events: (i) immediately upon the
         voluntary retirement or death of the Executive; (ii) upon the effective
         date of Resignation by the Executive (as defined below); (iii) upon the
         sixtieth day following notice given by the Employer of Termination
         Without Cause (as defined below); or (iv) upon the close of business on
         the date the Employer gives the Executive notice of Termination for
         Just Cause (as defined below); or (v) upon the Permanent Disability of
         the Executive (as defined below).

                  b.       For the purposes of this Agreement:

                           (1) "Resignation by the Executive" shall mean any
                  voluntary termination or resignation by the Executive. During
                  the Initial Period, the Executive is required to give at least
                  180 days advance written notice of Resignation to the
                  Employer, and the Employer is entitled, upon receiving such
                  notice, to accept such Resignation any time prior to the
                  Resignation date proposed by the Executive. After the Initial
                  Period, such notice period shall


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                  be 60 days. The effective date of the Resignation shall be the
                  Resignation date proposed by the Executive, or such other
                  earlier date designated by the Employer.

                           (2) "Termination Without Cause" shall mean any
                  termination of the employment of the Executive by the Employer
                  for any reason other than termination due to the retirement or
                  death of the Executive, "Permanent Disability" or "Termination
                  for Just Cause".

                           (3) "Termination for Just Cause" shall mean
                  termination of the employment of the Executive as the result
                  of: (i) an act or acts by the Executive, or any omission by
                  the Executive, constituting a felony, and the Executive has
                  entered a guilty plea, a plea of nolo contendere, or
                  confession to or has been convicted of such felony; or (ii)
                  any act of fraud or dishonesty by the Executive in connection
                  with the Executive's employment with the Employer; or (iii)
                  the breach of any fiduciary duty by the Executive to the
                  Employer, including the duty of loyalty; or (iv) the breach of
                  any provision of this Agreement by the Executive; or (v) the
                  refusal of the Executive to follow specific lawful
                  instructions given by the Board of Directors of the Employer
                  or the Compass CEO.

                           (4) "Permanent Disability" shall mean the Executive
                  is unable, with or without a reasonable accommodation, to
                  perform the essential functions and duties of the Executive's
                  job with the Employer by reason of a physical or mental
                  disability, impairment or condition which has continued for
                  more than 180 consecutive days. The Executive agrees to submit
                  such medical evidence to the Employer regarding such
                  disability, impairment or condition as is reasonably requested
                  by the Employer.

                  c.       Except for the payment of any earned but unpaid
         salary and/or accrued bonus due at the time of termination of the
         Employment Term and the Executive's general right to elect certain
         coverage continuation under COBRA, and except for any payments which
         may be due as set forth below, the Executive shall not be entitled to
         receive any additional compensation and/or benefits of any kind from
         the Employer hereunder upon the termination of the Employment Term:

                           (1) If termination of the Employment Term is due to
                  the death of the Executive, the Executive's estate or legal
                  representative shall be paid the Executive's Compensation
                  Package (which shall be the sum of those amounts payable under
                  Sections 5a, 5b and 5c) in monthly installments for a period
                  of 12 months commencing immediately upon the death of the
                  Executive, less applicable deductions required by law.



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                           (2) If termination of the Employment Term occurs at
                  any time during the Initial Period due to Termination Without
                  Cause by the Employer, then provided the Executive complies
                  with and continues to comply with Section 8 of this Agreement
                  and enters into a mutually acceptable release of any and all
                  claims Executive has against the Employer, then the Executive
                  shall be paid severance equal to: (a) the Executive's
                  Compensation Package through the remainder of the Initial
                  Period, payable in the same manner and at the same time as the
                  Executive's Compensation Package was paid by the Employer
                  prior to Termination Without Cause, less applicable deductions
                  required by law; and (b) one and one-half times the amount of
                  the Executive's Compensation Package then in effect, payable
                  over an 18-month period beginning after the end of the Initial
                  Period in biweekly installments when payroll is normally
                  distributed, less applicable deductions required by law.

