EXHIBIT 10.40
INDEMNIFICATION AGREEMENT
This Indemnification Agreement ("Agreement") is made as of July 29, 2003, by and
between Brightpoint, Inc., a Delaware corporation (the "Company"), and Xxxxx
Xxxxxxx ("Indemnitee").
RECITALS
The Company and Indemnitee recognize the increasing difficulty in obtaining
directors' and officers' liability insurance, the increases in the cost of such
insurance and the general reductions in the coverage of such insurance.
The Company and Indemnitee further recognize the substantial increase in
corporate litigation in general, subjecting officers and directors to expensive
litigation risks at the same time as the availability and coverage of liability
insurance has been severely limited. Indemnitee does not regard the current
protection available as adequate under the present circumstances, and Indemnitee
and other officers and directors of the Company may not be willing to continue
to serve as officers and directors without additional protection.
The Company desires to attract and retain the services of highly qualified
individuals, such as Indemnitee, to serve as officers and directors of the
Company and to indemnify its officers and directors so as to provide them with
the maximum protection permitted by law.
AGREEMENT
In consideration of the mutual promises made in this Agreement, and for other
good and valuable consideration, receipt of which is hereby acknowledged, the
Company and Indemnitee hereby agree as follows:
1. INDEMNIFICATION.
(a) GENERAL AGREEMENT. The Company shall indemnify Indemnitee if Indemnitee is
or was a party to or witness or other participant in, or is threatened to
be made a party to or witness or other participant to any threatened,
pending or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (including 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 any subsidiary of the
Company, by reason of any action or inaction on the part of Indemnitee
while an officer or director or by reason of the fact that Indemnitee is or
was serving at the request of the Company as a director, officer, employee
or agent of another corporation, partnership, joint venture, trust or other
enterprise, against expenses (including attorneys' fees and costs),
judgments, fines, any interest, assessments, and other charges and amounts
paid in settlement (if such settlement is approved in advance by the
Company, which approval shall not be unreasonably withheld) 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, with respect to any criminal action or proceeding, had no
reasonable cause to believe Indemnitee's conduct was unlawful. The
termination of any action, suit or proceeding by judgment, order,
settlement, conviction, or upon a plea of nolo contendere or its
equivalent, shall not, of itself, create a presumption that Indemnitee 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, with
respect to any criminal action or proceeding, had reasonable cause to
believe that Indemnitee's conduct was unlawful.
(b) MANDATORY PAYMENT OF EXPENSES. To the extent that Indemnitee has been
successful on the merits or otherwise in defense of any action, suit or
proceeding referred to in Subsection (a) of this Section 1 or the defense
of any claim, issue or matter therein, Indemnitee shall be indemnified
against expenses (including reasonable attorneys' fees) actually and
reasonably incurred by Indemnitee in connection therewith.
2. NO EMPLOYMENT RIGHTS. Nothing contained in this Agreement is intended to
create in Indemnitee any right to continued employment.
3. EXPENSES; INDEMNIFICATION PROCEDURE.
(a) ADVANCEMENT OF EXPENSES. Subject to the terms and conditions of this
Agreement, the Company shall advance all expenses incurred by Indemnitee in
connection with the investigation, defense, settlement or appeal of any
civil or criminal action, suit or proceeding referenced in Section 1(a)
hereof (including amounts actually paid in settlement of any such action,
suit or proceeding). Indemnitee hereby undertakes to repay such amounts
advanced only if, and to the extent that, it shall ultimately be determined
that Indemnitee is not entitled to be indemnified by the Company as
authorized hereby. Any advances made hereunder shall be paid by the Company
to Indemnitee within twenty (20) days following delivery of a written
request therefor by Indemnitee to the Company.
