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EXHIBIT 10.4
INDEMNITY AGREEMENT
THIS INDEMNITY AGREEMENT (this "Agreement") is entered into as of the ___
day of ______, 1998, between XxxxXxxxxx.XXX, Inc., a Georgia corporation (the
"Corporation"), and _____________ ("Indemnitee").
WHEREAS, it is essential to the Corporation to retain and attract as
directors and officers the most capable persons available; and
WHEREAS, Indemnitee is a director [and officer] of the Corporation and from
time to time may also serve at the Corporation's request as a director, officer,
partner, trustee, employee, or agent of another foreign or domestic corporation,
partnership, limited liability company, joint venture, trust, employee benefit
plan, or other entity; and
WHEREAS, both the Corporation and Indemnitee recognize the risk of
litigation and other claims being asserted against directors and officers of
business corporations in today's environment; and
WHEREAS, in recognition of Indemnitee's need for substantial protection
against personal liability and in order to enhance Indemnitee's continued
service to the Corporation and such other entities in an effective manner, and
with the approval of the shareholders as evidenced by their approval and
authorization of this Agreement, the Corporation desires to extend to Indemnitee
the contractual rights to indemnification and advancement of expenses as
provided herein;
NOW, THEREFORE, in consideration of the premises and intending to be
legally bound hereby, the parties hereto agree as follows:
1. Certain Definitions for Purposes of this Agreement. The following terms
as used in this Agreement shall have the meanings set forth below.
(a) "Corporation" includes any domestic or foreign predecessor entity
of the Corporation in a merger or other transaction in which the
predecessor's existence ceased upon consummation of the
transaction.
(b) "Director" means an individual who is or was a director of the
Corporation or an individual who, while a director of the
Corporation, is or was serving at the Corporation's request as a
director, officer, partner, trustee, employee, or agent of another
domestic or foreign corporation, partnership, limited liability
company, joint venture, trust, employee benefit plan, or other
entity. A Director is considered to be serving an employee benefit
plan at the Corporation's request if his duties to the Corporation
also impose duties on, or otherwise involve services by, him to the
plan or to participants in or beneficiaries of the plan. "Director"
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includes, unless the context requires otherwise, the estate or
personal representative of a Director.
(c) "Disinterested Director" or "Disinterested Officer" means a
Director or Officer, respectively, who at the time of an evaluation
referred to in Section 5 is not:
(1) A Party to the Proceeding; or
(2) An individual having a familial, financial, professional, or
employment relationship with Indemnitee, which relationship
would, in the circumstances, reasonably be expected to exert
an influence on the Director's or Officer's judgment when
voting on the decision being made.
(d) "Expenses" includes all reasonable counsel fees, retainers, court
costs, transcript costs, fees of experts, witness fees, travel
expenses, duplicating costs, printing and binding costs, telephone
charges, postage, delivery service fees, and all other
disbursements or expenses of the types customarily incurred in
connection with prosecuting, defending, preparing to prosecute or
defend, investigating, being or preparing to be a witness in, or
otherwise participating in, a Proceeding.
(e) "Liability" means the obligation to pay a judgment, settlement,
penalty, fine (including an excise tax assessed with respect to an
employee benefit plan), or reasonable Expenses incurred with
respect to a Proceeding.
(f) "Officer" means an individual who is or was an officer of the
Corporation or an individual who, while an officer of the
Corporation, is or was serving at the Corporation's request as a
director, officer, partner, trustee, employee, or agent of another
foreign or domestic corporation, partnership, limited liability
company, joint venture, trust, employee benefit plan, or other
entity. An Officer is considered to be serving an employee benefit
plan at the Corporation's request if his duties to the Corporation
also impose duties on, or otherwise involve services by, him to the
plan or to participants in or beneficiaries of the plan. "Officer"
includes, unless the context requires otherwise, the estate or
personal representative of an Officer.
(g) "Party" includes an individual who was, is, or is threatened to be
made a named defendant or respondent in a Proceeding.
(h) "Proceeding" means any threatened, pending, or completed action,
suit, or proceeding, whether civil, criminal, administrative,
arbitrative or investigative and whether formal or informal.
