Exhibit 10.4
INDEMNIFICATION AGREEMENT
INDEMNIFICATION AGREEMENT, made and executed as of this 3rd day of
December, 2003 (this "Agreement"), by and between XXXXX XXXXXX INCORPORATED, a
Delaware corporation (the "Company"), and _____________________, an individual
resident of the State of Texas (the "Indemnitee").
WHEREAS, the Company is aware that, in order to induce highly competent
persons to serve the Company as directors or officers or in other capacities,
the Company must provide such persons with adequate protection through insurance
and indemnification against inordinate risks of claims and actions against them
arising out of their service to and activities on behalf of the Company;
WHEREAS, the Company recognizes that the increasing difficulty in
obtaining directors' and officers' liability insurance, the increasing cost of
such insurance and the general reductions in coverage of such insurance have
made attracting and retaining such persons more difficult;
WHEREAS, the Company recognizes the substantial increase in corporate
litigation in general, subjecting directors and officers to expensive litigation
risks at the same time as the availability and coverage of liability insurance
has been severely limited;
WHEREAS, the Board of Directors of the Company has determined that it
is in the best interests of the Company's stockholders that the Company act to
assure such persons that there will be increased certainty of such protection in
the future;
WHEREAS, it is reasonable, prudent and necessary for the Company to
contractually obligate itself to indemnify such persons to the fullest extent
permitted by applicable law so that they will continue to serve the Company free
from undue concern that they will not be so indemnified; and
WHEREAS, the Indemnitee is willing to serve, continue to serve and take
on additional service for or on behalf of the Company or any of its direct or
indirect wholly-owned subsidiaries on the condition that he/she be so
indemnified.
NOW, THEREFORE, in consideration of the premises and the mutual
promises and covenants contained herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Company and the Indemnitee do hereby agree as follows:
1. DEFINITIONS. For purposes of this Agreement:
(a) "Change in Control" shall mean a change in control of
the Company occurring after the date hereof 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 is then subject to such reporting requirement;
provided, however, that, without limitation, a Change in Control shall
include the following: (i) the acquisition (other than from the
Company) by any person, entity or "group" within the meaning of Section
13(d)(3) or 14(d)(2) of the Act (excluding, for this purpose, the
Company or its subsidiaries, any employee benefit plan of the Company
or its subsidiaries which acquires beneficial ownership of voting
securities of the Company and any qualified institutional investor who
meets the requirements of Rule 13d-1(b)(1) promulgated under the Act)
of beneficial ownership (within the meaning of Rule 13d-3 promulgated
under the Act), directly or indirectly, of 30% or more of the combined
voting power of the Company's then outstanding securities, excluding
any person, entity or group that becomes a beneficial owner in
connection with a transaction described in clause (iii)(A) below; (ii)
individuals who, as of the date hereof, constitute the Board of
Directors of the Company (the "Incumbent Board") ceasing for any reason
to constitute at least a majority of the Board of Directors; provided
that, any person becoming a director subsequent to the date hereof
whose appointment or election by the Board of Directors of the Company
or nomination for election by the Company's stockholders was approved
or recommended by a vote of at least 2/3 of the directors then
comprising the Incumbent Board or whose appointment, election or
nomination for election was previously so approved or recommended
(other than an election or nomination of an individual whose initial
assumption of office is in connection with an actual or threatened
election contest relating to the election of the directors of the
Company) shall be, for purposes of this Agreement, considered as though
such person were a member of the Incumbent Board; (iii) the
consummation of a merger or consolidation of the Company or any direct
or indirect subsidiary of the Company with any other corporation, (A)
with respect to which persons who were the stockholders of the Company
immediately prior to such merger or consolidation, in combination with
the ownership of any trustee or other fiduciary holding securities
under an employee benefit plan of the Company or any "affiliate"
(within the meaning of Rule 12b-2 of the General Rules and Regulations
of the Act), do not, immediately thereafter, own at least 50% of the
combined voting power of the securities of the Company or such
surviving entity or any parent thereof outstanding, or (B) which is
