EXHIBIT 10.13
INDEMNITY AGREEMENT
This Agreement, effective as of January 20, 2004, is made and entered into
between First Horizon National Corporation, a Tennessee corporation
("Corporation"), and _____________, a director or officer of Corporation or one
of its subsidiaries ("Indemnitee").
WHEREAS, Corporation desires to attract and retain outstanding persons as
directors and officers of it and its subsidiaries; and
WHEREAS, Corporation and Indemnitee recognize the increased risk of
litigation and claims being asserted against directors and certain officers of
public companies and their subsidiaries and the need for Corporation to provide
protection against personal liability to enhance Indemnitee's effective service
to Corporation; and
WHEREAS, Corporation desires to provide in this Agreement for the
indemnification of and advancing of expenses to Indemnitee to the maximum extent
permitted (or not prohibited) by law and as set forth in this Agreement and, to
the extent such insurance is maintained by Corporation, for the continued
coverage of Indemnitee under Corporation's directors and officers liability
insurance policies;
NOW, THEREFORE, in consideration of the factors stated above, the promises
contained herein, and Indemnitee's continuing to serve Corporation directly or,
at its request, indirectly through a subsidiary, and intending to be legally
bound hereby, the parties agree as follows:
1. Definitions.
(a) "Change in Control" means the occurrence of any one of the following
events:
(i) individuals who, on January 21, 1997, constitute the Board (the
"Incumbent Directors") cease for any reason to constitute at least a
majority of the Board, provided that any person becoming a director
subsequent to January 21, 1997, whose election or nomination for election
was approved by a vote of at least three-fourths (3/4) of the Incumbent
Directors then on the Board (either by a specific vote or by approval of
the proxy statement of the Company in which such person is named as a
nominee for director, without written objection to such nomination) shall
be an Incumbent Director; provided, however, that no individual elected or
nominated as a director of the Company initially as a result of an actual
or threatened election contest with respect to directors or as a result of
any other actual or threatened solicitation of proxies or consents by or on
behalf of any person other than the Board shall be deemed to be an
Incumbent Director;
(ii) any "Person" (as defined under Section 3(a)(9) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act") and as used in
Section 13(d) or Section 14(d) of the Exchange Act) is or becomes a
"beneficial owner" (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of securities of the Company representing 20% or
more of the combined voting power of the Company's then outstanding
securities eligible to vote for the election of the Board (the "Company
Voting Securities"); provided, however, that the event described in this
paragraph (ii) shall not be deemed to be a change in control by virtue of
any of the following
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acquisitions: (A) by the Company or any entity in which the Company
directly or indirectly beneficially owns more than 50% of the voting
securities or interests (a "Subsidiary"), (B) by an employee stock
ownership or employee benefit plan or trust sponsored or maintained by the
Company or any Subsidiary, (C) by any underwriter temporarily holding
securities pursuant to an offering of such securities, or (D) pursuant to a
Non-Qualifying Transaction (as defined in paragraph (iii));
(iii) the consummation of a merger, consolidation, share exchange or
similar form of corporate transaction involving the Company or any of its
Subsidiaries that requires the approval of the Company's shareholders,
whether for such transaction or the issuance of securities in the
transaction (a "Business Combination"), unless immediately following such
Business Combination: (A) more than 60% of the total voting power of (x)
the corporation resulting from such Business Combination (the "Surviving
Corporation"), or (y) if applicable, the ultimate parent corporation that
directly or indirectly has beneficial ownership of 100% of the voting
securities eligible to elect directors of the Surviving Corporation (the
"Parent Corporation"), is represented by Company Voting Securities that
were outstanding immediately prior to the consummation of such Business
Combination (or, if applicable, is represented by shares into which such
Company Voting Securities were converted pursuant to such Business
Combination), and such voting power among the holders thereof is in
substantially the same proportion as the voting power of such Company
Voting Securities among the holders thereof immediately prior to the
Business Combination, (B) no person (other than any employee benefit plan
sponsored or maintained by the Surviving Corporation or the Parent
Corporation), is or becomes the beneficial owner, directly or indirectly,
of 20% or more of the total voting power of the outstanding voting
securities eligible to elect directors of the Parent Corporation (or, if
there is no Parent Corporation, the Surviving Corporation) and (C) at least
two-thirds (2/3) of the members of the board of directors of the Parent
Corporation (or, if there is no Parent Corporation, the Surviving
Corporation) were Incumbent Directors at the time of the Board's approval
of the execution of the initial agreement providing for such Business
Combination (any Business Combination which satisfies all of the criteria
specified in (A), (B) and (C) above shall be deemed to be a "Non-Qualifying
Transaction"); or
(iv) the shareholders of the Company approve a plan of complete
liquidation or dissolution of the Company or a sale of all or substantially
all of the Company's assets.
