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EXHIBIT 10.4
INDEMNITY AGREEMENT
This Indemnity Agreement ("Agreement") is made and entered into as of June
__, 1999, by and between Xxxxxx Xxxxxx, Inc., a Delaware corporation
("Company"), and ____________ ("Indemnitee").
Introduction
Indemnitee has been and is an officer and/or director of the Company and/or
an officer and/or director of certain of the Company's direct and indirect
subsidiaries (the "Subsidiaries"). The parties desire that the Company provide
indemnification (including advancement of expenses) to Indemnitee effective as
of the date Indemnitee became or does become an officer or director of the
Company or any of the Subsidiaries against any and all liabilities asserted
against Indemnitee to the fullest extent permitted by the Delaware General
Corporation Law ("Act"), as the Act presently exists and may be expanded from
time to time. Based on such premise, and for certain good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereby agree as follows:
1. Service. Indemnitee will serve at the will of the Company or under
separate contract, if such exists, as a director and/or officer of the Company
and the Subsidiaries (including in certain circumstances, as a shareholder of a
separate corporation for insurance purposes which corporation shall be
controlled and directed by the Company or the Subsidiaries) for so long as
Indemnitee is duly elected and qualified in accordance with the Bylaws of the
Company and the bylaws or other governing documents of the applicable
Subsidiaries, until Indemnitee's death, or the tender of his resignation to the
Company or until his removal in accordance with the Bylaws of the Company and
the bylaws or other governing documents of the applicable Subsidiaries.
2. Indemnification. The Company shall, or shall cause the applicable
Subsidiary to, indemnify Indemnitee as follows:
2.1. The Company shall indemnify Indemnitee when Indemnitee was or is a
party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the Company), by
reason of the fact that Indemnitee is or was a director, officer, employee or
agent of the Company or the Subsidiaries (or additionally as a shareholder of a
Subsidiary), or is or was serving at the request of the Company or the
Subsidiaries as a director, officer, shareholder, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, against
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by Indemnitee in connection with
such action, suit or proceeding if Indemnitee acted in good faith and in a
manner Indemnitee reasonably believed to be in or not opposed to the best
interests of the Company and its Subsidiaries, and, with respect to any criminal
action or proceeding, had no reasonable cause to believe that Indemnitee's
conduct was unlawful. The termination of any action, suit or proceeding by
judgment, order, settlement or conviction or upon a plea of nolo contendere or
its equivalent shall not, of itself, create a presumption that Indemnitee
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did not act in good faith and in a manner which Indemnitee reasonably
believed to be in or not opposed to the best interests of the Company and its
Subsidiaries, and, with respect to any criminal action or proceeding, had
reasonable cause to believe that Indemnitee's conduct was unlawful.
2.2. The Company shall indemnify Indemnitee when Indemnitee was or is a
party or is threatened to be made a party to any threatened, pending or
completed action or suit by or in the right of the Company to procure a judgment
in its favor by reason of the fact that Indemnitee is or was a director,
officer, employee or agent of the Company or the Subsidiaries (or additionally
as a shareholders of a Subsidiary), or is or was serving at the request of the
Company or the Subsidiaries as a director, officer, shareholder, employee or
agent of another corporation, partnership, joint venture, trust or other
enterprise against expenses (including attorneys' fees) actually and reasonably
incurred by Indemnitee in connection with the defense or settlement of such
action or suit if Indemnitee acted in good faith and in a manner that Indemnitee
reasonably believed to be in or not opposed to the best interests of the Company
and it Subsidiaries and except that no indemnification pursuant to this
Agreement shall be made in respect of any claim, issue or matter as to which
Indemnitee shall have been adjudged to be liable to the Company or its
Subsidiaries unless and only to the extent that the Delaware Court of Chancery
or the court in which such action or suit was brought shall determine upon
application that, despite the adjudication of liability but in view of all the
circumstances of the case, Indemnitee is fairly and reasonably entitled to
indemnity for such expenses which the Delaware Court of Chancery or such other
court shall deem proper.
