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EXHIBIT 10.14
INDEMNIFICATION AGREEMENT
THIS INDEMNIFICATION AGREEMENT is made and entered into this 21st day
of July, 1997, by and between C. XXXXXXX XXXXX (the "Indemnified Party") and
DISCOUNT AUTO PARTS, INC., a Florida corporation (the "Corporation").
W I T N E S S E T H:
WHEREAS, it is essential to the Corporation to retain and attract as
executive officers the most capable persons available; and
WHEREAS, the substantial increase in corporate litigation subjects
officers to expensive litigation risks at the same time that the availability
of directors' and officers' liability insurance has been severely limited; and
WHEREAS, in addition, the statutory indemnification provisions of the
Florida Business Corporations Act and Article VI of the bylaws of the
Corporation (the "Article") expressly provide that they are non-exclusive; and
WHEREAS, the Florida Business Corporations Act and the Article provide
that indemnification of executive officers of the Corporation may be authorized
by agreement, and thereby contemplates that contracts of this nature may be
entered into between the Corporation and the Indemnified Party with respect to
indemnification of the Indemnified Party as an executive officer of the
Corporation; and
WHEREAS, the Indemnified Party has advised the Corporation that, with
respect to all matters involving the Corporation, (a) he has acted in good
faith and in a manner he believed to be in, or not opposed to, the best
interests of the Corporation, (b) he had no reasonable cause to believe and did
not believe his conduct was unlawful and (c) he derived no improper personal
benefit from any activities engaged in on behalf of the Corporation for which
he might seek indemnification; and
WHEREAS, the Indemnified Party has requested that the Corporation
advance the Indemnified Party's expenses incurred in defending and/or
responding to matters with respect to which indemnification is sought and has
indicated his willingness to repay such amounts so advanced if he is ultimately
found not to be entitled to indemnification under the applicable provisions of
the Florida Business Corporation Act and/or because he has engaged in
Nonindemnifiable Conduct (as herein defined); and
WHEREAS, the Indemnified Party considers a contractual commitment to
indemnification on the terms set forth herein as necessary and desirable to his
continued service as an employee and in order to have adequate protection, and
the Corporation desires the Indemnified Party to continue to serve in such
capacity and to have such protection.
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NOW THEREFORE, in consideration of the premises and the mutual
covenants and agreements contained in this Agreement, it is hereby agreed as
follows:
1. RECITALS.
The Indemnified Party hereby confirms and represents that the
statements contained in the recitals of fact set forth above (the "Recitals")
are true and correct and the parties agree that by this reference the Recitals
shall be considered a part of this Agreement.
2. INDEMNIFICATION GENERALLY.
(a) Grant of Indemnity. Subject to and upon the terms
and conditions of this Agreement, the Corporation hereby agrees to indemnify
the Indemnified Party in respect of any and all claims, losses, damages and
expenses which may be incurred by the Indemnified Party as a result of or
arising out of prosecuting, defending, settling or investigating:
(1) any threatened, pending, or completed action,
suit or proceeding (including without limitation that certain
action styled Airgas, Inc., et. al. vs. Discount Auto Parts,
Inc., et. al., Civil Action File No. CV497-32, in the United
States District Court for the Southern District of Georgia,
Savannah Division), whether brought by or in the right of the
Corporation or otherwise and whether of a civil, criminal,
administrative or investigative nature, in which the
Indemnified Party may be or may have been involved as a party
or otherwise, arising out of the fact that the Indemnified
Party is or was a director, officer, employee, agent or
stockholder of the Corporation or any of its "affiliates" (as
such term is defined in the rules and regulations promulgated
by the Securities and Exchange Commission under the Securities
Act of 1933), or served as a director, officer, stockholder,
agent, employee, salesman, independent contractor, partner,
franchisor or joint venturer in or for any person, firm,
partnership, corporation or other entity at the request of the
Corporation (including without limitation service in any
capacity for or in connection with any employee benefit plan
maintained by the Corporation or on behalf of the
Corporation's employees).
