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EXHIBIT 10.41
INDEMNIFICATION AGREEMENT
AGREEMENT
This Agreement is made this ___ day of May, 2000, by and between NRG
Energy, Inc., a Delaware corporation (the "Company"), and _____________
("Director").
WITNESSETH:
WHEREAS, as a result of the Company's proposed initial public offering
of its common stock, the Company expects to experience increasing cost in
obtaining directors' and officers' liability insurance, including significantly
higher premiums for such insurance than have historically been charged the
Company and possible reductions in the coverage of such insurance; and
WHEREAS, the Company has been advised that there can be no assurance
that such insurance will continue to be available to the Company and Director,
and believes that it is possible that the cost of such insurance, if obtainable,
may not be acceptable to the Company; and
WHEREAS, Director is unwilling to serve, or continue to serve, the
Company as a director without assurances that adequate liability insurance,
indemnification or a combination thereof is, and will continue to be, provided;
and
WHEREAS, the Company, in order to induce Director to continue to serve
the Company, has agreed to provide Director with the benefits contemplated by
this Agreement which benefits are intended to supplement or replace, if and to
the extent necessary to make the Director whole, the Company's existing
directors' and officers' liability insurance; and
WHEREAS, as a result of the provision of such benefits Director has
agreed to serve or to continue to serve as a director of the Company;
NOW, THEREFORE, in consideration of the promises, conditions,
representations and warranties set forth herein, including the Director's
continued service to the Company, the Company and Director hereby agree as
follows:
1. Definitions. The following terms, as used herein, shall have the
following respective meanings:
"Covered Amount" means Loss and Expenses which, in type or amount, are
not insured under the directors' and officers' liability insurance maintained by
the Company from time to time, and do not exceed in the aggregate the Maximum
Amount.
"Covered Act" means any breach of duty, neglect, error, misstatement,
misleading statement, omission or other act done or wrongfully attempted by
Director or any of the foregoing alleged by any claimant or any claim against
Director solely by reason of him being a director or officer of the Company.
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"D & O Insurance" means the directors' and officers' liability
insurance issued by the insurer(s), and having the policy number(s), amount(s)
and deductible(s) set forth on Exhibit A hereto and any replacement or
substitute policies issued by one or more reputable insurers providing in all
respects coverage at least comparable to and in the same amount as that provided
under the policy or policies identified on Exhibit A.
"Determination" means a determination, based on the facts known at the
time, made by:
(i) A majority vote of the directors who are not parties to
the action, suit or proceeding as to which indemnification has been
requested, even though less than a quorum, or if there are no such
directors, or if such directors so direct;
(ii) Independent legal counsel in a written opinion prepared
at the request of a majority of a quorum of disinterested directors; or
(iii) A majority of the disinterested stockholders of the
Company; or
(iv) A final adjudication by a court of competent
jurisdiction.
"Determined" shall have a correlative meaning.
"Excluded Claim" means any payment for Losses or Expenses in
connection with any claim:
(i) Based upon or attributable to Director gaining in fact
any personal profit or advantage to which Director is not entitled; or
(ii) For the return by Director of any remuneration paid to
Director without the previous approval of the stockholders of the
Company which is illegal; or
(iii) For an accounting of profits in fact made from the
purchase or sale by Director of securities of the Company within the
meaning of Section 16 of the Securities Exchange Act of 1934 as
amended, or similar provisions of any state law; or
(iv) Resulting from Director's knowingly fraudulent,
dishonest or willful misconduct; or
(v) The payment of which by the Company under this Agreement
is not permitted by applicable law; or
(vi) The payment of which would cause the total amount of all
Losses and Expenses paid by the Company to exceed the Covered Amount.
"Expenses" means any reasonable expenses incurred by Director as a
result of a claim or claims made against him for Covered Acts including, without
limitation, counsel fees and costs of investigative, judicial or administrative
proceedings or appeals, but shall not include Fines.
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"Fines" means any fine, penalty or, with respect to an employee benefit
plan, any excise tax or penalty assessed with respect thereto.
