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INDEMNIFICATION AGREEMENT
THIS INDEMNIFICATION AGREEMENT (the "Agreement") is made and entered
into as of this _______ day of ______________, 1996, by and among Champion
Communication Services, Inc., a Delaware corporation (the "Company"), and
___________________________, a _____________ resident ("Indemnitee").
WHEREAS, competent and experienced persons are reluctant to serve or
to continue to serve corporations as directors or in other capacities unless
they are provided with adequate protection through insurance or indemnification
(or both) against claims and actions against them arising out of their service
to and activities on behalf of those corporations;
WHEREAS, the current uncertainties relating to the availability of
adequate insurance for directors and officers have increased the difficulty for
corporations to attract and retain competent and experienced persons;
WHEREAS, the Board of Directors of the Company has determined that the
continuation of present trends in litigation will make it more difficult to
attract and retain competent and experienced persons, that this situation is
detrimental to the best interests of the stockholders of the Company, and that
the Company should act to assure its directors and officers that there will be
increased certainty of adequate protection in the future;
WHEREAS, the Certificate of Incorporation of the Company requires the
Company to indemnify its directors and officers to the fullest extent permitted
by law;
WHEREAS, it is reasonable, prudent, and necessary for the Company to
obligate itself contractually to indemnify its directors and officers to the
fullest extent permitted by applicable law in order to induce them to serve or
continue to serve the Company;
WHEREAS, Indemnitee is willing to serve, continue to serve, and to
take on additional service for or on behalf of the Company on the condition
that he be indemnified to the fullest extent permitted by law; and
WHEREAS, concurrently with the execution of this Agreement, Indemnitee
is agreeing to serve or to continue to serve as a director or officer of the
Company.
NOW, THEREFORE, in consideration of the foregoing premises,
Indemnitee's agreement to serve or continue to serve as a director or officer
of the Company, and the covenants contained in this Agreement, the parties
hereto hereby covenant and agree as follows:
1. Certain Definitions:
(a) Acquiring Person: shall mean any Person other than
(i) the Company, (ii) any of the Company's Subsidiaries, (iii) any employee
benefit plan of the Company or of a Subsidiary of the Company or of a
corporation owned directly or indirectly by the stockholders
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of the Company in substantially the same proportions as their ownership of
stock of the Company, or (iv) any trustee or other fiduciary holding securities
under an employee benefit plan of the Company or of a Subsidiary of the Company
or of a corporation owned directly or indirectly by the stockholders of the
Company in substantially the same proportions as their ownership of stock of
the Company.
(b) Change in Control: shall be deemed to have occurred
if:
(i) any Acquiring Person, other than
_________________ or _______________, or any trust of which Messrs. ________ or
_______ have been or become the settlor or beneficiary, is or becomes the
"beneficial owner" (as defined in Rule l3d-3 under the Securities Exchange Act
of 1934, as amended (the "Exchange Act")), directly or indirectly, of
securities of the Company representing 20% or more of the combined voting power
of the then outstanding Voting Securities of the Company; or
(ii) members of the Incumbent Board cease for
any reason to constitute at least a majority of the Board of Directors of the
Company; or
(iii) a public announcement is made of a tender
or exchange offer by any Acquiring Person for 50% or more of the outstanding
Voting Securities of the Company, and the Board of Directors of the Company
approves or fails to oppose that tender or exchange offer in its statements in
Schedule 14D-9 under the Exchange Act; or
(iv) the stockholders of the Company approve a
merger or consolidation of the Company with any other corporation or
partnership (or, if no such approval is required, the consummation of such a
merger or consolidation of the Company), other than a merger or consolidation
that would result in the Voting Securities of the Company outstanding
immediately prior to the consummation thereof continuing to represent (either
by remaining outstanding or by being converted into Voting Securities of the
surviving entity or of a parent of the surviving entity) a majority of the
combined voting power of the Voting Securities of the surviving entity (or its
parent) outstanding immediately after that merger or consolidation; or
(v) the stockholders of the Company approve a
plan of complete liquidation of the Company or an agreement for the sale or
disposition by the Company of all or substantially all the Company's assets
(or, if no such approval is required, the consummation of such a liquidation,
sale, or disposition in one transaction or series of related transactions)
other than a liquidation, sale, or disposition of all or substantially all the
Company's assets in one transaction or a series of related transactions to a
corporation owned directly or indirectly by the stockholders of the Company in
substantially the same proportions as their ownership of stock of the Company.
(c) Claim: any threatened, pending, or completed action,
suit, or proceeding (including, without limitation, securities laws actions,
suits, and proceedings), or any inquiry or investigation (including discovery),
whether conducted by the Company or any other party, that
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Indemnitee in good faith believes might lead to the institution of any action,
suit, or proceeding, whether civil, criminal, administrative, investigative, or
other.
(d) Company: Champion Communication Services, Inc., a
Delaware corporation.
(e) Expenses: all costs, expenses (including attorneys'
and expert witnesses' fees), and obligations paid or incurred in connection
with investigating, defending (including affirmative defenses and
counterclaims), being a witness in, or participating in (including on appeal),
or preparing to defend, be a witness in, or participate in, any Claim relating
to any Indemnifiable Event.