(2) any attempt (regardless of its success) by any
person to charge the Indemnified Party with, or to cause the
Indemnified Party to be charged with, wrongdoing or with
financial responsibility for damages arising out of or
incurred in connection with the matters indemnified against in
this Agreement; or
(3) any expense, assessment, fine, tax, judgment or
settlement payment arising out of or incident to any of the
matters indemnified against in this Agreement including
reasonable fees and disbursements of counsel (before and at
trial and in appellate proceedings and otherwise).
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(b) Relation to Insurance Claim. The obligation of the
Corporation under this Agreement is not conditioned in any way on any attempt
by the Indemnified Party to collect from an insurer any amount under a
liability insurance policy.
(c) Indemnification Exclusions. In no case shall any
indemnification be provided under this Agreement to the Indemnified Party by
the Corporation:
(1) in any action or proceeding brought by or in
the name or interest of the Indemnified Party against the
Corporation;
(2) in any action or proceeding brought by the
Corporation against the Indemnified Party, which action is
initiated at the direction of the Board of Directors of the
Corporation; or
(3) for any "Nonindemnifiable Conduct" (as such
term is defined in Section 2(i)(ii)).
(d) Claims for Indemnification.
(i) Whenever any claims shall arise for
indemnification under this Agreement, the Indemnified Party shall notify the
Corporation promptly and in any event within 30 days after the Indemnified
Party has actual knowledge of the facts constituting the basis for such claim.
The notice shall specify all facts known to the Indemnified Party giving rise
to such indemnification right and the amount or an estimate of the amount of
liability (including estimated expenses) arising therefrom. A delay by the
Indemnified Party in providing such notice shall not relieve the Corporation
from its obligations under this Agreement unless and then only to the extent
that the Corporation is materially and adversely affected by the delay.
(ii) Any indemnification required under this
Agreement shall be made promptly after receipt by the Corporation of the
written notification specified in Section 2(d)(i) and a determination of the
amount required to be indemnified. The provisions of this Section 2(d)(ii)
shall not override or otherwise limit the right of the Indemnified Party to be
indemnified with respect to expenses incurred with respect to a Covered Third
Party Claim (as such term is defined in Section 2(e)(i)) in accordance with the
provisions contained in the last two sentences of Section 2(e)(ii).
(e) Rights to Defend or Settle; Covered Third Party
Claims, etc.
(i) If the facts giving rise to any
indemnification right under this Agreement shall involve any actual or
threatened claim or demand against the Indemnified Party, or any possible claim
by the Indemnified Party against any third party, such claim shall be referred
to as a "Covered Third Party Claim." If the Corporation provides the
Indemnified Party with an agreement in writing in form and substance
satisfactory to the Indemnified Party and his counsel, agreeing to indemnify,
defend
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or prosecute and hold the Indemnified Party harmless from all costs, claims,
losses, damages, expenses and liability arising from any Covered Third Party
Claim (an "Agreement of Indemnity"), and demonstrating to the satisfaction of
the Indemnified Party the financial wherewithal to accomplish such
indemnification, the Corporation may at its own expense undertake full
responsibility for the defense or prosecution of such Covered Third Party
Claim. The Corporation may contest or settle any such Covered Third Party
Claim for money damages on such terms and conditions as it deems appropriate
but shall be obligated to consult in good faith with the Indemnified Party and
not to contest or settle any Covered Third Party Claim involving injunctive or
equitable relief against or affecting the Indemnified Party or his properties
or assets without the prior written consent of the Indemnified Party, such
consent not to be withheld unreasonably. The Indemnified Party may participate
at his own expense and with his own counsel in defense or prosecution of a
Covered Third Party Claim pursuant to this Section 2(e)(i), and such
participation shall not relieve the Corporation of its obligation to indemnify
the Indemnified Party under this Agreement.
