EXHIBIT 10.31
FORM OF INDEMNITY AGREEMENT
THIS AGREEMENT made as of January 20, 2006, by and between Pinnacle
Airlines Corp., a Delaware corporation with executive offices located at 0000
Xxxxxxxxx Xxxx., Xxxxx 000, Xxxxxxx, XX 00000 ("PNCL") and
______________________, a Director or Officer of PNCL ("Indemnitee").
WHEREAS,
A. PNCL is aware that competent and experienced persons are
increasingly reluctant to serve as directors or officers of corporations unless
they are protected by comprehensive liability insurance and indemnification due
to increased exposure to litigation costs and risks resulting from their service
to such corporations, particularly after adoption by Congress of the
Xxxxxxxx-Xxxxx Act of 2002, and due to the fact that the exposure frequently
bears no reasonable relationship to the compensation of such directors and
officers;
B. The statutes and judicial decisions regarding the duties of
directors and officers are often difficult to apply, ambiguous, or conflicting,
and therefore fail to provide such directors and officers with adequate,
reliable knowledge of legal risks to which they are exposed or information
regarding the proper course of action to take;
C. Plaintiffs often seek damages in such large amounts and the costs of
litigation may be so substantial (whether or not the case is meritorious), that
the costs of defense and/or settlement of such litigation is often beyond the
personal resources of officers and directors;
D. PNCL believes that it is unfair for its directors and officers and
the directors and officers of its subsidiaries to assume the risk of large
judgments and other expense that may be incurred in cases in which the director
or officer received no personal profit and in cases where the director or
officer was not culpable;
E. PNCL recognizes that the issues in controversy in litigation against
a director or officer of a corporation such as PNCL or a subsidiary of PNCL are
often related to the knowledge, motives and intent of such director or officer,
that he or she is usually the only witness with knowledge of the essential facts
and exculpating circumstances regarding such matters and that the long period of
time which usually elapses before the trial or other disposition of which
litigation often extends beyond the time that the director or officer can
reasonably recall such matters; and may extend beyond the normal time for
retirement or in the event of his or her death, his or her spouse, heirs,
executors or administrators, may be faced with limited ability and undue
hardship in maintaining an adequate defense, which may discourage such a
director or officer from serving in that position;
F. Based upon their experience as business managers, the Board of PNCL
(the "Board") has concluded that, to retain and attract talented and experienced
individuals to serve as officers and directors of PNCL and its subsidiaries and
to encourage such individuals to take the business risks necessary for the
success of PNCL and its subsidiaries, it is necessary and in the bests interests
of PNCL's stockholders for PNCL to contractually indemnify its officers and
directors
and the officers and directors of its subsidiaries, and to assume for itself
maximum liability for expenses and damages in connection with claims against
such officers and directors in connection with their service to PNCL and its
subsidiaries, and has further concluded that the failure to provide such
contractual indemnification could result in great harm to PNCL and its
subsidiaries and PNCL's stockholders;
G. Section 145 of the General Corporation Law of Delaware, under which
PNCL is organized ("Section 145"), empowers PNCL to indemnify by agreement its
officers, directors, employees and agents, and persons who serve, at the request
of PNCL, as directors, officers, employees or agents of other corporations or
enterprises, and expressly provides that the indemnification provided by Section
145 is not exclusive;
H. The Board, after reasonable investigation prior to the date hereof,
has determined that the liability insurance coverage available to PNCL and its
subsidiaries as of the date hereof is inadequate alone. The Board believes,
therefore, that the interest of PNCL's stockholders would best be served by a
combination of such insurance as PNCL may obtain pursuant to PNCL's obligations
hereunder, and the indemnification by PNCL of the directors and officers of PNCL
and its subsidiaries pursuant to its Certificate of Incorporation and
contractually hereunder;
I. PNCL desires and has requested Indemnitee to serve or continue to
serve as a director or officer of PNCL and/or the subsidiaries of PNCL free from
undue concern for claims for damages arising out of or related to such services
to PNCL and/or a subsidiary of PNCL; and
J. Indemnitee is willing to serve, or to continue to serve, PNCL and/or
the subsidiaries of PNCL, provided that he or she is furnished the indemnity
provided for herein.
NOW, THEREFORE, the parties hereto, intending to be legally bound,
hereby agree as follows:
1. DEFINITIONS.
(a) Agent. For the purposes of this Agreement, "agent" of PNCL
means any person who is or was a director, officer, employee or other agent of
PNCL or a subsidiary of PNCL; or is or was serving at the request of, for the
convenience of or to represent the interest of PNCL or a subsidiary of PNCL as a
director, officer, employee or agent of another foreign or domestic corporation,
partnership, joint venture, trust or other enterprise.
(b) Expenses. For purposes of this Agreement, "expenses"
includes all direct and indirect costs of any type or nature whatsoever
(including, without limitation, all attorneys' fees and related disbursements,
and other out-of-pocket costs) actually and reasonably incurred by Indemnitee in
connection with either the investigation, defense or appeal of a proceeding or
establishing or enforcing a right to indemnification under this Agreement,
Section 145 or otherwise; provided, however, that expenses shall not include any
judgments, fines, ERISA excise taxes or penalties or amounts paid in settlement
of a proceeding, unless otherwise provided herein.
