Exhibit 10.2
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FORM OF DIRECTOR INDEMNIFICATION AGREEMENT
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THIS AGREEMENT is made and effective as of this day of ,
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, between Kansas City Southern Industries, Inc., a Delaware
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corporation ("Corporation") and ("Director").
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WHEREAS, Director is a member of the Board of Directors of Corporation and
in such capacity may be exposed to risks of undue personal liability; and
WHEREAS, the Amended and Restated Certificate of Incorporation (the
"Certificate") of the Corporation, which requires the Corporation to indemnify
and advance expenses to Director to the fullest extent permitted by the Delaware
General Corporation Law, is subject to change by amendment; and
WHEREAS, the directors' and officers' liability insurance obtained by the
Corporation may not provide complete protection to Director against all risks of
undue personal liability; and
WHEREAS, Director is serving the Corporation in part in reliance upon the
continued availability of effective protection against undue personal liability
arising out of or in connection with Director's service to the Corporation; and
WHEREAS, to supplement the Corporation's directors' and officers' liability
insurance and to provide Director with specific contractual assurance that the
protection provided by the Corporation's Certificate will continue to be
available to Director regardless of, among other things, an amendment of the
Certificate or a change in management or control of the Corporation, the
Corporation has agreed to enter into this Agreement;
NOW, THEREFORE, in consideration of the above premises and of Director's
continued service to the Corporation, the parties hereto agree as follows:
1. Indemnity of Director. In the event Director was or is made a party or
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is threatened to be made a party to or is otherwise involved in any action, suit
or proceeding, whether civil, criminal, administrative or investigative (a
"Proceeding"), by reason of the fact that he or she is or was a director,
officer, employee, agent, trustee, committee member or representative of the
Corporation or is or was serving at the request of the Corporation as a
director, officer, employee, agent, trustee, committee member or representative
of another corporation or other entity, including, without limitation, any
Subsidiary (as defined in the Certificate), partnership, joint venture, limited
liability company, limited liability partnership, unincorporated organization or
similar company, trust or other enterprise, including service with respect to
any employee benefit plan, whether the basis of such Proceeding is alleged
action in an official capacity or in any other capacity while serving as a
director, officer, employee, agent, trustee, committee member or representative
(an "Indemnifiable Event"), Director shall be indemnified and held harmless by
the Corporation to the fullest extent authorized by the Delaware General
Corporation Law, as the same exists or may hereafter be amended (but, in the
case of any such amendment, only to the extent that such amendment permits the
Corporation to
provide broader indemnification rights than such law permitted the Corporation
to provide prior to such amendment), against all expense, liability and loss
(including attorneys' fees, judgments, fines, ERISA excise taxes or penalties
and amounts paid in settlement) reasonably incurred or suffered by reason of
Director acting in any such capacity; provided, however, that with respect to
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Proceedings to enforce rights to indemnification, the Corporation shall
indemnify Director in connection with a Proceeding (or part thereof) initiated
by Director only if such Proceeding (or part thereof) is conducted as provided
in Section 3 below or if such Proceeding (or part thereof) was authorized by the
Board of Directors of the Corporation.
2. Advancement of Expenses. The right to indemnification conferred in
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Section 1 hereof shall include the right to have the Corporation pay the
expenses incurred in defending any Proceeding in advance of its final
disposition (an "Advancement of Expenses"); provided, however, that, if the
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Delaware General Corporation Law so requires, an Advancement of Expenses
incurred by Director shall be made only upon delivery to the Corporation of an
undertaking (an "Undertaking"), by or on behalf of Director, to repay all
amounts so advanced if it shall ultimately be determined by final judicial
decision from which there is no further right to appeal (a "Final
Adjudication"), that Director is not entitled to be indemnified for such
expenses under this Section or otherwise.
3. Enforcement. If a claim under Section 1 hereof is not paid in full by
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the Corporation within sixty (60) days after a written claim has been received
by the Corporation, or a claim under Section 2 hereof for an Advancement of
Expenses is not paid in full by the Corporation within twenty (20) days after a
written claim has been received by the Corporation, Director may at any time
thereafter bring suit against the Corporation to recover the unpaid amount of
the claim. If successful in whole or in part in any such suit, or in a suit
brought by the Corporation to recover an Advancement of Expenses pursuant to the
terms of an Undertaking, Director shall also be entitled to be paid the expense
of prosecuting or defending such suit, including any reasonable attorneys' fees.
In any suit by the Corporation to recover an Advancement of Expenses pursuant to
the terms of an Undertaking, the Corporation shall be entitled to recover such
expenses upon a Final Adjudication that Director has not met any applicable
standard for indemnification set forth in the Delaware General Corporation Law
as the same exists or may hereafter be amended (but, in the case of any such
amendment, only to the extent that such amendment permits the Corporation to
provide broader indemnification rights than such law permitted the Corporation
to provide prior to such amendment). Neither the failure of the Corporation
(including its Board of Directors, independent legal counsel or its
stockholders) to have made a determination prior to the commencement of such
suit that indemnification of Director is proper in the circumstances because
Director has met the applicable standard of conduct set forth in the Delaware
General Corporation Law, nor an actual determination by the Corporation
(including its Board of Directors, independent legal counsel, or its
stockholders) that Director has not met such applicable standard of conduct,
shall create a presumption that Director has not met the applicable standard of
conduct or, in the case of such a suit brought by Director, be a defense to such
suit. In any suit brought by Director to enforce a right to indemnification or
to an Advancement of Expenses hereunder, or by the Corporation to recover an
Advancement of Expenses pursuant to the terms of an Undertaking, the burden of
proving that Director is not entitled to be indemnified, or to such Advancement
of Expenses, under this Article or otherwise shall be on the Corporation.