"Loss" means any amount which Director is legally obligated to pay as a
result of a claim or claims made against him for Covered Acts including, without
limitation, damages and judgments and sums paid in settlement of a claim or
claims, but shall not include Fines.
"Maximum Amount" meats the lesser of (a) $____________ and (b) the
difference between $___________ and the aggregate amount of all Losses and
Expenses paid from time to time by the Company to all directors with whom the
Company has entered into agreements substantially similar to this Agreement
under such agreements.
2. Maintenance of D & O Insurance.
(a) The Company hereby represents and warrants that Exhibit
A contains a complete and accurate description of the policies of
directors' and officers' liability insurance purchased by the Company
and that such policies are in full force and effect.
(b) The Company hereby covenants and agrees that, so long as
Director shall continue to serve as a director of the Company and
thereafter so long as Director shall be subject to any possible claim
or threatened, pending or completed action, suit or proceeding, whether
civil, criminal or investigative, by reason of the fact that Director
was a director of the Company, the Company, subject to Section 2(d),
shall maintain in full force and effect D & O Insurance.
(c) In all policies of D & 0 Insurance, Director shall be
named as an insured in such a manner as to provide Director the same
rights and benefits, subject to the same limitations, as are accorded
to the Company's directors or officers most favorably insured by such
policy.
(d) The Company shall have no obligation to maintain D & 0
Insurance if the Company determines in good faith that such insurance
is not reasonably available, the premium costs for such insurance is
disproportionate to the amount of coverage provided, or the coverage
provided by such insurance is limited by exclusions so as to provide an
insufficient benefit.
3. Indemnification. The Company shall indemnify Director and hold him
harmless from the Covered Amount of any and all Losses and Expenses subject, in
each case, to the further provisions of this Agreement.
4. Excluded Coverage.
(a) The Company shall have no obligation to indemnify Director
for and hold him harmless from any Loss or Expense which has been
determined, by final adjudication by a court of competent jurisdiction,
to constitute an Excluded Claim.
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(b) The Company shall have no obligation to indemnify
Director and hold him harmless for any Loss or Expense to the extent
that Director is indemnified by the Company pursuant to the Company's
By-laws or otherwise indemnified.
5. Indemnification Procedures.
(a) Promptly after receipt by Director of notice of the
commencement of or the threat of commencement of any action, suit or
proceeding, Director shall, if indemnification with respect thereto may
be sought from the Company under this Agreement, notify the Company of
the commencement thereof.
(b) If, at the time of the receipt of such notice, the
Company has D & 0 Insurance in effect, the Company shall give prompt
notice of the commencement of such action, suit or proceeding to the
insurers in accordance with the procedures set forth in the respective
policies in favor of Director. The Company shall thereafter take all
necessary or desirable action to cause such insurers to pay, on behalf
of Director, all Losses and Expenses payable as a result of such
action, suit or proceeding in accordance with the terms of such
policies.
(c) To the extent the Company docs not, at the time of the
commencement of or the threat of commencement of such action, suit or
proceeding, have applicable D & 0 Insurance, or if a Determination is
made that any Expenses arising out of such action, suit or proceeding
will not be payable under the D & 0 Insurance then in effect, the
Company shall be obligated to pay the Expenses of any such action, suit
or proceeding in advance of the final disposition thereof and the
Company, if appropriate, shall be entitled to assume the defense of
such action, suit or proceeding, with counsel satisfactory to Director,
upon the delivery to Director of written notice of its election so to
do. After delivery of such notice, the Company will not be liable to
Director under this Agreement for any legal or other Expenses
subsequently incurred by the Director in connection with such defense
other than reasonable Expenses of investigation provided that Director
shall have the right to employ his counsel in any such action, suit or
proceeding but the fees and expenses of such counsel incurred after
delivery of notice from the Company of its assumption of such defense
shall be at the Director's expense provided further that if (i) the
employment of counsel by Director has been previously authorized by the
Company, (ii) Director shall have reasonably concluded that there may
be a conflict of interest between the Company and Director in the
conduct of any such defense or (iii) the Company shall not, in fact,
have employed counsel to assume the defense of such action, the fees
and expenses of counsel shall be at the expense of the Company.
