FORM OF INDEMNIFICATION AGREEMENT
Exhibit 10.13
FORM OF INDEMNIFICATION AGREEMENT
This Indemnification Agreement ("Agreement") is made as of this ____ day of ___________, ____ by and between Gables Residential Trust, a Maryland real estate investment trust (the "Company"), Gables Realty Limited Partnership, a Delaware limited partnership (the "Operating Partnership"), Gables GP, Inc., a Texas corporation (the "General Partner" and together with the Company and the Operating Partnership, "Indemnitors") and _______________ ("Indemnitee").
WHEREAS, Indemnitors desire to attract and retain the services of highly qualified individuals, such as Indemnitee, to serve as trustees, directors and/or executive officers of one or more of such Indemnitors; and
WHEREAS, Indemnitors recognize Indemnitee's need for protection against personal liability and in order to insure Indemnitee's continued service to such Indemnitors wish to provide in this Agreement for the indemnification of and the advancing of expenses to Indemnitee.
NOW, THEREFORE, Indemnitors and Indemnitee hereby agree as follows:
1. Indemnification.
(a)
Third Party Proceedings. Indemnitors
shall indemnify Indemnitee to the full extent permitted now or hereafter by
applicable law, as from time to time amended, subject to the exceptions provided
in Section 8 of this Agreement. Without
limiting the foregoing but subject to the provisions of this Agreement,
Indemnitors shall indemnify Indemnitee if Indemnitee is or was a party or is
threatened to be made a party to any threatened, pending or completed action or
proceeding, whether civil, criminal, administrative or investigative (other than
an action by or in the right of Indemnitors) by reason of Indemnitee's past,
present or future service as a trustee, director or executive officer of any
Indemnitor, or, at any such Indemnitor's request, of another enterprise or
entity in which any Indemnitor had, directly or indirectly, an interest at the
time of such service, against expenses (including attorney's fees), judgments,
fines and amounts paid in settlement (if such settlement is approved in advance
by Indemnitors, which approval shall not be unreasonably withheld) actually and
reasonably incurred by Indemnitee in connection with investigating, preparing
for, defending or settling such action or proceeding. Indemnitors hereby agree to indemnify Indemnitee's spouse
(whether by statute or at common law and without regard to the location of the
governing jurisdiction) and children as express third-party beneficiaries
hereunder to the same extent and subject to the same limitations applicable to
Indemnitee hereunder for claims arising out of the status of such person as a
spouse or child of Indemnitee, including claims seeking damages from marital
property (including community property) or property held by Indemnitee and such
spouse or property transferred to such spouse or child.
The indemnification provided under this Agreement may not be amended,
modified or limited in a manner adverse to the rights of Indemnitee without the
consent of Indemnitee and Indemnitee shall be deemed to be serving in his
capacity as an officer, director and/or trustee of any Indemnitor in reliance on
the terms of this Agreement.
(b)
Proceedings By or in the Right of Indemnitors.
Subject to the provisions of this Agreement, Indemnitors shall indemnify
Indemnitee if Indemnitee was or is a party or is threatened to be made a party
to any threatened, pending or completed action or proceeding by or in the right
of Indemnitors or any subsidiary of Indemnitors to procure a judgment in its
favor by reason of Indemnitee's past, present or future service as a trustee,
director or officer of any Indemnitor, or, at any such Indemnitor's request,
of another enterprise or entity in which any Indemnitor had, directly or
indirectly, an interest at the time of such service, against expenses (including
attorneys' fees) and, to the fullest extent permitted by law, amounts paid in
settlement, in each case to the extent actually and reasonably incurred by
Indemnitee in connection with the defense or settlement of such action or
proceeding.
2. Expenses; Indemnification Procedure.
(a) Advancement
of Expenses. Indemnitors shall
advance all expenses incurred by Indemnitee in connection with the
investigation, defense, settlement or appeal of any civil or criminal action or
proceeding referenced in Section 1(a) or (b) hereof (but not amounts actually
paid in settlement of any such action or proceeding).
Indemnitee hereby undertakes to repay such amounts advanced only if, and
to the extent that, it shall ultimately be determined, in accordance with
Section 2(c), that Indemnitee is not entitled to be indemnified by Indemnitors
as authorized hereby. The advances
to be made hereunder shall be paid by Indemnitors to Indemnitee within twenty
(20) days following delivery of a written request therefor by Indemnitee to
Indemnitors.
