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EXHIBIT 10.7
FORM OF INDEMNITY AGREEMENT
THIS INDEMNITY AGREEMENT ("Agreement") dated as of August , 1998, by
and between Simon Property Group, Inc., a Delaware corporation (the
"Corporation"), and (the "Indemnitee").
RECITALS
WHEREAS, the Restated Certificate of Incorporation of the Corporation
(the "Charter") and the Restated By-laws of the Corporation (the "By-laws"), as
the same have been restated, provide for indemnification by the Corporation of
its directors and officers as provided therein, and the Indemnitee has agreed to
serve as a director and/or officer of the Corporation or has agreed to continue
to serve as a director and/or officer of the Corporation;
WHEREAS, to provide the Indemnitee with additional contractual
assurance of protection against personal liability in connection with certain
proceedings described below, the Corporation desires to enter into this
Agreement;
WHEREAS, the General Corporation Law of the State of Delaware (the
"DGCL") expressly recognizes that the indemnification provisions of the DGCL are
not exclusive of any other rights to which a person seeking indemnification may
be entitled under the Charter or By-laws, a resolution of stockholders or
directors, an agreement or otherwise, and this Agreement is being entered into
pursuant to and in furtherance of the Charter and By-laws, as permitted by the
DGCL and as authorized by the Charter and the Board of Directors of the
Corporation;
WHEREAS, in order to induce the Indemnitee to serve or continue to
serve as a director and/or officer of the Corporation and in consideration of
the Indemnitee so serving, the Corporation desires to indemnify the Indemnitee
and to make arrangements pursuant to which the Indemnitee may be advanced or
reimbursed expenses incurred by the Indemnitee in certain proceedings described
below, according to the terms and conditions set forth below;
NOW, THEREFORE, in consideration of the Indemnitee's agreement to serve
or continue to serve as a director and/or officer of the Corporation and of
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Corporation has agreed to the covenants set forth
herein for the purpose of further securing to the Indemnitee the indemnification
provided by the Charter and the By-laws:
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1. Indemnification.
(a) In accordance with the provisions of paragraph (b) of this Section
1, the Corporation shall hold harmless and indemnify the Indemnitee against any
and all expenses, liabilities and losses (including, without limitation,
investigation expenses, expert witnesses' and attorneys' fees and expenses,
judgments, penalties, fines, ERISA excise taxes, amounts paid or to be paid in
settlement and any federal, state, local or foreign taxes imposed on the
Indemnitee as a result of the actual or deemed receipt of any payments under
this Agreement, including all interest, assessments and other charges paid or
payable in connection with or in respect of such expenses, liabilities and
losses) actually incurred by the Indemnitee (net of any related insurance
proceeds or other amounts received by the Indemnitee or paid by or on behalf of
the Corporation on the Indemnitee's behalf) in connection with any threatened,
pending or completed action, suit, arbitration or proceeding or any hearing,
inquiry or investigation, whether brought by or in the right of the Corporation
or otherwise, that the Indemnitee in good faith believes might lead to the
institution of any such action, suit, arbitration or proceeding, whether civil,
criminal, administrative, investigative or other, or any appeal therefrom, in
which the Indemnitee was, is or becomes a party, witness or other participant,
or was, is or becomes threatened to be made a party, witness or other
participant, (a "Proceeding") based upon, arising from, relating to, or by
reason of the fact that the Indemnitee is, was, shall be, or shall have been a
director and/or officer of the Corporation (or any subsidiary of the
Corporation) or is or was serving, shall serve, or shall have served at the
request of the Corporation as a director, officer, partner, trustee, employee,
fiduciary or agent ("Affiliate Indemnitee") of another foreign or domestic
corporation or non-profit corporation, cooperative, partnership, joint venture,
trust, or other incorporated or unincorporated enterprise (each, a "Corporation
Affiliate"). All amounts payable by the Corporation pursuant to this Section 1
and Section 2 hereof are herein referred to as "Indemnified Amounts."
(b) In providing the foregoing indemnification, the Corporation shall,
with respect to a Proceeding, hold harmless and indemnify the Indemnitee to the
fullest extent required by the DGCL (including, without limitation, Section
145(c) of the DGCL) and to the fullest extent permitted by the Express Permitted
Indemnification Provisions (as hereinafter defined) of the DGCL. For purposes of
this Agreement, the Express Permitted Indemnification Provisions of the DGCL
shall mean indemnification as permitted by Section 145 of the DGCL or by any
amendment thereof or other statutory provisions expressly permitting such
indemnification which is adopted after the date hereof (but, in the case of any
such amendment, only to the extent that such amendment permits the Corporation
to provide broader indemnification rights than said law required or permitted
the Corporation to provide prior to such amendment).
