EXHIBIT 10.10
INDEMNIFICATION AGREEMENT
THIS INDEMNIFICATION AGREEMENT (this "Agreement"), is made and entered into
this __ day of March __, 2002 (the "Effective Date"), by and among Mobile
Storage Group, Inc., a California corporation, Mobile Services Group, Inc., a
California Corporation, Mobile Services Group, Inc., a Delaware corporation
(each a "Company" and collectively, the "Companies"), and ____________________
("Indemnitee").
WHEREAS, it is essential to the Companies to retain and attract as
directors and officers the most capable persons available;
WHEREAS, at the request of the Companies, Indemnitee currently serves as a
director and/or officer of one or more of the companies and may, therefore, be
subjected to claims, suits or proceedings arising as a result of his service;
WHEREAS, as an inducement to Indemnitee to continue to serve as such
director and/or officer, the Companies have agreed (i) to jointly and severally
indemnify and be obligated to advance expenses and costs incurred by Indemnitee
in connection with any such claims, suits or proceedings, to the fullest extent
permitted by law and as set forth in this Agreement, and (ii) to the extent
insurance is maintained, to provide coverage for, or continue coverage of,
Indemnitee under the Companies' directors' and officer's liability insurance
policies; and
WHEREAS, the parties by this Agreement desire to set forth their agreement
regarding indemnification.
NOW, THEREFORE, in consideration of the premises contained herein and of
Indemnitee's agreement to continue to serve the Companies directly or, at their
request, another enterprise, and intending to be legally bound hereby, the
parties hereto agree as follows:
Section 1. Definitions. For purposes of this Agreement:
(a) "Change in Control" means a change in control of one or more of the
Companies occurring after the Effective Date of a nature that would be required
to be reported in response to Item 6(e) of Schedule 14A of Regulation 14A (or in
response to any similar item on any similar schedule or form) promulgated under
the Securities Exchange Act of 1934, as amended (the "Act"), whether or not the
Company involved is then subject to such reporting requirement; provided,
however, that, without limitation, such a Change in Control shall be deemed to
have occurred if after the Effective Date:
(i) any "person" (as such term is used in Sections 13(d) and 14(d) of
the Act), other than a trustee or other fiduciary holding securities under
an employee benefit plan of the Company involved or a corporation owned
directly or indirectly by the stockholders of such Company in
substantially the same proportions as their ownership of stock of such
Company, is or becomes the "beneficial owner" (as defined in Rule 13d-3
under the Act), directly or indirectly, of securities of such Company
representing 20% or more of the total voting power represented by such
Company's then outstanding Voting Securities without the prior approval of
at least two-thirds of the members of the Board of Directors in office
immediately prior to such person attaining such percentage interest;
(ii) there occurs a proxy contest, or the Company involved is a
party to a merger, consolidation, sale of assets, plan of liquidation or
other reorganization not approved by at least two-thirds of the members
of the Board of Directors then in office, as a consequence of which
members of the Board of Directors in office immediately prior to such
transaction or event constitute less than a majority of the Board of
Directors thereafter; or
(iii) during any period of two consecutive years, other than as
a result of an event described in clause (a)(ii) of this Section 1,
individuals who at the beginning of such period constituted the Board of
Directors of the Company involved and any new director whose election by
the Board of Directors or nomination for election by the Company's
stockholders was approved by a vote of at least two-thirds (2/3) of the
directors then still in office who either were directors at the
beginning of the period or whose election or nomination for election was
previously so approved, cease for any reason to constitute at least a
majority of the Board of Directors.
(b) "Claim" means any threatened, pending or completed action, suit or
proceeding, or any inquiry or investigation, whether instituted by any or all of
the Companies or by any other party, that Indemnitee in good faith believes
might lead to the institution of any such action, suit or proceeding, whether
civil, criminal, administrative, investigative or other.
(c) "Expenses" shall include attorneys' fees and all other costs,
expenses and obligations paid or incurred in connection with investigating,
defending, being a witness in or participating in (including on appeal), or
preparing to defend, be a witness in or participate in, any Claim relating to
any Indemnifiable Event.