(b) Notice/Cooperation
by Indemnitee. Indemnitee
shall, as a condition precedent to his right to be indemnified under this
Agreement, give Indemnitors notice in writing as soon as practicable of any
claim made against Indemnitee for which indemnification will or could be sought
under this Agreement. Such notice
shall contain the written affirmation of Indemnitee that the standard of conduct
necessary for indemnification hereunder has been satisfied. Notice to any Indemnitor shall be directed to the Chief Executive Officer
of the Company in the manner provided in Section 13 hereof.
Indemnitee shall give Indemnitors such information and cooperation as it
may reasonably require and as shall be within Indemnitee's power.
A delay in giving notice under this Section 2(b) shall invalidate
the Indemnitee's right to indemnity under this Agreement only to the extent
that such delay prejudices the defense of the claim or the availability to
Indemnitors of insurance coverage for such claim.
(c) Procedure. Any indemnification provided for in Section 1 shall be made no later
than forty-five (45) days after receipt of the written request of Indemnitee.
If a claim under this Agreement, under any statute, or under,
respectively, any provision of the Company's Declaration of Trust or Bylaws,
the Operating Partnership's Agreement of Limited Partnership, or the General
Partner's Articles of Incorporation or Bylaws, providing for indemnification,
is not paid in full by the applicable Indemnitor within forty-five (45) days
after a written request for payment thereof that complies with the requirements
of this Agreement has first been received by such Indemnitor, Indemnitee may,
but need not, at any time thereafter bring an action against such Indemnitor to
recover the unpaid amount of the claim and, subject to Section 12 of this
Agreement, Indemnitee shall also be entitled to be paid for the expenses
(including attorneys' fees) of bringing such action. It shall be a defense to any such action (other than an
action brought to enforce a claim for expenses incurred in connection with any
action or proceeding in advance of its final disposition) that Indemnitee has
not met the standards of conduct that made it permissible under applicable law
for such Indemnitor to indemnify Indemnitee for the amount claimed, but
Indemnitee shall be entitled to receive interim payments of expenses pursuant to
Subsection 2(a) unless and until such defense may be finally adjudicated by
court order or judgment from which no further right of appeal exists.
It is the parties' intention that if such Indemnitor contests
Indemnitee's right to indemnification, the question of Indemnitee's right to
indemnification shall be for the court to decide, and neither the failure of
such Indemnitor (including its Board of Trustees, Board of Directors or general
partner, as applicable, any committee or subgroup of the Board of Trustees or
Board of Directors, independent legal counsel, or its equity holders) to have
made a determination that indemnification of Indemnitee is proper in the
circumstances because Indemnitee has met the applicable standard of conduct
required by applicable law, nor an actual determination by such Indemnitor
(including its Board of Trustees, Board of Directors or general partner, as
applicable, any committee or subgroup of the Board of Trustees or Board of
Directors, independent legal counsel, or its equity holders) that Indemnitee has
not met such applicable standard of conduct, shall create a presumption that
Indemnitee has or has not met the applicable standard of conduct.
(d) Notice
to Insurers. If, at the time of
the receipt of a notice of a claim pursuant to Section 2(b) hereof, Indemnitors
have trustee/director and officer liability insurance in effect, Indemnitors
shall give prompt notice of the commencement of such proceeding to the insurers
in accordance with the procedures set forth in the respective policies.
Indemnitors shall thereafter take all necessary or desirable
action to cause such insurers to pay, on behalf of the Indemnitee, all amounts
payable as a result of such proceeding in accordance with the terms of such
policies.
(e) Selection
of Counsel. In the event
Indemnitors shall be obligated under Section 2(a) hereof to pay the expenses of
any proceeding against Indemnitee, Indemnitors, unless Indemnitee determines
that a conflict of interest exists between the Indemnitee and Indemnitors with
respect to a particular claim, shall be entitled to assume the defense of such
proceeding, with counsel approved by Indemnitee, which approval shall not be
unreasonably withheld, upon the delivery to Indemnitee of written notice of its
election so to do. After delivery
of such notice, approval of such counsel by Indemnitee and the retention of such
counsel by Indemnitors, Indemnitors will be not be liable to Indemnitee under
this Agreement for any fees of counsel subsequently incurred by Indemnitee with
respect to the same proceeding, provided that (i) Indemnitee shall have the
right to employ his own separate counsel in any such proceeding in addition to
or in place of any counsel retained by Indemnitors on behalf of Indemnitee at
Indemnitee's expense; and (ii) if (A) the employment of counsel by
Indemnitee has been previously authorized by Indemnitors, (B) Indemnitee
shall have concluded that there may be a conflict of interest between
Indemnitors and Indemnitee in the conduct of any such defense or (C) Indemnitors
shall not, in fact, have employed counsel to assume the defense of such
proceeding, then the fees and expenses of Indemnitee's counsel shall be at the
expense of Indemnitors.