effected to implement a recapitalization of the Company (or similar
transaction) in which no person, entity or group becomes the beneficial
owner, directly or indirectly, of securities of the Company (not
including in the securities beneficially owned by this person, entity
or group any securities acquired directly from the Company or its
affiliates other than in connection with the acquisition by the Company
or its affiliates of a business) representing 30% or more of the
combined voting power of the Company's then outstanding securities;
(iv) the consummation of a merger or consolidation of the Company or
any direct or indirect subsidiary of the Company with any other
corporation, other than a merger or consolidation immediately following
which the individuals who comprise the Incumbent Board constitute at
least a majority of the Board of Directors of the Company, the entity
surviving such merger or any parent thereof (or a majority plus one
member
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where such board comprises and odd number of members); or (v) the
stockholders of the Company approving a plan of complete liquidation or
dissolution of the Company or the consummation of an agreement for the
sale or disposition by the Company of all or substantially all of the
assets of the Company, other than (A) a sale or disposition of all or
substantially all of the assets of the Company to an entity, at least
50% of the combined voting power of the voting securities of which are
owned by the stockholders of the Company in substantially the same
proportions as their ownership of the Company immediately prior to such
sale (B) or where the individuals who comprise the Incumbent Board
constitute at least a majority of the board of directors of such entity
or any parent thereof (or a majority plus one member where such board
is comprised of an odd number of members). Notwithstanding the
foregoing, a "Change in Control" shall not be deemed to have occurred
by virtue of the consummation of any transaction or series of
integrated transactions immediately following which the record holders
of the common stock of the Company immediately prior to such
transaction or series of transactions continue to have substantially
the same proportionate ownership in an entity that owns all or
substantially all of the assets of the Company immediately following
such transaction or series of transactions.
(b) "Disinterested Director" shall mean a director of the
Company who is not or was not a party to the action, suit,
investigation or proceeding in respect of which indemnification is
being sought by the Indemnitee.
(c) "Expenses" shall include all attorneys' fees,
retainers, court costs, transcript costs, fees of experts, witness
fees, travel expenses, duplicating costs, printing and binding costs,
telephone charges, postage, delivery service fees, and all other
disbursements or expenses incurred in connection with prosecuting,
defending, preparing to prosecute or defend, investigating or being or
preparing to be a witness in any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative in nature.
(d) "Independent Counsel" shall mean a law firm or a
member of a law firm that neither is presently nor in the past five
years has been retained to represent (i) the Company or the Indemnitee
in any matter material to either such party or (ii) any other party to
the action, suit, investigation or proceeding giving rise to a claim
for 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 the Company or the
Indemnitee in an action to determine the Indemnitee's right to
indemnification under this Agreement.
2. SERVICE BY THE INDEMNITEE. The Indemnitee agrees to serve as a
director or officer of the Company and will discharge his/her duties and
responsibilities to the best of his/her ability so long as the Indemnitee is
duly elected or qualified in accordance with the provisions of the Restated
Certificate of Incorporation, as amended (the "Certificate"), and the Bylaws, as
amended (the "Bylaws"), of the Company and the General Corporation Law of the
State of
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Delaware, as amended (the "DGCL"), or until his/her earlier death, retirement,
resignation or removal. The Indemnitee may at any time and for any reason resign
from such position (subject to any other obligation, whether contractual or
imposed by operation of law), in which event this Agreement shall continue in
full force and effect after such resignation. Nothing in this Agreement shall
confer upon the Indemnitee the right to continue in the employ of the Company or
as a director of the Company, or affect the right of the Company to terminate,
in the Company's sole discretion (with or without cause) and at any time, the
Indemnitee's employment, in each case, subject to any contractual rights of the
Indemnitee created or existing otherwise than under this Agreement.