Notwithstanding the foregoing, a Change in Control of the Company shall not
be deemed to occur solely because any person acquires beneficial ownership of
more than 20% of the Company Voting Securities as a result of the acquisition of
Company Voting Securities by the Company which reduces the number of Company
Voting Securities outstanding; provided, that if after such acquisition by the
Company such person becomes the beneficial owner of additional Company Voting
Securities that increases the percentage of outstanding Company Voting
Securities beneficially owned by such person, a Change in Control of the Company
shall then occur.
(b) "Claim" is defined as any threatened, pending or contemplated action,
suit or proceeding, or any inquiry or investigation, whether conducted by
Corporation or any other party, that Indemnitee believes might lead to the
institution of any action, suit or proceeding, whether civil, criminal,
administrative, investigative, or other, in any way arising out of or in
connection with or related to any event or occurrence related to the fact that
Indemnitee is or was a director or officer of Corporation or any of its
subsidiaries, or
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is or was serving at the request of Corporation or any of its subsidiaries as a
director, officer, employee, trustee, agent or fiduciary of another corporation,
partnership, joint venture, employee benefit plan, political action committee,
trust or other enterprise, or by reason of anything done or not done by
Indemnitee in any such capacity. As used herein, Claim shall include, but is not
limited to, any threatened, pending or contemplated action, suit or proceeding,
or any inquiry or investigation, in any way arising out of or alleging any act,
error or omission by the Indemnitee in the rendering or failure to render
professional services, including legal and accounting services, for or at the
request of the Corporation or any of its subsidiaries; provided such
professional services are within the reasonably anticipated scope of the
Indemnitee's duties. Additionally, as used herein, "Claim" shall include, but is
not limited to, any threatened, pending or contemplated action, suit or
proceeding arising out of or alleging negligence on the part of the Indemnitee.
(c) "Expenses" is defined as 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 any appeals) or preparing to
defend, be a witness in or participate in any Claim.
(d) "Losses" is defined as 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 Indemnitee has
not been otherwise reimbursed.
(e) "Reviewing Party" is defined as (i) the directors of Corporation that
are not parties to or interested in the Claim (provided that there shall be at
least two such independent directors) or (ii) in the event that there are not at
least two independent directors or there has been a Change in Control, special,
independent counsel, selected in the manner provided in Section 6.
2. Basic Indemnification.
Subject to the limitations provided in the following sentence and Section 3
herein, Corporation shall indemnify and hold harmless Indemnitee in connection
with any Claim against any and all Expenses and Losses to the maximum extent
permitted (or not prohibited) by law and, if requested by Indemnitee, shall
advance Expenses as soon as practicable but in any event no later than 30 days
after written demand is presented to Corporation. Except as set forth in Section
4 herein, Indemnitee will not be entitled to indemnification pursuant to this
Agreement in connection with any Claim initiated by Indemnitee against
Corporation or any of its subsidiaries or any director or officer of it or of
any of its subsidiaries except for a Claim in which Corporation has joined or
the initiation of which the Corporation has consented to. In connection with any
determination by Reviewing Party or otherwise as to whether Indemnitee is
entitled to be indemnified under any provision of this Agreement, the burden of
proof shall be on Corporation to establish that Indemnitee is not so entitled.
3. Limitations on Indemnification.
Notwithstanding anything herein to the contrary (except for any additional
rights contemplated by Section l0(b) herein), the obligations of Corporation to
indemnify Indemnitee under Section 2 shall be subject to the condition that
Reviewing Party shall not have determined that Indemnitee would not be permitted
to be indemnified under applicable law. Corporation is obligated to advance
Expenses within the time period specified in Section 2 herein unless, during
such time period and prior to Expense
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advancement, Reviewing Party determines that Indemnitee would not be permitted
to be so indemnified under applicable law. If Expenses are advanced and
Reviewing Party subsequently determines that Indemnitee would not be permitted
to be so indemnified under applicable law, Corporation shall be entitled to be
reimbursed by Indemnitee (who hereby agrees to reimburse Corporation) for all
such amounts theretofore paid; provided, if Indemnitee has commenced legal
proceedings in a court of competent jurisdiction to secure a determination that
Indemnitee should be indemnified under applicable law, any determination made by
Reviewing Party that Indemnitee would not be permitted to be indemnified under
applicable law shall not be binding, and Indemnitee shall not be required to
reimburse Corporation for any Expenses advanced until a final judicial
determination is made with respect thereto as to which all rights of appeal
therefrom have been exhausted or lapsed. If there has been no determination by
Reviewing Party or Expenses are not advanced within the time frame provided in
Section 2 or if Reviewing Party determines that Indemnitee would not be
permitted to be indemnified in whole under applicable law, Indemnitee shall have
the right to commence litigation in any court in the state of Tennessee having
subject matter jurisdiction thereof and in which venue is proper seeking an
initial determination by the court or challenging any such determination by
Reviewing Party or any aspect thereof, and Corporation hereby consents to
service of process and to appear in any such proceeding. Any determination by
Reviewing Party otherwise shall be conclusive and binding on Corporation and
Indemnitee. Corporation shall have the burden of proving that Indemnitee is not
entitled to indemnification in any such legal proceeding.
