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EXHIBIT 10.3
FORM OF
INDEMNITY AGREEMENT
This Indemnity Agreement ("Agreement") is made as of
______________________, 19__ by and between International Aircraft Investors, 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, 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
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director, officer, employee or agent of another enterprise, whether or not he 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 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 agreement with the Company] for so long
as he is duly elected or appointed or until such time as he tenders his
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.
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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 were not parties to the Proceeding
due to 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 in the investigation, defense, appeal or
settlement of any Proceeding but not, however, for the total amount of his
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 not relieve it from any liability which it may have to the
Indemnitee otherwise than under this Agreement.
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(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 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 establishing or enforcing his right to indemnification or
advances in whole or in part pursuant to this Agreement shall also be
indemnified by the Company.
(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 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
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of defense, except with respect to Proceedings brought to establish or enforce a
right to indemnification under this Agreement or any other statute or 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; and
(d) If a court of competent jurisdiction finally
determines that any indemnification hereunder is unlawful.
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 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 Articles of
Incorporation, Bylaws, any
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agreement, vote of shareholders, or disinterested directors, provision of
California law, or otherwise, both as to action in his 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 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.
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
Amended and Restated Articles of Incorporation, Bylaws or by other agreements,
including D&O 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 International Aircraft Investors, 0000 Xxxxxxxx
Xxxxxxxxx, Xxxxx 000,
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Xxxxxxxx, Xxxxxxxxxx 00000, Attention: President, 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
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INTERNATIONAL AIRCRAFT INVESTORS
By:______________________
Its:__________________
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