(ii) If the Corporation fails to deliver a
satisfactory Agreement of Indemnity and evidence of financial wherewithal
within 10 days after receipt of notice pursuant to Section 2(d), the
Indemnified Party may contest or settle the Covered Third Party Claim on such
terms as he sees fit but shall not reach a settlement with respect to the
payment of money damages or with respect to other terms that materially affect
the Corporation without the consent of the Corporation. The Corporation may
participate at its own expense and with its own counsel in defense or
prosecution of a Covered Third Party Claim pursuant to this Section 2(e)(ii),
but any such participation shall not relieve the Corporation of its obligations
to indemnify the Indemnified Party under this Agreement.
(iii) If by reason of any Covered Third Party Claim
that is the proper subject of indemnification under this Agreement, a lien,
attachment, garnishment or execution is placed upon any of the property or
assets of the Indemnified Party, the Corporation shall promptly furnish a
satisfactory indemnity bond to obtain the prompt release of such lien,
attachment, garnishment or execution.
(f) Cooperation.
(i) The parties to this Agreement shall execute
such powers of attorney as may be necessary or appropriate to permit
participation of counsel selected by any party hereto and, as may be reasonably
related to any such claim or action, shall provide to the counsel, accountants
and other representatives of each party access during normal business hours to
all properties, personnel, books, records, contracts, commitments and all other
business records of such other party and will furnish to such other party
copies of all such documents as may be reasonably requested (certified, if
requested). The Indemnified Party agrees to cooperate in all other reasonable
respects with the Corporation in connection with any such claim or action. The
cooperation from the Indemnified Party as required by this Agreement shall be a
further condition to the Indemnified Party's entitlement to indemnification
under this Agreement; provided however and notwithstanding the foregoing, in
the event the Indemnified Party shall, in the exercise of his reasonable
judgment, determine that any
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cooperation or assistance requested by the Company will expose the Indemnified
Party to liability or jeopardy (other than direct monetary liability) in any
civil, criminal or administrative proceeding, or otherwise impose substantial
limitation on the defense of the Indemnified Party in such a proceeding, a
failure to provide the requested cooperation or assistance as a result of such
reasonable determination shall not however be considered a failure by the
Indemnified Party to satisfy a condition to the Indemnified Party's
entitlement, as provided for elsewhere herein, to have the Company continue to
advance the expenses incurred by the Indemnified Party in defending a Covered
Third Party Claim (but with the understanding that such advance of expenses
shall continue to be subject to the terms and provisions of Section 2(i) of
this Agreement).
(ii) The Indemnified Party's obligation to
cooperate shall include, without limitation, an obligation to cooperate in the
defense of any Covered Third Party Claim that is being controlled by the
Corporation; and so long as the Indemnified Party so cooperates and
notwithstanding the Corporation's control of the defense, the Indemnified Party
shall continue to be entitled to indemnification and reimbursement for all
costs and expenses incurred by him in connection therewith to the extent and
subject to the other limitations provided in this Agreement.
(g) Choice of Counsel. In all matters as to which
indemnification is or may be available to the Indemnified Party under this
Agreement, the Indemnified Party shall be free to choose and retain counsel,
provided that the Indemnified Party shall secure the prior written consent of
the Corporation as to such selection, which consent shall not be unreasonably
withheld.
(h) Consultation. If the Indemnified Party desires to
retain the services of an attorney prior to the determination by the
Corporation as to whether it will undertake the defense or prosecution of the
Third Party Claim as provided in Section 2(e), the Indemnified Party shall
notify the Corporation of such desire in the notice delivered pursuant to
Section 2(d)(i), and such notice shall identify the counsel to be retained.
The Corporation shall then have 10 days within which to advise the Indemnified
Party whether it will assume the defense or prosecution of the Third Party
Claim in accordance with Section 2(e)(i). If the Indemnified Party does not
receive an affirmative response within such 10 day period, he shall be free to
retain counsel of his choice, and the indemnity provided in Section 2(a) shall
apply to the reasonable expenses of such counsel incurred after the expiration
of such 10 day period. Any expenses incurred prior to the expiration of such
10 day period shall not be covered by the indemnity of Section 2(a).