2.3. To the extent that Indemnitee has been successful on the merits or
otherwise in defense of any action, suit or proceeding referred to in Sections
2.1 or 2.2, or in defense of any claim, issue or matter therein, or when the
Delaware Court of Chancery or the court in which such action or suit was brought
otherwise determines Indemnitee is fairly and reasonably entitled to Indemnity
for such expenses the Company shall indemnify Indemnitee against expenses
(including attorneys' fees) actually and reasonably incurred by Indemnitee in
connection therewith.
2.4. Any indemnification under Sections 2.1 and 2.2 (unless ordered by a
court) shall be made by the Company only as authorized in the specific case upon
a determination, in accordance with the procedures set forth in Section 3, that
indemnification of Indemnitee is proper in the circumstances because Indemnitee
has met the applicable standard of conduct set forth in such Sections 2.1 and
2.2. Such determination shall be made (1) by a majority vote of the board of
directors of the Company who are not parties to such action, suit or proceeding
even though less than a quorum, (2) if there are no such directors or, if such
directors so direct, by independent legal counsel in a written opinion, or (3)
by the stockholders of the Company.
2.5. Expenses (including attorneys' fees) incurred by Indemnitee in
defending any civil, criminal, administrative, or investigative action, suit or
proceeding shall be paid by the Company in advance of the final disposition of
such action, suit or proceeding upon receipt by the Company from Indemnitee of a
Statement of Undertaking in substantially the form set forth in Exhibit A, in
which Indemnitee undertakes to repay such amount if it shall ultimately be
determined that Indemnitee is not entitled to be indemnified by the Company as
authorized in this Section 2; provided, however, that should more than one
person other than Indemnitee be made or threatened
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to be made a party to the same civil, criminal, administrative or
investigative action, suit or proceeding, the Company shall advance the
attorneys' fees of the counsel who represents such group of persons, unless
Indemnitee is advised that the retention of separate counsel by Indemnitee is
necessary, in which case the Company shall also advance the expenses of such
separate counsel.
2.6. The indemnification and advancement of expenses provided by, or
granted pursuant to, this Section 2 shall not be deemed exclusive of any other
rights to which Indemnitee may be entitled under any bylaw, agreement, vote of
stockholders or disinterested directors or otherwise, both as to action in
Indemnitee's official capacity and as to action in another capacity while
holding such office, shall continue after Indemnitee has ceased to be a
director, officer, employee or agent of the Company or the Subsidiaries, and
shall inure to the benefit of the heirs, executors and administrators of
Indemnitee.
3. Determination of Right to Indemnification. For the purpose of making the
determination of whether to indemnify Indemnitee in a specific case under
Section 2.3, the board of directors of the Company, independent legal counsel or
stockholders, as the case may be, shall make the determination in accordance
with the following procedures:
3.1. Indemnitee shall submit to the board of directors a Statement of
Request for Indemnification in substantially the form set forth in Exhibit B, in
which Indemnitee states that Indemnitee has met the applicable standard of
conduct set forth in Sections 2.1 and 2.2.
3.2. Indemnitee's submission of a Statement of Request for Indemnification
to the board of directors shall create a rebuttable presumption that Indemnitee
has met the applicable standard of conduct set forth in Sections 2.1 and 2.2
and, therefore, is entitled to indemnification under Section 2. The Company
shall cause, the board of directors, independent legal counsel or stockholders,
as the case may be, to confirm, within 10 days after submission of the Statement
of Request for Indemnification, specifically that Indemnitee is so entitled,
unless it or they possess clear and convincing evidence to rebut the foregoing
presumption, which evidence shall be disclosed to Indemnitee with particularity
in a sworn written statement signed by all persons who participated in the
determination and voted to deny indemnification. If the board of directors,
independent legal counsel or stockholders fail to deny that Indemnitee is
entitled to Indemnification within 10 days after submission of the Statement of
Request for Indemnification, the presumption that Indemnity is entitled to
Indemnitee shall continue until rebutted.
