EXHIBIT 10.1
FORM OF INDEMNITY AGREEMENT
This Indemnity Agreement ("Agreement") is made as of _________________,
19__ by and between Korn/Ferry International, a California corporation
("Company"), and _____________________ ("Indemnitee"), a [director] [and]
[officer] of the Company.
R E C I T A L S
A. The Indemnitee is currently serving [has agreed to serve] as a
[director] [and] [officer] of the Company and in such capacity has rendered
[will render] valuable services to the Company.
B. The Company has investigated the availability and sufficiency of
liability insurance and California statutory indemnification provisions to
provide its [directors] [and] [officers] with adequate protection against
various legal risks and potential liabilities to which such individuals are
subject due to their positions with the Company and has concluded that such
insurance and statutory provisions may provide inadequate and unacceptable
protection to certain individuals requested to serve as its [directors] [and]
[officers].
C. In order to induce and encourage highly experienced and capable persons
such as the Indemnitee [to continue] to serve as a [director] [and] [officer] of
the Company, the Board of Directors has determined, after due consideration and
investigation of the terms and provisions of this Agreement and the various
other options available to the Company and the Indemnitee in lieu hereof, that
this Agreement is not only reasonable and prudent but necessary to promote and
ensure the best interests of the Company and its shareholders.
AGREEMENT
NOW, THEREFORE, in consideration of the [continued] services of the Indemnitee
and in order to induce the Indemnitee [to continue] to serve as a [director]
[and] [officer], the Company and the Indemnitee do hereby agree as follows:
1. DEFINITIONS. As used in this Agreement:
-----------
(a) The term "Proceeding" shall include any threatened, pending
or completed action, suit or proceeding, formal or informal, whether
brought in the name of the Company or otherwise and whether of a
civil, criminal or administrative or investigative nature, against the
Indemnitee by reason of the fact that the Indemnitee is or was a
[director] [and] [officer] of the Company, or is or was serving at the
request of the Company as a director, officer, employee or agent of
another enterprise, whether or not he [she] is serving in such
capacity at the time any liability or Expense is incurred for which
indemnification or reimbursement is to be provided under this
Agreement.
(b) The term "Expenses" includes, without limitation, attorneys'
fees, disbursements and retainers, accounting and witness fees, travel
and deposition costs, expenses of investigations, judicial or
administrative proceedings and appeals, amounts paid in settlement by
or on behalf of Indemnitee, and any expenses of establishing a right
to indemnification, pursuant to this Agreement or otherwise, including
reasonable compensation for time spent by the Indemnitee in connection
with the investigation, defense or appeal of a Proceeding or action
for indemnification for which he [she] is not otherwise compensated by
the Company or any third party. The term "Expenses" does not include
the amount of judgments, fines, penalties or ERISA excise taxes
actually levied against the Indemnitee.
2. AGREEMENT TO SERVE. The Indemnitee agrees [to continue] to serve
------------------
as a [director] [and] [officer] of the Company [at the will of the Company]
[under the terms of his [her]agreement with the Company] for so long as he
[she] is duly elected or appointed or until such time as he [she] tenders
his [her] resignation in writing or is removed as a [director] [and]
[officer].
3. INDEMNIFICATION IN THIRD PARTY ACTIONS. The Company shall
--------------------------------------
indemnify the Indemnitee if the Indemnitee is a party to or threatened to
be made a party to or is otherwise involved in any Proceeding (other than a
Proceeding by or in the name of the Company to procure a judgment in its
favor), by reason of the fact that the Indemnitee is or was a [director]
[and] [officer] of the Company, or is or was serving at the request of the
Company as a director, officer, employee or agent of another enterprise,
against all Expenses, judgments, fines, penalties and ERISA excise taxes
actually and reasonably incurred by the Indemnitee in connection with the
defense or settlement of such a Proceeding, to the fullest extent permitted
by California law and the Company's Amended and Restated Articles of
Incorporation; provided that any settlement of a Proceeding be approved in
writing by the Company.