(i) Repayment.
(i) Notwithstanding the other provisions of this
Agreement to the contrary, if the Corporation has incurred any cost, damage or
expense under this Agreement paid to or for the benefit of the Indemnified
Party and it is determined by a court of competent jurisdiction from which no
appeal may be taken that the Indemnified Party's actions or omissions
constitute "Nonindemnifiable Conduct" as that term is defined in Section
2(i)(ii), the Indemnified Party shall and does hereby undertake in such
circumstances to reimburse the Corporation for any and all such
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amounts previously paid to or for the benefit of the Indemnified Party. Such
reimbursement shall be without interest, except that interest at the prime rate
published from time to time in The Wall Street Journal in its "Money Rates"
column or a successor column or feature, shall begin to accrue 20 days after
such a determination of Nonindemnifiable Conduct.
(ii) For these purposes, "Nonindemnifiable
Conduct" shall mean an action or omission of the Indemnified Party material to
the cause of action to which the indemnification under this Agreement relates,
which action or omission is determined to involve:
(1) a violation of the criminal law,
unless the Indemnified Party had reasonable cause to believe
his conduct was lawful or had no reasonable cause to believe
his conduct was unlawful;
(2) a transaction from which the
Indemnified Party derived an improper personal benefit;
(3) willful misconduct or a conscious
disregard for the best interests of the Corporation (when
indemnification is sought in a proceeding by or in the right
of the Corporation to procure a judgment in favor of the
Corporation or when indemnification is sought in a proceeding
by or in the right of a stockholder);
(4) failure to have acted in good faith
and in a manner reasonably believed to be in the best
interests of the Corporation; or
(5) conduct pursuant to then applicable
law that prohibits such indemnification.
3. TERM.
This Agreement shall be effective upon its execution by all
parties and shall continue in full force and effect until seven years after the
date of this Agreement, or seven years after the termination or resignation of
the Indemnified Party's employment or term of office with the Corporation or
any of its affiliates, whichever is later, provided that such term shall be
extended by any period of time during which the Corporation is in breach of a
material obligation to the Indemnified Party, plus ninety days. Such term
shall also be extended with respect to each Covered Third Party Claim then
pending and as to which notice under Section 2(d) has theretofore been given by
the Indemnified Party to the Corporation, and this Agreement shall continue to
be applicable to each such Covered Third Party Claim.
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4. REPRESENTATIONS AND AGREEMENTS OF THE CORPORATION.
(a) Authority. The Corporation represents, covenants and
agrees that it has the corporate power and authority to enter into this
Agreement and to carry out its obligations under this Agreement. The
execution, delivery and performance of this Agreement and the consummation of
the transactions contemplated by this Agreement have been duly authorized by
the Board of Directors of the Corporation. This Agreement is a valid and
binding obligation of the Corporation and is enforceable against the
Corporation in accordance with its terms.
(b) Noncontestability. The Corporation represents,
covenants and agrees that it will not initiate, and will use its best efforts
to cause each of its affiliates not to initiate, any action, suit or proceeding
challenging the validity or enforceability of this Agreement.
(c) Good Faith Judgment. The Corporation represents,
covenants and agrees that it will exercise good faith judgment in determining
the entitlement of the Indemnified Party to indemnification under this
Agreement.
5. RELATIONSHIP OF THIS AGREEMENT TO OTHER INDEMNITIES.
(a) Nonexclusivity.
(i) This Agreement and all rights granted to the
Indemnified Party under this Agreement are in addition to and are not deemed to
be exclusive with or of any other rights that may be available to the
Indemnified Party under any Articles of Incorporation, bylaw, statute,
agreement, or otherwise.
