EXHIBIT 10.9
INDEMNIFICATION AGREEMENT
THIS INDEMNIFICATION AGREEMENT (the "Agreement") dated as of __________,
2000 is by and between Millers American Group, Inc., a Texas corporation (the
"Company"), and ___________________ ("Director").
RECITALS
A. Director is a member of the Board of Directors of the
Company and in such capacity is performing a valuable service to
the Company.
B. The Company's Bylaws (the "Bylaws") provide for the indemnification of
the directors, officers, employees and agents of the Company to the extent set
forth in the Articles of Incorporation of the Company (the "Articles").
C. The Articles provide that the Company shall indemnify the directors,
officers, employees and agents of the Company to the fullest extent permitted by
Article 2.02-1 of the Texas Business Corporation Act, as amended to date (the
"Corporation Act").
D. The Corporation Act specifically provides that indemnification and
advancement of expenses under any agreement is valid to the extent it is
consistent with the Corporation Act, as limited by the Articles, and thereby
contemplates that agreements may be entered into between the Company and members
of the Board of Directors of the Company with respect to the indemnification of
such directors.
E. In accordance with the authorization provided in the Corporation Act,
the Company has purchased and presently maintains a policy or policies of
directors' and officers' liabilities insurance (the "Insurance") covering
certain liabilities which may be incurred by the Company's directors and
officers in the performance of their services to the Company.
F. The general availability of directors' and officers' liability insurance
covering certain liabilities which may be incurred by the Company's directors
and officers in the performance of their services to the Company and the
applicability, amendment and enforcement of statutory and bylaw provisions have
raised questions concerning the adequacy and reliability of the protection
afforded to directors.
G. In order to induce Director to serve as a member of the Board of
Directors of the Company for the current term and for any subsequent term to
which he is elected by the shareholders of the Company, the Company has deemed
it to be in its best interest to enter into this Agreement with Director.
NOW, THEREFORE, in consideration of Director's agreement to serve as a
member of the Board of Directors of the Company after the date hereof, the
parties hereto agree as follows:
1. DEFINITIONS.
As used in this Agreement, the following terms shall have the following
meanings:
(a) CHANGE IN CONTROL. A "Change in Control" shall be deemed to have
occurred if (i) any "person" (as such term is used in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934, as amended (the "Act")),
other than a trustee or other fiduciary holding securities under an
employee benefit plan of the Company, is or becomes the "beneficial owner"
(as such term is defined in Rule 13d-3 under the Act), directly or
indirectly, of securities of the Company representing 25% or more of the
combined voting power of the outstanding securities of the Company, or (ii)
during any period of two consecutive years, individuals who at the
beginning of such period constitute the Board of Directors of the Company
and any new director whose election by the Board of Directors or nomination
for election by the Company's shareholders was approved by a vote of at
least two-thirds (2/3) of the directors then still in office who either
were directors at the beginning of the period or whose election or
nomination for election was previously so approved, cease for any reason to
constitute a majority thereof, or (iii) the shareholders of the Company
approve (x) a merger or consolidation of the Company with any other entity
(other than a merger or consolidation which would result in the voting
securities of the Company outstanding immediately prior thereto continuing
to represent (either by remaining outstanding or by being converted into
voting securities of the surviving entity) at least 80% of the combined
voting power of the voting securities of the Company or such surviving
entity outstanding immediately after such merger or consolidation), (y) a
plan of complete liquidation of the Company or (z) an agreement or
agreements for the sale or disposition, in a single transaction or series
of related transactions, by the Company of all or substantially all of the
property and assets of the Company. Notwithstanding the foregoing, events
otherwise constituting a Change in Control in accordance with the foregoing
shall not constitute a Change in Control if such events are solicited by
the Company and are approved, recommended or supported by the Board of
Directors of the Company in actions taken prior to, and with respect to,
such events.
(b) REVIEWING PARTY. A "Reviewing Party" means (i) the Board of
Directors or a committee of directors of the Company, who are not officers,
appointed by the Board of Directors, provided that a majority of such
directors are not parties to the claim or (ii) special, independent counsel
selected and appointed by the Board of Directors or by a committee of
directors of the Company who are not officers.