                           (3) If termination of the Employment Term occurs at
                  any time after the Initial Period due to Termination Without
                  Cause by the Employer, then provided the Executive complies
                  with and continues to comply with Section 8 of this Agreement
                  and enters into a mutually acceptable release of any and all
                  claims Executive has against the Employer, then the Executive
                  shall be paid severance equal to: one and one-half times the
                  amount of the Executive's Compensation Package then in effect,
                  payable over an 18-month period beginning after the date of
                  Termination Without Cause in biweekly installments when
                  payroll is normally distributed, less applicable deductions
                  required by law.

                           (4) Except as set forth herein, if the Executive
                  resigns his employment with the Employer, the Executive is not
                  entitled to any additional compensation or benefits from the
                  Employer. If, however, the Employer decides to substantially
                  and materially change the duties and responsibilities of the
                  Executive, whether or not such change would result in a
                  reduction in the Executive's Compensation Package, the
                  Executive shall have the option in lieu of such change of
                  responsibilities to resign prior to the effective date of such
                  change. In that case, the Executive shall be paid severance
                  equal to one and one-half times the Compensation Package then
                  in effect payable over an 18-month period beginning after the
                  date of the Executive's resignation, less applicable
                  deductions required by law, provided that the Executive
                  complies with and continues to comply with Section 8 of this
                  Agreement and enters into a mutually acceptable release of any
                  and all claims Executive has against the Employer. If the
                  Executive accepts the change of responsibilities, this
                  Agreement shall continue in effect.



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<PAGE>   6



         8.     PROTECTED INFORMATION; PROHIBITED SOLICITATION; NON-COMPETITION.
                ----------------------------------------------------------------

                  a.       The Executive acknowledges and agrees that all
         Confidential Information (as defined below), including this Agreement,
         that comes into the Executive's possession while an employee of the
         Employer, whether prepared by the Employer or others, is and shall
         remain the property of the Employer.

                           "Confidential Information" means: (1) all information
         regarding any Employer customer, including but not limited to customer
         lists, contracts, information, requirements, billing histories, needs,
         products or services provided by the Employer to such customers; or (2)
         all financial information concerning the Employer, including but not
         limited to financial statements, balance sheets, profit and loss
         statements, earnings, commissions and salaries paid to employees, sales
         data and projections, cost analyses and similar information; or (3) all
         sources and methods of supply to the Employer, including but not
         limited to contracts and similar information; or (4) all plans and
         projections for business opportunities for new or developing business
         of the Employer; or (5) all software, drawings, specifications, models
         and marketing techniques; or (6) all information relating the
         Employer's products, prices, costs, research and development
         activities, customers, product performance, financial data and
         operating results, personnel matters and other confidential processes,
         designs, patents, ideas, machinery, plans, know-how and trade secrets;
         or (7) any of the information described in subsections 1-6 that the
         Employer obtains from another party or entity and that the Employer
         treats or designates as confidential information, whether such
         information is owned or was developed by the Employer.

                  b.       The Executive acknowledges and agrees that during his
         employment with the Employer, the Executive shall not use any
         Confidential Information for any purpose other than to carry out
         assigned duties as an employee of the Employer. The Executive further
         acknowledges and agrees that:

                           (1) Upon termination of his employment with the
                  Employer for any reason, the Executive shall return and make
                  available to the Employer prior to the last date of his
                  employment the originals and all copies of any and all
                  documentary Confidential Information and any other Employer
                  reports, documents or data in his possession;

                           (2) With respect to Confidential Information which is
                  not a trade secret under applicable law, the Executive shall
                  not, either during or within 5 years after his employment with
                  the Employer, misappropriate, use or disclose to anyone any
                  such Confidential Information, except to the extent that such
                  disclosure is required by law or court order or is authorized
                  by written Employer policy or in writing by the Board of
                  Directors of the Employer;


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                           (3) With respect to Confidential Information which is
                  a trade secret under applicable law, the Executive shall not,
                  either during or within 5 years after his employment with the
                  Employer, misappropriate, use or disclose to anyone any such
                  Confidential Information, except to the extent that such
                  disclosure is authorized by written Employer policy or in
                  writing by the Board of Directors of the Employer; and

                           (4) During his employment with the Employer, the
                  Executive shall have an affirmative duty to preserve the
                  confidentiality and safe keeping of all Employer documents and
                  Confidential Information, however stored or maintained.