(c) Proceeding. For the purposes of this Agreement,
"proceeding" means any threatened, pending, or completed action, suit or other
proceeding, whether civil, criminal, administrative,
investigative or any other type whatsoever, which may be subject to
indemnification covered by this Agreement.
(d) Subsidiary. For purposes of this Agreement, "subsidiary"
means any corporation of which more than 50% of the outstanding voting
securities is owned directly or indirectly by PNCL, by PNCL and one or more
other subsidiaries, or by one or more other subsidiaries.
2. AGREEMENT TO SERVE.
Indemnitee agrees to serve and/or continue to serve as an agent of PNCL, at its
will (or under separate agreement, if such agreement exists), in the capacity
Indemnitee currently serves as an agent of PNCL, so long as he or she is duly
appointed or elected and qualified in accordance with the applicable provisions
of the Bylaws of PNCL or any subsidiary of PNCL or until such time as he or she
tenders his resignation in writing or he or she is removed from such position;
provided, however, that nothing contained in this Agreement is intended to
create any right to continued employment by Indemnitee.
3. MAINTENANCE OF LIABILITY INSURANCE.
(a) PNCL hereby covenants and agrees that, so long as
Indemnitee shall continue to serve as an agent of PNCL and thereafter so long as
Indemnitee shall be subject to any possible proceeding by reason of the fact
that Indemnitee was an agent of PNCL, PNCL, subject to Section 3(b), shall use
reasonable efforts to obtain and maintain in full force and effect directors'
and officers' liability insurance ("D&O Insurance") in reasonable amounts from
established and reputable insurers, and to the extent that that PNCL maintains
any D&O Insurance, Indemnitee shall be covered by such policy or policies, in
accordance with the terms thereof, to the maximum extent of the coverage
available for any PNCL director or officer under such policy or policies.
(b) Notwithstanding the foregoing, PNCL shall have no
obligation to obtain or maintain D&O Insurance if PNCL determines in good faith
that such insurance is not reasonably available, the premium costs for such
insurance are disproportionate to the amount of coverage provided, the coverage
is so limited and/or reduced by exclusions so as to provide an insufficient
benefit, or Indemnitee is covered by similar insurance maintained by a
subsidiary of PNCL.
4. MANDATORY INDEMNIFICATION.
(a) If Indemnitee is a person who was or is a party or is
threatened to be made a party to any proceeding by reason of the fact that he or
she is or was an agent of PNCL, or by reason of anything done or not done by him
or her in any such capacity, if he or she acted in good faith and in a manner he
or she reasonably believed to be in or not opposed to the best interests of
PNCL, then PNCL shall indemnify Indemnitee against any and all expenses and
liabilities of any type whatsoever (including, but not limited to, judgments,
fines, ERISA excise taxes or penalties, and amounts paid in settlement) actually
and reasonably incurred by him or her in connection with the investigation,
defense, settlement or appeal of such proceeding, as follows:
(i) Third Party Actions. In any proceeding other than
an action in the right of PNCL (but with respect to any criminal action or
proceeding, only if he or she also had no reasonable cause to believe his or her
conduct was unlawful); and
(ii) Derivative Actions. In any proceeding by or in
the right of PNCL to procure a judgment in its favor; except that no
indemnification under this subsection shall be made in respect of any claim,
issue or matter as to which such person shall have been finally adjudged to be
liable to PNCL after the time for an appeal has expired by a court of competent
jurisdiction due to willful misconduct of a culpable nature in the performance
of his or her duty to PNCL unless and only to the extent that the Court of
Chancery or the court in which such proceeding was brought shall determine upon
application that, despite the adjudication of liability but in view of all the
circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such amounts which the Court of Chancery or such other court shall
deem proper; and
(iii) Actions Where Indemnitee is Deceased. In any
proceeding, and prior to, during the pendency or after completion of such
proceeding Indemnitee is deceased, except as provided in Sections 3(b) and 12.
(b) Exception for Amounts Covered by Insurance.
Notwithstanding the foregoing, PNCL shall not be obligated to indemnify
Indemnitee for expenses or liabilities of any type whatsoever (including, but
not limited to, judgments, fees, ERISA excise taxes or penalties, and amounts
paid in settlement) which have been paid directly to Indemnitee or to others on
behalf of Indemnitee under D&O Insurance.
(c) Indemnification for Expenses of a Witness. Notwithstanding
any other provision of this Agreement, to the extent that Indemnitee is, by
reason of his or her corporate status as an agent of PNCL, a witness in any
proceeding to which Indemnitee is not a party, he shall be indemnified against
all expenses actually and reasonably incurred by him or on his behalf in
connection therewith.