(d) All payments on account of the Company's indemnification
obligations under this Agreement shall be made within sixty (60) days
of Director's written request therefor unless a Determination is made
that the claims giving rise to Director's request are Excluded Claims
or otherwise not payable under this Agreement, provided that all
payments on account of the Company's obligations under Paragraph 4(c)
of this Agreement prior to the final disposition of any action, suit or
proceeding shall be made within 20 days of Director's written request
therefor and such obligation shall not be
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subject to any such determination but shall be subject to Paragraph
4(e) of this Agreement.
(e) Director agrees that he will reimburse the Company for
all Losses and Expenses paid by the Company in connection with any
action, suit or proceeding against Director in the event and only to
the extent that a Determination shall have been made by a court in a
final adjudication from which there is no further right of appeal that
the Director is not entitled to be indemnified by the Company for such
Expenses because the claim is an Excluded Claim or because Director is
otherwise not entitled to payment under this Agreement.
6. Settlement. The Company shall have no obligation to
indemnify Director under this Agreement for any amounts paid in settlement of
any action, suit or proceeding effected without the Company's prior written
consent. The Company shall not settle any claim in any manner which would impose
any Fine or any obligation on Director without Director's written consent.
Neither the Company nor Director shall unreasonably withhold their consent to
any proposed settlement.
7. Rights Not Exclusive. The rights provided hereunder shall not
be deemed exclusive of any other rights to which the Director may be entitled
under any by-law, agreement, vote of stockholders or of disinterested directors
or otherwise, both as to action in his official capacity and as to action in any
other capacity by holding such office, and shall continue after the Director
ceases to serve the Corporation as a Director.
8. Enforcement.
(a) Director's right to indemnification shall be enforceable
by Director only in the Chancery Court of the State of Delaware and
shall be enforceable notwithstanding any adverse Determination, other
than a Determination which has been made by a final adjudication of a
court of competent jurisdiction. In any such action, if a prior adverse
Determination has been made, the burden of proving that indemnification
is required under this Agreement shall be on Director. The Company
shall have the burden of proving that indemnification is not required
under this Agreement if no prior adverse Determination shall have been
made.
(b) In the event that any action is instituted by Director
under this Agreement, or to enforce or interpret any of the terms of
this Agreement, Director shall be entitled to be paid all court costs
and expenses, including reasonable counsel fees, incurred by Director
with respect to such action, unless the court determines that each of
the material assertions made by Director as a basis for such action
were not made in good faith or were frivolous.
9. Severability. In the event that any provision of this
Agreement is determined by a court to require the Company to do or to fail to do
an act which is in violation of applicable law, such provision shall be limited
or modified in its application to the minimum extent necessary to avoid a
violation of law, and, as so limited or modified, such provision and the balance
of this Agreement shall be enforceable in accordance with their terms.
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10. Choice of Law. This Agreement shall be governed by and construed
and enforced in accordance with the laws of the State of Delaware.
11. Consent to Jurisdiction. The Company and the Director each hereby
irrevocably consent to the jurisdiction of the courts of the State of Delaware
for all purposes in connection with any action or proceeding which arises out of
or relates to this Agreement and agree that any action instituted under this
Agreement shall be brought only in the Chancery Court of the State of Delaware.
12. Successor and Assigns. This Agreement shall be (i) binding upon all
successors and assigns of the Corporation (including any transferee of all or
substantially all of its assets and any successor by merger or otherwise by
operation of law) and (ii) shall be binding on and inure to the benefit of the
heirs, personal representatives and estate of Director.
13. Amendment. No amendment, modification, termination or cancellation
of this Agreement shall be effective unless made in a writing signed by each of
the parties hereto.
IN WITNESS WHEREOF, the Company and Director have executed this
Agreement as of the day and year first above written.
NRG Energy, Inc.
By:
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Name:
Title:
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Director