                  c.       The Executive hereby agrees that for a period of
         three years following his last day of employment by the Employer, the
         Executive shall not, without the written consent of the Employer,
         knowingly solicit or hire for employment or as an independent
         contractor any other employee of the Employer or any employee of an
         affiliate of the Employer, or knowingly solicit, entice or persuade any
         such employee to leave the services of the Employer or such affiliate
         for any reason.

                  d.       The Executive further agrees that, in order to avoid
         impairment of the goodwill transferred by International, Daka and the
         Executive pursuant to the Acquisition Agreement, the Executive will
         not:

                           (1) For a period of 10 years following the
                  Executive's last day of employment by the Employer (regardless
                  of the reason for the end of the employment relationship),
                  engage in any Competitive Activity (as defined below) within
                  the Territory (as defined below) with any customer of the
                  Employer or International with whom the Employer or
                  International have a contract or agreement to furnish
                  foodservices or vending products as of the Effective Time of
                  the Acquisition (as defined in the Acquisition Agreement);
                  and/or

                           (2) For a minimum period of six and a half years and
                  for a maximum period equal to the amount of time during which
                  the Executive is entitled to receive severance pay from the
                  Employer pursuant to Section 7.c above plus five additional
                  calendar years, whichever is greater, following the
                  Executive's last day of employment by the Employer (regardless
                  of the reason for the end of the employment relationship),
                  engage in any Competitive Activity (as defined below) within
                  the Territory with any customer of the Employer with whom the
                  Employer has a contract or agreement to furnish foodservices
                  or vending products at the time of the end of the Executive's
                  employment by the Employer; and/or



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                           (3) For a period of 18 months or the period equal to
                  the amount of time during which the Executive is entitled to
                  receive severance pay from the Employer pursuant to Section
                  7.c. above, whichever is greater, following the Executive's
                  last day of employment by the Employer (regardless of the
                  reason for the end of the employment relationship), engage in
                  any Competitive Activity (as defined below) within the
                  Territory; and/or

                           (4) For a period of 18 months or the period equal to
                  the amount of time during which the Executive is entitled to
                  receive severance pay from the Employer pursuant to Section
                  7.c. above, whichever is greater, following the Executive's
                  last day of employment by the Employer (regardless of the
                  reason for the end of the employment relationship), enter into
                  any relationship whatsoever, alone or in a partnership, or as
                  an officer, director (other than as a member of the board of
                  directors of New International, Inc.), employee, stockholder
                  (beneficially owning the stock or options to acquire stock
                  totaling more than five percent of the outstanding shares) of
                  any corporation, or entity, or otherwise acquire or agree to
                  acquire a significant present or future equity or other
                  proprietorship interests, whether as a stockholder, partner,
                  proprietor, or otherwise, with any enterprise, business or
                  division thereof, which is engaged in Competitive Activity
                  with the Employer within the Territory.

                  In construing Section 8d(3) and 8d(4), the reference to 18
         months shall be changed to 60 months, but only for those individual
         food service accounts with an annual managed volume greater than
         $1,000,000 for any 12 month period. The phrase "annual managed volume"
         for an account shall mean the sum of gross sales or revenues at that
         location plus any customer subsidies or other payments.

                  "Competitive Activity" means providing contract foodservice
         and vending business to customers and in a manner like that engaged in
         by the Employer during the Employment Term.

                   "Territory" means the geographic territory in which Executive
         has conducted or supervised business for the Employer during the
         Employment Term, which includes the states of New York, New Jersey,
         Connecticut, Florida, Wisconsin and California and the Commonwealths of
         Massachusetts and Virginia.

                  The Executive further agrees that, except with the express
         written consent of the Board of Directors of the Employer or the
         Compass CEO, the Executive will not engage in any Competitive Activity
         individually or with any entity or individual other than the Employer
         during his employment by the Employer.

                  e.       The Parties agree that the running of the period of 
         the confidentiality agreement and covenant not to compete set forth
         above with respect to the Executive


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         shall be suspended during any period of time that the Executive is in
         violation of any provision of the confidentiality agreement and/or
         covenant not to compete or any period of time required for arbitration
         or litigation to enforce any such provisions. Moreover, the Parties
         agree that the provisions of such confidentiality agreement and
         covenant not to compete shall continue in force and in effect
         throughout the period of such suspension, if any.