(d) Change of Law. Subject to the further provisions of this
Agreement, if Section 145 of the Delaware General Corporation Law, or any
successor statute, is hereafter amended (the "Amended Statute") in a manner that
expands the authority of PNCL to indemnify or advance expenses to Indemnitee,
this Agreement shall thereupon be deemed modified to provide for indemnification
of and advance of expenses to Indemnitee to the fullest extent not prohibited by
the Amended Statute.
5. PARTIAL INDEMNIFICATION.
If Indemnitee is entitled under any provision of this Agreement to
indemnification by PNCL for some or a portion of any expenses or liabilities of
any type whatsoever (including, but not limited to, judgments, fines, ERISA
excise taxes or penalties, and amounts paid in settlement) incurred by him or
her in the investigation, defense, settlement or appeal of a proceeding, but is
not entitled to indemnification for all of the total amount thereof, then PNCL
shall nevertheless indemnify Indemnitee for such portion of the total amount to
which Indemnitee is entitled, but not as to the portion thereof to which
Indemnitee is not entitled.
6. MANDATORY ADVANCEMENT OF EXPENSES.
Except as otherwise limited or prohibited by applicable law, PNCL shall advance
all reasonable expenses incurred by or on behalf of Indemnitee in connection
with any proceeding within 20
days after the receipt by PNCL of a statement or statements from Indemnitee
requesting such advance or advances from time to time, whether prior to or after
final disposition of such proceeding. Such statement or statements shall contain
reasonable documentation evidencing the expenses incurred by Indemnitee and may
designate that payment be made to another person on Indemnitee's behalf. In
connection with any such payment, advance or reimbursement, Indemnitee
undertakes and agrees to repay any amounts paid, advanced or reimbursed by PNCL
in respect of expenses relating to, arising out of or resulting from any
proceeding in respect of which it shall have been determined, following the
final disposition of such proceeding and in accordance with Section 8, that the
Indemnitee is not entitled to indemnification hereunder; it being understood and
agreed that the foregoing shall satisfy any requirement that Indemnitee provide
PNCL with an undertaking to repay any advancement of expenses prior to the
payment, advancement or reimbursement thereof by PNCL.
7. NOTICE AND OTHER INDEMNIFICATION PROCEDURES.
(a) Indemnitee shall, as a condition precedent to his right to
be indemnified under this Agreement, give PNCL notice in writing as soon as
practicable of any claim made against Indemnitee for which indemnification will
or could be sought under this agreement, provided however, that a delay in
giving such notice shall not deprive Indemnitee of any right to be indemnified
under this Agreement unless, and then only to the extent that, such delay is
materially prejudicial to the defense of such claim. The omission to notify PNCL
will not relieve PNCL from any liability for indemnification which it may have
to Indemnitee otherwise than under this Agreement. The Secretary of PNCL shall,
promptly upon receipt of such a request for indemnification, advise the Board in
writing that Indemnitee has requested indemnification.
(b) If, at the time of the receipt of a notice of the
commencement of a proceeding pursuant to Section 7(a) hereof, PNCL has D&O
Insurance in effect, PNCL shall give prompt notice of the commencement of such
proceeding to the insurers and/or their agent(s) in accordance with the various
procedures set forth in the respective policies. PNCL shall thereafter take all
necessary or desirable action to cause such insurers to pay, on behalf of
Indemnitee, all amounts payable as a result of such proceeding in accordance
with the terms of such policies.
(c) If PNCL shall be obligated to advance the expenses for any
proceeding against Indemnitee, then PNCL, as appropriate, shall be entitled to
assume the defense of such proceeding, with counsel approved by Indemnitee, upon
the delivery to Indemnity of written notice of its election so to do. After
delivery of such notice, approval of such counsel by Indemnitee and the
retention of such counsel by PNCL, PNCL will not be liable to Indemnitee under
this Agreement for any fees of counsel subsequently incurred by Indemnitee with
respect to the same proceeding, provided that (i) Indemnitee shall have the
right to employ his or her counsel in any such proceeding at Indemnitee's
expense; and (ii) if (A) the employment of counsel by Indemnitee has been
previously authorized by PNCL, (B) Indemnitee shall have reasonably concluded
that there may be a conflict of interest between PNCL and Indemnitee in the
conduct of any such defense or (C) PNCL shall not, in fact, have employed
counsel to
assume the defense of such proceeding, then (after written notice to PNCL by
Indemnitee) the fees and expense of Indemnitee's counsel shall be at the expense
of PNCL.
8. DETERMINATION OF RIGHT TO INDEMNIFICATION.
(a) To the extent that Indemnitee shall have been successful
on the merits or otherwise in defense of any proceeding or any portion thereof
or in defense of any issue or matter therein, including, without limitation,
dismissal with or without prejudice, Indemnitee shall be indemnified against all
expenses (including, but not limited to, judgments, fines, ERISA excise taxes or
penalties, and amounts paid in settlement) relating to, arising out of or
resulting from such proceeding or portion thereof or issue or matter therein in
accordance with Section 4 and no Standard of Conduct Determination (as defined
below in Section 8(b)) shall be required.