4. Merger, Consolidation or Change in Control. If the Company is a
constituent corporation in a merger or consolidation, whether the Company is the
resulting or surviving corporation or is absorbed as a result thereof, or if
there is a change of control of the Company, Indemnitee shall stand in the same
position under this Agreement with respect to the resulting, surviving or
changed corporation as Indemnitee would have with respect to the Company if its
separate existence had continued or if there had been no change in the control
of the Company.
5. Certain Definitions. For the purposes of this Agreement, the following
terms shall have the indicated meanings and understandings:
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5.1. The term "other enterprise" includes, among others, employee benefit
plans and civic, non-profit and charitable organizations, whether or not
incorporated.
5.2. The term "fines" includes any excise taxes assessed on Indemnitee with
respect to any employee benefit plan.
5.3. The term "serving at the request of the Company" includes any service,
at the request or with the express or implied authorization of the Company, as a
director, officer, shareholder, employee or agent of another corporation,
partnership, joint venture, trust or other enter prise, which service imposes
duties on, or involves services by, Indemnitee with respect to such corporation,
partnership, joint venture, trust or other enterprise, its participants or
beneficiaries. If Indemnitee acted in good faith and in a manner Indemnitee
reasonably believed to be in or not opposed to the best interests of such other
enterprise, its participants or beneficiaries, Indemnitee shall be deemed to
have acted in a manner not opposed to the best interests of the Company.
5.4. The term "change of control" includes any change in the ownership of a
majority of the outstanding voting securities of the Company or in the
composition of a majority of the members of the board of directors of the
Company.
6. Attorney' Fees. If Indemnitee institutes any legal action to enforce
Indemnitee's rights under this Agreement, or to recover damages for breach of
this Agreement, Indemnitee, if Indemnitee prevails in whole or in part, shall be
entitled to recover from the Company all fees and expenses (including attorney's
fees) incurred by Indemnitee in connection therewith.
7. Deposit of Funds In Trust. If the Company voluntarily decides to
dissolve or to file a petition for relief under the applicable bankruptcy,
moratorium or similar laws, then not later than 10 days prior to such
dissolution or filing, the Company shall deposit in trust for the sole and
exclusive benefit of Indemnitee a cash amount equal to all amounts previously
authorized to be paid to Indemnitee hereunder, such amounts to be used to
discharge the Company's obligations to Indemnitee hereunder. Any amounts in such
trust not required for such purpose shall be returned to the Company. This
Section 7 shall not apply to the dissolution of the Company in connection with a
transaction as to which Section 4 applies.
8. Amendments to Act. This Agreement is intended to provide indemnity to
Indemnitee to the fullest extent allowed under Delaware law. Accordingly, to the
extent permitted by law, if the Act permits greater indemnity than the indemnity
set forth herein, or if any amendment is made to the Act expanding the indemnity
permissible under Delaware law, the indemnity obligations contained herein
automatically shall be expanded, without the necessity of action on the part of
any party, to the extent necessary to provide to Indemnitee the fullest
indemnity permissible under Delaware law.
9. Conflicts. As stated above, this Agreement is intended to provide
indemnity to Indemnitee to the fullest extent allowed under Delaware law. To the
extent a Subsidiary is not governed by Delaware law, this Agreement shall
control and the Company shall indemnify
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Indemnitee pursuant to the terms of this Agreement to the extent that the
Subsidiary's charter, bylaws or other governing documents or the applicable
State's statutes do not provide such indemnity.
10. Miscellaneous Provisions.
10.1. Survival. The provisions of this Agreement shall survive the
termination of Indemnitee's service as a director or officer of the Company and
shall relate back to Indemnitee's election as an officer or director of the
Company or any Subsidiary if prior to the date hereof.
10.2. Entire Agreement. This Agreement constitutes the full understanding
of the parties and a complete and exclusive statement of the terms and
conditions of their agreement relating to the subject matter hereof and
supersedes all prior negotiations, understandings and agree ments, whether
written or oral, between the parties, their affiliates, and their respective
principals, shareholders, directors, officers, employees, consultants and agents
with respect thereto.