(ii) The rights, duties and obligations of the
Corporation and the Indemnified Party under this Agreement do not limit,
diminish or supersede the rights, duties and obligations of the Corporation and
the Indemnified Party with respect to the indemnification afforded to the
Indemnified Party under any liability insurance, the Florida Business
Corporation Act, or under the Bylaws or the Articles of Incorporation of the
Corporation. In addition, the Indemnified Party's rights under this Agreement
will not be limited or diminished in any respect by any amendment to the Bylaws
or the Articles of Incorporation of the Corporation.
(b) Availability, Contribution, Etc.
(i) The availability or nonavailability of
indemnification by way of insurance policy, Articles of Incorporation, bylaw,
vote of stockholders, or otherwise from the Corporation to the Indemnified
Party shall not affect the right of the Indemnified Party to indemnification
under this Agreement, provided that all rights under this Agreement shall be
subject to applicable statutory provisions in effect from time to time.
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(ii) Any funds received by the Indemnified Party
by way of indemnification or payment from any source other than from the
Corporation under this Agreement shall reduce any amount otherwise payable to
the Indemnified Party under this Agreement.
(iii) If the Indemnified Party is entitled under
any provision of this Agreement to indemnification by the Corporation for some
claims, issues or matters, but not as to other claims, issues or matters, or
for some or a portion of the expenses, judgments, fines or penalties actually
and reasonably incurred by him or amounts actually and reasonably paid in
settlement by him in the investigation, defense, appeal or settlement of any
matter for which indemnification is sought under this Agreement, but not for
the total amount thereof, the Corporation shall indemnify the Indemnified Party
for the portion of such claims, issues or matters or expenses, judgments,
fines, penalties or amounts paid in settlement to which the Indemnified Party
is entitled.
6. MISCELLANEOUS.
(a) Notices. All notices, requests, demands and other
communications which are required or may be given under this Agreement shall be
in writing and shall be deemed to have been duly given when received if
personally delivered; when transmitted if transmitted by telecopy, electronic
telephone line facsimile transmission or other similar electronic or digital
transmission method; the day after it is sent, if sent by recognized overnight
delivery service with all fees payable by the sender; and five days after it is
sent, if mailed, first class mail, postage prepaid. In each case notice shall
be sent to:
if to the Indemnified Party: 0000 Xxxxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxx 00000
if to the Corporation: 0000 Xxxxxxxx Xxxx, Xxxxx
Xxxxxxxx, Xxxxxxx 00000
Attention: President
With a copy to: Xxxx X. Xxxxxx
Trenam, Kemker, Scharf, Barkin,
Frye, X'Xxxxx & Xxxxxx, P.A.
Post Office Box 1102
Xxxxx, Xxxxxxx 00000
or to such other address as either party may have specified in writing to the
other using the procedures specified above in this Section 6(a).
(b) Not an Employment Contract. The parties to this
Agreement recognize and acknowledge that the relationship between the
Corporation and the Indemnified Party is that of an
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at-will relationship, terminable by either party at any time and for any or no
reason. It is specifically agreed and understood among the parties that this
Agreement shall not and does not change the termination at-will relationship
and neither party has any right by virtue of this Agreement or for any other
reason to continued employment of the Indemnified Party by the Corporation.
(c) Governing Law. This Agreement shall be construed
pursuant to and governed by the substantive laws of the State of Florida (but
any provision of Florida law shall not apply if the application of such
provision would result in the application of the law of a state or jurisdiction
other than Florida).
(d) Severability. Any provision of this Agreement that
is determined by a court of competent jurisdiction to be prohibited,
unenforceable or not authorized in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition,
unenforceability or non-authorization without invalidating the remaining
provisions hereof or affecting the validity, enforceability or legality of such
provision in any other jurisdiction. In any such case, such determination
shall not affect any other provision of this Agreement, and the remaining
provisions of this Agreement shall remain in full force and effect. If any
provision or term of this Agreement is susceptible to two or more constructions
or interpretations, one or more of which would render the provision or term
void or unenforceable, the parties agree that a construction or interpretation
which renders the term or provision valid shall be favored.