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(c) Without limiting the generality of the foregoing, the Indemnitee
shall be entitled to the rights of indemnification provided in this Section 1
for any expenses actually incurred in any Proceeding initiated by or in the
right of the Corporation unless the Indemnitee shall have been adjudged to be
liable to the Corporation; provided, however, that, despite the adjudication of
liability but in view of all the circumstances of the case, the Indemnitee shall
be entitled to any indemnification by the Corporation that the court or other
decision maker of any Proceeding deems proper, as permitted by Section 145(b) of
the DGCL.
(d) If the Indemnitee is entitled under this Agreement to
indemnification by the Corporation for some or a portion of the Indemnified
Amounts but not, however, for all of the total amount thereof, the Corporation
shall nevertheless indemnify the Indemnitee for the portion thereof to which the
Indemnitee is entitled.
2. Other Indemnification Arrangements. The DGCL and the Charter and
By-laws permit the Corporation to purchase and maintain insurance or furnish
similar protection or make other arrangements, including, but not limited to,
providing a trust fund, letter of credit, or surety bond ("Indemnification
Arrangements") on behalf of the Indemnitee against any liability asserted
against him or her or incurred by or on behalf of him or her in such capacity as
a director or officer of the Corporation or an Affiliated Indemnitee, or arising
out of his or her status as such, whether or not the Corporation would have the
power to indemnify him or her against such liability under the provisions of
this Agreement or under the DGCL, as it may then be in effect. The purchase,
establishment, and maintenance of any such Indemnification Arrangement shall not
in any way limit or affect the rights and obligations of the Corporation or of
the Indemnitee under this Agreement except as expressly provided herein, and the
execution and delivery of this Agreement by the Corporation and the Indemnitee
shall not in any way limit or affect the rights and obligations of the
Corporation or the other party or parties thereto under any such Indemnification
Arrangement.
3. Advance Payment of Indemnified Amounts.
(a) The Indemnitee hereby is granted the right to receive in advance of
a final, non-appealable judgment or other final adjudication of a Proceeding (a
"Final Determination") the amount of any and all expenses, including, without
limitation, investigation expenses, expert witnesses' and attorneys' fees and
expenses and other expenses expended or incurred, or expected to be expended or
incurred, by the Indemnitee in connection with any Proceeding or otherwise
expended or incurred by the Indemnitee (such amounts so expended or incurred, or
expected to be expended or incurred, being referred to as "Advanced Amounts").
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(b) In making any written request for Advanced Amounts, the Indemnitee
shall submit to the Corporation a schedule setting forth in reasonable detail
the dollar amount expended or incurred and expected to be expended or incurred.
Each such listing shall be supported by the xxxx, agreement, or other
documentation relating thereto, each of which shall be appended to the schedule
as an exhibit. In addition, before the Indemnitee may receive Advanced Amounts
from the Corporation, the Indemnitee shall provide to the Corporation (i) a
written affirmation of the Indemnitee's good faith belief that the applicable
standard of conduct required for indemnification by the Corporation has been
satisfied by the Indemnitee, and (ii) a written undertaking by or on behalf of
the Indemnitee to repay the Advanced Amount if it shall ultimately be determined
that the Indemnitee has not satisfied any applicable standard of conduct and is
not entitled to be indemnified by the Corporation. The written undertaking
required from the Indemnitee shall be an unlimited general obligation of the
Indemnitee but need not be secured. The Corporation shall pay to the Indemnitee
all Advanced Amounts within twenty (20) days after receipt by the Corporation of
all information and documentation required to be provided by the Indemnitee
pursuant to this paragraph.
4. Procedure for Payment of Indemnified Amounts.
(a) To obtain indemnification under this Agreement, the Indemnitee
shall submit to the Corporation a written request for payment of the appropriate
Indemnified Amounts, including with each request documentation and information
as is reasonably available to the Indemnitee and reasonably necessary to
determine whether and to what extent the Indemnitee is entitled to
indemnification. The Secretary of the Corporation shall, promptly upon receipt
of such a request for indemnification, advise the Board of Directors in writing
that the Indemnitee has requested indemnification.