10.3. Amendments and Waivers. No alteration, modification, amendment,
change or waiver of any provision of this Agreement shall be effective or
binding on any party hereto unless the same is in writing and is executed by all
parties hereto.
10.4. Modification and Severability. If a court of competent jurisdiction
declares that any provision of this Agreement is illegal, invalid or
unenforceable, then such provision shall be modified automatically to the extent
necessary to make such provision fully legal, valid or enforce able. If such
court does not modify any such provision as contemplated herein, but instead
declares it to be wholly illegal, invalid or unenforceable, then such provision
shall be severed from this Agreement, this Agreement and the rights and
obligations of the parties hereto shall be construed as if this Agreement did
not contain such severed provision, and this Agreement otherwise shall remain in
full force and effect.
10.5. Enforceability. This Agreement is enforceable by and against the
Company, the Indemnitee and their respective executors, legal representatives,
administrators, heirs, successors and assignees.
10.6. Governing Law. This Agreement is governed by, construed under, and
enforced in accordance with the laws of the State of Delaware without reference
to the conflict-of- laws provisions thereof.
10.7. Multiple Counterparts. This Agreement may be executed by the parties
hereto in multiple counterparts, each of which shall be deemed an original for
all purposes, and all of which together shall constitute one and the same
instrument.
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The parties hereto have executed this Agreement to be effective as of the
date first written above.
COMPANY:
XXXXXX XXXXXX, INC.
By:
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Xxxxxxx X. Xxxxxx
President
INDEMNITEE:
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Name:
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EXHIBIT A
STATEMENT OF UNDERTAKING
STATE OF TEXAS $
$
COUNTY OF XXXXXX $
I, __________, being first duly sworn, depose and say as follows:
1. This Statement of Undertaking is submitted pursuant to the Indemnity
Agreement dated June __, 1999 between Xxxxxx Xxxxxx, Inc., a Delaware
corporation ("Company"), and me.
2. I hereby undertake to repay this advancement of expenses if it is
ultimately determined that I am not entitled to be indemnified by the Company.
3. I hereby undertake to repay any advancement of expenses related to my
Indemnification by the Company if it is ultimately determined that I am not
entitled to be indemnified by the Company.
4. I am requesting the advancement of expenses in connection with the
following action, suit or proceeding:
I have executed this Statement of Undertaking on ________________________.
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Signature
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Print Name
Subscribed and sworn to before me on ____________________________________.
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Notary Public in and for
said state and county
My commission expires:
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EXHIBIT B
STATEMENT OF REQUEST FOR INDEMNIFICATION
STATE OF TEXAS $
$
COUNTY OF XXXXXX $
I, ___________________, being first duly sworn, depose and say as follows:
1. This Statement of Request for Indemnification is submitted pursuant to
the Indemnity Agreement dated June __, 1999, between Xxxxxx Xxxxxx, Inc., a
Delaware corporation ("Company"), and me.
2. I am requesting indemnification against expenses (including attorneys'
fees) and, with respect to any action not by or in the right of the Company,
judgments, fines and amounts paid in settlement, all of which have been actually
and reasonably incurred by me in connection with a certain action, suit or
proceeding to which I am a party or am threatened to be made a party by reason
of the fact that I am or was a director and/or officer of the Company.
3. With respect to all matters related to any such action, suit or
proceeding, I acted in good faith and in a manner I reasonably believed to be in
or not opposed to the best interests of the Company, and, with respect to any
criminal action or proceeding, I had no reason to believe that my conduct was
unlawful.
4. I am requesting indemnification in connection with the following suit,
action or proceeding:
I have executed this Statement of Request for Indemnification on
___________________________.
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Signature
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Print Name
Subscribed and sworn to before me on ____________________________________.
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Notary Public in and for
said state and county
My Commission expires:
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