INDEMNIFICATION AGREEMENT
This Indemnification Agreement, dated as of ______________, 1997, is made by and
between XXXXX Financial, a Delaware corporation (the "Corporation"), and
the person whose name, address and position at the Corporation and/or any of the
direct or indirect subsidiaries of the Corporation appear on the signature page
hereto ("Indemnitee").
RECITALS
A. Indemnitee is currently serving as, or is assuming the position of, a
director and/or officer of the Corporation and/or, at the Corporation's
request, a director, officer, employee and/or agent of another corporation,
partnership, joint venture, trust or other enterprise, and the Corporation
wishes Indemnitee to continue in such capacity(ies);
B. The Corporation and Indemnitee recognize that the present state of
the law is too uncertain to provide the Corporation's directors and officers
with adequate and reliable advance knowledge or guidance with respect to the
legal risks and potential liabilities to which they may become personally
exposed as a result of performing their duties for the Corporation;
C. The Certificate of Incorporation (the "Articles") and the Bylaws (the
"Bylaws") of the Corporation each provide that the Corporation may indemnify,
to the fullest extent permitted by law, certain persons, including directors,
officers, employees or agents of the Corporation, against specified expenses
and losses arising out of certain threatened, pending or completed actions,
suits or proceedings;
D. Section 145(f) of the Delaware General Corporation Law (the "DGCL")
expressly recognizes that the indemnification provided by the other
subsections of Section 145 of the DGCL shall not be deemed exclusive of any
other rights to which those seeking indemnification or advancement of
expenses may be entitled under any bylaw, agreement, vote of stockholders or
disinterested directors or otherwise, both as to action in an official
capacity and as to action in another capacity while holding such office;
E. Indemnitee has indicated that he may not be willing to serve, or
continue to serve, as a director and/or officer of the Corporation and/or, at
the Corporation's request, as a director, officer, employee and/or agent of
another corporation, partnership, joint venture, trust or other enterprise in
the absence of an indemnification agreement of the Corporation;
F. The Board of Directors of the Corporation has concluded that, to
retain and attract talented and experienced individuals to serve as directors
and officers of the Corporation and to encourage such individuals to take the
business risks necessary for the success of the Corporation, it is necessary
for the Corporation to contractually indemnify them, and to assume for itself
liability for expenses and damages in connection with claims against them in
connection with their service to the Corporation, and has further concluded
that the failure to provide such contractual indemnification could result in
great harm to the Corporation and its stockholders.
AGREEMENT
NOW, THEREFORE, the Corporation and Indemnitee agree as follows:
1. DEFINITIONS.
(a) "Expenses" means, for the purposes of this Agreement, all direct
and indirect costs of any type or nature whatsoever (including, without
limitation, any fees and disbursements of Indemnitee's counsel, accountants
and other experts and other out-of-pocket costs) actually and reasonably
incurred by Indemnitee in connection with the investigation, preparation,
defense or appeal of a Proceeding; PROVIDED, HOWEVER, that Expenses shall not
include judgments, fines, penalties or amounts paid in settlement of a
Proceeding unless such matters may be indemnified under applicable provisions
of the DGCL.
(b) "Proceeding" means, for the purposes of this Agreement, any
threatened, pending or completed action, suit or proceeding whether civil,
criminal, administrative or investigative (including actions, suits or
proceedings brought by or in the right of the Corporation) in which
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 or officer of the
Corporation, 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 is or was serving at the request of the Corporation as a director,
officer, employee or agent of another foreign or domestic corporation,
partnership, joint venture, trust or other enterprise, or was a director
and/or officer of the foreign or domestic corporation which was a predecessor
corporation to the Corporation or of another enterprise at the request of
such predecessor corporation, whether or not he is serving in such capacity
at the time any liability or expense is incurred for which indemnification or
reimbursement can be provided under this Agreement.
2. INDEMNIFICATION.
(a) THIRD PARTY PROCEEDINGS. To the fullest extent permitted by law,
the Corporation shall indemnify Indemnitee against Expenses and liabilities
of any type whatsoever (including, but not limited to, judgments, fines,
penalties, and amounts paid in settlement (if the settlement is approved in
advance by the Corporation)) actually and reasonably incurred by Indemnitee
in connection with a Proceeding (other than a Proceeding by or in the right
of the Corporation) 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 Corporation, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe Indemnitee's conduct was
unlawful. The termination of any 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 that Indemnitee reasonably believed to be in, or not opposed to,
the best interests of the Corporation, or, with respect to any criminal
Proceeding, had reasonable cause to believe that Indemnitee's conduct was
unlawful. Notwithstanding the foregoing, no indemnification shall be made in
any criminal proceeding where Indemnitee has been adjudged guilty unless a
disinterested majority of the directors determines that Indemnitee did not
receive, participate in or share in any pecuniary benefit to the detriment of
the Corporation and, in view of all the circumstances of the case, Indemnitee
is fairly and reasonably entitled to indemnity for Expenses or liabilities.
