Exhibit 10.5
INDEMNIFICATION AGREEMENT
This Agreement is made as of the 1st day of May, 1998, by and between
Boston Chicken, Inc., a Delaware corporation (the "Company"), and J. Xxxxxxx
Xxxxxxx, a resident of Littleton, Colorado (the "Indemnitee"), with reference to
the following facts:
A. The Company desires to hire Indemnitee as Chairman and Chief
Executive Officer and for Indemnitee to become a Director of the Company
and the Indemnitee wishes to continue to serve in such capacity.
B. Section 145 of the General Corporation Law of the State of
Delaware, under which Law the Company is organized, empowers corporations
to indemnify a person serving as a director, officer, employee or agent of
the corporation and a person who serves at the request of the corporation
as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust, or other enterprise, and said Section
145 specifies that the indemnification set forth therein shall not be
deemed exclusive of any other rights to which those seeking Indemnification
may be entitled under any bylaw, agreement, vote of stockholders or
disinterested directors or otherwise.
C. The Company's Certificate of Incorporation and Bylaws expressly
provide for the indemnification of directors of the Company to the full
extent permitted by applicable law. The Indemnitee has indicated that he
does not regard the indemnities available under the Company's Certificate
of Incorporation and Bylaws as adequate to protect him against the risks
associated with his service to the Company. In this connection the Company
and the Indemnitee now agree they should enter into this Agreement in order
to provide greater protection to Indemnitee against such risks of service
to the Company.
D. In order to induce the Indemnitee to continue to serve as a
Director of the Company and in consideration of his continued service, the
Company hereby agrees to indemnify the Indemnitee as follows:
1. Indemnity. The Company will indemnify the Indemnitee, his executors,
administrators or assigns, for any Expenses (as defined below) which the
Indemnitee is or becomes legally obligated to pay in connection with any
Proceeding. As used in this Agreement the term "Proceeding" shall include any
threatened, pending or completed claim, action, suit or proceeding, (other than
actions brought by or in the right of the Company) or otherwise and whether of a
civil, criminal, administrative or investigative nature, in which the Indemnitee
may be or may have been involved as a party or otherwise, by reason of the fact
that Indemnitee is or was a director of the Company, by reason of any actual or
alleged error or misstatement or misleading statement made or suffered by the
Indemnitee, by reason of any action taken by him or of any inaction on his
part while acting as such director or officer, or by reason of the fact that he
was serving at the request of the Company as a director, trustee, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise; provided, that in each such case Indemnitee acted in good
faith and in a manner which he reasonably believed to be in or not opposed to
the best interests of the Company, and, in the case of a criminal proceeding, in
addition had no reasonable cause to believe that his conduct was unlawful. With
respect to any action brought by or in the right of the Company, such Indemnitee
may also be indemnified, to the extent not prohibited by applicable laws or as
determined by a court of competent jurisdiction, against expenses actually and
reasonably incurred by him in connection with such action if he acted in good
faith and in a manner he reasonably believed to be in or not opposed to the best
interests of the Company. As used in this Agreement, the term "other
enterprise" shall include (without limitation) employee benefit plans and
administrative committees thereof, and the term "fines" shall include (without
limitations) any excise tax assessed with respect to any employee benefit plan.
2. Expenses. As used in this Agreement, the term "Expenses" shall
include, without limitation, damages, judgments, fines, penalties, settlements
and costs, attorneys' fees and disbursements and costs of attachment or similar
bonds, investigations, and any expenses of establishing a right to
indemnification under this Agreement.
3. Enforcement. If a claim or request under this Agreement is not paid by
the Company, or on its behalf, within thirty days after a written claim or
request has been received by the Company, the Indemnitee may at any time
thereafter bring suit against the Company to recover the unpaid amount of the
claim or request and if successful in whole or in part, the Indemnitee shall be
entitled to be paid also the Expenses of prosecuting such suit. The Company
shall have the right to recoup from the Indemnitee the amount of any item or
items of Expenses theretofore paid by the Company pursuant to this Agreement, to
the extent such Expenses are not reasonable in nature or amounts; provided,
however, that the Company shall have the burden of proving such Expenses to be
unreasonable. The burden of proving that the Indemnitee is not entitled to
indemnification for any other reason shall be upon the Company.
4. Subrogation. In the event of payment under this Agreement, the Company
shall be subrogated to the extent of such payment to all of the rights of
recovery of the Indemnitee, who shall execute all papers required and shall do
everything that may be necessary to secure such rights, including the execution
of such documents necessary to enable the Company effectively to bring suit to
enforce such rights.