2. INDEMNIFICATION OF DIRECTOR.
The Company hereby agrees that it shall hold harmless and indemnify
Director to the fullest extent authorized and permitted by the provisions of the
Articles and Bylaws and the provisions of the Corporation Act, or by any
amendment thereof, but in the case of any such amendment, only to the extent
that such amendment permits the Company to provide broader indemnification
rights than the Articles, Bylaws or Corporation Act permitted the Company to
provide prior to such amendment, or other statutory provisions authorizing or
permitting such indemnification which is adopted after the date hereof.
3. INSURANCE.
3.1. INSURANCE POLICIES. So long as Director may be subject to any possible
claim or threatened, pending or completed action, suit or proceeding, whether
civil, criminal, administrative, arbitrative, or investigative, any appeal in
such an action, suit, or proceeding, and any inquiry or investigation that could
lead to such an action, suit, or proceeding, by reason of the fact that Director
is or was a director, to the extent that the Company maintains one or more
insurance policy or policies providing directors' and officers' liability
insurance, Director shall be covered by such policy or policies in accordance
with its or their terms, to the maximum extent of the coverage applicable to any
director or officer then serving the Company.
3.2. MAINTENANCE OF INSURANCE. The Company shall not be required to
maintain the Insurance or any policy or policies of comparable insurance, as the
case may be, if such insurance is not reasonably available or if, in the
reasonable business judgment of the Board of Directors of the Company which
shall be conclusively established by such determination by the Board of
Directors, or any appropriate committee thereof, either (i) the premium cost for
such insurance is substantially disproportionate to the amount of coverage
thereunder or (ii) the coverage provided by such insurance is so limited by
exclusions that there is insufficient benefit from such insurance.
3.3. SELF-INSURANCE. To the extent Director is not indemnified under other
Sections of this Agreement and is not fully, by reason of deductible or
otherwise, covered by directors' and officers' liability insurance, the Company
shall maintain self-insurance for, and thereby indemnify and hold harmless,
Director from and against any and all expenses, including attorneys' fees,
judgments, fines and amounts paid in settlement actually and reasonably incurred
by Director in connection with any possible claim or threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative, in which Director was or is made a party or was or is involved by
reason of the fact that Director is or was a director of the Company.
Notwithstanding the foregoing, payments of self-insurance under this Section to
Director by the Company shall not exceed the amount of $5,000,000 for any event
and further shall be limited in accordance with Section 5 hereof. An "event" as
used in the preceding sentence in reference to a limitation on self-insurance
shall include the same acts or omissions by Director and interrelated, repeated
or continuous acts or omissions.
4. ADDITIONAL INDEMNIFICATION.
Subject only to the exclusions set forth in Section 5 hereof, the Company
hereby agrees that it shall hold harmless and indemnify Director:
(a) against any and all judgments, penalties (including excise and
similar taxes), fines, settlements, and reasonable expenses (including
court costs and attorneys' fees) actually incurred by Director in
connection with any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative, arbitrative, or
investigative, including an action by or on behalf of shareholders of the
Company or by or in the right of the Company, any appeal in such an action,
suit, or proceeding, and any inquiry or investigation that could lead to
such an action, suit, or proceeding; and
(b) otherwise to the fullest extent as may be provided to Director by
the Company under the Corporation Act.
5. LIMITATIONS ON ADDITIONAL INDEMNIFICATION.
No indemnification pursuant to this Agreement shall be paid by the Company:
(a) in respect to any transaction if it shall be determined by the
Reviewing Party, or by final judgment or other final adjudication, that
Director derived an improper personal benefit;
(b) on account of Director's conduct which is determined by the
Reviewing Party, or by final judgment or other final adjudication, to have
involved acts or omissions not in good faith, intentional misconduct or a
knowing violation of law;
(c) if the Reviewing Party or a court having jurisdiction in the
matter shall determine that such indemnification is in violation of the
Articles, the Bylaws or the law. 6. ADVANCEMENT OF EXPENSES.
In the event of any threatened or pending action, suit or proceeding in
which Director is a party or is involved and which may give rise to a right of
indemnification under this Agreement, following written request to the Company
by Director, the Company shall promptly pay to Director amounts to cover
reasonable expenses incurred by Director in such proceeding in advance of its
final disposition upon the receipt by the Company of (i) a written affirmation
by Director of his good faith belief that he has met the standard of conduct
necessary for indemnification under the Corporation Act and (ii) a written
undertaking by or on behalf of Director to repay the amount paid or reimbursed
if it is ultimately determined that he has not met that standard or if it is
ultimately determined that indemnification of Director against expenses incurred
by him in connection with that proceeding is prohibited by the Corporation Act.
