INDEMNITY AGREEMENT
Exhibit
10.1
INDEMNITY
AGREEMENT
This
INDEMNITY AGREEMENT dated as of the ___ day of _______, is made by and between
Knight Transportation, Inc. (the “Corporation”), and ___________________ (the
“Indemnitee”).
RECITALS
The
Articles of Incorporation and Bylaws of the Corporation provide for
indemnification by the Corporation of its directors to the fullest extent
permitted by law. The Indemnitee has been serving and desires to
continue to serve as a director of the Corporation in part in reliance on such
indemnity provision.
To
provide the Indemnitee with additional contractual assurance of protection
against personal liability in connection with certain proceedings described
below, the Corporation desires to enter into this Agreement.
In order
to induce the Indemnitee to serve or continue to serve as a director of the
Corporation, and in consideration of the Indemnitee’s so serving, the
Corporation desires to indemnify the Indemnitee and to make arrangements
pursuant to which the Indemnitee may be advanced or reimbursed expenses incurred
by Indemnitee in certain proceedings described below, according to the terms and
conditions set forth below.
AGREEMENT
THEREFORE,
in consideration of the foregoing recitals and of Indemnitee’s serving or
continuing to serve the Corporation as a director, the parties agree as
follows:
1. Indemnification.
(a) In
accordance with the provisions of subsection (b) of this Section 1, the
Corporation shall hold harmless and indemnify the Indemnitee against any and all
expenses, liabilities and losses (including, without limitation, investigation
expenses and expert witnesses’ and attorneys’ fees and expenses, costs of court,
judgments, penalties, fines, and amounts paid or to be paid in settlement)
actually incurred by the Indemnitee (net of any related insurance proceeds or
other amounts received by Indemnitee or paid by or on behalf of the Corporation
on the Indemnitee’s behalf), in connection with any action, suit, or proceeding,
whether civil, criminal, administrative, or investigative, to which the
Indemnitee is a party or is threatened to be made a party (a “Proceeding”) based
upon, arising from, relating to, or by reason of the fact that Indemnitee is,
was, shall be, or shall have been a director and/or officer of the Corporation
or is or was serving, shall serve, or shall have served at the request of the
Corporation as a director, officer, partner, trustee, member, employee, or agent
(“Affiliate Indemnitee”) of another foreign or domestic corporation or
non-profit corporation, cooperative, partnership, joint venture, limited
liability company, trust or other incorporated or unincorporated enterprise
(each, a “Company Affiliate”).
(b) Without
limiting the generality of the foregoing, the Indemnitee shall be entitled to
the rights of indemnification provided in this Section 1 for any expenses
actually incurred in any Proceeding initiated by or in the right of the
Corporation, unless indemnification is barred by A.R.S. §§ 10-851.D or 10-856.A,
or any other applicable law.
(c) In
providing the foregoing indemnification, the Corporation shall, with respect to
any proceeding, hold harmless and indemnify the Indemnitee to the fullest extent
not prohibited by the law of the State of Arizona, as in effect from time and
time, and the Articles of Incorporation. For purposes of this
Agreement, it is intended that the indemnification afforded hereby be mandatory
and the broadest possible under any then existing statutory provision expressly
authorizing the Corporation to indemnify directors or officers whether in effect
on the date of this Agreement or hereafter, provided, however, that the
indemnification provisions of this Agreement shall apply without regard to
whether any provision set forth in the Articles or Bylaws of the Corporation
authorizing or permitting indemnification shall be in force or
effect.
2. Other Indemnification
Agreements. The Corporation may purchase and maintain
insurance or furnish similar protection or make other arrangements, including,
but not limited to, providing a trust fund, letter of credit, or surety bond
(“Indemnification Arrangements”) on behalf of the Indemnitee against any
liability asserted against him or her or incurred by or on behalf of him or her
in such capacity as a director or officer of the Corporation or an Affiliated
Indemnitee, or arising out of his or her status as such, whether or not the
Corporation would have the power to indemnify him or her against such liability
under the provisions of this Agreement. The purchase, establishment,
and maintenance of any such Indemnification Arrangement shall not in any way
limit or affect
the rights and obligations of the Corporation or of the Indemnitee under this
Agreement except as expressly provided herein, and the execution and delivery of
this Agreement by the Corporation and the Indemnitee shall not in any way limit
or affect the rights and obligations of the Corporation or the other party or
parties thereto under any such Indemnification Arrangement. All
amounts payable by the Corporation pursuant to this Section 2 and Section 1
hereof are herein referred to as “Indemnified Amounts.” To the extent
the Corporation is able to obtain directors and officers liability insurance of
a reasonable premium (as determined by the Corporation in its sole discretion),
the Corporation shall use reasonable efforts to cause the Indemnitee to be
covered by such insurance.