3. INDEMNIFICATION. The Company shall indemnify the Indemnitee
and advance Expenses to the Indemnitee as provided in this Agreement to the
fullest extent permitted by the Certificate, the Bylaws in effect as of the date
hereof and the DGCL or other applicable law in effect on the date hereof and to
any greater extent that the DGCL or applicable law may in the future from time
to time permit. Without diminishing the scope of the indemnification provided by
this Section 3, the rights of indemnification of the Indemnitee provided
hereunder shall include, but shall not be limited to, those rights hereinafter
set forth, except that no indemnification shall be paid to the Indemnitee:
(a) on account of any action, suit or proceeding in which
judgment is rendered against the Indemnitee for disgorgement of profits
made from the purchase or sale by the Indemnitee of securities of the
Company pursuant to the provisions of Section 16(b) of the Act or
similar provisions of any federal, state or local statutory law;
(b) on account of conduct of the Indemnitee which is
finally adjudged by a court of competent jurisdiction to have been
knowingly fraudulent or to constitute willful misconduct;
(c) in any circumstance where such indemnification is
expressly prohibited by applicable law;
(d) with respect to liability for which payment is
actually made to the Indemnitee under a valid and collectible insurance
policy or under a valid and enforceable indemnity clause, Bylaw or
agreement (other than this Agreement), except in respect of any
liability in excess of payment under such insurance, clause, Bylaw or
agreement;
(e) if a final decision by a court having jurisdiction in
the matter shall determine that such indemnification is not lawful
(and, in this respect, both the Company and the Indemnitee have been
advised that it is the position of the Securities and Exchange
Commission that indemnification for liabilities arising under the
federal securities laws is against public policy and is, therefore,
unenforceable, and that claims for indemnification should be submitted
to the appropriate court for adjudication); or
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(f) in connection with any action, suit or proceeding by
the Indemnitee against the Company or any of its direct or indirect
wholly-owned subsidiaries or the directors, officers, employees or
other Indemnitees of the Company or any of its direct or indirect
wholly-owned subsidiaries, (i) unless such indemnification is expressly
required to be made by law, (ii) unless the action, suit or proceeding
was previously authorized by a majority of the Board of Directors of
the Company, (iii) unless such indemnification is provided by the
Company, in its sole discretion, pursuant to the powers vested in the
Company under applicable law or (iv) except as provided in Sections 12
and 14 hereof.
4. ACTIONS OR PROCEEDINGS OTHER THAN AN ACTION BY OR IN THE RIGHT
OF THE COMPANY. The Indemnitee shall be entitled to the indemnification rights
provided in this Section 4 if the Indemnitee was or is a party or is threatened
to be a party to any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative in nature,
other than an action by or in the right of the Company, by reason of the fact
that the Indemnitee is or was a director, officer or employee, agent or
fiduciary of the Company, or any of its direct or indirect wholly-owned
subsidiaries, or is or was serving at the request of the Company, or any of its
direct or indirect wholly-owned subsidiaries, as a director, officer or employee
of any other entity, including, but not limited to, another corporation,
partnership, limited liability company, employee benefit plan, joint venture,
trust or other enterprise, or by reason of any act or omission by him/her in
such capacity. Pursuant to this Section 4, the Indemnitee shall be indemnified
against all Expenses, judgments, penalties (including excise and similar taxes),
fines and amounts paid in settlement which were actually and reasonably incurred
by the Indemnitee in connection with such action, suit or proceeding (including,
but not limited to, the investigation, defense or appeal thereof), if 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, and, with
respect to any criminal action or proceeding, had no reasonable cause to believe
his/her conduct was unlawful.
5. ACTIONS BY OR IN THE RIGHT OF THE COMPANY. The Indemnitee
shall be entitled to the indemnification rights provided in this Section 5 if
the Indemnitee was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding brought by or in the
right of the Company to procure a judgment in its favor by reason of the fact
that the Indemnitee is or was a director, officer or employee, agent or
fiduciary of the Company, or any of its direct or indirect wholly-owned
subsidiaries, or is or was serving at the request of the Company, or any of its
direct or indirect wholly-owned subsidiaries, as a director, officer or employee
of another entity, including, but not limited to, another corporation,
partnership, limited liability company, employee benefit plan, joint venture,
trust or other enterprise, or by reason of any act or omission by him/her in any
such capacity. Pursuant to this Section 5, the Indemnitee shall be indemnified
against all Expenses actually and reasonably incurred by him/her in connection
with the defense or settlement of such action, suit or proceeding (including,
but not limited to the investigation, defense or appeal thereof), if 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; provided,
however, that no such indemnification shall be made in respect of any claim,
issue or matter as to which the Indemnitee shall have been adjudged to be liable
to the Company, unless and only to the extent that the Court of Chancery of the
State of Delaware or the court in which such action, suit or proceeding was
brought shall
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determine upon application that, despite the adjudication of liability but in
view of all the circumstances of the case, the Indemnitee is fairly and
reasonably entitled to indemnity for such Expenses which such court shall deem
proper.