(b) To the extent that the provisions of Section 8(a) are
inapplicable to a proceeding that shall have been finally disposed of and there
has been no Change of Control pursuant to Section 8(f), any determination of
whether Indemnitee has satisfied any applicable standard of conduct under
Delaware law that is a legally required condition precedent to indemnification
of Indemnitee hereunder against expenses (including, but not limited to,
judgments, fines, ERISA excise taxes or penalties, and amounts paid in
settlement) relating to, arising out of or resulting from such proceeding (a
"Standard of Conduct Determination") shall be made, at the election of
Indemnitee, either (i) by a majority vote of directors of PNCL who are not and
were not a party to the proceeding in respect of which indemnification is sought
by Indemnitee ("Disinterested Directors"), even if less than a quorum of the
Board or, if such Disinterested Directors so direct, by a majority vote of a
committee of Disinterested Directors designated by a majority vote of all
Disinterested Directors, (ii) by Independent Counsel (as defined below in
Section 8(f)) in a written opinion addressed to the Board, a copy of which shall
be delivered to Indemnitee, or (iii) by a panel of three arbitrators, one of
whom is selected by Indemnitee, another of whom is selected by PNCL and the last
of whom is selected by the first two arbitrators so selected. Indemnitee will
cooperate with the person or persons making such Standard of Conduct
Determination, including providing to such person or persons, upon reasonable
advance request, any documentation or information which is not privileged or
otherwise protected from disclosure and which is reasonably available to
Indemnitee and reasonably necessary to such determination. PNCL shall indemnify
and hold harmless Indemnitee against and, if requested by Indemnitee, shall
reimburse Indemnitee for, or advance to Indemnitee, within 20 business days of
such request, any and all reasonable costs, expenses and other amounts
(including attorneys' and experts' fees and expenses) paid or payable by
Indemnitee in so cooperating with the person or persons making such Standard of
Conduct Determination.
(c) PNCL shall use its reasonable best efforts to cause any
Standard of Conduct Determination required under Section 8(b) to be made as
promptly as practicable. If (i) the person or persons empowered or selected
under Section 8 to make the Standard of Conduct Determination shall not have
made a determination within 30 days after the later of (A) receipt by PNCL of
written notice from Indemnitee advising PNCL of the final disposition of the
applicable proceeding and (B) receipt by PNCL of written notice from Indemnitee
notifying PNCL of Indemnitee's choice of forum pursuant to Section 8(b) (the
later of the events specified in clause (A) and clause (B) being the
"Notification Date") and (ii) Indemnitee shall have fulfilled its obligations
set forth in the second sentence of Section 8(b), then Indemnitee shall be
deemed to have satisfied the applicable standard of conduct; provided that such
30-day period may be extended for a reasonable time, not to exceed an additional
30 days, in good faith by the
person or persons making such Standard of Conduct Determination if (s)he/they
require such additional time for the obtaining or evaluation of documentation
and/or information relating to such determination.
(d) If Indemnitee shall be entitled to indemnification
hereunder against any expenses under circumstances where (i) no determination of
whether Indemnitee has satisfied any applicable standard of conduct under
Delaware law is a legally required condition precedent to indemnification of
Indemnitee hereunder against such expenses, or (ii) Indemnitee has been
determined or deemed pursuant to Section 8(b) or (c) to have satisfied any
applicable standard of conduct under Delaware law which is a legally required
condition precedent to indemnification of Indemnitee hereunder against such
expenses, then PNCL shall pay such expenses to Indemnitee within 20 business
days after the later of (x) the Notification Date in respect of the proceeding
or portion thereof to which such expenses are related, out of which such
expenses arose or from which such expenses resulted and (y) the earliest date on
which the applicable criterion specified in clause (i) or (ii) above shall have
been satisfied.
(e) If a Standard of Conduct Determination is to be made by
Independent Counsel pursuant to Section 8(b), then the Independent Counsel shall
be selected by Indemnitee, and Indemnitee shall give written notice to PNCL
advising it of the identity of the Independent Counsel so selected. PNCL may,
within five business days after receiving written notice of selection from
Indemnitee, deliver to Indemnitee a written objection to such selection;
provided, however, that such objection may be asserted only on the ground that
the Independent Counsel so selected does not satisfy the criteria set forth in
the definition of "Independent Counsel" in Section 8(f), and the objection shall
set forth with particularity the factual basis of such assertion. Absent a
proper and timely objection, the person or firm so selected shall act as
Independent Counsel. If such written objection is properly and timely made and
substantiated, (i) the Independent Counsel so selected may not serve as
Independent Counsel unless and until such objection is withdrawn or a court has
determined that such objection is without merit and (ii) Indemnitee may, at its
option, select an alternative Independent Counsel and give written notice to
PNCL advising PNCL of the identity of the alternative Independent Counsel so
selected, in which case the provisions of the two immediately preceding
sentences and clause (i) of this sentence shall apply to such subsequent
selection and notice. If applicable, the provisions of clause (ii) of the
immediately preceding sentence shall apply to successive alternative selections.