7. REPAYMENT OF EXPENSES.
Director agrees that Director shall reimburse the Company for all
reasonable expenses paid by the Company in defending any civil, criminal,
administrative, arbitrative, or investigative action, suit or proceeding against
Director in the event and only to the extent that it shall be determined by
final judgment or other final adjudication that Director is not entitled to be
indemnified by the Company for such expenses under the provisions of the
Corporation Act or any applicable law.
8. DETERMINATION OF INDEMNIFICATION; BURDEN OF PROOF.
With respect to all matters concerning the rights of Director to
indemnification and payment of expenses under this Agreement or under the
provisions of the Articles and Bylaws now or hereafter in effect, the Company
shall appoint a Reviewing Party and any determination by the Reviewing Party
shall be conclusive and binding on the Company and Director. If under applicable
law, the entitlement of Director to be indemnified under this Agreement depends
on whether a standard of conduct has been met, the burden of proof of
establishing that Director did not act in accordance with such standard of
conduct shall rest with the Company. Director shall be presumed to have acted in
accordance with such standard and entitled to indemnification or advancement of
expenses hereunder, as the case may be, unless, based upon a preponderance of
the evidence, it shall be determined by the Reviewing Party that Director did
not meet such standard. For purposes of this Agreement, unless otherwise
expressly stated herein, the termination of any action, suit or proceeding by
judgment, order, settlement, whether with or without court approval, or
conviction, or upon a plea of nolo contendere or its equivalent shall not create
a presumption that Director did not meet any particular standard of conduct or
have any particular belief or that a court has determined that indemnification
is not permitted by applicable law.
9. EFFECT OF CHANGE IN CONTROL.
If there has not been a Change in Control after the date of this Agreement,
the determination of (i) the rights of Director to indemnification and payment
of expenses under this Agreement or under the provisions of the Articles and the
Bylaws, (ii) standard of conduct and (iii) evaluation of the reasonableness of
amounts claimed by Director shall be made by the Reviewing Party or such other
body or persons as may be permitted by the Corporation Act. If there has been a
Change in Control after the date of this Agreement, such determination and
evaluation shall be made by a special, independent counsel who is selected by
Director and approved by the Company, which approval shall not be unreasonably
withheld, and who has not otherwise performed services for Director or the
Company.
10. CONTINUATION OF INDEMNIFICATION. All agreements and obligations of the
Company contained herein shall continue during the period that Director is
director of the Company and, while a director of the Company, is or was serving
at the request of the Company as a director, officer, partner, venturer,
proprietor, trustee, employee, agent, or similar functionary of another foreign
or domestic corporation, partnership, joint venture, sole proprietorship, trust,
employee benefit plan, or other enterprise, and shall continue thereafter so
long as Director shall be subject to any possible claim or threatened, pending,
or completed action, suit, or proceeding, whether civil, criminal,
administrative, arbitrative, or investigative, any appeal in such an action,
suit, or proceeding, and any inquiry or investigation that could lead to such an
action, suit, or proceeding, by reason of the fact that Director was a director
of the Company or serving in any other capacity referred to herein.