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4. Change in Control.
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(a) Upon the Trigger Date (as defined in the Certificate in effect on
the date hereof), the Corporation shall seek legal advice concerning the
rights of Director to indemnity payments under this Agreement, the
Certificate, or any other bylaw or agreement now or hereafter in effect,
only from special independent counsel selected by Director and approved by
the Corporation (which approval shall not be unreasonably withheld). Such
counsel shall not have otherwise performed services for the Corporation
(except in connection with similar questions about payments of indemnity),
and the Corporation shall not engage such counsel for any purpose other
than with respect to rights under this or similar agreements. Such counsel,
among other things, shall determine whether and to what extent Director is
permitted to be indemnified under applicable law and shall render its
written opinion to the Corporation and Director to such effect.
(b) The Corporation agrees to pay the reasonable fees of the special
independent counsel referred to above and to fully indemnify such counsel
against any and all expenses (including attorneys' fees), claims,
liabilities and damages arising out of or relating to this Agreement or its
engagement pursuant hereto except for such counsel's willful misconduct or
gross negligence.
5. Defense. The Corporation shall have the right to participate at its own
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expense in any action, suit, proceeding, inquiry or investigation against
Director with respect to an Indemnifiable Event and to assume the defense
thereof with counsel satisfactory to Director. Director shall have the right to
employ separate counsel in any such action, suit, proceeding, inquiry or
investigation and the fees and expenses of such separate counsel shall be borne
by Director; provided that, all fees and expenses of such separate counsel shall
be borne by the Corporation if: (i) the Corporation shall have authorized the
engagement of such separate counsel, (ii) the Corporation shall have failed to
employ any counsel to represent Director in such matter, or (iii) such separate
counsel shall have reasonably advised Director that there may be a conflict of
interest between Director and Corporation in the defense or investigation of
such matter.
6. Additional Indemnity. The Corporation shall indemnify Director to the
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fullest extent permitted by law against any and all expenses (including
attorneys' fees) and, if requested by Director, shall (within twenty business
days of such request) advance such expenses to Director, which are incurred in
connection with any claim asserted or action brought by Director for (i)
indemnification or advance payment of expenses by the Corporation under this
Agreement, the Certificate or any other bylaw or agreement hereafter in effect
relating to claims for Indemnifiable Events and/or (ii) recovery under any
directors' and officers' liability insurance policies maintained by the
Corporation; provided that, if Director ultimately is determined in the manner
provided for herein not to be entitled to such indemnification, advance payment
of expenses or insurance recovery, Director shall, and Director hereby
undertakes to, reimburse the Corporation for all such amounts received by
Director promptly after receipt of a written demand therefor from the
Corporation.
7. Additional Rights. The rights of Director hereunder shall be in addition
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to any other rights Director may have under the Certificate as in effect on the
date of this Agreement or the Delaware General Corporation Law or otherwise. To
the extent a change in the Delaware General Corporation Law (whether by statute
or judicial decision) or in the Certificate permits
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greater indemnification by agreement than would be afforded currently, it is the
intent of the parties hereto that Director shall enjoy by this Agreement the
greater benefits afforded by such change.
8. Insurance Coverage. To the extent the Corporation maintains an insurance
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policy or policies providing directors' and officers' liability insurance,
Director shall be covered by such policy or policies, in accordance with the
terms thereof, to the maximum extent of the coverage available for any director
or officer of the Corporation.
9. Modification of Agreement. No supplement, modification or amendment of
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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 provisions hereof nor shall
such waiver constitute a continuing waiver.
10. Subrogation. In the event of payment under this Agreement, the
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Corporation shall be subrogated to the extent of such payment to all of the
rights of recovery of Director. Director shall do everything reasonably
necessary to enable the Corporation to secure and enforce such rights, provided
any costs incurred by Director in connection therewith shall be advanced or
promptly reimbursed by the Corporation.
11. Limits of Corporation's Liability. The Corporation shall not be liable
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under this Agreement to make any payment in connection with any claim made
against Director to the extent Director has otherwise actually received payment
(under any insurance policy, bylaw or otherwise) of the amounts otherwise
indemnifiable hereunder.
12. Binding Effect. This Agreement shall be binding upon Director and upon
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the Corporation, its successors and assigns, and shall inure to the benefit of
Director, such Director's heirs, personal representatives and assigns and to the
benefit of Corporation, its successors and assigns. This Agreement shall
continue in effect regardless of whether Director continues to serve the
Corporation or any other enterprise at the Corporation's request.
13. Severability. Each of the provisions of this Agreement is a separate
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and distinct agreement and independent of the others, and if any provision
hereof shall be held to be invalid or unenforceable for any reason, such
invalidity or unenforceability shall not affect the validity or enforceability
of the other provisions hereof.
14. Governing Law. This Agreement shall be interpreted and enforced in
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accordance with the laws of the State of Delaware, without regard to conflicts
of law rules or principles which might refer such interpretation or enforcement
to the laws of another state or country.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on and
as of the day and year first above written.
[COMPANY NAME]
By
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Director