6. GOOD FAITH DEFINITION. For purposes of this Agreement, the
Indemnitee shall be deemed to have 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, to have had
no reasonable cause to believe the Indemnitee's conduct was unlawful, if such
action was based on any of the following: (a) the records or books of the
account of the Company or other enterprise, including financial statements; (b)
information supplied to the Indemnitee by the officers of the Company or other
enterprise in the course of his/her duties; (c) the advice of legal counsel for
the Company or other enterprise; or (d) information or records given in reports
made to the Company or other enterprise by an independent certified public
accountant or by an appraiser or other expert selected with reasonable care by
the Company or other enterprise.
7. INDEMNIFICATION FOR EXPENSES OF SUCCESSFUL PARTY.
Notwithstanding the other provisions of this Agreement, to the extent that the
Indemnitee has served on behalf of the Company, or any of its direct or indirect
wholly-owned subsidiaries, as a witness or other participant in any class action
or proceeding, or has been successful, on the merits or otherwise, in defense of
any action, suit or proceeding referred to in Sections 4 and 5 hereof, or in
defense of any claim, issue or matter therein, including, but not limited to,
the dismissal of any action without prejudice, the Indemnitee shall be
indemnified against all Expenses actually and reasonably incurred by the
Indemnitee in connection therewith.
8. PARTIAL INDEMNIFICATION. If the Indemnitee is entitled under
any provision of this Agreement to indemnification by the Company for some or a
portion of the Expenses, judgments, fines and amounts paid in settlement
actually and reasonably incurred by the Indemnitee in connection with the
investigation, defense, appeal or settlement of such suit, action, investigation
or proceeding described in Sections 4 and 5 hereof, but is not entitled to
indemnification for the total amount thereof, the Company shall nevertheless
indemnify the Indemnitee for the portion of such Expenses, judgments, penalties,
fines and amounts paid in settlement actually and reasonably incurred by the
Indemnitee to which the Indemnitee is entitled.
9. PROCEDURE FOR DETERMINATION OF ENTITLEMENT TO INDEMNIFICATION.
(a) To obtain indemnification under this Agreement, the Indemnitee shall submit
to the Company a written request, including documentation and information which
is reasonably available to the Indemnitee and is reasonably necessary to
determine whether and to what extent the Indemnitee is entitled to
indemnification. The Secretary of the Company shall, promptly upon receipt of a
request for indemnification, advise the Board of Directors in writing that the
Indemnitee has requested indemnification. Any Expenses incurred by the
Indemnitee in connection with the Indemnitee's request for indemnification
hereunder shall be borne by the Company. The Company hereby indemnifies and
agrees to hold the Indemnitee harmless for any Expenses incurred by the
Indemnitee under the immediately preceding sentence irrespective of the outcome
of the determination of the Indemnitee's entitlement to indemnification.
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(b) Upon written request by the Indemnitee for indemnification
pursuant to Sections 4 and 5 hereof, the entitlement of the Indemnitee to
indemnification pursuant to the terms of this Agreement shall be determined by
the following person or persons, who shall be empowered to make such
determination: (i) if a Change in Control shall have occurred, by Independent
Counsel (unless the Indemnitee shall request in writing that such determination
be made by the Board of Directors (or a committee thereof) in the manner
provided for in clause (b)(ii) of this Section 9) in a written opinion to the
Board of Directors, a copy of which shall be delivered to the Indemnitee; (ii)
if a Change in Control shall not have occurred, (A) by the Board of Directors of
the Company, by a majority vote of a quorum consisting of Disinterested
Directors, or (B) if a quorum consisting of Disinterested Directors is not
obtainable, or if a majority vote of a quorum consisting of Disinterested
Directors so directs, by Independent Counsel in a written opinion to the Board
of Directors, a copy of which shall be delivered to the Indemnitee; or (iii) in
any event, by the stockholders pursuant to the Bylaws of the Company. The
Independent Counsel shall be selected by the Board of Directors and approved by
the Indemnitee. Upon failure of the Board of Directors to so select, or upon
failure of the Indemnitee to so approve, the Independent Counsel shall be
selected by the Chancellor of the State of Delaware or such other person as the
Chancellor shall designate to make such selection. Such determination of
entitlement to indemnification shall be made not later than 45 days after
receipt by the Company of a written request for indemnification. If the person
making such determination shall determine that the Indemnitee is entitled to
indemnification as to part (but not all) of the application for indemnification,
such person shall reasonably prorate such part of indemnification among such
claims, issues or matters. If it is so determined that Indemnitee is entitled to
indemnification, payment to Indemnitee shall be made within 10 days after such
determination.