                  f.       The Executive acknowledges and agrees that the
         restrictions placed upon him by this Section 8 are reasonable, given
         the nature of Executive's position, and that there is sufficient
         consideration promised Executive pursuant to this Agreement and the
         Acquisition Agreement to support these restrictions. Specifically, the
         Executive acknowledges that the length of the covenant not to compete
         is reasonable and that the definitions of "Confidential Information",
         "Competitive Activity" and "Territory" are reasonable.

                  g.       The Executive acknowledges that all of the provisions
         of this Section 8 are fair and necessary to protect the interest of the
         Employer. Accordingly, the Executive agrees not to contest the validity
         or enforceability of this Section of the Agreement and agrees that if
         any court should deem any provision of this section to be
         unenforceable, the remaining provisions will nonetheless be enforceable
         according to their terms. Further, if any provision or subsection is
         held to be over broad as written, the Executive agrees that a court
         should view the above provisions and subsections as separable and
         uphold those separable provisions and subsections deemed to be
         reasonable.

                  h.       The Parties agree that the restrictions of this
         Section 8 shall survive the Executive's last day of employment by the
         Employer and shall be in addition to any restrictions imposed upon the
         Executive by statute or at common law. The Parties further acknowledge
         and agree that the restrictions of this Section 8 shall continue to be
         enforceable regardless of whether there is a subsequent dispute between
         the Parties concerning any alleged breach of this Agreement.

         9.       CONSIDERATION. Executive acknowledges that the consideration
to Executive in this Agreement is valuable consideration for the Executive's
covenants and obligations in this Agreement and is in addition to any
consideration currently due to Executive from the Employer.

         10.      INJUNCTIVE AND OTHER RELIEF. The Executive hereby expressly
acknowledges that any breach or threatened breach by the Executive of any of the
terms set forth in Sections 2 and 8 of this Agreement may result in significant
and continuing injury to the Employer, the monetary value of which may be
impossible to establish. Accordingly, the Parties agree that in the event of any
breach of Section 8 of this Agreement by the Executive, the Employer may pursue
actual damages from the Executive, or in its discretion, may be entitled to seek
an injunction, without bond, restraining any breach or


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<PAGE>   10



threatened breach of Sections 2 or 8 of this Agreement, and costs and attorneys'
fees relating to any such proceedings or any other legal action to enforce those
sections of the Agreement, but nothing herein shall be construed as preventing
the Employer from pursuing other remedies available to it for such breach or
threatened breach. Moreover, in the event the Executive breaches Section 8 of
this Agreement or challenges the duration, scope or enforceability of Section 8,
and to the extent that the Employer is paying severance to the Executive, the
Employer's obligation to continue making any severance payment shall cease and
the Employer shall be entitled to recover of the Executive any severance payment
previously made to the Executive by the Employer. The provisions of Section 8
and this Section 10 shall survive the Employment Term.

         11.      PARTIES BENEFITED; ASSIGNMENTS. This Agreement shall be 
binding upon the Executive, the heirs and personal representative or
representatives of the Executive and upon the Employer and its successors and
assigns. Neither this Agreement nor any rights or obligations hereunder may be
assigned by the Executive.

         12.      NOTICES. Any notice required or permitted by this Agreement 
shall be in writing, sent by personal delivery, or by registered or certified
mail, return receipt requested, addressed to the Chief Executive Officer of
Compass Holdings and/or Compass Group USA, Inc. and the Employer at its then
principal office, or to the Executive at the Executive's then current work or
home address, as the case may be, or to such other address or addressees as any
party hereto may from time to time specify in writing for the purpose of a
notice given to the other Parties in compliance with this Section 12. Notices
shall be deemed given when received.

         13.      GOVERNING LAW AND VENUE. This Agreement takes effect on the
date provided in Section 18 upon acceptance and execution by the Employer in
North Carolina and shall be governed by, construed and enforced in accordance
with the laws of the State of North Carolina without regard to conflict of law
principles.