11. NOTIFICATION AND DEFENSE OF CLAIM.
Promptly after receipt by Director of notice of the commencement of any
action, suit or proceeding, Director shall, if a claim in respect hereof is to
be made against the Company under this Agreement, notify the Company of the
commencement thereof; provided, however, that delay in so notifying the Company
shall not constitute a waiver or release by Director of rights hereunder and
that omission by Director to so notify the Company shall not relieve the Company
from any liability which it may have to Director otherwise than under this
Agreement. With respect to any such action, suit or proceeding as to which
Director notifies the Company of the commencement thereof:
(a) the Company shall be entitled to participate therein at its
own expense;
(b) except as otherwise provided below, to the extent that it may
wish, the Company, jointly with any other indemnifying party similarly
notified, shall be entitled to assume the defense thereof and to employ
counsel reasonably satisfactory to Director. After notice from the Company
to Director of its election to so assume the defense thereof, the Company
shall not be liable to Director under this Agreement for any legal or other
expenses subsequently incurred by Director in connection with the defense
thereof other than reasonable costs of investigation or as otherwise
provided below. Director shall have the right to employ counsel of his own
choosing in such action, suit or proceeding but the fees and expenses of
such counsel incurred after notice from the Company of assumption by the
Company of the defense thereof shall be at the expense of Director unless
(i) the employment of counsel by Director has been specifically authorized
by the Company, such authorization to be conclusively established by action
by disinterested members of the Board of Directors though less than a
quorum; (ii) representation by the same counsel of both Director and the
Company would, in the reasonable judgment of Director and the Company, be
inappropriate due to an actual or potential conflict of interest between
the Company and Director in the conduct of the defense of such action, such
conflict of interest to be conclusively established by an opinion of
counsel to the Company to such effect; (iii) the counsel employed by the
Company and reasonably satisfactory to Director has advised Director in
writing that such counsel's representation of Director would likely involve
such counsel in representing differing interests which could adversely
affect the judgment or loyalty of such counsel to Director, whether it be a
conflicting, inconsistent, diverse or other interest; or (iv) the Company
shall not in fact have employed counsel to assume the defense of such
action, in each of which cases the fees and expenses of counsel shall be
paid by the Company. The Company shall not be entitled to assume the
defense of any action, suit or proceeding brought by or on behalf of the
Company or as to which a conflict of interest has been established as
provided in (ii) hereof. Notwithstanding the foregoing, if an insurance
company has supplied directors' and officers' liability insurance covering
an action, suit or proceeding, then such insurance company shall employ
counsel to conduct the defense of such action, suit or proceeding unless
Director and the Company reasonably concur in writing that such counsel is
unacceptable; and
(c) the Company shall not be liable to indemnify Director under this
Agreement for any amounts paid in settlement of any action or claim
effected without its written consent. The Company shall not settle any
action or claim in any manner which would impose any liability or penalty
on Director without Director's written consent. Neither the Company nor
Director shall unreasonably withhold consent to any proposed settlement.
12. ENFORCEMENT.
(a) The Company expressly confirms and agrees that it has entered into
this Agreement and assumed the obligations imposed on the Company hereby in
order to induce Director to serve as a director of the Company and
acknowledges that Director is relying upon this Agreement in continuing in
such capacity.
(b) If a claim for indemnification or advancement of expenses is not
paid in full by the Company within thirty (30) days after a written claim
by Director has been received by the Company, Director may at any time
assert the claim and bring suit against the Company to recover the unpaid
amount of the claim. In the event Director is required to bring any action
to enforce rights or to collect moneys due under this Agreement and is
successful in such action, the Company shall reimburse Director for all of
Director's reasonable attorneys' fees and expenses in bringing and pursuing
such action.
13. PROCEEDINGS BY DIRECTOR.
The Company shall not be liable to make any payment under this Agreement in
connection with any action, suit or proceeding, or any part thereof, initiated
by Director unless such action, suit or proceeding, or part thereof, (i) was
authorized by the Company, such authorization to be conclusively established by
action by disinterested members of the Board of Directors though less than a
quorum or (ii) was brought by Director pursuant to Section 12(b) hereof.
14. EFFECTIVENESS.
This Agreement is effective for, and shall apply to, (i) any claim which is
asserted or threatened before, on or after the date of this Agreement but for
which no action, suit or proceeding has been brought prior to the date hereof
and (ii) any action, suit or proceeding which is threatened before, on or after
the date of this Agreement but which is not pending prior to the date hereof.
This Agreement shall not apply to any action, suit or proceeding which was
brought before the date of this Agreement. So long as the foregoing is
satisfied, this Agreement shall be effective for, and be applicable to, acts or
omissions occurring prior to, on or after the date hereof.
15. NONEXCLUSIVITY.
The rights of Director under this Agreement shall not be deemed exclusive,
or in limitation of, any rights to which Director may be entitled under any
applicable common or statutory law, or pursuant to the Articles, the Bylaws,
vote of shareholders or otherwise.
16. OTHER PAYMENTS.
The Company shall not be liable to make any payment under this Agreement in
connection with any action, suit or proceeding against Director to the extent
Director has otherwise received payment of the amounts otherwise payable by the
Company hereunder.