4. INDEMNIFICATION IN PROCEEDINGS BY OR IN THE NAME OF THE COMPANY.
---------------------------------------------------------------
The Company shall indemnify the Indemnitee if the Indemnitee is a party to
or threatened to be made a party to or is otherwise involved in any
Proceeding by or in the name of the Company to procure a judgment in its
favor by reason of the fact that the Indemnitee was or is a [director]
[and] [officer] of the Company, or is or was serving at the request of the
Company as a director, officer, employee or agent of another enterprise,
against all Expenses, judgments, fines, penalties and ERISA excise taxes
actually and reasonably incurred by the Indemnitee in connection with the
defense or settlement of such a Proceeding, to the fullest extent permitted
by California law and the Company's Amended and Restated Articles of
Incorporation.
5. CONCLUSIVE PRESUMPTION REGARDING STANDARDS OF CONDUCT. The
-----------------------------------------------------
Indemnitee shall be conclusively presumed to have met the relevant
standards of conduct, if any, as defined by California law, for
indemnification pursuant to this Agreement, unless a determination is made
that the Indemnitee has not met such standards (i) by the Board of
Directors by a majority vote of a quorum thereof consisting of directors
who
-2-
were not parties to the Proceeding for which a claim is made under this
Agreement, (ii) by the shareholders of the Company by majority vote of a
quorum thereof consisting of shareholders who are not parties to the
Proceeding due to which a claim is made under this Agreement, (iii) in a
written opinion by independent counsel, the selection of whom has been
approved by the Indemnitee in writing, or (iv) by a court of competent
jurisdiction.
6. INDEMNIFICATION OF EXPENSES OF SUCCESSFUL PARTY. Notwithstanding
-----------------------------------------------
any other provision of this Agreement, to the extent that the Indemnitee
has been successful in defense of any Proceeding or in defense of any
claim, issue or matter therein, on the merits or otherwise, including the
dismissal of a Proceeding without prejudice or the settlement of a
Proceeding without an admission of liability, the Indemnitee shall be
indemnified against all Expenses incurred in connection therewith to the
fullest extent permitted by California law.
7. ADVANCES OF EXPENSES. The Expenses incurred by the Indemnitee in
--------------------
any Proceeding shall be paid promptly by the Company in advance of the
final disposition of the Proceeding at the written request of the
Indemnitee to the fullest extent permitted by California law; provided that
the Indemnitee shall undertake in writing to repay any advances if it is
ultimately determined that the Indemnitee is not entitled to
indemnification.
8. PARTIAL INDEMNIFICATION. If the Indemnitee is entitled under any
-----------------------
provision of this Agreement to indemnification by the Company for a portion
of the Expenses, judgments, fines, penalties or ERISA excise taxes actually
and reasonably incurred by him [her] in the investigation, defense, appeal
or settlement of any Proceeding but not, however, for the total amount of
his [her] Expenses, judgments, fines, penalties or ERISA excise taxes, the
Company shall nevertheless indemnify the Indemnitee for the portion of
Expenses, judgments, fines, penalties or ERISA excise taxes to which the
Indemnitee is entitled.
9. INDEMNIFICATION PROCEDURE; DETERMINATION OF RIGHT TO
----------------------------------------------------
INDEMNIFICATION.
---------------
(a) Promptly after receipt by the Indemnitee of notice of the
commencement of any Proceeding, the Indemnitee shall, if a claim in
respect thereof is to be made against the Company under this
Agreement, notify the Company of the commencement thereof in writing.
The omission to so notify the Company will relieve the Company of any
liability which it may have to the Indemnitee under this Agreement but
will not relieve the Company from any liability which it may have to
the Indemnitee otherwise than under this Agreement.
(b) If a claim for indemnification or advances under this
Agreement is not paid by the Company within 30 days of receipt of
written notice, the rights provided by this Agreement shall be
enforceable by the Indemnitee in any court of competent jurisdiction.