(b) PROCEEDINGS BY OR IN THE RIGHT OF THE CORPORATION. To the fullest
extent permitted by law, the Corporation shall indemnify Indemnitee against
Expenses actually
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and reasonably incurred by Indemnitee in connection with the defense or
settlement of a Proceeding by or in the right of the Corporation to procure a
judgment in its favor 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 Corporation. Notwithstanding the foregoing, no
indemnification shall be made in respect of any claim, issue or matter as to
which Indemnitee shall have been adjudged to be liable to the Corporation in
the performance of Indemnitee's duty to the Corporation unless and only to
the extent that the court in which such Proceeding is or was pending shall
determine upon application that, in view of all the circumstances of the
case, Indemnitee is fairly and reasonably entitled to indemnity for Expenses
and then only to the extent that the court shall determine.
(c) SCOPE. Notwithstanding any other provision of this Agreement other
than Sections 3 and 13, the Corporation shall indemnify Indemnitee to the
fullest extent permitted by law, notwithstanding that such indemnification is
not specifically authorized by other provisions of this Agreement, the
Articles, the Bylaws or statute.
3. LIMITATIONS ON INDEMNIFICATION. Any other provision herein to the
contrary notwithstanding, the Corporation shall not be obligated pursuant to
the terms of this Agreement:
(a) EXCLUDED ACTS. To indemnify Indemnitee for any acts or omissions
or transactions from which a director may not be relieved of liability under
Section 102(b)(7) of the DGCL; or
(b) 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 DGCL, but such indemnification or advancement of Expenses
may be provided by the Corporation in specific cases if a majority of the
disinterested directors has approved the initiation or bringing of such suit;
or
(c) LACK OF GOOD FAITH. To indemnify Indemnitee for any Expenses
incurred by 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
Indemnitee in such proceeding was not made in good faith or was frivolous; or
(d) INSURED CLAIMS. To indemnify Indemnitee for Expenses or
liabilities of any type whatsoever (including, but not limited to, judgments,
fines or penalties, and amounts paid in settlement) which have been paid
directly to or on behalf of Indemnitee by an insurance carrier under a policy
of directors' and officers' liability insurance maintained by the Corporation
or any other policy of insurance maintained by the Corporation or Indemnitee;
or
(e) 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.
4. DETERMINATION OF RIGHT TO INDEMNIFICATION. Upon receipt of a written
claim addressed to the Board of Directors for indemnification pursuant to
Section 2 of this Agreement, the Corporation shall determine by any of the
methods set forth in Section 145(d)
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of the DGCL whether Indemnitee has met the applicable standards of conduct
that make it permissible under applicable law to indemnify Indemnitee. If a
claim under Section 2 of this Agreement is not paid in full by the
Corporation within ninety days after such written claim has been received by
the Corporation, Indemnitee may at any time thereafter bring suit against the
Corporation to recover the unpaid amount of the claim and, unless such action
is dismissed by the court as frivolous or brought in bad faith, Indemnitee
shall be entitled to be paid also the expense of prosecuting such claim.
Neither the failure of the Corporation (including its Board of Directors,
independent legal counsel, or its stockholders) to make a determination prior
to the commencement of such action that indemnification of Indemnitee is
proper in the circumstances because Indemnitee has met the applicable
standard of conduct under applicable law, nor an actual determination by the
Corporation (including its 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 not met the
applicable standard of conduct. The court in which such action is brought
shall determine whether Indemnitee or the Corporation shall have the burden
of proof concerning whether Indemnitee has or has not met the applicable
standard of conduct.
5. ADVANCEMENT AND REPAYMENT OF EXPENSES. The Expenses incurred by
Indemnitee in defending and investigating any Proceeding shall be paid by the
Corporation prior to the final disposition of such Proceeding within thirty
days after receiving from Indemnitee copies of invoices presented to
Indemnitee for such Expenses and an undertaking by or on behalf of Indemnitee
to the Corporation to repay such amount to the extent it is ultimately
determined that Indemnitee is not entitled to indemnification. In
determining whether or not to make an advance hereunder, the ability of
Indemnitee to repay shall not be a factor. Notwithstanding the foregoing, in
a proceeding brought by the Corporation directly, in its own right (as
distinguished from an action brought derivatively or by any receiver or
trustee), the Corporation shall not be required to make the advances called
for hereby if a majority of the disinterested directors determine that it
does not appear that Indemnitee has met the standards of conduct that made it
permissible under applicable law to indemnify Indemnitee and that the
advancement of Expenses would not be in the best interests of the Corporation
and its stockholders.
6. PARTIAL INDEMNIFICATION. If Indemnitee is entitled under any
provision of this Agreement to indemnification or advancement by the
Corporation of some or a portion of any Expenses or liabilities of any type
whatsoever (including, but not limited to, judgments, fines, penalties, and
amounts paid in settlement) incurred by him in the investigation, defense,
settlement or appeal of a Proceeding, but is not entitled to indemnification
or advancement of the total amount thereof, the Corporation shall
nevertheless indemnify or pay advancements to Indemnitee for the portion of
such Expenses or liabilities to which Indemnitee is entitled.