(d) "Indemnifiable Event" means any event or occurrence related to the
fact that Indemnitee is or was a director, officer, employee, agent or fiduciary
of any of the Companies, or is or was serving at the request of any of the
Companies as a director, officer, employee, trustee, agent or fiduciary of
another corporation, partnership, joint venture, employee benefit plan, trust or
other enterprise, or by reason of anything done or not done by Indemnitee in any
such capacity.
(e) "Independent Legal Counsel" means an attorney or firm of attorneys,
selected in accordance with the provisions of Section 3, who shall not have
otherwise performed services for any of the Companies or Indemnitee within the
last three years (other than with respect to matters concerning the rights of
Indemnitee under this Agreement, or of other indemnitees under similar indemnity
agreements).
(f) "Potential Change in Control" shall be deemed to have occurred if
(i) any of the Companies enters into an agreement, the consummation of which
would result in the occurrence of a Change in Control; (ii) any person
(including the Company involved) publicly announces an intention to take or to
consider taking actions which if consummated would constitute a Change in
Control; (iii) any person, other than a trustee or other fiduciary holding
securities under an employee benefit plan such Company or a corporation owned,
directly or indirectly, by the stockholders of such Company in substantially the
same proportions as their ownership of stock of such Company, who is or becomes
the beneficial owner, directly or indirectly, of securities of such Company
representing nine and one-half percent (9.5%) or more of the combined voting
power of such Company's then outstanding Voting Securities, increases his
beneficial ownership
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of such securities by five percent (5%) or more over the percentage so owned by
such person; or (iv) the Board adopts a resolution to the effect that, for
purposes of this Agreement, a Potential Change in Control has occurred.
(g) "Reviewing Party" means any appropriate person or body consisting of
a member or members of one of the Companies' Boards of Directors or any other
person or body appointed by the Board who is not a party to the particular Claim
for which Indemnitee is seeking indemnification, or Independent Legal Counsel.
(h) "Voting Securities" means any securities of any of the Companies
which vote generally in the election of directors.
Section 2. Basic Indemnification Arrangement. (a) In the event
Indemnitee was, is or becomes a party to or witness or other participant in, or
is threatened to be made a party to or witness or other participant in, a Claim
by reason of (or arising in part out of) an Indemnifiable Event, the Companies,
jointly and severally shall indemnify Indemnitee to the fullest extent permitted
by law as soon as practicable but in any event no later than 30 days after
written demand is presented to any of the Companies, against any and all
Expenses, judgments, fines, penalties and amounts paid in settlement (including
all interest, assessments and other charges paid or payable in connection with
or in respect of such Expenses, judgments, fines, penalties or amounts paid in
settlement) of such Claim. If so requested by Indemnitee, the Companies, jointly
and severally shall be obligated to advance (within two business days of such
request) any and all Expenses to Indemnitee (an "Expense Advance").
(b) Notwithstanding the foregoing, (i) the obligations of the Companies
under Section 2(a) shall be subject to the condition that the Reviewing Party
shall not have determined (in a written opinion, in any case in which the
Independent Legal Counsel referred to in Section 3 hereof is involved) that
Indemnitee would not be permitted to be indemnified under applicable law, and
(ii) the obligation of the Companies, jointly and severally, to make an Expense
Advance pursuant to Section 2(a) shall be subject to the condition that, if,
when and to the extent that the Reviewing Party determines that Indemnitee would
not be permitted to be so indemnified under applicable law, the Companies shall
be entitled to be reimbursed by Indemnitee (who hereby agrees to reimburse the
Companies) for all such amounts theretofore paid; provided, however, that if
Indemnitee has commenced or thereafter commences legal proceedings in a court of
competent jurisdiction to secure a determination that Indemnitee should be
indemnified under applicable law, any determination made by the Reviewing Party
that Indemnitee would not be permitted to be indemnified under applicable law
shall not be binding and Indemnitee shall not be required to reimburse the
Companies for any Expense Advance until a final judicial determination is made
with respect thereto (as to which all rights of appeal therefrom have been
exhausted or lapsed). If there has not been a Change in Control, the Reviewing
Party shall be selected by the Board of Directors of Mobile Services Group,
Inc., a Delaware corporation, and if there has been such a Change in Control
(other than a Change in Control which has been approved by a majority of the
Company's Board of Directors who were directors immediately prior to such Change
in Control), the Reviewing Party shall be the Independent Legal Counsel referred
to in Section 3 hereof. If there has been no determination by the Reviewing
Party or if the Reviewing Party determines that Indemnitee substantively would
not be permitted to be indemnified in whole or in part under applicable law,
Indemnitee shall have the right to commence litigation in any court in the
States of California or Delaware having subject matter jurisdiction thereof and
in which venue is proper seeking an initial determination by the court or
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challenging any such determination by the Reviewing Party or any aspect thereof,
including the legal or factual bases therefor, and the Companies hereby consent
to service of process and to appear in any such proceeding. Any determination by
the Reviewing Party otherwise shall be conclusive and binding on the Companies
and Indemnitee.