(b) NOTICE/COOPERATION BY INDEMNITEE. Indemnitee shall, as a condition
precedent to his or her right to be indemnified under this Agreement, give
the Company notice in writing as soon as practicable of any claim made
against Indemnitee for which indemnification will or could be sought under
this Agreement. Notice to the Company shall be directed to the Chief
Executive Officer of the Company at the address shown on the signature page
of this Agreement (or such other address as the Company shall designate in
writing to Indemnitee). Notice shall be deemed received three (3) business
days after the date postmarked if sent by domestic certified or registered
mail, properly addressed, otherwise notice shall be deemed received when
such notice shall actually be received by the Company. In addition,
Indemnitee shall give the Company such information and cooperation as it
may reasonably require and as shall be within Indemnitee's power.
(c) PROCEDURE. Any indemnification and advances 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 any provision of the Company's Certificate of Incorporation or
Bylaws providing for indemnification, is not paid in full by the Company
within forty-five (45) days after a written request for payment thereof has
first been received by the Company, Indemnitee may, but need not, at any
time thereafter bring an action against the Company to recover the unpaid
amount of the claim and, subject to Section 13 of this Agreement,
Indemnitee shall also be entitled to be paid for the expenses (including
attorneys' fees and interest, at the Bank One, Indiana, National
Association, prime rate in effect on the date of Indemnitee's written
request, on the unpaid amount of the claim) 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, suit
or proceeding in advance of its final disposition) that Indemnitee has not
met the standards of conduct which make it permissible under applicable law
for the Company to indemnify Indemnitee for the amount claimed. Indemnitee
shall be entitled to receive interim payments of expenses pursuant to
Subsection 3(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 the Company 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 the Company
(including its Board of Directors, any committee or subgroup of the Board
of Directors, independent legal counsel, or its stockholders) 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 the Company
(including its Board of Directors, any committee or subgroup of the Board
of Directors, independent legal counsel, or its stockholders) 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 3(b) hereof, the Company has director and officer
liability insurance in effect, the Company shall give prompt notice of the
commencement of such proceeding to the insurers in accordance with the
procedures set forth in the respective policies. The Company 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 the Company shall be obligated under
Section 3(a) hereof to pay the expenses of any proceeding against
Indemnitee, the Company, if appropriate, shall be entitled to assume the
defense of such proceeding, with counsel approved by Indemnitee, 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 the Company, the Company will 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 or her counsel in any
such proceeding at Indemnitee's expense; and (ii) if (A) the employment of
counsel by Indemnitee has been previously authorized by the Company, (B)
Indemnitee shall have reasonably concluded that there may be a conflict of
interest between the Company and Indemnitee in the conduct of any such
defense, or (C) the Company 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 the
Company.
(f) (i) For purposes of this Agreement, a "Change of Control" shall be deemed
to occur, unless previously consented to in writing by the Employee, upon
(a) individuals who, as of the date hereof, constitute the Board of
Directors of the Employer (the "Incumbent Board") ceasing for any reason to
constitute at least a majority of the Board of Directors of the Employer
(the "Board"); provided, however, that any individual becoming a director
subsequent to the date hereof whose election, or nomination for election by
the Employer's shareholders, was approved by a vote of at least a majority
of the directors then comprising the Incumbent Board shall be considered as
though such individual were a member of the Incumbent Board, but excluding,
for this purpose, any such individual whose initial assumption of office
occurs in connection with a Combination, as defined below, or as a result
of either an actual or threatened election contest (as such terms are used