(e) Specific Enforcement. The parties agree and
acknowledge that in the event of a breach by the Corporation of its obligation
promptly to indemnify the Indemnified Party as provided in this Agreement, or
breach of any other material provision of this Agreement, damages at law will
be an insufficient remedy to the Indemnified Party. Accordingly, the parties
agree that, in addition to any other remedies or rights that may be available
to the Indemnified Party, the Indemnified Party shall also be entitled, upon
application to a court of competent jurisdiction, to obtain temporary or
permanent injunctions to compel specific performance of the obligations of the
Corporation under this Agreement.
(f) Cost of Enforcement. If the Indemnified Party
engages the services of an attorney or any other third party or in any way
initiates legal action to enforce his rights under this Agreement, including
but not limited to the collection of monies due from the Corporation to the
Indemnified Party, the prevailing party shall be entitled to recover all
reasonable costs and expenses (including reasonable attorneys' fees before and
at trial, in appellate proceedings and otherwise). Should the Indemnified
Party prevail, such costs and expenses shall be in addition to monies otherwise
due him under this Agreement.
(g) Application to Third Parties, Etc. Nothing in this
Agreement, whether express or implied, is intended or should be construed to
confer upon, or to grant to, any person, except the Corporation, the
Indemnified Party and their respective heirs, assignees and successors, any
claim, right or remedy under or because of this Agreement or in any provision
of it. This Agreement shall
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be binding upon and inure to the benefit of the successors in interest and
assigns, heirs and personal representatives, as the case may be, of the
parties, including any successor corporation resulting from a merger,
consolidation, recapitalization, reorganization, sale of all or substantially
all of the assets of the Corporation, or any other transaction resulting in the
successor corporation assuming the liabilities of the Corporation under this
Agreement (by operation of law or otherwise).
(h) Construction. As used in this Agreement, (1) the
word "including" is always without limitation; (2) the words in the singular
number include words of the plural number and vice versa; and (3) the word
"person" includes a trust, corporation, association, partnership, joint
venture, business trust, unincorporated organization, limited liability
company, government, public body or authority, any governmental agency or
department, and any other entity, as well as a natural person.
(i) Further Assurances. The parties to this Agreement
will execute and deliver, or cause to be executed and delivered, such
additional or further documents, agreements or instruments and shall cooperate
with one another in all respects for the purpose of carrying out the
transactions contemplated by this Agreement.
(j) Venue; Process. The parties to this Agreement agree
that jurisdiction and venue in any action brought pursuant to this Agreement to
enforce its terms or otherwise with respect to the relationships between the
parties shall properly lie in the Circuit Court of the State of Florida in and
for Hillsborough County or in and for Polk County, or in the United States
District Court for the Middle District of Florida, Tampa Division. The parties
agree that they will not object that any action commenced in the foregoing
jurisdictions is commenced in a forum non conveniens. The parties further
agree that the mailing by certified or registered mail, return receipt
requested, of any process required by any such court shall constitute valid and
lawful service of process against them, without the necessity for service by
any other means provided by statute or rule of court.
(k) Waiver and Delay. No waiver or delay in enforcing
the terms of this Agreement shall be construed as a waiver of any subsequent
breach. No action taken by the Indemnified Party shall constitute a waiver of
his rights under this Agreement.
(l) Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be considered an original, but all
of which together shall constitute one and the same instrument.
(m) Headings. The headings of the various sections in
this Agreement are inserted for the convenience of the parties and shall not
affect the meaning, construction or interpretation of this Agreement.
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IN WITNESS WHEREOF, the parties have executed this Agreement on the
date first above written.
DISCOUNT AUTO PARTS, INC.
By: /s/ Xxxxx X. Xxxxxxxx
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Xxxxx X. Xxxxxxxx, Chief Executive Officer
WITNESSES:
/s/ /s/ C. Xxxxxxx Xxxxx
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C. Xxxxxxx Xxxxx
/s/
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