4. Indemnification for Additional Expenses.
Corporation shall indemnify Indemnitee against any and all expenses
(including attorneys' fees and all other costs, expenses, and obligations of the
same sort as contemplated by Section l(c)) and, if requested by Indemnitee,
shall advance such expenses to Indemnitee within 30 days after written demand is
presented to Corporation, which expenses are incurred by Indemnitee in
connection with any claim asserted against or claim or action brought by
Indemnitee for indemnification or advance payment of Expenses by Corporation
under this Agreement or for recovery under any directors and officers liability
insurance policies maintained by Corporation, regardless of whether Indemnitee
ultimately is determined to be entitled to such indemnification, expense advance
or insurance recovery. [Note: The expenses provided in Section 4, which are not
repayable to Corporation, are different from the Expenses permitted in Section
2, which must be repaid to Corporation in the situation described in Section 3.]
5. Insurance.
To the extent Corporation maintains insurance policies providing directors
and officers liability insurance, Indemnitee shall be covered by such policies,
in accordance with their terms, to the maximum extent of the coverage available
for any Corporation director or officer.
6. Change in Control.
Corporation agrees that if there is a Change in Control, then with respect
to all matters thereafter arising concerning the rights of Indemnitee to
indemnity payments and Expense advances under this Agreement or any other
agreement or Corporation Charter or Bylaw provision now in effect or hereafter
adopted relating to Claims, Corporation shall seek legal advice only from
special, independent counsel selected by Indemnitee and approved by Corporation
(which approval shall not be unreasonably withheld). Such counsel, among other
things, shall render its written opinion to Corporation and Indemnitee as to
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whether and to what extent Indemnitee would be permitted to be indemnified under
applicable law. Corporation agrees to pay the fees of the special, independent
counsel referred to above and fully to indemnify such counsel against any and
all expenses and losses of the same sort as contemplated by Sections l(c) and
l(d) arising out of or relating to this Agreement or its engagement pursuant
hereto.
7. Creation of Trust.
In the event of a Change in Control or if the Board determines that a
Change in Control is imminent, Corporation shall (and the appropriate officers
of Corporation are hereby authorized and directed to take all action deemed
necessary or desirable in connection herewith) upon the written request of
Indemnitee, create a trust or appropriately amend an existing trust for the
benefit of Indemnitee and from time to time upon written request of Indemnitee
shall fund such trust in an amount sufficient to satisfy any and all Expenses
reasonably anticipated at the time of each such request and any and all Losses
from time to time actually paid or claimed, reasonably anticipated or proposed
to be paid. The amount or amounts to be deposited in the trust pursuant to the
foregoing shall be determined by Reviewing Party. The trustee shall be chosen by
Corporation, but the trustee may not be a party to or interested in a Claim nor
may the trustee be any person or entity (or an affiliate thereof) whose direct
or indirect ownership of Corporation stock has triggered a Change in Control.
Any trust established or amended pursuant hereto shall provide, with respect to
the rights and obligations created under this Agreement, that upon a Change in
Control (i) the trust shall not be revoked or the principal thereof invaded
without the written consent of Indemnitee, (ii) the trustee shall advance any
and all Expenses to Indemnitee within thirty days after written demand is
presented to the trustee (and Indemnitee hereby agrees to reimburse the trust
under the circumstances under which Indemnitee would be required to do so under
Section 3 herein), (iii) the trust shall continue to be funded by Corporation in
accordance with the funding obligations set forth above, (iv) the trustee shall
promptly pay to Indemnitee all amounts for which Indemnitee shall be entitled to
indemnification pursuant to this Agreement or otherwise, and (v) all unexpended
funds in such trust attributable to a Claim, Expense or Loss of Indemnitee shall
revert to Corporation upon a final determination by Reviewing Party or a court
of competent jurisdiction that Indemnitee has been fully indemnified under this
Agreement. If Section 7(v) would otherwise be applicable, then notwithstanding
anything in Section 7(v) to the contrary, at any time a Claim is still pending
against a director or officer of Corporation or any of its subsidiaries who has
entered into an agreement with Corporation substantially similar to this
Agreement, any funds held by the trustee under this Section 7 shall be retained
by the trustee until a final determination is made with respect to such Claim
and such funds may be used to pay such Claim. Nothing in this Section shall
relieve Corporation of any of its obligations under this Agreement.