         14.      ARBITRATION OF DISPUTES. Except for claims barred by the
applicable statute of limitations and except for claims for injunctive relief
which the Employer may elect to pursue in state or federal court, the Executive
and Employer agree that any and all disputes between them, and any claim by
either party that cannot be amicably settled, shall be determined solely and
exclusively by arbitration in accordance with the Employment Dispute Resolution
Rules then pertaining of the American Arbitration Association, or any successor
thereto, at its office nearest Employer's principal place of business, unless
the Parties otherwise agree in writing. The arbitration shall be conducted by
three arbitrators. Judgment upon an award by the majority of the arbitrators
shall be binding, and shall be entered in a court of competent jurisdiction.

         15.      RELEASE. Except for the express obligations of the Employer
under this Agreement, Executive hereby releases and forever discharges the
Employer, its present or former parents, subsidiaries and affiliates, and their
respective officers, employees, agents,


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directors, successors and assigns from all claims or actions of any kind
available to the Executive. This general release and waiver shall further
include, but not be limited to, all claims or actions arising out of, or
relating in any way to, the Executive's employment and severance of Executive's
employment with the Employer, including any claim for compensation or employee
benefits, any non-pending claim for workers' compensation (Executive is
acknowledging that Executive is currently able to work without any physical or
mental limitations, except for any pending workers' compensation claim filed by
Executive), or any claim of discrimination under any state, federal, or local
law or regulation, or any claim for wrongful termination, breach of contract,
breach of covenant of good faith and fair dealing, negligent or intentional
infliction of emotional distress, misrepresentation, or defamation. If the
Executive files, maintains, or participates in any claim or action, in any court
or agency, based wholly or partially upon a claim or action Executive has
released or waived under this Agreement, Executive agrees to pay all expenses
and costs (including reasonable attorneys' fees) incurred by the Employer and
those associated with the Employer in defense of such claim or action.

         16.      MISCELLANEOUS. This Agreement contains the entire agreement of
the Parties relating to the subject matter hereof. This Agreement supersedes any
prior written or oral agreements or understandings between the Parties relating
to the employment of Executive, the compensation or benefits promised to
Executive or any other agreement or understanding relating in any way to the
subject matter in this Agreement. No modification or amendment of this Agreement
shall be valid unless in writing and signed by or on behalf of the Parties
hereto. A waiver of the breach of any term or condition of this Agreement shall
not be deemed to constitute a waiver of any subsequent breach of the same or any
other term or condition. This Agreement is intended to be performed in
accordance with, and only to the extent permitted by, all applicable laws,
ordinances, rules and regulations. If any person or circumstance, shall, for any
reason and to any extent, be held invalid or unenforceable, such invalidity and
unenforceability shall not affect the remaining provisions hereof and the
application of such provision to other persons or circumstances, all of which
shall be enforced to the greatest extent permitted by law. The compensation
provided to the Executive pursuant to this Agreement shall be subject to any
withholdings and deductions required by any applicable tax or other laws. Any
amounts payable to the Executive hereunder after the death of the Executive
shall be paid to the Executive's estate or legal representative. The headings in
this Agreement are inserted to convenience of reference only and shall not be
part of or control or affect the meaning of any provision hereof.

         17.      TERMINATION OF PRIOR CONTRACTS. The Executive hereby
acknowledges and agrees that all prior and/or existing employment contracts or
other agreements between the Employer and the Executive other than this
Agreement, whether oral or written, including an agreement dated as of October
1, 1996, as amended, are hereby terminated as of the effective time of the
Acquisition, and the Executive acknowledges that he is not entitled to any
wages, pay, compensation, consideration or benefits of any kind from the
Employer, except as set forth herein.



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         18.      EFFECTIVENESS OF CONTRACT. This Agreement has been executed by
the Parties in contemplation of and contingent upon the completion of the
Acquisition under the terms of the Acquisition Agreement. The provisions of
Section 8 shall become effective immediately, and the balance of the Agreement
shall automatically become effective, without any further action of the
undersigned required, upon the Effective Time of the Acquisition (as defined in
the Acquisition Agreement). In the event that the Acquisition does not occur or
the Acquisition Agreement is terminated for any reason, this Agreement shall
have no force or effect and shall automatically be extinguished and terminated
as a result of the termination of the Acquisition Agreement.

         IN WITNESS WHEREOF the Parties have duly executed and delivered this
Agreement as of the day and year first above written.