in Rule 14a-11 of Regulation 14A promulgated under the Securities Exchange
Act of 1934, as amended (the "Exchange Act")) or other actual or threatened
solicitation of proxies or consents by or on behalf of a person other than
the Board; (b) the acquisition of beneficial ownership (as determined
pursuant to Rule 13d-3 promulgated under the Exchange Act) of 15% or more
of the voting securities of the Employer by any person, entity or group
(within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act)
not affiliated with the Employee or the Employer; provided, however, that
no Change of Control shall be deemed to have occurred for purposes of this
Agreement if such person, entity or group acquires beneficial ownership of
15% or more of the voting securities of the Employer (i) as a result of a
combination of the Employer or a wholly-owned subsidiary of the Employer
with such person, entity or group or another entity owned or controlled by
such person, entity or group (whether effected by a merger, consolidation,
sale of assets or exchange of stock or otherwise) (a "Combination") and
(ii) (x) executive officers of the Employer (as designated by the Board for
purposes of Section 16 of the Exchange Act) immediately prior to the
Combination constitute not less than 50% of the executive officers of the
Employer for a period of not less than six (6) months after the Combination
(for purposes of calculating the executive officers of the Employer after
the Combination, those executive officers who are terminated by the
Employer for Cause or who terminate their employment without Good Reason
shall be excluded from the calculation entirely), and (y) the members of
the Incumbent Board immediately prior to the Combination constitute not
less than 50% of the membership of the Board after the Combination and (z)
after the Combination, more than 35% of the voting securities of the
Employer is then beneficially owned, directly or indirectly, by all or
substantially all of the individuals and entities who were the beneficial
owners of the outstanding voting securities of the Employer immediately
prior to the Combination, it being understood that while the existence of a
Change in Control pursuant to this Section 6.4.2(b) may not be
ascertainable for six (6) months after the Combination, if it is ultimately
determined that such Combination constituted a Change in Control, the date
of the Change of Control shall be the effective date of the Combination;
(c) the commencement of a proxy contest against the management for the
election of a majority of the Board of the Employer if the group conducting
the proxy contest owns, has or gains the power to vote at least 15% of the
voting securities of the Employer; (d) the consummation of a
reorganization, merger or consolidation, or the sale, transfer or
conveyance of all or substantially all of the assets of the Employer to any
person or entity not affiliated with the Employee or the Employer unless,
following such reorganization, merger, consolidation, sale, transfer or
conveyance, the conditions set forth in clause (b)(ii) above are present;
or (e) the complete liquidation or dissolution of the Employer. (ii) With
respect to all matters arising after a Change in Control (other than a
Change in Control approved by a majority of the directors on the Board who
were directors immediately prior to such Change in Control) concerning the
rights of Indemnitee to indemnity payments and advancement of expenses
under this Agreement, the Company shall seek legal advice only from
independent counsel selected by Indemnitee and approved by the Company
(which approval shall not be unreasonably withheld) (the "Independent
Counsel"), and who has not otherwise performed services for the Company or
the Indemnitee (other than in connection with indemnification matters)
within the last five years. The Independent Counsel shall not include any
person who, under the applicable standards of professional conduct then
prevailing, would have a conflict of interest in representing either the
Company or Indemnitee in an action to determine Indemnitee's rights under
this Agreement. Such counsel, among other things, shall render its written
opinion to the Company and Indemnitee as to whether and to what extent the
Indemnitee should be permitted to be indemnified under applicable law. The
Company agrees to pay the reasonable fees of the Independent Counsel and to
indemnify fully such counsel against any and all expenses (including
attorneys' fees), claims, liabilities, loss, and damages arising out of or
relating to this Agreement or the engagement of Independent Counsel
pursuant hereto.