If no Independent Counsel that is permitted under the foregoing provisions of
this Section 8(e) to make the Standard of Conduct Determination shall have been
selected within 30 days after Indemnitee gives its initial notice pursuant to
the first sentence of this Section 8(e) or PNCL gives its initial notice
pursuant to the second sentence of this Section 8(e), as the case may be, either
PNCL or Indemnitee may petition the Court of Chancery of the State of Delaware
for resolution of any objection which shall have been made by PNCL or Indemnitee
to the other's selection of Independent Counsel and/or for the appointment as
Independent Counsel of a person selected by the Court or by such other person as
the Court shall designate, and the person or firm with respect to whom all
objections are so resolved or the person or firm so appointed will act as
Independent Counsel. In all events, PNCL shall pay all of the reasonable fees
and expenses of, and all other reasonable fees and expenses paid or payable by,
the Independent Counsel in connection with the Independent Counsel's
determination pursuant to Section 8(b), including in connection with any
challenge thereto or defense thereof, and PNCL shall fully indemnify and hold
harmless such counsel against any and all reasonable expenses (including
attorney's fees),
claims, liabilities and damages arising out of or relating to this Agreement or
its engagement pursuant hereto.
(f) PNCL agrees that if there is a Change in Control (as
defined in Attachment "A" hereto) of PNCL, then with respect to all matters
thereafter arising concerning the rights of Indemnitee to indemnity payments and
advances of any expenses under this Agreement or any other agreement or PNCL
by-law now or hereafter in effect relating to proceedings, PNCL shall seek legal
advice only from Independent Counsel (as defined in Attachment "A" hereto)
selected by Indemnitee and approved by PNCL (which approval shall not be
unreasonably withheld). Such counsel, among other things, shall render its
written opinion to PNCL and Indemnitee as to whether and to what extent
Indemnitee would be permitted to be indemnified under applicable law. In all
events, PNCL shall pay all of the reasonable fees and expenses of, and all other
reasonable fees and expenses paid or payable by, the Independent Counsel
referred to in this Section 8(f) in connection with the foregoing, including in
connection with any challenge to or defense of any action or decision of such
Independent Counsel, and PNCL shall fully indemnify and hold harmless such
counsel against any and all reasonable expenses (including attorney's fees),
claims, liabilities and damages arising out of or relating to this Agreement or
its engagement pursuant hereto.
9. RELIANCE AS SAFE HARBOR; ACTIONS OF OTHERS.
(a) For purposes of any Standard of Conduct Determination, the
Indemnitee shall be deemed to have met the requisite standard of conduct if
Indemnitee's action is based on the records or books of account of PNCL,
including financial statements, or on information supplied to Indemnitee by the
officers of PNCL in the course of their duties, (provided, if Indemnitee is an
officer, then Indemnitee shall not be entitled to rely upon such data furnished
in the course of their duties by officers who report directly to Indemnitee) or
on the advice of legal counsel for PNCL or on information or records given or
reports made to PNCL by an independent certified public accountant or by an
appraiser or other expert selected with reasonable care by PNCL. The provisions
of this Section 9 shall not be deemed to be exclusive or to limit in any way the
other circumstances in which Indemnitee may be deemed to have met the applicable
standard of conduct set forth in this Agreement.
(b) The knowledge and/or actions, or failure to act, of any
director, officer, agent or employee of PNCL shall not be imputed to Indemnitee
for purposes of determining the right to indemnification under this Agreement.
10. LIMITATION OF ACTIONS AND RELEASE OF CLAIMS.
No proceeding shall be brought and no cause of action shall be asserted by or on
behalf of PNCL or any subsidiary against Indemnitee, his or her spouse, heirs,
estate, executors or administrators after the expiration of one year from the
act or omission of Indemnitee upon which such proceeding is based; however, in a
case where Indemnitee fraudulently conceals the facts underlying such cause of
action, no proceeding shall be brought and no cause of action shall be asserted
after the expiration of one year from the earlier of (i) the date PNCL or any
subsidiary of PNCL discovers such facts, or (ii) the date PNCL or any subsidiary
of PNCL could have discovered such facts by the exercise of reasonable
diligence. Any claim or cause of action of PNCL or any subsidiary of PNCL,
including claims predicated upon the negligent act or
omission of Indemnitee, shall be extinguished and deemed released unless
asserted by filing of a legal action within such period. This Section 9 shall
not apply to any cause of action which has accrued on the date hereof and of
which Indemnitee is aware on the date hereof, but as to which PNCL has no actual
knowledge apart from Indemnitee's knowledge.
11. PRESUMPTION OF ENTITLEMENT.
In making any Standard of Conduct Determination or other determination relating
to this Agreement, the person or persons making such determination shall presume
that Indemnitee has satisfied the applicable standard of conduct or otherwise is
entitled to the treatment hereunder requested by Indemnitee, and PNCL shall have
the burden of proof to overcome such presumption and shall satisfy such burden
of proof (and the person or persons making such determination shall be entitled
to reach a conclusion contrary to such presumption) only if PNCL adduces clear
and convincing evidence to the contrary.