The burden of proving by clear and convincing evidence
that indemnification or advances are not appropriate shall be on the
-3-
Company. Neither the failure of the directors or shareholders of the
Company or its independent legal counsel to have made a determination
prior to the commencement of such action that indemnification or
advances are proper in the circumstances because the Indemnitee has
met the applicable standard of conduct, if any, nor an actual
determination by the directors or shareholders of the Company or
independent legal counsel that the Indemnitee has not met the
applicable standard of conduct, shall be a defense to the action or
create a presumption for the purpose of an action that the Indemnitee
has not met the applicable standard of conduct.
(c) The Indemnitee's Expenses incurred in connection with any
proceeding concerning his [her] right to indemnification or advances
in whole or in part pursuant to this Agreement shall also be
indemnified by the Company, regardless of the outcome of such action,
suit or proceeding.
(d) With respect to any Proceeding for which indemnification is
requested, the Company will be entitled to participate therein at its
own expense and, except as otherwise provided below, to the extent
that it may wish, the Company may assume the defense thereof, with
counsel satisfactory to the Indemnitee. After notice from the Company
to the Indemnitee of its election to assume the defense of a
Proceeding, the Company will not be liable to the Indemnitee under
this Agreement for any Expenses subsequently incurred by the
Indemnitee in connection with the defense thereof, other than as
provided below. The Company shall not settle any Proceeding in any
manner which would impose any penalty or limitation on the Indemnitee
without the Indemnitee's written consent. The Indemnitee shall have
the right to employ his [her] own counsel in any Proceeding, but the
fees and expenses of such counsel incurred after notice from the
Company of its assumption of the defense of the Proceeding 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 a Proceeding, or (iii) the Company shall not in fact have
employed counsel to assume the defense of a Proceeding, in each of
which cases the fees and expenses of the Indemnitee's counsel shall be
advanced by the Company. The Company shall not be entitled to assume
the defense of any Proceeding brought by or on behalf of the Company
or as to which the Indemnitee has concluded that there may be a
conflict of interest between the Company and the Indemnitee.
10. LIMITATIONS ON INDEMNIFICATION. No payments pursuant to this
------------------------------
Agreement shall be made by the Company:
(a) To indemnify or advance funds to the Indemnitee for Expenses
with respect to Proceedings initiated or brought voluntarily by the
Indemnitee and not by way of defense, except with respect to
Proceedings brought to establish or enforce a right to indemnification
under this Agreement or any other statute or
-4-
law or otherwise as required under California law, but such
indemnification or advancement of expenses may be provided by the
Company in specific cases if the Board of Directors finds it to be
appropriate;
(b) To indemnify the Indemnitee for any Expenses, judgments,
fines, penalties or ERISA excise taxes sustained in any Proceeding for
which payment is actually made to the Indemnitee under a valid and
collectible insurance policy, except in respect of any excess beyond
the amount of payment under such insurance;
(c) To indemnify the Indemnitee for any Expenses, judgments,
fines or penalties sustained in any Proceeding for an accounting 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
Securities Exchange Act of 1934, the rules and regulations promulgated
thereunder and amendments thereto or similar provisions of any
federal, state or local statutory law;
(d) If a court of competent jurisdiction finally determines that
any indemnification hereunder is unlawful.
(e) To indemnify the Indemnitee for any Expenses based upon or
attributable to the Indemnitee gaining in fact any personal profit or
advantage to which he [she] was not legally entitled; and
(f) To indemnify the Indemnitee for any Expenses brought about or
contributed to by the dishonesty of the Indemnitee seeking payment
hereunder; however, notwithstanding the foregoing, the Indemnitee
shall be protected under this Agreement to the fullest extent
permitted under law as to any claims upon which suit may be brought
against him [her] by reason of any alleged dishonesty on his [her]
part, unless a judgement or other final adjudication thereof adverse
to the Indemnitee shall establish that he [she] committed (i) acts of
active and deliberate dishonesty (ii) with actual dishonest purpose
and intent, which acts were material to the cause of action so
adjudicated.