10. PRESUMPTIONS AND EFFECT OF CERTAIN PROCEEDINGS. (a) In making
a determination with respect to entitlement to indemnification, the Indemnitee
shall be presumed to be entitled to indemnification hereunder and the Company
shall have the burden of proof in the making of any determination contrary to
such presumption.
(b) If the Board of Directors, or such other person or persons
empowered pursuant to Section 9 to make the determination of whether the
Indemnitee is entitled to indemnification, shall have failed to make a
determination as to entitlement to indemnification within 45 days after receipt
by the Company of such request, the requisite determination of entitlement to
indemnification shall be deemed to have been made and the Indemnitee shall be
absolutely entitled to such indemnification, absent actual and material fraud in
the request for indemnification or a prohibition of indemnification under
applicable law. The termination of any action, suit, investigation or proceeding
described in Sections 4 or 5 hereof by judgment, order, settlement or
conviction, or upon a plea of nolo contendere or its equivalent, shall not, of
itself: (i) create a presumption that the Indemnitee did not act in good faith
and in a manner which he/she reasonably believed to be in or not opposed to the
best interests of the Company, or, with respect to any criminal action or
proceeding, that the Indemnitee has reasonable cause to believe that the
Indemnitee's conduct was unlawful; or (ii) otherwise adversely affect the rights
of the Indemnitee to indemnification, except as may be provided herein.
11. ADVANCEMENT OF EXPENSES. Subject to applicable law, all
reasonable Expenses actually incurred by the Indemnitee in connection with any
threatened or pending action, suit
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or proceeding shall be paid by the Company in advance of the final disposition
of such action, suit or proceeding, if so requested by the Indemnitee, within 20
days after the receipt by the Company of a statement or statements from the
Indemnitee requesting such advance or advances. The Indemnitee may submit such
statements from time to time. The Indemnitee's entitlement to such Expenses
shall include those incurred in connection with any proceeding by the Indemnitee
seeking an adjudication or award in arbitration pursuant to this Agreement. Such
statement or statements shall reasonably evidence the Expenses incurred by the
Indemnitee in connection therewith and shall include or be accompanied by a
written affirmation by the Indemnitee of the Indemnitee's good faith belief that
the Indemnitee has met the standard of conduct necessary for indemnification
under this Agreement and an undertaking by or on behalf of the Indemnitee to
repay such amount if it is ultimately determined that the Indemnitee is not
entitled to be indemnified against such Expenses by the Company pursuant to this
Agreement or otherwise. Each written undertaking to pay amounts advanced must be
an unlimited general obligation but need not be secured, and shall be accepted
without reference to financial ability to make repayment.
12. REMEDIES OF THE INDEMNITEE IN CASES OF DETERMINATION NOT TO
INDEMNIFY OR TO ADVANCE EXPENSES. In the event that a determination is made that
the Indemnitee is not entitled to indemnification hereunder or if the payment
has not been timely made following a determination of entitlement to
indemnification pursuant to Sections 9 and 10, or if Expenses are not advanced
pursuant to Section 11, the Indemnitee shall be entitled to a final adjudication
in an appropriate court of the State of Delaware or any other court of competent
jurisdiction of the Indemnitee's entitlement to such indemnification or advance.
Alternatively, the Indemnitee may, at the Indemnitee's option, seek an award in
arbitration to be conducted by a single arbitrator chosen by the Indemnitee and
approved by the Company, which approval shall not be unreasonably withheld or
delayed. If the Indemnitee and the Company do not agree upon an arbitrator
within 30 days following notice to the Company by the Indemnitee that it seeks
an award in arbitration, the arbitrator will be chosen pursuant to the rules of
the American Arbitration Association (the "AAA"). The arbitration will be
conducted pursuant to the rules of the AAA and an award shall be made within 60
days following the filing of the demand for arbitration. The arbitration shall
be held in Houston, Xxxxxx County, Texas. The Company shall not oppose the
Indemnitee's right to seek any such adjudication or award in arbitration or any
other claim. Such judicial proceeding or arbitration shall be made de novo, and
the Indemnitee shall not be prejudiced by reason of a determination (if so made)
that the Indemnitee is not entitled to indemnification. If a determination is
made or deemed to have been made pursuant to the terms of Section 9 or Section
10 hereof that the Indemnitee is entitled to indemnification, the Company shall
be bound by such determination and shall be precluded from asserting that such
determination has not been made or that the procedure by which such
determination was made is not valid, binding and enforceable. The Company
further agrees to stipulate in any such court or before any such arbitrator that
the Company is bound by all the provisions of this Agreement and is precluded
from making any assertions to the contrary. If the court or arbitrator shall
determine that the Indemnitee is entitled to any indemnification hereunder, the
Company shall pay all reasonable Expenses actually incurred by the Indemnitee in
connection with such adjudication or award in arbitration (including, but not
limited to, any appellate proceedings).
