EXHIBIT 10.14
INDEMNIFICATION AGREEMENT
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THIS INDEMNIFICATION AGREEMENT is entered into as of this _____ day of
April, 1998, by and between United Road Services, Inc., a Delaware corporation,
(the "Company"), and _________________ ("Indemnitee").
RECITALS
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A. The Company is aware that because of the increased exposure to
litigation costs, talented and experienced persons are increasingly reluctant to
serve or continue serving as directors and officers of corporations unless they
are protected by comprehensive liability insurance and indemnification.
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 guidance
regarding the proper course of action.
C. The Company believes that it is fair and proper to protect the
Company's directors and certain of its officers, from the risk and judgments,
settlements and other expenses which may occur as a result of their service to
the Company, even in cases in which such persons received no personal profit or
were not otherwise culpable.
D. The Board of Directors of the Company (the "Board") has concluded
that, to retain and attract talented and experienced individuals to serve as
officers and directors of the Company and to encourage such individuals to take
the business risks necessary for the success of the Company, the Company should
contractually indemnify its officers and directors, in connection with claims
against such officers and directors in connection with their services to the
Company, and has further concluded that the failure to provide such contractual
indemnification could be detrimental to the Company, and its stockholders.
NOW, THEREFORE, the parties, intending to be legally bound, hereby
agree as follows:
1. Definitions:
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(a) Agent. "Agent" means any person who is or was a director,
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officer, employee or other Agent of the Company; or is or was serving at the
request of, for the convenience of, or to represent the interests of, the
Company as a director, officer, employee or Agent of another entity or
enterprise; or was a director, officer, employee or Agent of a predecessor
corporation of the Company, or was a director, officer, employee or Agent of
another enterprise at the request of, for the convenience of, or to represent
the interests of such predecessor corporation.
(b) Expenses. "Expenses" means all direct and indirect costs of any
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type or nature whatsoever (including, without limitation, all attorneys' fees,
costs of investigation and related disbursements) incurred by the Indemnitee in
connection with the investigation, settlement, defense or appeal of a claim or
Proceeding covered hereby or establishing or enforcing a right to
indemnification under this Agreement.
(c) Proceeding. "Proceeding" means any threatened, pending, or
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completed claim, suit or action, whether civil, criminal, administrative,
investigative or otherwise.
2. Maintenance of Liability Insurance.
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(a) The Company hereby covenants and agrees with Indemnitee that,
subject to Section 2(b), the Company shall obtain and maintain in full force and
effect directors' and officers' liability insurance ("D&O Insurance") in
reasonable amounts as the Board of Directors shall determine from established
and reputable insurers, but no less than the amounts in effect upon initial
procurement of the D&O Insurance. In all policies of D&O Insurance, Indemnitee
shall be named as an insured.
(b) Notwithstanding the foregoing, the Company shall have no
obligation to obtain or maintain D&O Insurance if the Company determines in good
faith that the premium costs for such insurance are (i) disproportionate to the
amount of coverage provided after giving effect to exclusions, and (ii)
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substantially more burdensome to the Company than the premiums charged to the
Company for its initial D&O Insurance.
3. Mandatory Indemnification. The Company shall defend, indemnify
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and hold harmless Indemnitee:
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(a) Third party Actions. If Indemnitee is a person who was or is a
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party or is threatened to be made a party to any proceeding (other than an
action by or in the right of the Company) by reason of the fact that Indemnitee
is or was or is claimed to be an Agent of the Company, or by reason of anything
done or not done by Indemnitee in any such capacity, or by reason of the fact
that Indemnitee personally guaranteed any obligation of the Company at any time,
against any and all Expenses and liabilities or any type whatsoever (including,
but not limited to, legal fees, judgments, fines, ERISA excise taxes or
penalties, and amounts paid in settlement) incurred by such person in connection
with the investigation, defense, settlement or appeal of such proceeding, so
long as the Indemnitee acted in good faith and in a manner the Indemnitee
reasonably believed to be in or not opposed to the best interests of the
Company, or, with respect to any criminal action or Proceeding, had no
reasonable cause to believe such person's conduct was unlawful.
(b) Derivative Actions. If Indemnitee is a person who was or is a
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party or is threatened to be made a party to any Proceeding by or in the right
of the Company by reason of the fact that Indemnitee is or was an Agent of the
Company, or by reason of anything done or not done by Indemnitee in any such
capacity, against any amounts paid in settlement of any such Proceeding, and all
other Expenses incurred by such person in connection with the investigation,
defense, settlement or appeal of such Proceeding so long as the Indemnitee acted
in good faith and in a manner the Indemnitee reasonably believed to be in or not
opposed to the best interests of the Company; except that no indemnification
under this subsection shall be made, and Indemnitee shall repay all amounts
previously advanced by the Company, in respect of any claim, issue or matter for
which such person is judged in a final, non-appealable decision to be liable to
the Company by a court of competent jurisdiction due to willful misconduct in
the performance of such person's duties to the Company, unless and only to the
extent that the court in which such Proceeding was brought shall determine that
Indemnitee is fairly and reasonably entitled to indemnity.