8. Partial Indemnity.
If Indemnitee is entitled under any provision of this Agreement to
indemnification by Corporation for some or a portion of the Expenses or Losses
but not for the total amount thereof, Corporation shall nevertheless indemnify
Indemnitee for the portion thereof to which Indemnitee is entitled.
9. Notification.
Promptly after receipt by Indemnitee of notice of the commencement of any
Claim with respect to which Indemnitee may seek indemnification under this
Agreement, Indemnitee will notify Corporation of the commencement thereof. The
failure of Indemnitee promptly to notify Corporation hereunder shall not,
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however, relieve Corporation of its obligations hereunder unless and to the
extent that Corporation was materially prejudiced by such failure to notify
promptly. Corporation will be entitled to participate in a Claim at its own
expense and 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 Corporation and Indemnitee in the conduct of the
defense of such action. Even if Indemnitee concludes that no conflict of
interest exists, Indemnitee shall retain the right to employ his or her own
counsel and participate in such action, suit or proceeding, but the fees and
expenses of such counsel incurred after notice from 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 the defense
of the Claim is not permitted to be undertaken by Corporation, or (ii)
Corporation shall not in fact have employed counsel to assume such defense.
Corporation shall not be liable to indemnify Indemnitee under this Agreement for
any amounts paid in settlement of any Claim effected without its written
consent. Corporation shall not settle any Claim in any manner which would impose
any penalty or limitation on Indemnitee without Indemnitee's written consent.
Neither Corporation nor Indemnitee will unreasonably withhold consent to any
proposed settlement.
10. Miscellaneous.
(a) Presumptions. For purposes of this Agreement, the termination of any
claim, action, suit or proceeding, by judgment, order or settlement (whether
with or without court approval) or conviction, or upon a plea of nolo
contendere, or its equivalent, shall not create a presumption that Indemnitee
did not meet any particular standard of conduct or have any particular belief or
that a court has determined that indemnification is not permitted by applicable
law.
(b) Nonexclusive Rights. The rights of Indemnitee hereunder shall be in
addition to any other rights Indemnitee may have under Corporation's Charter and
Bylaws and the Tennessee Business Corporation Act or otherwise. To the extent
that a change in the Tennessee Business Corporation Act (whether by statute or
judicial decision) permits greater indemnification by agreement than would be
afforded currently under Corporation's Charter and Bylaws and this Agreement, it
is the intent of the parties hereto that Indemnitee shall enjoy by virtue of
this Agreement the greater benefits so afforded by such change.
(c) Amendment. 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 provision hereof (whether or not similar) nor
shall such waiver constitute a continuing waiver.
(d) Subrogation. In the event of payment under this Agreement, Corporation
shall be subrogated to the extent of such payment to all rights of recovery of
Indemnitee, who shall execute all papers required and shall do everything that
may be necessary to secure such rights, including execution of such documents as
may be necessary to enable Corporation effectively to bring suit to enforce such
rights.
(e) Duplicate Payment. Corporation shall not be liable under this Agreement
to make any payment in connection with any Claim made against Indemnitee to the
extent Indemnitee has otherwise actually received payment (under any insurance
policy, Charter provision, Bylaw, or otherwise) of the amounts otherwise
indemnifiable hereunder.
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(f) 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 or assign by
purchase, merger, consolidation or otherwise to all or substantially all of the
business and/or assets of Corporation), spouses, heirs, and personal and legal
representatives. This Agreement shall continue in effect regardless of whether
Indemnitee continues to serve as a director or officer of Corporation or any of
its subsidiaries or of any other entity at Corporation's request.
(g) Severability. The provisions of this Agreement shall be severable in
the event that any of the provisions hereof (including any provision within a
single section, paragraph or sentence) are held by a court of competent
jurisdiction to be invalid, void or otherwise unenforceable, and the remaining
provisions shall remain enforceable to the maximum extent permitted by law.
(h) Headings of Sections. Section and subsection headings are for
convenience only and shall not affect the construction of this Agreement.
(i) Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Tennessee.
IN WITNESS WHEREOF, Corporation has caused this Agreement to be executed by
its duly authorized officers and Indemnitee has duly executed this Agreement,
each as of the day first above written.
ATTEST: FIRST HORIZON NATIONAL CORPORATION
By:
------------------------------------- ------------------------------------
Name: [authorized officer]
Corporate Secretary Title:
----------------------------------------
(Indemnitee)
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