13. NOTIFICATION AND DEFENSE OF CLAIM. Promptly after receipt by
the Indemnitee of notice of the commencement of any action, suit or proceeding,
the Indemnitee will, if a claim in respect thereof is to be made against the
Company under this Agreement, notify the Company in
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writing of the commencement thereof. The omission by the Indemnitee to so notify
the Company will not relieve the Company from any liability that it may have to
the Indemnitee under this Agreement or otherwise, except to the extent that the
Company may suffer material prejudice by reason of such failure. Notwithstanding
any other provision of this Agreement, with respect to any such action, suit or
proceeding as to which the Indemnitee gives notice to the Company of the
commencement thereof:
(a) The Company will be entitled to participate therein
at its own expense.
(b) Except as otherwise provided in this Section 13(b),
to the extent that it may wish, the Company, jointly with any other
indemnifying party similarly notified, shall be entitled to assume the
defense thereof with counsel reasonably satisfactory to the Indemnitee.
After notice from the Company to the Indemnitee of its election to so
assume the defense thereof, the Company shall not be liable to the
Indemnitee under this Agreement for any legal or other Expenses
subsequently incurred by the Indemnitee in connection with the defense
thereof other than reasonable costs of investigation or as otherwise
provided below. The Indemnitee shall have the right to employ the
Indemnitee's own counsel in such action, suit or proceeding, but the
fees and Expenses of such counsel incurred after notice from the
Company of its assumption of the defense thereof shall be at the
expense of the Indemnitee unless (i) the employment of counsel by the
Indemnitee has been authorized by the Company, (ii) the Indemnitee
shall have reasonably concluded that there may be a conflict of
interest between the Company and the Indemnitee in the conduct of the
defense of such action and such determination by the Indemnitee shall
be supported by an opinion of counsel, which opinion shall be
reasonably acceptable to the Company, or (iii) the Company shall not in
fact have employed counsel to assume the defense of the action, in each
of which cases the fees and Expenses of counsel shall be at the expense
of the Company. The Company shall not be entitled to assume the defense
of any action, suit or proceeding brought by or on behalf of the
Company or as to which the Indemnitee shall have reached the conclusion
provided for in clause (ii) above.
(c) The Company shall not be liable to indemnify the
Indemnitee under this Agreement for any amounts paid in settlement of
any action, suit or proceeding affected without its written consent,
which consent shall not be unreasonably withheld. The Company shall not
be required to obtain the consent of the Indemnitee to settle any
action, suit or proceeding which the Company has undertaken to defend
if the Company assumes full and sole responsibility for such settlement
and such settlement grants the Indemnitee a complete and unqualified
release in respect of any potential liability.
14. OTHER RIGHT TO INDEMNIFICATION. The indemnification and
advancement of Expenses provided by this Agreement are cumulative, and not
exclusive, and are in addition to any other rights to which the Indemnitee may
now or in the future be entitled under any provision of the Bylaws or
Certificate of the Company, the Certificate or Bylaws or other
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governing documents of any direct or indirect wholly-owned subsidiary of the
Company, any vote of the stockholders or Disinterested Directors, any provision
of law or otherwise. Except as required by applicable law, the Company shall not
adopt any amendment to its Bylaws or Certificate the effect of which would be to
deny, diminish or encumber the Indemnitee's right to indemnification under this
Agreement.
15. DIRECTOR AND OFFICER LIABILITY INSURANCE. The Company shall,
from time to time, make the good faith determination whether or not it is
practicable for the Company to obtain and maintain a policy or policies of
insurance with reputable insurance companies providing the officers and
directors of the Company, and any direct or indirect wholly-owned subsidiary of
the Company, with coverage for losses from wrongful acts, or to ensure the
Company's performance of its indemnification obligations under this Agreement.
Among other considerations, the Company will weigh the costs of obtaining such
insurance coverage against the protection afforded by such coverage.