12. EXCEPTIONS.
Notwithstanding any other provision herein to the contrary, PNCL shall not be
obligated, pursuant to the terms of this Agreement:
(a) Claims Initiated by Indemnitee. To indemnify or advance
expenses to Indemnitee with respect to proceedings or claims initiated or
brought voluntarily by Indemnitee and not by way of defense, except with respect
to proceedings brought to establish or enforce a right to indemnification under
this Agreement or any other statute or law or otherwise as required under
Section 145, but such indemnification or advancement of expenses may be provided
by PNCL in specific cases if the Board finds it to be appropriate; or
(b) Lack of Good Faith. To indemnify Indemnitee for any
expenses incurred by Indemnitee with respect to any proceeding instituted by
Indemnitee to enforce or interpret this Agreement, if a court of competent
jurisdiction determines that each of the material assertions made by Indemnitee
in such proceeding was not made in good faith or was frivolous; or
(c) Unauthorized Settlements. To indemnify Indemnitee under
this Agreement for any amounts paid in settlement of a proceeding unless PNCL
consents to such settlement; or
(d) Claims by PNCL for Willful Misconduct. To indemnify or
advance expenses to Indemnitee under this Agreement for any expenses incurred by
Indemnitee with respect to any proceeding or claim brought by PNCL against
Indemnitee for willful misconduct, unless a court of competent jurisdiction
determines that each of such claims by PNCL was not made in good faith or was
frivolous; or
(e) Section 16(b). To indemnify Indemnitee for expenses and
the payment of profits arising from the purchase and sale by Indemnitee of PNCL
securities in violation of Section 16(b) of the Securities Exchange Act of 1934,
as amended, or any similar successor statute; or
(f) Willful Misconduct. To indemnify Indemnitee on account of
Indemnitee's conduct which is finally adjudged to have been knowingly fraudulent
or deliberately dishonest, or to constitute willful misconduct; or
(g) Unlawful Indemnification. To indemnify Indemnitee if a
final decision by a court having jurisdiction in the matter shall determine that
such indemnification is not lawful; or
(h) Forfeiture of Certain Bonuses and Profits. To indemnify
Indemnitee for the payment of amounts required to be reimbursed to PNCL pursuant
to Section 304 of the Xxxxxxxx-Xxxxx Act of 2002, as amended, or any similar
successor statute.
13. REMEDIES OF INDEMNITEE.
(a) In the event that (i) a determination is made pursuant to
Section 8 of this Agreement that Indemnitee is not entitled to indemnification
under this Agreement, (ii) advancement of expenses is not timely made pursuant
to Section 6 of this Agreement, (iii) no determination of entitlement to
indemnification shall have been made pursuant to Section 8(b) or (f) of this
Agreement within 30 days after receipt by PNCL of the request for
indemnification, (iv) payment of indemnification is not made pursuant to Section
6 or the last sentence of Section 8(b) of this Agreement within 20 days after
receipt by PNCL of a written request therefore, or (v) payment of
indemnification pursuant to Sections 4 or 5 of this Agreement is not made within
the time set forth in Section 8(d), Indemnitee shall be entitled to an
adjudication by a court of his entitlement to such indemnification or
advancement of expenses. Alternatively, Indemnitee, at his option, may seek an
award in arbitration to be conducted by a single arbitrator pursuant to the
Commercial Arbitration Rules of the American Arbitration Association. PNCL shall
not oppose Indemnitee's right to seek any such adjudication or award in
arbitration.
(b) In the event that a determination shall have been made
pursuant to Section 8 of this Agreement that Indemnitee is not entitled to
indemnification, any judicial proceeding or arbitration commenced pursuant to
this Section 13 shall be conducted in all respects as a de novo trial, or
arbitration, on the merits and Indemnitee shall not be prejudiced by reason of
that adverse determination. In any judicial proceeding or arbitration commenced
pursuant to this Section 13 PNCL shall have the burden of proving Indemnitee is
not entitled to indemnification or advancement of expenses, as the case may be.
(c) If a determination shall have been made pursuant to
Section 8 of this Agreement that Indemnitee is entitled to indemnification, PNCL
shall be bound by such determination in any judicial proceeding or arbitration
commenced pursuant to this Section 13, absent (i) a misstatement by Indemnitee
of a material fact, or an omission of a material fact necessary to make
Indemnitee's statement not materially misleading, in connection with the request
for indemnification, or (ii) a prohibition of such indemnification under
applicable law.
(d) PNCL shall be precluded from asserting in any judicial
proceeding or arbitration commenced pursuant to this Section 13 that the
procedures and presumptions of this Agreement are not valid, binding and
enforceable and shall stipulate in any such court or before any such arbitrator
that PNCL is bound by all the provisions of this Agreement. PNCL shall indemnify
Indemnitee against any and all expenses and, if requested by Indemnitee, shall
(within ten days after receipt by PNCL of a written request therefore) advance
such expenses to Indemnitee, which are incurred by Indemnitee in connection with
any action brought by Indemnitee for indemnification or advance of expenses from
PNCL under this Agreement or under any directors' and officers' liability
insurance policies maintained by PNCL, regardless of whether Indemnitee
ultimately is determined to be entitled to such indemnification, advancement of
expenses or insurance recovery, as the case may be.