17. SUBROGATION.
In the event the Company makes any payment under this Agreement, the
Company shall be subrogated, to the extent of such payment, to all rights of
recovery of Director with respect thereto, and Director shall execute all
agreements, instruments, certificates or other documents and do or cause to be
done all things necessary or appropriate to secure such recovery rights to the
Company including, without limitation, executing such documents as shall enable
the Company to bring an action or suit to enforce such recovery rights.
18. SURVIVAL; CONTINUATION.
The rights of Director under this Agreement shall inure to the benefit of
Director, his heirs, executors, administrators, personal representatives and
assigns, and this Agreement shall be binding upon the Company, its successors
and assigns. The rights of Director under this Agreement shall continue so long
as Director may be subject to any action, suit or proceeding because of the fact
that Director is or was a director of the Company and, while a director of the
Company, is or was serving at the request of the Company as a director, officer,
partner, venturer, proprietor, trustee, employee, agent, or similar functionary
of another foreign or domestic corporation, partnership, joint venture, sole
proprietorship, trust, employee benefit plan, or other enterprise. If the
Company, in a single transaction or series of related transactions, sells,
leases, exchanges, or otherwise disposes of all or substantially all of its
property and assets, the Company shall, as a condition precedent to any such
transaction, cause effective provision to be made so that the persons or
entities acquiring such property and assets shall become bound by and replace
the Company under this Agreement.
19. AMENDMENT AND TERMINATION.
No amendment, modification, termination or cancellation of this Agreement
shall be effective unless made in writing signed by both parties hereto.
20. HEADINGS.
Section headings of the sections and paragraphs of this Agreement have been
inserted for convenience of reference only and do not constitute a part of this
Agreement.
21. NOTICES. All notices and other communications hereunder shall be in
writing and shall be deemed to have been duly given if delivered personally,
mailed by certified mail (return receipt requested) or sent by overnight
delivery service, cable, telegram, facsimile transmission or telex to the
parties at the following addresses or at such other addresses as shall be
specified by the parties by like notice:
(a) if to the Company:
Millers American Group, Inc.
000 Xxxxxxx Xxxxxx
Xxxx Xxxxx, Xxxxx 00000-0000
Attn: Chief Executive Officer
Facsimile no.: (000) 000-0000
with a copy to:
Akin, Gump, Strauss, Xxxxx & Xxxx, L.L.P.
0000 Xxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000-0000
Attn: Xxxxx X. Xxxxxx, P.C.
Facsimile no.: (000) 000-0000
(b) if to the Director, to the address of the Director on the
signature page hereto.
Notice so given shall, in the case of notice so given by mail, be deemed to be
given and received on the fourth calendar day after posting, in the case of
notice so given by overnight delivery service, on the date of actual delivery
and, in the case of notice so given by cable, telegram, facsimile transmission,
telex or personal delivery, on the date of actual transmission or, as the case
may be, personal delivery.
22. SEVERABILITY.
If any provision of this Agreement shall be held to be illegal, invalid or
unenforceable under any applicable law, then such contravention or invalidity
shall not invalidate the entire Agreement. Such provision shall be deemed to be
modified to the extent necessary to render it legal, valid and enforceable, and
if no such modification shall render it legal, valid and enforceable, then this
Agreement shall be construed as if not containing the provision held to be
invalid, and the rights and obligations of the parties shall be construed and
enforced accordingly.
23. COMPLETE AGREEMENT.
This Agreement, those documents expressly referred to herein and other
documents of even date herewith embody the complete agreement and understanding
among the parties and supersede and preempt any prior understandings, agreements
or representations by or among the parties, written or oral, which may have
related to the subject matter hereof in any way.
24. COUNTERPARTS.
This Agreement may be executed in any number of counterparts and by
different parties hereto in separate counterparts, with the same effect as if
all parties had signed the same document. All such counterparts shall be deemed
an original, shall be construed together and shall constitute one and the same
instrument.
25. CHOICE OF LAW. THIS AGREEMENT WILL BE GOVERNED BY THE INTERNAL LAW, AND
NOT THE LAW OF CONFLICTS, OF THE STATE OF TEXAS.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed on the day and year first above written.
MILLERS AMERICAN GROUP, INC.
By: _____________________________
Name: _______________________
Title: ______________________
__________________________________
________________, Director
Address:
__________________________________
__________________________________