7. NOTICE TO CORPORATION BY INDEMNITEE. Indemnitee shall notify the
Corporation in writing of any matter with respect to which Indemnitee intends
to seek indemnification hereunder as soon as reasonably practicable following
the receipt by Indemnitee of written notice thereof; provided that any delay
in so notifying the Corporation shall not constitute a waiver by Indemnitee
of his rights hereunder. The written notification to the Corporation shall be
addressed to the Board of Directors and shall include a description of the
nature of the Proceeding and the facts underlying the Proceeding and be
accompanied by copies of any documents filed with the court, if any, in which
the Proceeding is pending. In addition, Indemnitee shall give the
Corporation such information and cooperation as it may reasonably require and
as shall be within Indemnitee's power.
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8. DEFENSE OF CLAIM. In the event that the Corporation shall be
obligated under Section 5 hereof to pay the Expenses of any Proceeding
against Indemnitee, the Corporation, if appropriate, 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 to do so. After delivery of
such notice, approval of such counsel by Indemnitee and the retention of such
counsel by the Corporation, the Corporation 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 own 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 Corporation, or (B) Indemnitee shall
have reasonably concluded that there may be a conflict of interest between
the Corporation and Indemnitee in the conduct of such defense or (C) the
Corporation 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 paid by the Corporation.
9. ATTORNEYS' FEES. If any legal action is necessary to enforce the
terms of this Agreement, the prevailing party shall be entitled to recover,
in addition to other amounts to which the prevailing party may be entitled,
actual attorneys' fees and court costs as may be awarded by the court.
10. CONTINUATION OF OBLIGATIONS. All agreements and obligations of the
Corporation contained herein shall continue during the period Indemnitee is a
director or officer of the Corporation, or is or was serving at the request
of the Corporation as a director, officer, fiduciary, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise,
and shall continue thereafter so long as Indemnitee shall be subject to any
possible Proceeding by reason of the fact that Indemnitee served in any
capacity referred to herein.
11. SUCCESSORS AND ASSIGNS. This Agreement establishes contract rights
that shall be binding upon, and shall inure to the benefit of, the
successors, assigns, heirs and legal representatives of the parties hereto.
12. NON-EXCLUSIVITY.
(a) The provisions for indemnification and advancement of expenses set
forth in this Agreement shall not be deemed to be exclusive of any other
rights that Indemnitee may have under any provision of law, the Articles or
Bylaws, the vote of the Corporation's stockholders or disinterested
directors, other agreements or otherwise, both as to action in his official
capacity and action in another capacity while occupying his position as a
director or officer of the Corporation.
(b) In the event of any changes, after the date of this Agreement, in
any applicable law, statute, or rule that expand the right of a Delaware
corporation to indemnify its directors and officers, Indemnitee's rights and
the Corporation's obligations under this Agreement shall be expanded to the
fullest extent permitted by such changes. In the event of any changes in any
applicable law, statute or rule, that narrow the right of a Delaware
corporation to indemnify a director and 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.
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13. EFFECTIVENESS OF AGREEMENT. This Agreement shall be effective as
of the date set forth on the first page and may apply to acts or omissions of
Indemnitee that occurred prior to such date if Indemnitee was a director or
officer of the Corporation or its predecessor, or was serving at the request
of the Corporation or its predecessor as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust or other
enterprise, at the time such act or omission occurred.
14. SEVERABILITY. Nothing in this Agreement is intended to require or
shall be construed as requiring the Corporation to do or fail to do any act
in violation of applicable law. The Corporation'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 14. If this Agreement or any
portion hereof shall be invalidated on any ground by any court of competent
jurisdiction, then the Corporation shall nevertheless indemnify Indemnitee to
the fullest 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.
15. GOVERNING LAW. This Agreement shall be interpreted and enforced in
accordance with the laws of the State of Delaware without regard to its rules
pertaining to conflicts of laws. To the extent permitted by applicable law,
the parties hereby waive any provisions of law that render any provision of
this Agreement unenforceable in any respect.
16. 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 addressed, on the date of
such receipt, or (ii) if delivered by facsimile transmission to the recipient
followed by a copy sent by mail on the same date as the facsimile
transmission, on the date of receipt of such facsimile transmission, or (iii)
if mailed by certified or registered mail with postage prepaid, on the third
business day after the mailing date. Addresses for notice to either party
are as shown on the signature page of this Agreement, or as subsequently
modified by written notice.
17. MUTUAL ACKNOWLEDGMENT. Both the Corporation and Indemnitee
acknowledge that in certain instances, federal law or applicable public
policy may prohibit the Corporation from indemnifying its directors and
officers under this Agreement or otherwise. Indemnitee understands and
acknowledges that the Corporation 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 Corporation's right under public policy to indemnify
Indemnitee.
18. COUNTERPARTS. This Agreement may be executed in several
counterparts, each of which shall constitute an original.
19. AMENDMENT AND TERMINATION. No amendment, modification, termination
or cancellation of this Agreement shall be effective unless in writing signed
by both parties hereto.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year set forth above.
XXXXX FINANCIAL,
a Delaware corporation
By:
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Title:
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[ADDRESS AND NOTICE PERSON]
INDEMNITEE:
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Indemnitee
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[ADDRESS]
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