EXHIBIT 10LL
INDEMNITY AGREEMENT
AGREEMENT, effective as of _____________________________, between BellSouth
Corporation, a Georgia corporation (the "Corporation"), and
____________________________________ (the "Indemnitee").
WHEREAS, both the Corporation and Indemnitee recognize the increased risk of
litigation and other claims being asserted against directors and officers of
public companies in today's environment; and
WHEREAS, the Corporation wishes to provide in this Agreement for the
indemnification of and the advancing of expenses to Indemnitee to the full
extent provided by law and as set forth in this Agreement and, to the extent
insurance is maintained, for the continued coverage of Indemnitee under the
Corporation's directors' and officers' liability insurance policies;
NOW, THEREFORE, in consideration of the premises and Indemnitee's continuing to
serve the Corporation directly or, at its request, with another enterprise, and
intending to be legally bound hereby, the parties agree as follows:
1. INDEMNIFICATION AND ADVANCEMENT OF EXPENSES.
(a) INDEMNIFICATION AND ADVANCEMENT OF EXPENSES. Subject to the
limitations set forth herein, the Corporation shall hold harmless and
indemnify Indemnitee in connection with any Claim as soon as
practicable but in any event no later than thirty (30) days after
written demand is presented to the Corporation, against any and all
Expenses and Losses, and shall advance any and all Expenses to
Indemnitee within two (2) business days of the date a request is
presented in writing to the Corporation. If Indemnitee is entitled
under any provision of this Agreement to indemnification by the
Corporation for some or a portion of the Expenses and Losses but not
the total amount thereof, the Corporation shall nevertheless indemnify
Indemnitee for the portion thereof to which Indemnitee is entitled.
(b) SPECIFIC LIMITATIONS OF INDEMNIFICATION. Notwithstanding
anything in this Agreement to the contrary, the Indemnitee shall not
be entitled to indemnification and shall reimburse the Corporation for
all such amounts theretofore paid to the extent that a Reviewing Party
has determined that the Expenses or Losses for which indemnification
is sought out of or were based upon a Claim attributable to any of the
following: (i) the appropriation by Indemnitee, in violation of
Indemnitee's duties, of any business opportunity of the Corporation;
(ii) an act or
omission by Indemnitee not in good faith or which involves intentional
misconduct or a knowing violation of law; (iii) an act by Indemnitee
for which Indemnitee would otherwise be liable under Section 154 of
the Georgia Business Corporation Code or any successor provision; or
(iv) any transaction from which Indemnitee derived an improper
personal benefit.
If any Reviewing Party determines that Indemnitee would not be
permitted to be indemnified (in whole or in part) under this
Agreement, Indemnitee shall have the right to commence litigation to
enforce such indemnification rights without prejudice by virtue of
such determination. The Corporation shall have the burden of proving
that Indemnitee is not entitled to indemnification. If such litigation
is not commenced by Indemnitee, the determination by the Reviewing
Party shall be conclusive and binding on the Corporation and
Indemnitee.
If Indemnitee has commenced such legal proceedings, Indemnitee shall
not be required to make reimbursement to the Corporation and may
continue to be entitled to further expense advances, at the discretion
of the court, until a final judicial determination is made with
respect thereto as to which all rights of appeal therefrom have been
exhausted or lapsed.
(c) SELECTION OF SPECIAL, INDEPENDENT COUNSEL. In the event that
all of the directors are parties to or interested in the Claim or if
there has been a change in control, then only special, independent
counsel may act as a Reviewing Party. Such counsel shall be selected
by Indemnitee and approved by the Corporation (which approval shall
not be unreasonably withheld), and shall not otherwise have performed
services for the Corporation or Indemnitee. In the event that
Indemnitee and the Corporation are unable to agree on the selection,
then such special, independent counsel shall be selected by lot in the
presence of Indemnitee (and legal counsel) from among at least five
law firms in the State of Georgia having a rating of "av" or better in
the then current Xxxxxxxxxx-Xxxxxxx Law Directory.
The Corporation agrees to pay the reasonable fees of the special,
independent counsel and fully indemnify such counsel against any and
all Expenses and Losses arising out of or relating to its engagement
pursuant hereto.
2. INSURANCE.
To the extent the Corporation maintains an insurance policy providing
directors' and officers' liability insurance, Indemnitee shall be
covered by such policy, in accordance with its terms, to the maximum
extent of the coverage available for any Corporation director or
officer.
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3. LETTER OF CREDIT.
In order to secure the obligations of the Corporation to indemnify and
advance Expenses to Indemnitee pursuant to this Agreement, the
Corporation shall obtain and maintain for the benefit of Indemnitee
for a period of five years from the time of any Change in Control an
irrevocable standby letter of credit naming Indemnitee as the sole
beneficiary (the "Letter of Credit"). The Letter of Credit shall be an
appropriate amount not less than $1,000,000 issued by a financial
institution having assets in excess of $100,000,000 and containing
terms and conditions reasonably acceptable to Indemnitee. The Letter
of Credit shall provide that Indemnitee may from time to time draw
certain amounts thereunder, upon written certification by Indemnitee
to the issuer of the Letter of Credit that (a) Indemnitee has made a
written request upon the Corporation for an amount not less than the
amount he is drawing under the Letter of Credit and that the
Corporation has failed or refused to provide him with such amount in
full within thirty (30) days after receipt of request, or to advance
expenses within two (2) days after receipt of request, (b) Indemnitee
believes that he or she is entitled under the terms of this Agreement
to the amount which he or she is drawing under the Letter of Credit,
and (c) a Reviewing Party has not determined that the Indemnitee is
not entitled to Indemnification under this Agreement. The issuance of
the Letter of Credit shall not in any way diminish the Corporation's
obligation to indemnify Indemnitee against Expenses and Losses to the
full extent required by this Agreement.