(b) The Corporation shall pay the Indemnitee the appropriate
Indemnified Amounts unless it is established that the Indemnitee has not met any
applicable standard of conduct of the Express Permitted Indemnification
Provisions. For purposes of determining whether the Indemnitee is entitled to
Indemnified Amounts, in order to deny indemnification to the Indemnitee the
Corporation has the burden of proof in establishing that the Indemnitee did not
meet the applicable standard of conduct. In this regard, a termination of any
Proceeding by judgment, order or settlement does not create a presumption that
the Indemnitee did not meet the requisite standard of conduct; provided,
however, that the termination of any criminal proceeding by a conviction, a plea
of nolo contendere or its equivalent or an entry of an order of probation prior
to judgment, creates a rebuttable presumption that the Indemnitee did not meet
the applicable standard of conduct.
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(c) Any determination that the Indemnitee has not met the applicable
standard of conduct required to qualify for indemnification shall be made (i)
either by the Board of Directors by a majority vote of a quorum consisting of
directors who were not parties of such action, suit or proceeding; or (ii) by
independent legal counsel (who may be the outside counsel regularly employed by
the Corporation); provided that the manner in which (and, if applicable, the
counsel by which) the right to indemnification is to be determined shall be
approved in advance in writing by both the highest ranking executive officer of
the Corporation who is not party to such action (sometimes hereinafter referred
to as "Senior Officer") and by the Indemnitee. In the event that such parties
are unable to agree on the manner in which any such determination is to be made,
such determination shall be made by independent legal counsel retained by the
Corporation especially for such purpose, provided that such counsel be approved
in advance in writing by both the said Senior Officer and the Indemnitee and
provided further, that such counsel shall not be outside counsel regularly
employed by the Corporation. The fees and expenses of counsel in connection with
making said determination contemplated hereunder shall be paid by the
Corporation, and, if requested by such counsel, the Corporation shall give such
counsel an appropriate written agreement with respect to the payment of their
fees and expenses and such other matters as may be reasonably requested by
counsel.
(d) The Corporation will use its reasonable best efforts to conclude as
soon as practicable any required determination pursuant to subparagraph (c)
above and promptly will advise the Indemnitee in writing with respect to any
determination that the Indemnitee is or is not entitled to indemnification,
including a description of any reason or basis for which indemnification has
been denied. Payment of any applicable Indemnified Amounts will be made to the
Indemnitee within ten (10) days after any determination of the Indemnitee's
entitlement to indemnification.
(e) Notwithstanding the foregoing, the Indemnitee may, at any time
after sixty (60) days after a request for Indemnified Amounts has been submitted
to the Corporation (or upon receipt of written notice that a request for
Indemnified Amounts has been rejected, if earlier) and before three (3) years
after a request for Indemnified Amounts has been filed, petition a court of
competent jurisdiction to determine whether the Indemnitee is entitled to
indemnification under the provisions of this Agreement, and such court shall
thereupon have the exclusive authority to make such determination unless and
until such court dismisses or otherwise terminates such action without having
made such determination. The court shall, as petitioned, make an independent
determination of whether the Indemnitee is entitled to indemnification as
provided under this Agreement, irrespective of any prior determination made by
the Board of Directors or independent counsel. If the court shall determine that
the Indemnitee is entitled to indemnification as to any claim, issue or matter
involved in the Proceeding with respect to which there
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has been no prior determination pursuant to this Agreement or with respect to
which there has been a prior determination that the Indemnitee was not entitled
to indemnification hereunder, the Corporation shall pay all expenses (including
attorneys' fees and disbursements) actually incurred by the Indemnitee in
connection with such judicial determination.
(f) Excluded Coverage. The Corporation shall have no obligation to
indemnify the Indemnitee for and hold him or her harmless from any loss or
expense which has been determined, by final adjudication by a court of competent
jurisdiction, to constitute an Excluded Claim (as hereinafter defined). For
purposes of this Agreement, an Excluded Claim shall mean any payment for losses
or expenses in connection with any claim:
(i) Based upon or attributable to the Indemnitee gaining in
fact any personal profit or advantage to which the Indemnitee is not entitled;
(ii) For the return by the Indemnitee of any remuneration paid
to the Indemnitee without the previous approval of the stockholders of the
Corporation which is illegal;
(iii) For an accounting of profits in fact made from the
purchase or sale by the Indemnitee of securities of the Corporation within the
meaning of Section 16 of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), or similar provisions of any state law;
(iv) Resulting from the Indemnitee's knowingly fraudulent,
dishonest or willful misconduct; or
(v) The payment of which by the Corporation under this
Agreement is not permitted by applicable law.