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(j) "Reviewing Party" shall mean the person or persons making the
determination as to reasonableness of Expenses pursuant to Section
5 of this Agreement, and shall not include a court making any
determination under this Agreement or otherwise.
2. Basic Indemnification Arrangement.
(a) Obligation to Indemnify. The Corporation shall indemnify Indemnitee
against Liability incurred in a Proceeding; provided, however that
the Corporation shall not indemnify Indemnitee under this Agreement
for any Liability incurred in a Proceeding in which Indemnitee is
adjudged liable to the Corporation or is subjected to injunctive
relief in favor of the Corporation:
(1) For any appropriation, in violation of Indemnitee's
duties, of any business opportunity of the Corporation;
(2) For acts or omissions which involve intentional
misconduct or a knowing violation of law;
(3) For the types of liability set forth in Section 14-2-832
of the Georgia Business Corporation Code; or
(4) For any transaction from which Indemnitee received an
improper personal benefit.
(b) Partial Indemnification. If Indemnitee is entitled under any
provision of this Agreement or otherwise to indemnification by the
Corporation for some portion of Liability incurred by him, but not
the total amount thereof, the Corporation shall indemnify
Indemnitee for the portion of such Liability to which he is
entitled.
3. Advances for Expenses.
(a) Obligations and Requirements. The Corporation shall, before final
disposition of a Proceeding, advance funds to pay for or reimburse
the reasonable Expenses incurred by Indemnitee as a Party to such
Proceeding if he delivers to the Corporation:
(1) A written affirmation of Indemnitee's good faith belief that
his conduct does not constitute behavior that could lead to
the kind of liability described in Section 2(a) above; and
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(2) Indemnitee's written undertaking (meeting the qualifications
set forth below in Section 3(b)) to repay any funds advanced
if it is ultimately determined that Indemnitee is not entitled
to indemnification under this Agreement, the Georgia Business
Corporation Code or otherwise.
(b) Undertaking. The undertaking required by Section 3(a)(2) above must
be an unlimited general obligation of Indemnitee but need not be
secured and shall be accepted without reference to Indemnitee's
financial ability to make repayment. If Indemnitee seeks to enforce
his rights to indemnification in a court pursuant to Section 4
below, such undertaking to repay shall not be applicable or
enforceable unless and until there is a final court determination
that he is not entitled to indemnification, as to which all rights
of appeal have been exhausted or have expired.
4. Court-Ordered Indemnification and Advances for Expenses.
(a) Procedure. If Indemnitee is a Party to a Proceeding, he may apply
for indemnification or for advances for Expenses to the court
conducting the Proceeding or to another court of competent
jurisdiction. For purposes of this Agreement, the Corporation
hereby consents to personal jurisdiction and venue in any court in
which is pending a Proceeding to which Indemnitee is a Party.
Regardless of any determination by the Reviewing Party as to the
reasonableness of Expenses, and regardless of any failure by the
Reviewing Party to make a determination as to the reasonableness of
Expenses, such court's review shall be a de novo review. After
receipt of an application and after giving any notice it considers
necessary, the court shall:
(1) Order indemnification or the advance for Expenses if it
determines that Indemnitee is entitled to indemnification or
to advance for Expenses; or
(2) Order indemnification or the advance for Expenses if it
determines, in view of all the relevant circumstances, that it
is fair and reasonable to indemnify Indemnitee, or to advance
Expenses to Indemnitee, even if Indemnitee has failed to
comply with the requirements for advance of Expenses, or was
adjudged liable in a Proceeding referred to in Section 2(a)(4)
above.
(b) Payment of Expenses to Seek Court-Ordered Indemnification. If the
court determines that Indemnitee is entitled to indemnification or
to advance for Expenses, the Corporation shall pay Indemnitee's
reasonable Expenses to obtain such court-ordered indemnification or
advance for Expenses.
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5. Determination of Reasonableness of Expenses.
(a) The Corporation acknowledges that indemnification of Indemnitee
under this Agreement has been pre-authorized by the Corporation as
permitted by Section 14-2-859(a) of the Georgia Business
Corporation Code, and that pursuant authority exercised under
Section 14-2-856 of the Georgia Business Corporation Code, no
determination need be made for a specific Proceeding that
indemnification of Indemnitee is permissible in the circumstances
because Indemnitee has met a particular standard of conduct.