Section 3. Change in Control. The Companies agree that if there is a
Change in Control of any of the Companies (other than a Change in Control which
has been approved by a majority of the Company's Board of Directors who were
directors immediately prior to such Change in Control) then with respect to all
matters thereafter arising concerning the rights of Indemnitee to indemnity
payments and Expense Advances under this Agreement or any other agreement or the
Companies' bylaws now or hereafter in effect relating to Claims for
Indemnifiable Events, the Companies shall seek legal advice only from
Independent Legal Counsel selected by Indemnitee and approved by the Companies
(which approval shall not be unreasonably withheld). Such counsel, among other
things, shall render its written opinion to the Companies and Indemnitee as to
whether and to what extent the Indemnitee would be permitted to be indemnified
under applicable law. The Companies agree to, jointly and severally be obligated
to pay the reasonable fees of the Independent Legal Counsel referred to above
and to indemnify fully such counsel against any and all expenses (including
attorneys' fees), claims, liabilities and damages arising out of or relating to
this Agreement or its engagement pursuant hereto.
Section 4. Indemnification for Additional Expenses. The Companies,
jointly and severally shall indemnify Indemnitee against any and all expenses
(including attorneys' fees) and, if requested by Indemnitee, shall (within two
business days of such request) advance such expenses to Indemnitee, which are
incurred by Indemnitee in connection with any action brought by Indemnitee for
(i) indemnification or advance payment of Expenses by the Companies under this
Agreement or any other agreement or the Companies' bylaws now or hereafter in
effect relating to Claims for Indemnifiable Events and/or (ii) recovery under
any directors' and officers' liability insurance policies maintained by the
Companies, regardless of whether Indemnitee ultimately is determined to be
entitled to such indemnification, advance expense payment or insurance recovery,
as the case may be.
Section 5. Partial Indemnity. If Indemnitee is entitled under any
provision of this Agreement to indemnification by the Companies, jointly and
severally, for some or a portion of the Expenses, judgments, fines, penalties
and amounts paid in settlement of a Claim but not, however, for all of the total
amount thereof, the Companies, jointly and severally shall nevertheless
indemnify Indemnitee for the portion thereof to which Indemnitee is entitled.
Moreover, notwithstanding any other provision of this Agreement, to the extent
that Indemnitee has been successful on the merits or otherwise in defense of any
or all Claims relating in whole or in part to an Indemnifiable Event or in
defense of any issue or matter therein, including dismissal without prejudice,
Indemnitee shall be indemnified against all Expenses incurred in connection
therewith.
Section 6. Burden of Proof. In connection with any determination by the
Reviewing Party or otherwise as to whether Indemnitee is entitled to be
indemnified hereunder, the burden of proof shall be on the Companies to
establish that Indemnitee is not so entitled.