(g) ESTABLISHMENT OF TRUST. In the event of a Change in Control (other than a
Change in Control approved by a majority of the directors on the Board who
were directors immediately prior to such Change in Control) the Company
shall, upon written request by Indemnitee, create a trust for the benefit
of the Indemnitee and from time to time upon written request of Indemnitee
shall fund the trust in an amount sufficient to satisfy any and all
expenses reasonably anticipated at the time of each such request to be
incurred in connection with investigating, preparing for, participating in,
and/or defending any proceeding relating to any indemnifiable event covered
herein. The amount or amounts to be deposited in the trust pursuant to the
foregoing funding obligation shall be determined by the Independent
Counsel. The terms of the
trust shall provide that (i) the trust shall not be revoked or the
principal thereof invaded without the written consent of the Indemnitee,
(ii) the trustee shall advance, within ten business days of a request by
the Indemnitee, any and all expenses to the Indemnitee (and the Indemnitee
hereby agrees to reimburse the trust under the same circumstances for which
the Indemnitee would be required to reimburse the Company under Section
3(a) of this Agreement), (iii) the trust shall continue to be funded by the
Company in accordance with the funding obligation set forth above, (iv) the
trustee shall promptly pay to the Indemnitee all amounts for which the
Indemnitee shall be entitled to indemnification pursuant to this Agreement
or otherwise, and (v) all unexpended funds in the trust shall revert to the
Company upon a final determination by the Independent Counsel or a court of
competent jurisdiction, as the case may be, that the Indemnitee has been
fully indemnified under the terms of this Agreement. The trustee shall be
chosen by the Indemnitee. Nothing in this Section 3(g) shall relieve the
Company of any of its obligations under this Agreement. All income earned
on the assets held in the trust shall be reported as income by the Company
for federal, state, local, and foreign tax purposes. The Company shall pay
all costs of establishing and maintaining the trust and shall indemnify the
trustee against any and all expenses (including attorneys' fees), claims,
liabilities, loss, and damages arising out of or relating to this Agreement
or the establishment and maintenance of the trust.
4 ADDITIONAL INDEMNIFICATION RIGHTS; NONEXCLUSIVITY.
(a) SCOPE. Notwithstanding any other provision of this Agreement, the Company
hereby agrees to indemnify the Indemnitee to the fullest extent permitted
by law, notwithstanding that such indemnification is not specifically
authorized by the other provisions of this Agreement, the Company's
Certificate of Incorporation, the Company's Bylaws or by statute. In the
event of any change in any applicable law, statute or rule which narrows
the right of a Delaware corporation to indemnify a member of its board of
directors or an officer, such changes, to the extent not otherwise required
by such law, statute or rule to be applied to this Agreement shall have no
effect on this Agreement or the parties' rights and obligations hereunder.
(b) NONEXCLUSIVITY. The indemnification provided by this Agreement shall not be
deemed exclusive of any rights to which Indemnitee may be entitled under
the Company's Certificate of Incorporation, its Bylaws, any agreement, any
vote of stockholders or disinterested members of the Company's Board of
Directors, the General Corporation Law of the State of Delaware, or
otherwise, both as to action in Indemnitee's official capacity and as to
action in another capacity while holding such office. The indemnification
provided under this Agreement shall continue as to Indemnitee for any
action taken or not taken while serving in an indemnified capacity even
though he or she may have ceased to serve in such capacity at the time of
any action, suit or other covered proceeding.
5. PARTIAL INDEMNIFICATION. If Indemnitee is entitled under any provision of
this Agreement to indemnification by the Company for some or a portion of
the expenses, judgments, fines or penalties actually or reasonably incurred
by him or her in the investigation, defense, appeal or settlement of any
civil or criminal action, suit or proceeding, but not, however, for the
total amount thereof, the Company shall nevertheless indemnify Indemnitee
for the portion of such expenses, judgments, fines or penalties to which
Indemnitee is entitled.
6. MUTUAL ACKNOWLEDGMENT. Both the Company and Indemnitee acknowledge that in
certain instances, Federal law or applicable public policy may prohibit the
Company from indemnifying its directors and officers under this Agreement
or otherwise. Indemnitee understands and acknowledges that the Company has
undertaken or 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
the Company's right under public policy to indemnify Indemnitee.
7. OFFICER AND DIRECTOR LIABILITY INSURANCE. The Company shall, from time to
time, make the good faith determination whether or not it is practicable
for the Company to obtain and maintain a policy or policies of insurance
with reputable insurance companies providing the officers and directors of
the Company with coverage for losses from wrongful acts, or to ensure the
Company's performance of its indemnification obligations under this
Agreement. Among other considerations, the Company will weigh the costs of
obtaining such insurance coverage against the protection afforded by such
coverage. 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 necessary or 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. However, the Company's decision whether or not to
adopt and maintain such insurance shall not affect in any way its
obligations to indemnify its officers and directors under this Agreement or
otherwise. In all policies of director and officer 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 directors, if Indemnitee is a director; or of the Company's
officers, if Indemnitee is not a director of the Company, but is an
officer; or of the Company's key employees, if Indemnitee is not an officer
or director, but is a key employee.