Nevertheless, except as set forth in Section 5(b) below, evaluation
as to reasonableness of Expenses of Indemnitee for a specific
Proceeding shall be made as follows:
(1) If there are two or more Disinterested Directors, by the Board
of Directors of the Corporation by a majority vote of all
Disinterested Directors (a majority of whom shall for such
purpose constitute a quorum) or by a majority of the members
of a committee of two or more Disinterested Directors
appointed by such a vote; or
(2) If there are fewer than two Disinterested Directors, by the
Board of Directors (in which determination Directors who do
not qualify as Disinterested Directors may participate); or
(3) By the shareholders of the Corporation, but shares owned by or
voted under the control of a Director or Officer who at the
time does not qualify as a Disinterested Director or
Disinterested Officer may not be voted on the determination.
(b) Notwithstanding the requirement under Section 5(a) that the
Reviewing Party evaluate the reasonableness of Expenses claimed by
Indemnitee, any Expenses claimed by Indemnitee shall be deemed
reasonable if the Reviewing Party fails to make the evaluation
required by Section 5(a) within sixty (60) days following
Indemnitee's written request for indemnification or advance for
Expenses.
6. Vested Rights; Specific Performance. No amendment to the Articles of
Incorporation of the Corporation or any other corporate action shall in any way
limit Indemnitee's rights under this Agreement. In any Proceeding brought by or
on behalf of Indemnitee to specifically enforce the provisions of this
Agreement, the Corporation hereby waives the claim or defense therein that the
plaintiff or claimant has an adequate remedy at law, and the Corporation shall
not urge in any such Proceeding the claim or defense that such remedy at law
exists. The provisions of this Section 6, however, shall not prevent Indemnitee
from seeking a remedy at law in connection with any breach of this Agreement.
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7. Liability Insurance. To the extent the Corporation maintains an
insurance policy or policies providing directors' or officers' liability
insurance, Indemnitee shall be covered by such policy or policies, in accordance
with its or their terms, to the maximum extent of the coverage provided under
such policy or policies in effect for any other Director or Officer of the
Corporation, as the case may be.
8. Witness Fees. Nothing in this Agreement shall limit the Corporation's
power to pay or reimburse Expenses incurred by Indemnitee in connection with his
appearance as a witness in a Proceeding at a time when he has not been made a
named defendant or respondent in the Proceeding.
9. Security for Indemnification Obligations. The Corporation may at any
time and in any manner, at the discretion of the Board of Directors, secure the
Corporation's obligations to indemnify or advance Expenses to Indemnitee
pursuant to this Agreement.
10. Non-exclusivity, No Duplication of Payments. The rights of Indemnitee
hereunder shall be in addition to any other rights with respect to
indemnification, advancement of Expenses or otherwise that Indemnitee may have
under the Corporation's Articles of Incorporation or Bylaws, the Georgia
Business Corporation Code or otherwise; provided, however, that the Corporation
shall not be liable under this Agreement to make any payment to Indemnitee
hereunder to the extent Indemnitee has otherwise actually received payment
(under any insurance policy, provision of the Articles of Incorporation or
Bylaws, or otherwise) of the amounts otherwise payable hereunder. The
Corporation's obligation to indemnify or advance expenses hereunder to
Indemnitee who is or was serving at the request of the Corporation as a
director, officer, partner, trustee, employee or agent of any other entity shall
be reduced by any amount Indemnitee has actually received as indemnification or
advancement of expenses from such other entity.
11. Amendments. To the extent that the provisions of this Agreement are
held to be inconsistent with the provisions of the Georgia Business Corporation
Code (including Section 14-2-856 thereof), such provisions of such statute shall
govern. To the extent that the Georgia Business Corporation Code is hereafter
amended to permit a Georgia business corporation, without the need for
shareholder approval, to provide to its directors greater rights to
indemnification or advancement of Expenses than those specifically set forth
hereinabove, this Agreement shall be deemed amended to require such greater
indemnification or more liberal advancement of Expenses to Indemnitee, in each
case consistent with the Georgia Business Corporation Code as so amended from
time to time. Otherwise, no supplement, modification or amendment of this
Agreement shall be binding unless executed in writing by the Corporation and
Indemnitee.