Section 7. No Presumptions. For purposes of this Agreement, the
termination of any claim, action, suit or proceeding, by judgment, order,
settlement (whether with or without
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court approval) or conviction, or upon a plea of nolo contendere, or its
equivalent, shall not create a presumption that Indemnitee did not meet any
particular standard of conduct or have any particular belief or that a court has
determined that indemnification is not permitted by applicable law. In addition,
neither the failure of the Reviewing Party to have made a determination as to
whether Indemnitee has met any particular standard of conduct or had any
particular belief, nor an actual determination by the Reviewing Party that
Indemnitee has not met such standard of conduct or did not have such belief,
prior to the commencement of legal proceedings by Indemnitee to secure a
judicial determination that Indemnitee should be indemnified under applicable
law shall be a defense to Indemnitee's claim or create a presumption that
Indemnitee has not met any particular standard of conduct or did not have any
particular belief.
Section 8. Nonexclusivity. The rights of the Indemnitee hereunder shall
be in addition to any other rights Indemnitee may have under the Companies'
bylaws, the Corporations Code of California, the Delaware General Corporation
Law or otherwise. To the extent that a change in the Corporations Code of
California or the Delaware General Corporation Law (whether by statute or
judicial decision) permits greater indemnification by agreement than would be
afforded currently under the Companies' bylaws and this Agreement, it is the
intent of the parties hereto that Indemnitee shall enjoy by this Agreement the
greater benefits so afforded by such change.
Section 9. Liability Insurance. To the extent the Companies maintain an
insurance policy or policies providing directors' and officers' liability
insurance, Indemnitee shall be covered by such policy or policies, in accordance
with its or their terms, to the maximum extent of the coverage available for any
of the Companies' directors or officers.
Section 10. Period of Limitations. No legal action shall be brought and
no cause of action shall be asserted by or in the right of any of the Companies
against Indemnitee, Indemnitee's spouse, heirs, executors or personal or legal
representatives after the expiration of two years from the date of accrual of
such cause of action, and any claim or cause of action of any of the Companies
shall be extinguished and deemed released unless asserted by the timely filing
of a legal action within such two-year period; provided, however, that if any
shorter period of limitations is otherwise applicable to any such cause of
action, such shorter period shall govern.
Section 11. Amendments. No supplement, modification or amendment of this
Agreement shall be binding unless executed in writing by the parties hereto. No
waiver of any of the provisions of this Agreement shall be deemed or shall
constitute a waiver of any other provisions hereof (whether or not similar) nor
shall such waiver constitute a continuing waiver.
Section 12. Subrogation. In the event of payment under this Agreement,
the Companies 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 the Companies effectively to
bring suit to enforce such rights.
Section 13. No Duplication of Payments. The Companies shall not be
liable under this Agreement to make any payment in connection with any Claim
made against Indemnitee to the extent Indemnitee has otherwise actually received
payment (under any insurance policy, the Companies' bylaws or otherwise) of the
amounts otherwise indemnifiable hereunder.
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Section 14. Binding Effect. This Agreement shall be binding upon and
inure to the benefit of and be enforceable by the parties hereto and their
respective successors, assigns, including any direct or indirect successor by
purchase, merger, consolidation or otherwise to all or substantially all of the
business and/or assets of the Companies, spouses, heirs, executors and personal
and legal representatives. This Agreement shall continue in effect regardless of
whether Indemnitee continues to serve as an officer or director of the Companies
or of any other enterprise at the Companies' request.
Section 15. Severability. The provisions of this Agreement shall be
severable in the event that any of the provisions hereof (including any
provision within a single section, paragraph or sentence) are held by a court of
competent jurisdiction to be invalid, void or otherwise unenforceable in any
respect, and the validity and enforceability of any such provision in every
other respect and of the remaining provisions hereof shall not be in any way
impaired and shall remain enforceable to the fullest extent permitted by law.
Section 16. Governing Law. This Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of Delaware
applicable to contracts made and to be performed in such state without giving
effect to the principles of conflicts of laws.
(Signature Follow)
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the Effective Date.
MOBILE STORAGE GROUP, INC.,
a California corporation
By:
------------------------------------
Name:
Title:
MOBILE SERVICES GROUP, INC.
a California corporation
By:
------------------------------------
Name:
Title:
MOBILE SERVICES GROUP, INC.
a Delaware corporation
By:
------------------------------------
Name:
Title:
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[Name of Indemnitee]
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