5. Agreement Not Exclusive; Subrogation etc.
(a) This Agreement shall not be deemed exclusive of and shall not
diminish any other rights the Indemnitee may have to be indemnified or insured
or otherwise protected against any liability, loss, or expense by the
Corporation, any subsidiary of the Corporation, or any other person or entity
under any charter, by-laws, law, agreement, policy of insurance or similar
protection, vote of stockholders or directors, disinterested or not, or
otherwise, whether or not now in effect, both as to actions in the Indemnitee's
official capacity, and as to actions in another capacity while holding such
office. The Corporation's obligations to make payments of Indemnified Amounts
hereunder shall be satisfied to the extent that payments with respect to the
same Proceeding (or part thereof) have been made to or for the benefit of the
Indemnitee by reason of the indemnification of the Indemnitee pursuant to any
other arrangement made by the Corporation for the benefit of the Indemnitee;
provided, however, that in no event shall the Indemnitee be required to maintain
any
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other such arrangement or request payment pursuant to any other such arrangement
before seeking to be indemnified hereunder.
(b) In the event the Indemnitee shall receive payment from any
insurance carrier or from the plaintiff in any Proceeding against such
Indemnitee in respect of Indemnified Amounts after payments on account of all or
part of such Indemnified Amounts have been made by the Corporation pursuant
hereto, such Indemnitee shall promptly reimburse to the Corporation the amount,
if any, by which the sum of such payment by such insurance carrier or such
plaintiff and payments by the Corporation or pursuant to arrangements made by
the Corporation to the Indemnitee exceeds such Indemnified Amounts; provided,
however, that such portions, if any, of such insurance proceeds that are
required to be reimbursed to the insurance carrier under the terms of its
insurance policy, such as deductible or co-insurance payments, shall not be
deemed to be payments to the Indemnitee hereunder. In addition, upon payment of
Indemnified Amounts hereunder, the Corporation shall be subrogated to the rights
of the Indemnitee receiving such payments to the extent thereof against any
insurance carrier (to the extent permitted under such insurance policies) or in
respect of such Indemnified Amounts and the Indemnitee shall execute and deliver
any and all instruments and documents and perform any and all other acts or
deeds which the Corporation deems necessary or advisable to secure such rights.
Such right of subrogation shall be terminated upon receipt by the Corporation of
the amount to be reimbursed by the Indemnitee pursuant to the first sentence of
this paragraph (b).
6. Insurance Coverage. In the event that the Corporation maintains
directors and officers liability insurance to protect itself and any director or
officer of the Corporation against any expense, liability or loss, such
insurance shall cover the Indemnitee to at least the same extent as any other
director or officer of the Corporation.
7. Establishment of Trust. In the event of a potential business
combination or change in control of the Corporation of the type required to be
reported under Item 1 of Form 8-K promulgated under the Exchange Act
(collectively, a "Change in Control"), the Corporation shall, upon written
request by the Indemnitee, create a trust (the "Trust") for the benefit of the
Indemnitee and from time to time upon written request of the Indemnitee shall
fund the Trust in an amount sufficient to satisfy any and all Indemnified
Amounts (including, without limitation, Advanced Amounts) which are actually
paid (but not as yet reimbursed) or which the Indemnitee reasonably determines
from time to time may be payable by the Corporation under this Agreement. The
amount or amounts to be deposited in the Trust pursuant to the foregoing funding
obligation shall be determined by the independent legal counsel appointed under
Section 4 hereof. The terms of the Trust shall provide that following its
establishment: (i) the Trust shall not be revoked or the
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principal thereof invaded without the written consent of the Indemnitee; (ii)
the trustee of the Trust shall advance, within twenty (20) days of a request by
the Indemnitee, any and all Advanced Amounts to the Indemnitee (and the
Indemnitee hereby agrees to reimburse the Trust under the circumstances under
which the Indemnitee would be required to reimburse the Corporation under
Section 3(b)(ii) hereof; (iii) the Corporation shall continue to fund the Trust
from time to time in accordance with the funding obligations set forth above;
(iv) the trustee of the Trust shall promptly pay to the Indemnitee all
Indemnified Amounts for which the Indemnitee shall be entitled to
indemnification pursuant to this Agreement; and (v) all unexpended funds in the
Trust shall revert to the Corporation upon a final determination by a court of
competent jurisdiction in a final decision from which there is no further right
of appeal that the Indemnitee has been fully Indemnified under the terms of this
Agreement. The trustee of the Trust shall be chosen by the Indemnitee.
8. Continuation of Indemnity. All agreements and obligations of the
Corporation contained herein shall continue during the period the Indemnitee is
a director or officer, as the case may be, of the Corporation (or is serving at
the request of the Corporation as an Affiliate Indemnitee) and shall continue
thereafter so long as the Indemnitee shall be subject to any possible Proceeding
by reason of the fact that the Indemnitee was a director or officer of the
Corporation or was serving in any other capacity referred to herein.