3. Advance Payment of
Indemnified Amounts.
(a) The
Indemnitee hereby is granted the right to receive in advance of a final,
nonappealable judgment or other final adjudication of a Proceeding (a “Final
Determination”) the amount of any and all expenses, including, without
limitation, investigation expenses, court costs, expert witnesses’ and
attorneys’ fees and other expenses expended or incurred by the Indemnitee in
connection with any Proceeding or otherwise expensed or incurred by the
Indemnitee (such amounts so expended or incurred being hereinafter referred to
as “Advanced Amounts”).
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(b) In
making any written request for Advanced Amounts, the Indemnitee shall submit to
the Corporation a schedule setting forth in reasonable detail the dollar amount
expended or incurred and expected to be expended. Each such listing
shall be supported by the xxxx, agreement, or other documentation relating
thereto, each of which shall be appended to the schedule as an
exhibit. In addition, before the Indemnitee may receive Advanced
Amounts from the Corporation, the Indemnitee shall provide to the Corporation
(i) a written affirmation of the Indemnitee’s good faith belief that the
applicable standard of conduct required for indemnification by the Corporation
has been satisfied by the Indemnitee, and (ii) a written undertaking by or on
behalf of the Indemnitee to repay the Advanced Amount if it shall ultimately be
determined that the Indemnitee has not satisfied any applicable standard of
conduct. The written undertaking required from the Indemnitee shall
be an unlimited general obligation of the Indemnitee but need not be
secured. The Corporation shall pay to the Indemnitee all Advanced
Amounts within twenty (20) days after receipt by the Corporation of all
information and documentation required to be provided by the Indemnitee pursuant
to this paragraph.
4. Procedure for Payment of
Indemnified Amounts.
(a) To
obtain indemnification under this Agreement, the Indemnitee shall submit to the
Corporation a written request for payment of the appropriate Indemnified
Amounts, including with such requests such documentation and information as is
reasonably available to the Indemnitee and reasonably necessary to determine
whether and to what extent the Indemnitee is entitled to
indemnification. The Secretary of the Corporation shall, promptly
upon receipt of such a request for indemnification, advise the Board of
Directors in writing that the Indemnitee has requested
indemnification.
(b) The
Corporation shall pay the Indemnitee the appropriate Indemnified Amounts unless
it is established that the Indemnitee engaged in one of the Prohibited Acts, and
such Prohibited Act was the subject matter of the Proceeding. For
purposes of determining whether the Indemnitee is entitled to Indemnified
Amounts, in order to deny indemnification to the Indemnitee, the Corporation has
the burden of proof in establishing (1) that the Indemnitee engaged in the
Prohibited Act, and (2) that the Prohibited Act was the subject matter of the
Proceeding. In this regard, a termination of any Proceeding by
judgment, order or settlement does not create a presumption that the Indemnitee
did not meet the requisite standard of conduct; provided, however, that the
termination of any criminal proceeding by conviction, or a pleading of nolo
contendere or its equivalent, or an entry of an order of probation prior to
judgment, creates a rebuttable presumption that the Indemnitee engaged in a
Prohibited Act. For purposes of this Agreement, a Prohibited Act
shall mean any act, omission or condition (i) described in A.R.S. § 10-851.D or
10-856.A for which the Corporation may not indemnify the Indemnitee or (ii) any
act, omission or condition for which indemnity is not available under any
federal or state law or public policy.