(f) Incumbent Board: individuals who, as of __________,
199__, constitute the Board of Directors of the Company and any other
individual who becomes a director of the Company after that date and whose
election or appointment by the Board of Directors or nomination for election by
the Company's stockholders was approved by a vote of at least a majority of the
directors then comprising the Incumbent Board.
(g) Indemnifiable Event: any event or occurrence related
to the fact that Indemnitee is or was a director, officer, employee, agent, or
fiduciary of the Company, or is or was serving at the request of the Company as
a director, officer, employee, trustee, agent, or fiduciary of another
corporation, partnership, joint venture, employee benefit plan, trust, or other
enterprise, or by reason of any thing done or not done by Indemnitee in any
such capacity. For purposes of this Agreement, the Company agrees that
Indemnitee's service on behalf of or with respect to any Subsidiary of the
Company shall be deemed to be at the request of the Company.
(h) Person: shall mean any person or entity of any
nature whatsoever, specifically including an individual, a firm, a company, a
corporation, a partnership, a trust, or other entity. A Person, together with
that Person's Affiliates and Associates (as those terms are defined in Rule
12b-2 under the Exchange Act), and any Persons acting as a partnership, limited
partnership, joint venture, association, syndicate, or other group (whether or
not formally organized), or otherwise acting jointly or in concert or in a
coordinated or consciously parallel manner (whether or not pursuant to any
express agreement), for the purpose of acquiring, holding, voting, or disposing
of securities of the Company with such Person, shall be deemed a single
"Person."
(i) Potential Change in Control: shall be deemed to have
occurred if (i) the Company enters into an agreement, the consummation of which
would result in the occurrence of a Change in Control; (ii) any Person
(including the Company) publicly announces an intention to take or to consider
taking actions that, if consummated, would constitute a Change in Control;
(iii) any Acquiring Person (other than _________________ or _________________,
or any trust of which Messrs. ________ or ________ have been or become the
settlor or beneficiary) who is or becomes the beneficial owner, directly or
indirectly, of securities of the Company representing 10% or more of the
combined voting power of the then outstanding Voting Securities of the Company
increases his beneficial ownership of such securities by 5% or more over the
percentage
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so owned by that Person on the date hereof; or (iv) the Board of Directors of
the Company adopts a resolution to the effect that, for purposes of this
Agreement, a Potential Change in Control has occurred.
(j) Reviewing Party: any appropriate Person or body
consisting of a member or members of the Company's Board of Directors or any
other Person or body appointed by the Board (including Special Counsel referred
to in Section 3) who is not a party to the particular Claim for which
Indemnitee is seeking indemnification.
(k) Special Counsel: special, independent counsel
selected by Indemnitee and approved by the Company (which approval shall not be
unreasonably withheld), and who has not otherwise performed services for the
Company or for Indemnitee within the last three years (other than as Special
Counsel under this Agreement or similar agreements).
(l) Subsidiary: with respect to any Person, any
corporation or other entity of which a majority of the voting power of the
voting equity securities or equity interest is owned, directly or indirectly,
by that Person.
(m) Voting Securities: any securities that vote
generally in the election of directors, in the admission of general partners,
or in the selection of any other similar governing body.
2. Basic Indemnification and Expense Reimbursement Arrangement.
(a) In the event Indemnitee was, is, or becomes a party
to or witness or other participant in, or is threatened to be made a party to
or witness or other participant in, a Claim by reason of (or arising in part
out of) an Indemnifiable Event, the Company shall indemnify Indemnitee to the
fullest extent permitted by law as soon as practicable but in any event no
later than 30 days after written demand is presented to the Company, against
any and all Expenses, judgments, fines, penalties, and amounts paid in
settlement (including all interest, assessments, and other charges paid or
payable in connection with or in respect of such Expenses, judgments, fines,
penalties, or amounts paid in settlement) of or with respect to that Claim.
Notwithstanding the foregoing, the obligations of the Company under Section
2(a) shall be subject to the condition that the Reviewing Party shall not have
determined (in a written opinion, in any case in which Special Counsel referred
to in Section 3 hereof is involved) that Indemnitee would not be permitted to
be indemnified under applicable law. Nothing contained in this Agreement shall
require any determination under this Section 2(a) to be made by the Reviewing
Party prior to the disposition or conclusion of the Claim against the
Indemnitee; provided, however, that Expense Advances shall continue to be made
by the Company pursuant to and to the extent required by the provisions of
Section 2(b).