8. SEVERABILITY. Nothing in this Agreement is intended to require or shall be
construed as requiring the Company to do or fail to do any act in violation
of applicable law. The Company's 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 8. If this Agreement or any portion hereof shall
be invalidated on any ground by any court of competent jurisdiction, then
the Company 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.
9. EXCEPTIONS. Any other provision herein to the contrary notwithstanding, the
Company shall not be obligated pursuant to the terms of this Agreement:
(a) CLAIMS INITIATED BY INDEMNITEE. 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 or otherwise as required
under Section 145 of the Delaware General Corporation Law, but such
indemnification or advancement of expenses may be provided by the Company
in specific cases if the Board of Directors has approved the initiation or
bringing of such suit.
(b) LACK OF GOOD FAITH. To indemnify Indemnitee for any expenses incurred by
the Indemnitee with respect to any proceeding instituted by Indemnitee to
enforce or interpret this Agreement, if a court of competent jurisdiction
determines that each of the material assertions made by the Indemnitee in
such proceeding was not made in good faith or was frivolous.
(c) INSURED CLAIMS. 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
such expenses or liabilities have been paid directly to Indemnitee by an
insurance carrier under a policy of officers' and directors' liability
insurance maintained by the Company.
(d) CLAIMS UNDER SECTION 16(B). 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.
10. CONSTRUCTION OF CERTAIN PHRASES.
(a) For purposes of this Agreement, references to the "COMPANY" shall include
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, and 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 "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 THE COMPANY" shall
include any service as a director, officer, employee or agent of the
Company which imposes duties on, or involves services by, such director,
officer, employee or agent with respect to an employee benefit plan, its
participants, or beneficiaries; and if Indemnitee acted in good faith and
in a manner Indemnitee reasonably believed to be in the interest of the
participants and beneficiaries of an employee benefit plan, Indemnitee
shall be deemed to have acted in a manner "NOT OPPOSED TO THE BEST
INTERESTS OF THE COMPANY" as referred to in this Agreement.
11. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon the Company
and its 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 expense,
including reasonable attorneys' fees, incurred by Indemnitee with respect
to such action. The Company hereby consents to service of process and to
appear in any such action. In the event of an action instituted by or in
the name of the Company 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 attorneys' fees and costs, incurred by
Indemnitee in defense of such action (including with respect to
Indemnitee's counterclaims and cross-claims made in such action).
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 either party are as shown on the signature page of
this Agreement, or as subsequently modified by written notice.
14. CONSENT TO JURISDICTION. The Company and Indemnitee each hereby irrevocably
consent to the jurisdiction of the courts of the State of Indiana for all
purposes in connection with any action or proceeding which arises out of or
relates to this Agreement and agree that any action instituted under this
Agreement shall be brought only in the state courts of the State of
Indiana.
15. CHOICE OF LAW. This Agreement shall be governed by and its provisions
construed in accordance with the laws of the State of Delaware, as applied
to contracts between Delaware residents entered into and to be performed
entirely within Delaware.
16. MODIFICATION. This Agreement constitutes the entire agreement between the
parties hereto with respect to the subject matter hereof. All prior
negotiations, agreements and understandings between parties with respect
thereto are superseded hereby. This Agreement may not be modified or
amended except by an instrument in writing signed by or on behalf of the
parties hereto.
The parties hereto have executed this Agreement as of the day and year set forth
on the first page of this Agreement.
BRIGHTPOINT, INC.
By: /s/ Xxxxxx X. Xxxxxx
Name: Xxxxxx X. Xxxxxx
Title: Chairman of the Board and Chief Executive Officer
AGREED TO AND ACCEPTED:
INDEMNITEE
/s/ Xxxxx Xxxxxxx
Printed Name: Xxxxx Xxxxxxx
Address: ____________________