3. Nonexclusivity of Indemnification Rights. The indemnification provided by this Agreement shall not be deemed exclusive of any rights to which Indemnitee may be entitled under the Company's Declaration of Trust or its Bylaws, the Operating Partnership's Agreement of Limited Partnership, the General Partner's Articles of Incorporation or Bylaws, any agreement, any vote of equity holders or disinterested Trustees, applicable law, or otherwise, both as to action in Indemnitee's official capacity and as to action in another capacity while holding such office.
4.
Partial Indemnification. If
Indemnitee is entitled under any provision of this Agreement to indemnification
by Indemnitors for some or a portion of the expenses, judgments, fines or
penalties actually or reasonably incurred by him in the investigation, defense,
appeal or settlement of any civil or criminal action or proceeding, but not,
however, for the total amount thereof, Indemnitors shall nevertheless indemnify
Indemnitee for the portion of such expenses, judgments, fines or penalties to
which Indemnitee is entitled.
5.
Mutual Acknowledgment. Both
Indemnitors and Indemnitee acknowledge that in certain instances, Federal law or
applicable public policy may prohibit Indemnitors from indemnifying their
respective trustees, directors and officers under this Agreement or otherwise.
Indemnitee understands and acknowledges that Indemnitors have undertaken
and may be required in the future to undertake with the Securities and Exchange
Commission to submit the question of indemnification to a court in certain
circumstances for a determination of Indemnitors' right under public policy to
indemnify Indemnitee.
6. Trustees' and Officers' Liability Insurance.
The Company currently intends to obtain and maintain a policy or policies
of insurance with reputable insurance companies providing the officers and
trustees of the Company with coverage for losses from wrongful acts, or to
ensure the Company's performance of its indemnification obligations under this
Agreement, subject to its good faith determination from time to time whether or
not it is practicable for the Company to obtain or maintain such insurance.
Among other considerations, the Company will weigh the costs of obtaining
such insurance coverage against the protection afforded by such coverage. In all policies of trustees' and officers' liability insurance,
Indemnitee shall be named as an insured in such a manner as to provide
Indemnitee the same rights and benefits as are accorded to the most favorably
insured of the Company's trustees. 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
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 Indemnitee is covered by similar insurance maintained by a
subsidiary or parent of the Company.
7. Severability. Nothing
in this Agreement is intended to require or shall be construed as requiring
Indemnitors to do or fail to do any act in violation of applicable law.
Indemnitors' inability, pursuant to court order, to perform its
obligations under this Agreement shall not constitute a breach of this
Agreement. The provisions of this
Agreement shall be severable as provided in this Section 7.
If this Agreement or any portion hereof shall be invalidated on any
ground by any court of competent jurisdiction, then Indemnitors shall
nevertheless indemnify Indemnitee to the full extent permitted by any applicable
portion of this Agreement that shall not have been invalidated, and the balance
of this Agreement not so invalidated shall be enforceable in accordance with its
terms.
8.
Exceptions. Any other
provision herein to the contrary notwithstanding, Indemnitors shall not be
obligated pursuant to the terms of this Agreement to indemnify Indemnitee in the
following circumstances:
(a)
Excluded Acts. Each
Indemnitor shall not be obligated to indemnify Indemnitee for any acts or
omissions or transactions from which a person serving in Indemnitee's capacity
with respect to such Indemnitor may not be relieved of liability under the
jurisdiction of such Indemnitor's organization.
(b) Claims Initiated by Indemnitee.