14. NONEXCLUSIVITY.
The provisions for indemnification and advancement of expenses set forth in this
Agreement shall not be deemed exclusive of any other rights which Indemnitee may
have under any provision of law, PNCL's Certificate of Incorporation or Bylaws,
the vote of PNCL's stockholders or disinterested directors, other agreements, or
otherwise, both as to actions in his or her official capacity and to actions in
another capacity while occupying his or her position as an agent of PNCL.
Indemnitee's rights hereunder shall continue after Indemnitee has ceased acting
as an agent of PNCL, subject to Section 21.
15. INTERPRETATION OF AGREEMENT.
It is understood that the parties hereto intend this Agreement to be interpreted
and enforced so as to provide indemnification to Indemnitee to the fullest
extent now or hereafter permitted by law.
16. SEVERABILITY.
If any provision or provisions of this Agreement shall be held to be invalid,
illegal or unenforceable for any reason whatsoever, (i) the validity, legality
and enforceability of the remaining provisions of the Agreement (including,
without limitation, all portions of any paragraphs of this Agreement containing
any such provision held to be invalid, illegal or unenforceable, that are not
themselves invalid, illegal or unenforceable) shall not in any way be affected
or impaired thereby, and (ii) to the fullest extent possible, the provisions of
this Agreement (including, without limitation, all portions of any paragraphs of
this Agreement containing any such provision held to be invalid, illegal or
unenforceable, that are not themselves invalid, illegal or unenforceable) shall
be construed so as to give effect to the intent manifested by the provision held
invalid, illegal or unenforceable and to give effect to Section 4 hereof.
17. MODIFICATION AND WAIVER.
No supplement, modification or amendment of this Agreement shall be binding
unless executed in writing by both of the parties hereto. No waiver of any of
the provisions of this Agreement shall be deemed or shall constitute a waiver of
any other provision hereof (whether or not similar) nor shall such waiver
constitute a continuing waiver.
18. NOTICE.
All notices, requests, demands and other communications under this Agreement
shall be in writing and shall be deemed duly given (i) if delivered by hand and
receipted for by the party addressee or (ii) if mailed by certified or
registered mail with postage prepaid, on the third business day after the
mailing date:
(a) If to Indemnitee, to the address at his signature.
(b) If to PNCL, to:
Pinnacle Airlines Corp.
Attn: General Counsel
0000 Xxxxxxxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxx, XX 00000
Addresses may be subsequently modified by written notice.
19. GOVERNING LAW; CONSENT TO JURISDICTION.
This Agreement shall be governed exclusively by and construed according to the
laws of the State of Delaware, as applied to contracts between Delaware
residents entered into and to be performed entirely within Delaware. PNCL and
Indemnitee 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.
20. SPECIFIC PERFORMANCE.
PNCL and Indemnitee recognize that if any provision of this Agreement is
violated by PNCL, Indemnitee may be without an adequate remedy at law.
Accordingly, in the event of any such violation, Indemnitee shall be entitled,
if Indemnitee so elects, to institute proceedings, either in law or at equity,
to obtain damages, to enforce specific performance, to enjoin such violation, or
to obtain any relief or any combination of the foregoing as Indemnitee may elect
it to pursue.
21. EFFECTIVENESS OF AGREEMENT; DURATION.
This Agreement shall be effective as of the date set forth on the first page and
may apply to acts or omissions of Indemnitee which occurred prior to such date
if Indemnitee was an officer, director, employee, or other agent of PNCL, or was
serving at the request of PNCL as a director, officer, employee, or agent of
another corporation, partnership, joint venture, trust, or other enterprise at
the time such act or omission occurred. This Agreement shall terminate upon the
later of: (a) ten years after the Indemnitee has ceased to be an agent of PNCL;
and (b) the final termination of all then-pending or threatened proceedings to
which the Indemnitee may be subject. The indemnification provided under this
Agreement shall continue as to the Indemnitee even though he may have ceased to
be a director or officer of the Company. This Agreement shall be binding upon
the Company and its successors and assigns and shall inure to the benefit of the
Indemnitee and his spouse, assigns, heirs, devises, executors, administrators or
other legal representatives.
22. CONTRIBUTION.
To the fullest extent permissible under applicable law, if the indemnification
provided for in this Agreement is unavailable to Indemnitee for any reason
whatsoever, PNCL, in lieu of indemnifying Indemnitee, shall contribute to the
amount incurred by Indemnitee, whether for judgments, fines, penalties, excise
taxes, amounts paid or to be paid in settlement and/or for expenses, in
connection with any claim relating to an indemnifiable event under this
Agreement, in such proportion as is deemed fair and reasonable in light of all
of the circumstances of such proceeding in order to reflect (i) the relative
benefits received by PNCL and Indemnitee as a result of the event(s) and/or
transaction(s) giving cause to such proceeding; and/or (ii) the
relative fault of PNCL (and its directors, officers, employees and agents) and
Indemnitee in connection with such event(s) and/or transaction(s).