Notwithstanding the foregoing, the Company shall have no obligation to obtain or
maintain such insurance if the Company determines in good faith that such
insurance is not necessary or is not reasonably available, if the premium costs
for such insurance are disproportionate to the amount of coverage provided, if
the coverage provided by such insurance is limited by exclusions so as to
provide an insufficient benefit or if the Indemnitee is covered by similar
insurance maintained by a direct or indirect wholly-owned subsidiary of the
Company. However, the Company's decision whether or not to adopt and maintain
such insurance shall not affect in any way its obligations to indemnify its
officers and directors under this Agreement or otherwise. In all policies of
director and officer liability insurance, the Indemnitee shall be named as an
insured in such a manner as to provide the Indemnitee the same rights and
benefits as are accorded to the most favorably insured of the Company's
directors, if the Indemnitee is a director; or of the Company's officers, if the
Indemnitee is not a director of the Company, but is an officer. The Company
agrees that the provisions of this Agreement shall remain in effect regardless
of whether liability or other insurance coverage is at any time obtained or
retained by the Company; except that any payments made to, or on behalf of, the
Indemnitee under an insurance policy shall reduce the obligations of the Company
hereunder.
16. SPOUSAL INDEMNIFICATION. The Company will indemnify the
Indemnitee's spouse to whom the Indemnitee is legally married at any time the
Indemnitee is covered under the indemnification provided in this Agreement (even
if the Indemnitee did not remain married to him or her during the entire period
of coverage) against any pending or threatened action, suit, proceeding or
investigation for the same period, to the same extent and subject to the same
standards, limitations, obligations and conditions under which the Indemnitee is
provided indemnification herein, if the Indemnitee's spouse (or former spouse)
becomes involved in a pending or threatened action, suit, proceeding or
investigation solely by reason of his or her status as the Indemnitee's spouse,
including, without limitation, any pending or threatened action, suit,
proceeding or investigation that seeks damages recoverable from marital
community property, jointly-owned property or property purported to have been
transferred from the Indemnitee to his/her spouse (or former spouse). The
Indemnitee's spouse or former spouse also may be entitled to advancement of
Expenses to the same extent that the Indemnitee is entitled to advancement of
Expenses herein. The Company may maintain insurance to cover its obligation
hereunder with respect to the Indemnitee's spouse (or former spouse) or set
aside assets in a trust or escrow funds for that purpose.
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17. INTENT. This Agreement is intended to be broader than any
statutory indemnification rights applicable in the State of Delaware and shall
be in addition to any other rights the Indemnitee may have under the Company's
Certificate, Bylaws, applicable law or otherwise. To the extent that a change in
applicable law (whether by statute or judicial decision) permits greater
indemnification by agreement than would be afforded currently under the
Company's Certificate, Bylaws, applicable law or this Agreement, it is the
intent of the parties that the Indemnitee enjoy by this Agreement the greater
benefits so afforded by such change.
18. ATTORNEY'S FEES AND OTHER EXPENSES TO ENFORCE AGREEMENT. In
the event that the Indemnitee is subject to or intervenes in any proceeding in
which the validity or enforceability of this Agreement is at issue or seeks an
adjudication or award in arbitration to enforce the Indemnitee's rights under,
or to recover damages for breach of, this Agreement the Indemnitee, if he/she
prevails in whole or in part in such action, shall be entitled to recover from
the Company and shall be indemnified by the Company against any actual expenses
for attorneys' fees and disbursements reasonably incurred by the Indemnitee.
19. SUBROGATION. In the event of payment under this Agreement, the
Company shall be subrogated to the extent of such payment to all of the rights
of recovery of the Indemnitee, who shall execute all documents required and
shall do all acts that may be necessary to secure such rights and to enable the
Company effectively to bring suit to enforce such rights.
20. EFFECTIVE DATE. The provisions of this Agreement shall cover
claims, actions, suits or proceedings whether now pending or hereafter commenced
and shall be retroactive to cover acts or omissions or alleged acts or omissions
which heretofore have taken place. The Company shall be liable under this
Agreement, pursuant to Sections 4 and 5 hereof, for all acts of the Indemnitee
while serving as a director and/or officer, notwithstanding the termination of
the Indemnitee's service, if such act was performed or omitted to be performed
during the term of the Indemnitee's service to the Company.