12. Subrogation. In the event of payment under this Agreement, the
Corporation shall be subrogated to the extent of such payment to all of the
rights of recovery of Indemnitee, who shall execute all papers required and
shall do everything that
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may be necessary to secure such rights, including the execution of such
documents necessary to enable the Corporation effectively to bring suit to
enforce such rights.
13. Waiver. No waiver of any of the provisions of this Agreement shall be
deemed or shall constitute a waiver of any other provisions hereof (whether or
not similar) nor shall such waiver constitute a continuing waiver.
14. Binding Effect, Etc. This Agreement shall be binding upon and inure to
the benefit of and be enforceable by the parties hereto and their respective
successors or assigns (including any direct or indirect successor or assign by
purchase, merger, consolidation or otherwise to all or substantially all of the
business and/or assets of the Corporation), spouses, heirs, and personal and
legal representatives.
15. Applicability of Agreement. This Agreement shall apply retroactively
with respect to acts or omissions of Indemnitee occurring since the date that
Indemnitee first became a Director or Officer, and this Agreement shall continue
in effect regardless of whether Indemnitee continues to serve as a Director or
Officer, but only in respect of acts or omissions occurring prior to the
termination of Indemnitee's service as a Director or Officer.
16. Severability. If any provision or provisions of this Agreement shall be
held to be invalid, illegal, or unenforceable for any reason whatsoever: (a) the
validity, legality, and enforceability of the remaining provisions of this
Agreement (including without limitation, each portion of any Section of this
Agreement containing any such provision held to be invalid, illegal, or
unenforceable, that is not itself invalid, illegal, or unenforceable) shall not
in any way be affected or impaired thereby; (b) such provision or provisions
shall be deemed reformed to the extent necessary to conform to applicable law
and to give the maximum effect to the intent of the parties hereto; and (c) to
the fullest extent possible, the provisions of this Agreement (including,
without limitation, each portion of any Section of this Agreement containing any
such provision held to be invalid, illegal, or unenforceable, that is not itself
invalid, illegal, or unenforceable) shall be construed so as to give effect to
the intent manifested thereby.
17. Governing Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Georgia applicable to
contracts made and to be performed in such state without giving effect to the
principles of conflicts of laws.
18. Headings. The headings of the Sections of this Agreement are inserted
for convenience only and shall not be deemed to constitute part of this
Agreement or to affect the construction thereof.
19. Inducement. The Corporation expressly confirms and agrees that it has
entered into this Agreement and assumed the obligations imposed on it hereby in
order to induce Indemnitee to serve as a Director and/or Officer, and the
Corporation
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acknowledges that Indemnitee is relying upon this Agreement in serving as a
director, officer, employee or agent of the Corporation or, at the request of
the Corporation, as a director, officer, partner, trustee, employee, or agent of
another foreign or domestic corporation, partnership, limited liability company,
joint venture, trust, employee benefit plan, or other entity.
20. Notice by the Indemnitee. Indemnitee agrees promptly to notify the
Corporation in writing upon being served with any summons, citation, subpoena,
complaint, indictment, information, or other document relating to any Proceeding
or matter which may be subject to indemnification or advancement of Expenses
covered hereunder. The failure of Indemnitee so to notify the Corporation shall
not relieve the Corporation of any obligation which it may have to Indemnitee
under this Agreement or otherwise.
21. Notices. All notices, requests, demands, and other communications
hereunder shall be in writing and shall be deemed to have been duly given if (i)
delivered by hand and receipted for by the party to whom said notice or other
communication shall have been directed or (ii) mailed by certified or registered
mail with postage prepaid, on the third business day after the date on which it
is so mailed if to the Corporation, to the principal office address of the
Corporation, or if to Indemnitee, to the address of Indemnitee last on file with
the Corporation, or to such other address as may have been furnished to
Indemnitee by the Corporation or to the Corporation by Indemnitee, as the case
may be.
Executed as of the date first above written.
THE CORPORATION:
XxxxXxxxxx.XXX, Inc.
By:
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INDEMNITEE:
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