(c) Any
determination that the Indemnitee has engaged in a Prohibited Act shall be made
(i) either by the Board of Directors by a majority vote of a quorum consisting
of directors who were not parties to such Proceeding; or (ii) by independent
legal counsel (who may be the outside counsel regularly employed by the
Corporation); provided that the manner in which (and, if applicable, the counsel
by which) the right of indemnification is to be determined
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shall be
approved in advance in writing by both the highest ranking executive officer of
the Corporation who is not a party to such action (sometimes hereinafter
referred to as “Senior Officer”) and by the Indemnitee. In the event
that such parties are unable to agree on the manner in which any such
determination is to be made, such determination shall be made by independent
legal counsel retained by the Corporation especially for such purpose, provided
that such counsel be approved in advance in writing by both the Senior Officer
and the Indemnitee and, provided further, that such counsel shall not be outside
counsel regularly employed by the Corporation. The fees and expenses
of counsel in connection with making the determination contemplated hereunder
shall be paid by the Corporation, and, if requested by such counsel, the
Corporation shall give such counsel an appropriate written agreement with
respect to the payment of their fees and expenses and such other matters as may
be reasonably requested by counsel.
(d) The
Corporation will use its best efforts to conclude as soon as practicable any
required determination pursuant to subparagraph (c) above and promptly will
advise the Indemnitee in writing with respect to any determination that the
Indemnitee is or is not entitled to indemnification, including a description of
any reason or basis for which indemnification has been
denied. Payment of any applicable Indemnified Amounts will be made to
the Indemnitee within ten (10) days after any determination of the Indemnitee’s
entitlement to indemnification.
(e) Notwithstanding
the foregoing, the Indemnitee may, at any time after sixty (60) days after a
claim for Indemnified Amounts has been filed with the Corporation (or upon
receipt of written notice that a claim for Indemnified Amounts has been
rejected, if earlier) and before three (3) years after a claim for Indemnified
Amounts has been filed, petition a court of competent jurisdiction to determine
whether the Indemnitee is entitled to indemnification under the provisions of
this Agreement, and such court shall thereupon have the exclusive authority to
make such determination unless and until such court dismisses or otherwise
terminates such action without having made such determination. The
court shall, as petitioned, make an independent determination of whether the
Indemnitee is entitled to indemnification as provided under this Agreement,
irrespective of any prior determination made by the Board of Directors or
independent counsel. If the court shall determine that the Indemnitee
is entitled to indemnification as to any claim, issue or matter involved in the
Proceeding with respect to which there has been no prior determination pursuant
to this Agreement or with respect to which there has been a prior determination
that the Indemnitee was not entitled to indemnification hereunder, the
Corporation shall pay all expenses (including attorneys’ fees and court costs)
actually incurred by the Indemnitee in connection with such judicial
determination.
5. Agreement Not Exclusive;
Subrogation Rights, etc.
(a) This
Agreement shall not be deemed exclusive of and shall not diminish any other
rights the Indemnitee may have to be indemnified or insured or otherwise
protected against any liability, loss, or expense by the Corporation, any
subsidiary of the Corporation, or any other person or entity under any charter,
bylaws, law, agreement, policy of insurance or similar protection, vote of
stockholders or directors, disinterested or not, or otherwise, whether or not
now in effect, both as to actions in the Indemnitee’s official capacity, and as
to actions in another capacity while holding such office. The
Corporation’s obligations to
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make
payments of Indemnified Amounts hereunder shall be satisfied to the extent that
payments with respect to the same Proceeding (or part thereof) have been made to
or for the benefit of the Indemnitee by reason of the indemnification of the
Indemnitee pursuant to any other arrangement made by the Corporation for the
benefit of the Indemnitee.
(b) In
the event the Indemnitee shall receive payment from any insurance carrier or
from the plaintiff in any Proceeding against such Indemnitee in respect of
Indemnified Amounts after payments on account of all or part of such Indemnified
Amounts have been made by the Corporation pursuant hereto, such Indemnitee shall
promptly reimburse to the Corporation the amount, if any, by which the sum of
such payment by such insurance carrier or such plaintiff and payments by the
Corporation or pursuant to arrangements made by the Corporation to Indemnitee
exceeds such Indemnified Amounts; provided, however, that such portions, if any,
of such insurance proceeds that are required to be reimbursed to the insurance
carrier under the terms of its insurance policy, such as deductible or
co-insurance payments, shall not be deemed to be payments to the Indemnitee
hereunder. In addition, upon payment of Indemnified Amounts
hereunder, the Corporation shall be subrogated to the rights of Indemnitee
receiving such payments (to the extent thereof) against any insurance carrier
(to the extent permitted under such insurance policies) or plaintiff in respect
to such Indemnified Amounts and the Indemnitee shall execute and deliver any and
all instruments and documents and perform any and all other acts or deeds which
the Corporation deems necessary or advisable to secure such
rights. Such right of subrogation shall be terminated upon receipt by
the Corporation of the amount to be reimbursed by the Indemnitee pursuant to the
first sentence of this paragraph.