11. MAINTENANCE OF LIABILITY INSURANCE.
----------------------------------
(a) The Company hereby covenants and agrees that, as long as the
Indemnitee continues to serve as a [director] [and] [officer] of the
Company and thereafter as long as the Indemnitee may be subject to any
possible Proceeding, the Company, subject to subsection (c) below,
shall promptly obtain and maintain in full force and effect directors'
and officers' liability insurance ("D&O Insurance") in reasonable
amounts from established and reputable insurers.
(b) In all D&O Insurance policies, the Indemnitee shall be named
as an insured in such a manner as to provide the Indemnitee the same
rights and
-5-
benefits as are accorded to the most favorably insured of the
Company's directors [and officers].
(c) Notwithstanding the foregoing, the Company shall have no
obligation to obtain or maintain D&O Insurance if the Company
determines, in its sole discretion, that such insurance is not
reasonably available, the premium costs for such insurance are
disproportionate to the amount of coverage provided, the coverage
provided by such insurance is so limited by exclusions that it
provides an insufficient benefit, or the Indemnitee is covered by
similar insurance maintained by a subsidiary of the Company.
12. INDEMNIFICATION HEREUNDER NOT EXCLUSIVE. The indemnification
---------------------------------------
provided by this Agreement shall not be deemed exclusive of any other
rights to which the Indemnitee may be entitled under the Company's Amended
and Restated Articles of Incorporation, the Company's Bylaws, any
agreement, vote of shareholders, or disinterested directors of the Company,
provision of California law, or otherwise, both as to action in his [her]
official capacity and as to action in another capacity on behalf of the
Company while holding such office.
13. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon,
----------------------
and shall inure to the benefit of the Indemnitee and his [her] heirs,
executors, administrators and assigns, whether or not Indemnitee has ceased
to be a director or officer, and the Company and its successors and
assigns.
14. SEPARABILITY. Each and every paragraph, sentence, term and
------------
provision of this Agreement is separate and distinct so that if any
paragraph, sentence, term or 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 any other paragraph, sentence,
term or provision hereof. To the extent required, any paragraph, sentence,
term or provision of this Agreement may be modified by a court of competent
jurisdiction to preserve its validity and to provide the Indemnitee with
the broadest possible indemnification permitted under California law.
15. SAVINGS CLAUSE. If this Agreement or any paragraph, sentence,
--------------
term or provision hereof is invalidated on any ground by any court of
competent jurisdiction, the Company shall nevertheless indemnify the
Indemnitee as to any Expenses, judgments, fines, penalties or ERISA excise
taxes incurred with respect to any Proceeding to the full extent permitted
by any applicable paragraph, sentence, term or provision of this Agreement
that has not been invalidated or by any other applicable provision of
California law.
16. INTERPRETATION: GOVERNING LAW. This Agreement shall be construed
-----------------------------
as a whole and in accordance with its fair meaning. Headings are for
convenience only and shall not be used in construing meaning. This
Agreement shall be governed and interpreted in accordance with the laws of
the State of California.
-6-
17. AMENDMENTS. No amendment, waiver, modification, termination or
----------
cancellation of this Agreement shall be effective unless in writing signed
by the party against whom enforcement is sought. The indemnification rights
afforded to the Indemnitee hereby are contract rights and may not be
diminished, eliminated or otherwise affected by amendments to the Company's
Amended and Restated Articles of Incorporation, the Company's Bylaws or by
other agreements, including directors' and officers' liability insurance
policies.
18. COUNTERPARTS. This Agreement may be executed in one or more
------------
counterparts, all of which shall be considered one and the same agreements
and shall become effective when one or more counterparts have been signed
by each party and delivered to the other.
19. NOTICES. Any notice required to be given under this Agreement
-------
shall be directed to Korn/Ferry International, 0000 Xxxxxxx Xxxx Xxxx,
Xxxxx 000, Xxx Xxxxxxx, Xxxxxxxxxx 00000, Attention: General Counsel, and
to Indemnitee at _______________ ______________________________ or to such
other address as either shall designate in writing.
IN WITNESS WHEREOF, the parties have executed this Indemnity Agreement as
of the date first written above.
INDEMNITEE
________________________________
KORN/FERRY INTERNATIONAL
By:_____________________________
Its:____________________________
-7-