4. DEFINITIONS.
(a) CHANGE IN CONTROL: shall be deemed to have occurred if (i)
any "person" (as such term is used in Section 13(c) and 14(d) of the
Securities Exchange Act of 1934, as amended), other than a trustee or
other fiduciary holding securities under an employee benefit plan of
the Corporation or a corporation owned directly or indirectly by the
Shareholders of the Corporation in substantially the same proportions
as their ownership of stock of the Corporation, is or becomes the
"beneficial owner" (as defined in Rule 13d-3 under said Act), directly
or indirectly, of securities of the Corporation representing 20% or
more of the total voting power represented by the Corporation's then
outstanding voting securities; or (ii) during any period of two
consecutive years, individuals who at the beginning of such period
constitute the Board of Directors of the Corporation and any new
director whose election by the Board of Directors or nomination for
election by the Corporation's shareholders was approved by a vote of
at least two-thirds (2/3) of the directors who either were directors
at the beginning of the two-
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year period or whose election or nomination for election was
previously so approved, cease for any reason to constitute a majority
thereof.
(b) CLAIM: is any threatened, pending or completed action, suit
or proceeding, or any inquiry or investigation, whether conducted by
or on behalf of the Corporation or any other party, that Indemnitee in
good faith believes might lead to the institution of any action, suit
or proceeding, whether civil, criminal, administrative, investigative
or other, arising in connection with any event or occurrence related
to the Indemnitee's capacity as a director or officer of the
Corporation, or service at the request of the Corporation as a
director, officer, trustee, agent or fiduciary of another corporation,
partnership, joint venture, employee benefit plan, trust or
enterprise.
(c) EXPENSES: include attorney's fees and all other costs,
expenses and obligations paid or incurred in connection with
investigating, defending, being a witness in or participating in
(including on appeal), or preparing to defend, be a witness in or
participate in any Claim.
(d) LOSSES: are any judgments, fines, penalties and amounts paid
in settlement or discharge, including all interest assessments and
other charges paid or payable in connection therewith of a Claim, and
for which the Indemnitee has not been otherwise reimbursed.
(e) REVIEWING PARTY: shall mean (i) the directors of the
Corporation that are not parties to or interested in the Claim
provided there shall be two independent directors, or (ii) special,
independent counsel.
5. NO MODIFICATION.
No supplement, modification or amendment of this Agreement shall be
binding unless executed in writing by both of the 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.
6. NOTIFICATION AND DEFENSE OF CLAIM.
Promptly after receipt by Indemnitee of notice of the commencement of
any action, suit or proceeding which may constitute a Claim hereunder,
Indemnitee will, if a Claim in respect thereof is to be made against
the Corporation under this Agreement, notify the Corporation of the
commencement thereof, whereupon:
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(a) the Corporation will be entitled to participate therein at
its own expense;
(b) except as otherwise provided below, the Corporation will be
entitled to assume the defense thereof, with counsel satisfactory to
Indemnitee, unless Indemnitee shall have reasonably concluded that
there may be a conflict of interest between the Corporation and the
Indemnitee in the conduct of the defense of such action. Indemnitee
shall have the right to employ its own counsel in such action, suit or
proceeding, but the fees and expenses of such counsel incurred after
notice from the Corporation of its assumption of the defense thereof
shall be at the expense of Indemnitee unless (i) the employment of
counsel by Indemnitee has been authorized or is not permitted to be
undertaken by the Corporation, or (ii) the Corporation shall not in
fact have employed counsel to assume such defense; and
(c) the Corporation shall not be liable to indemnify the
Indemnitee under this Agreement for any amounts paid in settlement of
any action or claim effected without its written consent. The
Corporation shall not settle any action or claim in any manner which
would impose any penalty or limitation on the Indemnitee without the
Indemnitee's written consent. Neither the Corporation nor the
Indemnitee will unreasonably withhold their consent to any proposed
settlement.
7. NON-EXCLUSIVITY.
The rights of the Indemnitee hereunder shall not be deemed exclusive
of any other substantive or procedural rights or presumptions under
the Corporation's By-laws or the Georgia Business Corporation Code or
otherwise, and to the extent that during the period of this Agreement
the rights of the then existing directors and officers are more
favorable to such directors or officers than the rights currently
provided thereunder or under this Agreement to Indemnitee, Indemnitee
shall be entitled to the full benefits of such more favorable rights.
8. BINDING EFFECT.
This Agreement shall be binding upon and inure to the benefit of and
be enforceable by the parties hereto and their respective successors,
assigns, including any direct or indirect successor by purchase,
merger, consolidation or otherwise to all or substantially all of the
business and/or assets of the Corporation, spouses, heirs and personal
and legal representatives.
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9. SEVERABILITY.
The provisions of this Agreement shall be severable in the event that
any provision hereof (including any provision within a single section,
paragraph or sentence) is held by a court of competent jurisdiction to
be invalid, void or otherwise unenforceable, and the remaining
provisions shall remain enforceable to the fullest extent permitted by
law.
10. GOVERNING LAW.
This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of Georgia.
Executed this ________ day of ______________, _____.
BELLSOUTH CORPORATION
By
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By , Indemnitee
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