23. SUBROGATION.
In the event of payment to Indemnitee under this Agreement, PNCL shall be
subrogated to the extent of such payment to all of the rights of recovery of
Indemnitee, who shall execute all papers required and shall do everything that
may be necessary to secure such rights, including the execution of such
documents necessary to enable PNCL effectively to bring suit to enforce such
rights.
EXECUTED as of the date first above written.
PINNACLE AIRLINES CORP.
By:
------------------------------
Name:
------------------------------
Title:
------------------------------
Date:
------------------------------
---------------------------------------
Name of Indemnitee:
-------------------
Date:
---------------------------------
Address:
---------------------------------------
---------------------------------------
ATTACHMENT A
DEFINITION OF "CHANGE IN CONTROL"
"Change in Control" means the occurrence after the date of this Agreement of any
of the following events: (i) any individual, entity or group (within the meaning
of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a "Person"), is or becomes
the beneficial owner (within the meaning of Rule 13d-3 promulgated under the
Exchange Act), directly or indirectly, of 50% or more of the total voting power
of the then outstanding Voting Stock; provided, however, that the following
events shall not constitute or result in a Change in Control: (A) any
acquisition of Voting Stock directly from PNCL, (B) any acquisition of Voting
Stock by PNCL, (C) any acquisition of Voting Stock by any employee benefit plan
(or related trust, or any trustee or other fiduciary thereof in such capacity)
sponsored or maintained by PNCL or any Subsidiary or (D) any acquisition of
Voting Stock by any Person pursuant to a Business Combination that complies with
clauses (A), (B) and (C) of Section (iii) below; or (ii) during any two-year
period, individuals who, as of the beginning of such period, constitute the
Board (the "Incumbent Directors") cease for any reason (other than death or
disability) to constitute at least a majority of the Board; provided, however,
that any individual becoming a director subsequent to the date hereof whose
election, or nomination for election by PNCL's stockholders, was approved by a
vote of at least a majority of the then Incumbent Directors (either by a
specific vote or by approval of the proxy statement of PNCL in which such person
is named as a nominee for director, without objection of PNCL, to such
nomination) shall be considered as though such individual were an Incumbent
Director, but excluding for this purpose, any such individual whose initial
assumption of office occurs as a result of an actual or threatened election
contest (as described in Rule 14a-12(c) of the Exchange Act) with respect to the
election or removal of directors or other actual or threatened solicitation of
proxies or consents by or on behalf of a Person other than the Board; or (iii)
consummation of a reorganization, merger or consolidation, or sale or other
disposition of all or substantially all of the assets, of PNCL (a "Business
Combination"), unless, in each case, immediately following such Business
Combination, (A) all or substantially all of the individuals and entities who
were the beneficial owners of Voting Stock of PNCL immediately prior to such
Business Combination beneficially own, directly or indirectly, more than 50% of
the combined voting power of the then outstanding voting securities entitled to
vote generally in the election of directors of the entity resulting from such
Business Combination (including, without limitation, an entity which as a result
of such transaction owns PNCL or all or substantially all of PNCL's assets
either directly or through one or more subsidiaries) in substantially the same
proportions relative to each other as their ownership, immediately prior to such
Business Combination, of the Voting Stock of PNCL, (B) no Person (excluding any
entity resulting from such Business Combination or any employee benefit plan (or
related trust, or any trustee or other fiduciary thereof in such capacity)
sponsored or maintained by PNCL, any Subsidiary or such entity resulting from
such Business Combination) beneficially owns, directly or indirectly, voting
securities representing 15% or more of the combined voting power of the then
outstanding voting securities entitled to vote generally in the election of
directors of the entity resulting from such Business Combination except to the
extent such ownership existed prior to the Business Combination and (C) at least
a majority of the members of the Board of the entity resulting from such
Business Combination were Incumbent Directors at the time of the execution of
the initial agreement or of the action of the Board providing for such Business
Combination; or (iv) approval by the stockholders of
PNCL of a plan of complete liquidation or dissolution of PNCL, except pursuant
to a Business Combination that complies with clauses (A), (B) and (C) of Section
(iii) above. For purposes of this Section, the following terms shall have the
following meanings:
(i) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder.
(ii) "Subsidiary" means an entity in which PNCL directly or indirectly
beneficially owns 50% or more of the outstanding Voting Stock.
(iii) "Voting Stock" means securities entitled to vote generally in the
election of directors.
(iv) "Independent Counsel" means a law firm, or a member of a law firm,
that is experienced in matters of corporation law and neither presently is, nor
in the past five years has been, retained to represent (i) PNCL or Indemnitee in
any matter material to either such party (other than with respect to matters
concerning other indemnitees under similar [i.e., non-Pinnacle] indemnification
agreements) or (ii) any other party to the proceeding giving rise to
indemnification hereunder. Notwithstanding the foregoing, the term "Independent
Counsel" shall not include any person who, under the applicable standards of
professional conduct then prevailing, would have a conflict of interest in
representing either PNCL or Indemnitee in an action to determine Indemnitee's
rights under this Agreement.