5. Exclusions. The Company shall not be liable under this Agreement to
pay any Expenses in connection with any claim made against the Indemnitee:
(a) to the extent that payment is actually made to the Indemnitee
under a valid, enforceable and collectible insurance policy of the Company;
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(b) in connection with a judicial action by or in the right of the
Company, in respect of any claim, issue or matter as to which the
Indemnitee shall have been adjudged to be liable for negligence or
misconduct in the performance of his duty to the Company unless and only to
the extent that any court in which such action was brought shall determine
upon application that, despite the adjudication of liability but in view of
all the circumstances of the case, the Indemnitee is fairly and reasonably
entitled to indemnity for such expenses as such court shall deem proper;
(c) if it is provided by final judgment in a court of law or other
final adjudication to have been based upon or attributable to the
Indemnitee's in fact having gained any personal profit or advantage to
which he was not legally entitled;
(d) brought about or contributed to by the dishonesty of the
Indemnitee seeking payment hereunder, however, notwithstanding the
foregoing, the Indemnitee shall be protected under this Agreement as to any
claims upon which suit may be brought against him by reason of any alleged
dishonesty on his part, unless a judgment or other final adjudication
thereof adverse to the Indemnitee shall establish that he committed (i)
acts of active and deliberate dishonesty, (ii) with actual dishonest
purpose and intent, (iii) which acts were material to the cause of action
so adjudicated; or
(e) for any judgment, fine or penalty which the Company is prohibited
by applicable law from paying as indemnity or for any other reason.
6. Indemnification of Expenses of Successful Party. Notwithstanding any
other provision of this Agreement, to the extent that the Indemnitee has been
successful on the merits or otherwise in defense of any Proceeding or in defense
of any claim, issue or matter therein, including dismissal without prejudice,
Indemnitee shall be indemnified against any and all Expenses incurred in
connection therewith.
7. Partial Indemnification. If the Indemnitee is entitled under any
provision of this Agreement to the indemnification by the Company for some or a
portion of Expenses, but not, however, for the total amount thereof, the Company
shall nevertheless indemnify the Indemnitee for the portion of such Expenses to
which the Indemnitee is entitled.
8. Advances of Expenses. Expenses incurred by the Indemnitee in
connection with any Proceeding, except the amount of any settlement, shall be
paid by the Company in advance upon the request of the Indemnitee that the
Company pay such Expenses. The Indemnitee hereby undertakes to repay to the
Company the amount of any Expenses theretofore paid by the Company to the extent
that it is ultimately determined
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that such Expenses were not reasonable or that the Indemnitee is not entitled to
indemnification.
9. Approval of Expenses. No Expenses for which indemnity shall be sought
under this Agreement, other than those in respect of judgments and verdicts
actually rendered, shall be incurred without the prior consent of the Company,
which consent shall not be unreasonably withheld.
10. Notice of Claim. The Indemnitee, as a condition precedent to his
right to be indemnified under this Agreement, shall give to the Company notice
in writing as soon as practicable of any claim made against him for which
indemnity will or could be sought under this Agreement. Notice to the Company
shall be given at its principal office and shall be directed to the Corporate
Secretary (or such other address as the Company shall designate in writing to
the Indemnitee); notice shall be deemed received if sent by prepaid mail
properly addressed, the date of such notice being the date postmarked. In
addition, the Indemnitee shall give the Company such information and cooperation
as it may reasonably require and as shall be within the Indemnitee's power.
11. Counterparts. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one instrument.
12. Indemnification Hereunder Not Exclusive. Nothing herein shall be
deemed to diminish or otherwise restrict the Indemnitee's right to
indemnification under any provision of the Restated Certificate of Incorporation
or Amended and Restated Bylaws of the Company and amendments thereto or under
law.
13. Governing Law. This Agreement shall be governed by and construed in
accordance with Delaware Law.
14. Saving Clause. Wherever there is conflict between any provision of
this Agreement and any applicable present or future statute, law or regulation
contrary to which the Company and the Indemnitee have no legal right to
contract, the latter shall prevail, but in such event the affected provisions of
this Agreement shall be curtailed and restricted only to the extent necessary to
bring them within applicable legal requirements.
15. Coverage. The provisions of this Agreement shall apply with respect
to the Indemnitee's service as a Director of the Company prior to the date of
this Agreement and with respect to all periods of such service after the date of
this Agreement, even though the Indemnitee may have ceased to be a Director of
the Company.
16. Gender. Wherever herein the masculine gender is used, the same shall
apply to the feminine version, as the context may require.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and signed as of the day and year first above written.
BOSTON CHICKEN, INC.
By: /s/ Xxxxxxx X. Xxxxxx
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Name: Xxxxxxx X. Xxxxxx
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Title: Senior Vice President and General
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Counsel
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/s/ J. Xxxxxxx Xxxxxxx
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J. Xxxxxxx Xxxxxxx
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