21. DURATION OF AGREEMENT. This Agreement shall continue until and
terminate upon the later of: (a) ten years after the Indemnitee has ceased to
occupy any of the positions or have any relationships described in Sections 4
and 5 of this Agreement and (b) the final termination of all pending or
threatened actions, suits, proceedings or investigations to which the Indemnitee
may be subject by reason of the fact that he/she is or was a director, officer,
employee, agent or fiduciary of the Company, or any direct or indirect
wholly-owned subsidiary of the Company, or is or was serving at the request of
the Company as a director, officer, employee of any other entity, including, but
not limited to, another corporation, partnership, limited liability company,
employee benefit plan, joint venture, trust or other enterprise, or by reason of
any act or omission by the Indemnitee in any such capacity. The indemnification
provided under this Agreement shall continue as to the Indemnitee even though
he/she may have ceased to be a director or officer of the Company, or any direct
or indirect wholly-owned subsidiary of the Company. This Agreement shall be
binding upon the Company and its successors and assigns, including, without
limitation, any corporation or other entity which may have acquired all or
substantially all of the Company's assets or business or into which the Company
may be consolidated or merged, and shall inure to the benefit of the Indemnitee
and his/her spouse, successors, assigns, heirs, devisees, executors,
administrators or other legal representations. The Company shall require any
successor or assignee (whether direct or
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indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company, by written
agreement in form and substance reasonably satisfactory to the Company and the
Indemnitee, expressly to assume and agree to perform this Agreement in the same
manner and to the same extent that the Company would be required to perform if
no such succession or assignment had taken place.
22. DISCLOSURE OF PAYMENTS. Except as expressly required by any
federal securities laws or other federal or state law, neither party hereto
shall disclose any payments under this Agreement unless prior approval of the
other party is obtained.
23. SEVERABILITY. If any provision or provisions of this Agreement
shall be held invalid, illegal or unenforceable for any reason whatsoever, (a)
the validity, legality and enforceability of the remaining provisions of this
Agreement (including, but not limited to, all portions of any Sections of this
Agreement containing any such provision held to be invalid, illegal or
unenforceable) shall not in any way be affected or impaired thereby and (b) to
the fullest extent possible, the provisions of this Agreement (including, but
not limited to, all portions of any paragraph 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 manifest by the provision held invalid, illegal or
unenforceable.
24. COUNTERPARTS. This Agreement may be executed by one or more
counterparts, each of which shall for all purposes be deemed to be an original
but all of which together shall constitute one and the same agreement. Only one
such counterpart signed by the party against whom enforceability is sought shall
be required to be produced to evidence the existence of this Agreement.
25. CAPTIONS. The captions and headings used in this Agreement are
inserted for convenience only and shall not be deemed to constitute part of this
Agreement or to affect the construction thereof.
26. ENTIRE AGREEMENT, MODIFICATION AND WAIVER. This Agreement
constitutes the entire agreement and understanding of the parties hereto
regarding the subject matter hereof, and no supplement, modification or
amendment of this Agreement shall be binding unless executed in writing by both
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. No
supplement, modification or amendment to this Agreement shall limit or restrict
any right of the Indemnitee under this Agreement in respect of any act or
omission of the Indemnitee prior to the effective date of such supplement,
modification or amendment unless expressly provided therein.
27. NOTICES. All notices, requests, demands or other
communications hereunder shall be in writing and shall be deemed to have been
duly given if (a) delivered by hand with receipt acknowledged by the party to
whom said notice or other communication shall have been directed, (b) mailed by
certified or registered mail, return receipt requested with postage prepaid, on
the date shown on the return receipt or (c) delivered by facsimile transmission
on the date shown on the facsimile machine report:
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(a) If to the Indemnitee to:
Facsimile:
(b) If to the Company, to:
Xxxxx Xxxxxx Incorporated
Attn: General Counsel
0000 Xxxxx Xxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000-0000
Facsimile: (000) 000-0000
or to such other address as may be furnished to the Indemnitee by the Company or
to the Company by the Indemnitee, as the case may be.
28. GOVERNING LAW. The parties hereto agree that this Agreement
shall be governed by, and construed and enforced in accordance with, the laws of
the State of Delaware, applied without giving effect to any conflicts of law
principles.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the day and year first above written.
XXXXX XXXXXX INCORPORATED
By_________________________________
Xxxxxxx X. Xxxxx
Chairman, President and
Chief Executive Officer
INDEMNITEE:
By_________________________________
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