9. Successors; Binding Agreement. This Agreement shall be binding on
and shall inure to the benefit of and be enforceable by the parties hereto, by
the Corporation's successors and assigns and by the Indemnitee's personal or
legal representatives, executors, administrators, successors, assigns, heirs,
spouses, distributees, devisees, and legatees. The Corporation shall require and
cause any successor or assignee (whether direct or indirect, by purchase,
merger, consolidation, or otherwise) to all, substantially all or a substantial
part of the business and/or assets of the Corporation, by written agreement in
form and substance reasonably satisfactory to the Corporation and to the
Indemnitee, expressly to assume and agree to perform this Agreement in the same
manner and to the same extent that the Corporation would be required to perform
if no such succession or assignment had taken place.
10. Enforcement. The Corporation has entered into this Agreement and
assumed the obligations imposed on the Corporation hereby in order to induce the
Indemnitee to act as a director or officer, as the case may be, of the
Corporation, and acknowledges that the Indemnitee is relying upon this Agreement
in continuing in such capacity.
(a) The Indemnitee's right to indemnification shall be enforceable by
the Indemnitee only in the Chancery Court of the
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State of Delaware and shall be enforceable notwithstanding any adverse
determination, other than a determination which has been made by a final
adjudication of a court of competent jurisdiction. In any such action, if a
prior adverse determination has been made, the burden of proving that
indemnification is required under this Agreement shall be on the Indemnitee. The
Corporation shall have the burden of proving that indemnification is not
required under this Agreement if no prior adverse determination shall have been
made.
(b) In the event the Indemnitee is required to bring any
action to enforce rights or to collect moneys due under this Agreement and is
successful in such action, the Corporation shall reimburse the Indemnitee for
all of the Indemnitee's fees and expenses (including attorney's fees and
expenses) in bringing and pursuing such action. The Indemnitee shall be entitled
to the advancement of Indemnified Amounts to the full extent contemplated by
Section 3 hereof in connection with such proceeding.
11. Severability. In the event that any provision of this Agreement
(including any provision within a single section, paragraph or sentence) is
determined by a court of competent jurisdiction to require the Corporation to do
or to fail to do an act which is in violation of applicable law, such provision
shall be limited or modified in its application to the minimum extent necessary
to avoid a violation of law, and, as so limited or modified, such provision and
the balance of this Agreement shall be enforceable in accordance with their
terms.
12. Miscellaneous. No provision of this Agreement may be modified,
waived, or discharged unless such modification, waiver, or discharge is agreed
to in writing signed by the Indemnitee and either the Chairman of the Board or
the President of the Corporation or another officer of the Corporation
specifically designated by the Board of Directors. No waiver by either party at
any time of any breach by the other party of, or of compliance with, any
condition or provision of this Agreement to be performed by such other party
shall be deemed a waiver of similar or dissimilar provisions or conditions at
the same time or at any prior or subsequent time. This Agreement sets forth the
entire understanding between the parties hereto and supersedes and merges all
previous negotiations, representations, commitments, understandings and
agreements (written, oral or otherwise, express or implied) with respect to the
subject matter hereof between the parties hereto. The validity, interpretation,
construction, and performance of this Agreement shall be governed by the laws of
the State of Delaware, without giving effect to the principles of conflicts of
laws thereof. The Indemnitee may bring an action seeking resolution of disputes
or controversies arising under or in any way related to this Agreement in the
state or federal court jurisdiction in which the Indemnitee resides or in which
his or her place of business is located, and
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in any related appellate courts, and the Corporation consents to the
jurisdiction of such courts and to such venue.
13. Notices. For the purposes of this Agreement, notices and all other
communications provided for in the Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by United States
registered mail, return receipt requested, postage prepaid, as follows:
If to the Indemnitee:
[Name]
[Address]
[Facsimile]
If to the Corporation:
Simon Property Group, Inc.
000 Xxxx Xxxxxxxxxx Xxxxxx, Xxxxx 00 Xxxx
Xxxxxxxxxxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Secretary and General Counsel
or to such other address as either party may have furnished to the other in
writing in accordance herewith, except that notices of change of address shall
be effective only upon receipt.
14. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together shall constitute one and the same instrument.
15. Effectiveness. This Agreement shall be effective as of the date
first above written.
IN WITNESS WHEREOF, the undersigned have caused this Agreement to be
executed as of the day and year first above written.
ATTEST: SIMON PROPERTY GROUP, INC.
By:
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Secretary
WITNESS: INDEMNITEE
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Name
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