(c) Actions Where Indemnitee is Deceased. If Indemnitee is a person
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who was or is a party or is threatened to be made a party to any Proceeding by
reason of the fact that Indemnitee is or was an Agent of the Company, or by
reason of anything done or not done by Indemnitee in any such capacity, and
prior to, during the pendency of, or after completion of, such
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Proceeding, the Indemnitee shall die, then the Company shall defend, indemnify
and hold harmless the estate, heirs and legatees of the Indemnitee against any
and all Expenses and liabilities incurred by or for such persons or entities in
connection with the investigation, defense, settlement or appeal of such
Proceeding on the same basis as provided for the Indemnitee in Sections 3(a) and
3(b) above.
The Expenses and liabilities covered hereby shall be net of any payments by D&O
Insurance carriers or others.
4. Partial Indemnification. If Indemnitee is found under Section
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3(b), 6 or 9 hereof not to be entitled to indemnification for all of the
Expenses relating to a Proceeding, the Company shall indemnify the Indemnitee
for any portion of such Expenses not specifically precluded by the operation of
such Section 3(b), 6 or 9.
5. Indemnification Procedures; Mandatory Advancement of Expenses.
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(a) Promptly after receipt by Indemnitee of notice to him or her of
the commencement or threat of any Proceeding covered hereby, Indemnitee shall
notify the Company of the commencement or threat thereof, provided that any
failure to so notify shall not relieve the Company of any of its obligations
hereunder.
(b) If, at the time of the receipt of a notice pursuant to Section
5(a) above, the Company has D&O Insurance in effect, the Company shall give
prompt notice of the Proceeding or claim to its insurers in accordance with the
procedures set forth in the applicable policies. The Company shall thereafter
take all necessary or desirable action to cause such insurers to pay all amounts
payable as a result of such Proceeding in accordance with the terms of such
policies.
(c) Indemnitee shall be entitled to retain one or more counsel from
time to time selected by him or her in such person's sole discretion to act as
his or her counsel in and for the investigation, defense, settlement or appeal
of each Proceeding.
(d) The Company shall bear all fees and Expenses (including invoices
for advance retainers) of such counsel, and all fees
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and Expenses invoiced by other persons or entities, in connection with the
investigation, defense, settlement or appeal of each such Proceeding. Such fees
and Expenses are referred to herein as "Covered Expenses."
(e) Until a determination to the contrary under Section 6 hereof is
made, the Company shall advance all Covered Expenses in connection with each
Proceeding. If required by law, as a condition to such advances, Indemnitee
shall, at the request of the Company, agree to repay such amounts advanced if it
shall ultimately be determined by a final order of a court that Indemnitee is
not entitled to be indemnified by the Company by the terms hereof or under
applicable law.
(f) Each advance to be made hereunder shall be paid by the Company to
Indemnitee within 10 days following delivery of a written request therefor by
Indemnitee to the Company.
(g) The Company acknowledges the potentially severe damage to
Indemnitee should the Company fail timely to make such advances to Indemnitee.
6. Determination of Right to Indemnification.
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(a) To the extent Indemnitee has been successful on the merits or
otherwise in defense of any Proceeding, claim, issue or matter covered hereby,
Indemnitee need not repay any of the Expenses advanced in connection with the
investigation, defense or appeal of such Proceeding.
(b) If Section 6(a) is inapplicable, the Company shall remain
obligated to indemnify Indemnitee, and Indemnitee need not repay Expenses
previously advanced, unless the Company, by motion before a court of competent
jurisdiction, obtains an order for preliminary or permanent relief suspending or
denying the obligation to advance or indemnify for Expenses.
(c) Notwithstanding a determination by a court that Indemnitee is not
entitled to indemnification with respect to a specific Proceeding, Indemnitee
shall have the right to apply to the Court of Chancery of Delaware for the
purpose of enforcing Indemnitee's right to indemnification pursuant to this
Agreement.
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(d) Notwithstanding any other provision in this Agreement to the
contrary, the Company shall indemnify Indemnitee against all Expenses incurred
by Indemnitee in connection with any Proceeding under Section 6(b) or 6(c) and
against all Expenses incurred by Indemnitee in connection with any other
Proceeding between the Company and Indemnitee involving the interpretation or
enforcement of the rights of Indemnitee under this Agreement unless a court of
competent jurisdiction finds that the material claims and/or defenses of
Indemnitee in any such Proceeding were frivolous or made in bad faith.