Indemnitors shall not be obligated to indemnify or advance expenses to
Indemnitee with respect to proceedings or claims initiated or brought
voluntarily by 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 law in accordance with Section 1(b)
hereof, but such indemnification or advancement of expenses may be provided by
any Indemnitor in specific cases if such Indemnitor's Board of Trustees, Board
of Directors or general partner, as applicable, has approved the initiation or
bringing of such suit; or
(c) Insured Claims . Indemnitors
shall not be obligated to indemnify Indemnitee for expenses or liabilities of
any type whatsoever (including, but not limited to, judgments, fines, ERISA
excise taxes or penalties and amounts paid in settlement) to the extent that
Indemnitee has otherwise actually received payment, or payments have been made
on behalf of Indemnitee, with respect to such expense or liability (under any
insurance policy, provision of the Company's Declaration of Trust or Bylaws,
the Operating Partnership's Agreement of Limited Partnership, the General
Partner's Articles of Incorporation or Bylaws, or otherwise) of amounts
otherwise indemnifiable hereunder; or
(d) Claims Under Section 16 (b)
.. Indemnitors
shall not be obligated to indemnify Indemnitee for expenses and the payment of
profits arising from the purchase and sale by Indemnitee of securities in
violation of Section 16(b) of the Securities Exchange Act of 1934, as amended,
or any similar successor statute.
9. Construction of
Certain Phases .
(a) For purposes of this Agreement, references to "Indemnitors" shall
include, in addition to the resulting corporation, any constituent corporation
(including any constituent of a constituent) absorbed in a consolidation or
merger which, if its separate existence had continued, would have had power and
authority to indemnify its directors, officers, employees or agents, so that if
Indemnitee is or was a director, officer, employee or agent of such constituent
corporation, or is or was serving at the request of such constituent corporation
as a director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise, Indemnitee shall stand in the same
position under the provisions of this Agreement with respect to the resulting or
surviving corporation as Indemnitee would have with respect to such constituent
corporation if its separate existence had continued.
(b) For purposes of this Agreement, references to "another enterprise" or
"other enterprises" shall include employee benefit plans; references to
"fines" shall include any excise taxes assessed on Indemnitee with respect
to an employee benefit plan; and references to "serving at the request of
Indemnitors" shall include any service as a trustee, director, officer,
employee or agent of Indemnitors which imposes duties on, or involves services
by, such trustee, director, officer, employee or agent with respect to an
employee benefit plan, its participants, or beneficiaries.
10. Counterparts.
This Agreement may be executed in one or more counterparts, each of which
shall constitute an original and all of which together shall constitute a single
agreement.
11. Successors
and Assigns. This Agreement
shall be binding upon Indemnitors and their respective successors and assigns,
and shall inure to the benefit of Indemnitee and Indemnitee's estate, heirs,
legal representatives and assigns.
12. Attorneys'
Fees. In the event that any
action is instituted by Indemnitee under this Agreement to enforce or interpret
any of the terms hereof, Indemnitee shall be entitled to be paid all court costs
and expenses, including reasonable attorneys' fees, incurred by Indemnitee
with respect to such action, unless as a part of such action, the court of
competent jurisdiction determines that each of the material assertions made by
Indemnitee as a basis for such action were not made in good faith or were
frivolous. In the event of an
action instituted by or in the name of Indemnitors under this Agreement or to
enforce or interpret any of the terms of this Agreement, Indemnitee shall be
entitled to be paid all court costs and expenses, including reasonable
attorneys' fees, incurred by Indemnitee in defense of such action (including
with respect to Indemnitee's counterclaims and cross-claims made in such
action), unless as a part of such action the court determines that each of
Indemnitee's material defenses to such action were made in bad faith or were
frivolous.
13. Notice. All notices, requests, demands and other communications under
this Agreement shall be in writing and shall be deemed duly given (i) if
delivered by hand and receipted for by the party addressee, on the date of such
receipt or (ii) if mailed by domestic certified or registered mail with
postage prepaid, on the third business day after the date postmarked. Addresses for notice to any party are as shown on the signature page of
this Agreement, or as subsequently modified by written notice.
14. Choice
of Law. This Agreement shall be
governed by and its provisions construed in accordance with the laws of the
State of Maryland as applied to contracts between Maryland residents entered
into and to be performed entirely within Maryland.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written.
By: ____________________________________
Name:
Title:
GABLES REALTY LIMITED PARTNERSHIP
By: Gables GP, Inc., as General Partner
By: _____________________________________
Name:
Title:
GABLES GP, INC.
By: _____________________________________
Name:
Title:
AGREED TO AND ACCEPTED:
INDEMNITEE:
______________________________