                                    EMPLOYER:

                                    DAKA INTERNATIONAL, INC.

                                    By:  /s/ William H. Baumhauer
                                         ---------------------------------------
                                         Chief Executive Officer


                                    DAKA, INC.

                                    By:  /s/ Allen R. Maxwell
                                         ---------------------------------------
                                         Chief Executive Officer


                                    COMPASS GROUP USA, INC.

                                    By:  /s/ Michael J. Bailey
                                         ---------------------------------------
                                         Chief Executive Officer


                                    EXECUTIVE:

                                    /s/ Allen R. Maxwell
                                    --------------------------------------(SEAL)
                                    Allen R. Maxwell


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<PAGE>   13




                                   SCHEDULE A

                              COMPUTATION OF BONUS
                                     FOR THE
                                 INITIAL PERIOD


         (1)      The Executive will not be eligible to receive a bonus for 
Fiscal Year 1997 which ends September 30, 1997.

         (2)      On or within ninety 90 days of the end of the Fiscal Year (as
defined below) ending in 1998 and in 1999 during the Employment Term, the
Employer will make available to the Executive an annual bonus as additional
incentive compensation (the "Annual Bonus") in the amount of 50% of the
Executive's Annual Base Salary, the eligibility criteria for which shall be
mutually developed with the Executive subject to the final discretion of the
Compass CEO (the "Bonus Amount"). Such determination will be based in part on
the Executive meeting certain financial and other targets as may be set by the
Compass CEO.

         (3)      Assuming that an Annual Bonus is awarded to the Executive by
the Employer for a particular Fiscal Year, the Executive shall be entitled to
receive 50% of the Bonus Amount in a lump sum cash payment, less applicable
deductions required by law, payable by the Employer to the Executive on or
within 90 days of the end of the applicable Fiscal Year (as defined below).

         (4)      Assuming that an Annual Bonus is awarded to the Executive by
the Employer for a particular Fiscal Year, the Executive shall be entitled to
receive the remaining 50% of the Bonus Amount (the "Deferred Bonus") as follows:

                  (a) In the event that the Executive remains employed by the
         Employer through a minimum of one calendar year following the date the
         applicable Annual Bonus was awarded to the Executive by the Employer,
         the Deferred Bonus shall be paid by the delivery to the Executive of an
         amount of Compass Group PLC stock with a value based upon the midpoint
         between the closing price of such shares on each of the first and last
         day of the applicable Fiscal Year [as reported for Compass Group PLC
         ADR's trading on the New York Stock Exchange (the "NYSE") or if not
         actively traded on the NYSE, as reported on the London Stock Exchange]
         and using the weighted average "Late New York Trading" exchange rate
         for the fiscal year (as reported in The Wall Street Journal) on each
         measurement date. The actual amount paid shall be the share equivalent
         of twice the dollar amount of the Deferred Bonus, less applicable
         deductions required by law and shall be delivered by the Employer to
         the Executive on or within 90 calendar days following the end of the


                                       13

<PAGE>   14



         Fiscal Year following the Fiscal Year for which the applicable Annual
         Bonus was awarded to the Executive.

                  (b) In the event that the Executive does not remain employed
         by the Employer through a minimum of one calendar year following the
         date the applicable Annual Bonus was awarded to the Executive because
         of death or disability, the Deferred Bonus shall be paid to the
         Executive in a lump sum cash payment without interest, less applicable
         deductions required by law, payable by the Employer to the Executive on
         or within 90 calendar days following the date of death or disability.
         If the Executive is not employed by the Employer for such one year
         period, the Deferred Bonus will be subject to forfeiture at the
         Employer's discretion.

         (5)      In order for the Executive to be eligible to receive an Annual
Bonus, the Executive must be employed by the Employer on the date such Annual
Bonus is to be awarded to the Executive by the Employer as set forth above.

         If the Executive is Terminated without cause, and at the time of his
termination, he was meeting all performance goals and it is clear that the
Executive otherwise would be entitled to an Annual Bonus hereunder, then he will
receive a prorated cash Annual Bonus based upon the number of whole months
actually worked.

         "Fiscal Year" means the end of each 12-month Employer accounting period
         ending on or about the end of September of each calendar year.


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