7. Certificate of Incorporation and By-Laws. The Company agrees
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that the Company's Certificate of Incorporation and Bylaws in effect on the date
hereof shall not be amended to reduce, limit, hinder or delay (i) the rights of
Indemnitee granted hereby, or (ii) the ability of the Company to indemnify
Indemnitee as required hereby. The Company further agrees that it shall exercise
the powers granted to it under its Certificate of Incorporation, its Bylaws and
by applicable law to indemnify Indemnitee to the fullest extent possible as
required hereby.
8. Witness Expenses. The Company agrees to compensate Indemnitee
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for the reasonable value of his or her time spent, and to reimburse Indemnitee
for all Expenses (including attorneys' fees and travel costs) incurred by him or
her, in connection with being a witness, or if Indemnitee is threatened to be
made a witness, with respect to any Proceeding, by reason of Indemnitee's
serving or having served as an Agent of the Company.
9. Exceptions. Notwithstanding any other provision hereunder to the
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contrary, the Company shall not be obligated pursuant to the terms of this
Agreement:
(a) Claims Initiated by Indemnitee. To indemnify or advance Expenses
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to Indemnitee with respect to Proceedings or claims initiated or brought
voluntarily by Indemnitee and not by way of defense (other than Proceedings
brought to establish or enforce a right to indemnification under this Agreement
or the provisions of the Company's Certificate of Incorporation or Bylaws unless
a court of competent jurisdiction determines that each of the material
assertions made by Indemnitee in such Proceeding were not made in good faith or
were frivolous).
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(b) Unauthorized Settlements. To indemnify Indemnitee under this
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Agreement for any amounts paid in settlement of any Proceeding covered hereby
without the prior written consent of the Company to such settlement.
10. Non-exclusivity. This Agreement is not the exclusive arrangement
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between the Company and Indemnitee regarding the subject matter hereof and shall
not diminish or affect any other rights which Indemnitee may have under any
provision of law, the Company's Certificate of Incorporation or Bylaws, under
other agreements, or otherwise. To the extent that this Agreement provides for
rights to the Indemnitee in excess of or in addition to those provided under any
agreements signed heretofore, this Agreement cancels and supersedes all such
prior agreements.
11. Continuation After Term. Indemnitee's rights hereunder shall
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continue after the Indemnitee has ceased acting as a director or Agent of the
Company and the benefits hereof shall inure to the benefit of the heirs,
executors and administrators of Indemnitee.
12. Interpretation of Agreement. This Agreement shall be interpreted
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and enforced so as to provide indemnification to Indemnitee to the fullest
extent now or hereafter permitted by law.
13. Severability. If any provision or provisions of this Agreement
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shall be held to be invalid, illegal or unenforceable, provisions of the
Agreement shall not in any way be affected or impaired thereby, and to the
fullest extent possible, the provisions of this Agreement shall be construed or
altered by the court so as to remain enforceable and to provide Indemnitee with
as many of the benefits contemplated hereby as are permitted under law.
14. Counterparts, Modifications and Waiver. This Agreement may be
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signed in counterparts. This Agreement constitutes a separate Agreement between
the Company and Indemnitee and may be supplemented or amended as to Indemnitee
only by a written instrument signed by the Company and Indemnitee, with such
amendment binding only the Company and Indemnitee. All waivers must be in a
written document signed by the party to be charged. No waiver of any of the
provisions of this Agreement shall be imposed by the conduct of the parties. A
waiver of any right hereunder shall not constitute a waiver of any other right
hereunder.
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15. Notices. All notices, demands, consents, requests, approvals and
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other communications required or permitted hereunder shall be in writing and
shall be deemed to have been properly given if hand delivered (effective upon
receipt or when refused), or if sent by a courier freight prepaid (effective
upon receipt or when refused), in the case of the Company, at the address listed
below, and in the case of Indemnitee, at Indemnitee's address of record at the
office of the Company, or to such other addresses as the parties may notify each
other in writing.
To Company: United Road Services, Inc.
0 Xxxxxxxxxx Xxxx
Xxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxx
With a copy to: Xxxxxx X. Xxxxxxx, Esq.
Howard, Rice, Nemerovski, Canady,
Xxxx & Xxxxxx, A Professional Corporation
Three Xxxxxxxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxxxxxxx, XX 00000
To Indemnitee: At the Indemnitee's residence address on the records of the
Company from time to time.
16. Evidence of Coverage. Upon request by Indemnitee, the Company
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shall provide evidence of the liability insurance coverage required by this
Agreement. The Company shall promptly notify Indemnitee of any change in the
Company's D&O Insurance coverage.
17. Governing Law. This Agreement shall be governed by and construed
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in accordance with the internal laws of the State of Delaware.
IN WITNESS WHEREOF, the parties hereto have entered into this
Indemnification Agreement effective as of the date first above written.
UNITED ROAD SERVICES, INC.
By:------------------------------------
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Xxxxxx X. Xxxxxxx,
Chief Executive Officer
INDEMNITEE:
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