6. Continuation of
Indemnity. All agreements and obligations of the Corporation
contained herein shall continue during the period Indemnitee is a director of
the Corporation (or is serving at the request of the Corporation as an Affiliate
Indemnitee) and shall continue thereafter so long as Indemnitee shall be subject
to any possible Proceeding by reason of the fact that Indemnitee was a director,
officer or employee of the Corporation or was serving in any other capacity
referred to herein.
7. Successors; Binding
Agreement. This Agreement shall be binding on and shall inure
to the benefit of and be enforceable by the Corporation’s successors and assigns
and by the Indemnitee’s personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees, and
legatees. The Corporation shall require any successor or assignee
(whether direct or indirect, by purchase, merger, consolidation, or otherwise)
to all or substantially all of the business and/or assets of the Corporation, by
written agreement in form and substance reasonably satisfactory to the
Corporation and to the Indemnitee, expressly to assume and agree to perform this
Agreement in the same manner and to the same extent that the Corporation would
be required to perform if no such succession or assignment had taken
place.
8. Enforcement. The
Corporation has entered into this Agreement and assumed the obligations imposed
on the Corporation hereby in order to induce the Indemnitee to act as a director
of the Corporation, and acknowledges that the Indemnitee is relying upon this
Agreement in continuing in such capacity. In the event the Indemnitee
is required to bring any action to enforce rights or to collect monies due under
this Agreement and is successful in such action, the Corporation shall reimburse
Indemnitee for all of the Indemnitee’s fees and expenses in bringing and
pursuing such action. The Indemnitee shall be entitled to the
advancement of Indemnified Amounts to the full extent contemplated by Section 3
hereof in connection with such Proceeding.
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9. Separability. Each
of the provisions of this Agreement is a separate and distinct agreement
independent of the others, so that if any provision hereof shall be held to be
invalid or unenforceable for any reason, such invalidity or unenforceability
shall not affect the validity or enforceability of the other provisions hereof,
which other provisions shall remain in full force and effect.
10. Miscellaneous. No
provision of this Agreement may be modified, waived, or discharged unless such
modification, waiver, or discharge is agreed to in writing signed by Indemnitee
and either the Chairman of the Board or the President of the Corporation or
another officer of the Corporation specifically designated by the Board of
Directors. No waiver by either party at any time of any breach by the
other party of, or of compliance with, any condition or provision of this
Agreement to be performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same time or at any prior
or subsequent time. No agreements or representations, oral or
otherwise, express or implied, with respect to the subject matter hereof have
been made by either party which are not set forth expressly in this
Agreement. The validity, interpretation, construction, and
performance of this Agreement shall be governed by the laws of the State of
Arizona, without giving effect to the principles of conflicts of laws
thereof. The Indemnitee may bring an action seeking resolution of
disputes or controversies arising under or in any way related to this Agreement
in the state or federal court jurisdiction in which Indemnitee resides or in
which his or her place of business is located, and in any related appellate
courts, and the Corporation consents to the jurisdiction of such courts and to
such venue.
11. Notices. For
the purposes of this Agreement, notices and all other communications provided
for in the Agreement shall be in writing and shall be deemed to have been duly
given when delivered or mailed by United States registered mail, return receipt
requested, postage prepaid, as follows:
If to
Indemnitee:
___________________
Knight
Transportation, Inc.
0000 X.
Xxxxxxx Xxxx
Xxxxxxx,
Xxxxxxx 00000
If to
Corporation: Knight
Transportation, Inc.
0000 Xxxx
Xxxxxxx Xxxx
Xxxxxxx,
Xxxxxxx 00000
Attention: Secretary
or to
such other address as either party may have furnished to the other in writing in
accordance herewith, except that notices of change of address shall be effective
only upon receipt.
12. Counterpart. This
Agreement may be executed in one or more counterparts, each of which shall be
deemed to be an original but all of which together shall constitute one and the
same instrument.
13. Effectiveness. This
Agreement shall be effective as of _________, ____.
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IN
WITNESS WHEREOF, the undersigned have caused this Agreement to be executed as of
the day and year first above written.
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