(b) If so requested by Indemnitee, the Company shall pay
any and all Expenses incurred by Indemnitee (or, if applicable, reimburse
Indemnitee for any and all Expenses incurred by Indemnitee and previously paid
by Indemnitee) within two business days after such request (an "Expense
Advance"). The Company shall be obligated to make or pay an Expense Advance in
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advance of the final disposition or conclusion of any Claim. In connection
with any request for an Expense Advance, if requested by the Company,
Indemnitee or Indemnitee's counsel shall submit an affidavit stating that the
Expenses incurred were reasonable. Any dispute as to the reasonableness of any
Expense shall not delay an Expense Advance by the Company, and the Company
agrees that any such dispute shall be resolved only upon the disposition or
conclusion of the underlying Claim against the Indemnitee. If, when, and to
the extent that the Reviewing Party determines that Indemnitee would not be
permitted to be indemnified with respect to a Claim under applicable law, the
Company shall be entitled to be reimbursed by Indemnitee and Indemnitee hereby
agrees to reimburse the Company without interest (which agreement shall be an
unsecured obligation of Indemnitee) for all related Expense Advances
theretofore made or paid by the Company; provided, however, that if Indemnitee
has commenced legal proceedings in a court of competent jurisdiction to secure
a determination that Indemnitee should be indemnified under applicable law, any
determination made by the Reviewing Party that Indemnitee would not be
permitted to be indemnified under applicable law shall not be binding and
Indemnitee shall not be required to reimburse the Company for any Expense
Advance, and the Company shall be obligated to continue to make Expense
Advances, until a final judicial determination is made with respect thereto (as
to which all rights of appeal therefrom have been exhausted or lapsed). If
there has not been a Change in Control, the Reviewing Party shall be selected
by the Board of Directors of the Company. If there has been a Change in
Control, the Reviewing Party shall be advised by or shall be Special Counsel
referred to in Section 3 hereof, if and as Indemnitee so requests. If there
has been no determination by the Reviewing Party or if the Reviewing Party
determines that Indemnitee substantively would not be permitted to be
indemnified in whole or in part under applicable law, Indemnitee shall have the
right to commence litigation in any court in the State of Delaware having
subject matter jurisdiction thereof and in which venue is proper seeking an
initial determination by the court or challenging any such determination by the
Reviewing Party or any aspect thereof, and the Company hereby consents to
service of process and to appear in any such proceeding. Any determination by
the Reviewing Party otherwise shall be conclusive and binding on the Company
and Indemnitee.
3. Change in Control. The Company agrees that, if there is a
Change in Control and if Indemnitee requests in writing that Special Counsel
advise the Reviewing Party or be the Reviewing Party, then the Company shall
not deny any indemnification payments (and Expense Advances shall continue to
be paid by the Company pursuant to Section 2(b)) that Indemnitee requests or
demands under this Agreement or any other agreement or law now or hereafter in
effect relating to Claims for Indemnifiable Events. The Company further agrees
not to request or seek reimbursement from Indemnitee of any related Expense
Advances unless, with respect to a denied indemnification payment, Special
Counsel has rendered its written opinion to the Company and Indemnitee that the
Company would not be permitted under applicable law to pay Indemnitee such
indemnification payment. The Company agrees to pay the reasonable fees of
Special Counsel referred to in this Section 3 and to indemnify fully Special
Counsel against any and all expenses (including attorneys' fees), claims,
liabilities, and damages arising out of or relating to this Agreement or
Special Counsel's engagement pursuant hereto.
4. Establishment of Trust. In the event of a Potential Change in
Control, the Company shall, upon written request by Indemnitee, create a trust
for the benefit of Indemnitee
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(the "Trust") and from time to time upon written request of Indemnitee shall
fund the Trust in an amount sufficient to satisfy any and all Expenses
reasonably anticipated at the time of each such request to be incurred in
connection with investigating, preparing for, and defending any Claim relating
to an Indemnifiable Event, and any and all judgments, fines, penalties, and
settlement amounts of any and all Claims relating to an Indemnifiable Event
from time to time actually paid or claimed, reasonably anticipated, or proposed
to be paid. The amount or amounts to be deposited in the Trust pursuant to the
foregoing funding obligation shall be determined by the Reviewing Party, in any
situation in which Special Counsel referred to in Section 3 is involved. The
terms of the Trust shall provide that, upon a Change in Control, (i) the Trust
shall not be revoked or the principal thereof invaded, without the written
consent of Indemnitee; (ii) the trustee of the Trust shall advance, within two
business days of a request by Indemnitee, any and all Expenses to Indemnitee
(and Indemnitee hereby agrees to reimburse the Trust under the circumstances in
which Indemnitee would be required to reimburse the Company for Expense
Advances under Section 2(b) of this Agreement); (iii) the Trust shall continue
to be funded by the Company in accordance with the funding obligation set forth
above; (iv) the trustee of the Trust shall promptly pay to Indemnitee all
amounts for which Indemnitee shall be entitled to indemnification pursuant to
this Agreement or otherwise; and (v) all unexpended funds in that Trust shall
revert to the Company upon a final determination by the Reviewing Party or a
court of competent jurisdiction, as the case may be, that Indemnitee has been
fully indemnified under the terms of this Agreement. The trustee of the Trust
shall be chosen by Indemnitee. Nothing in this Section 4 shall relieve the
Company of any of its obligations under this Agreement.
5. Indemnification for Additional Expenses. The Company shall
indemnify Indemnitee against any and all costs and expenses (including
attorneys' and expert witnesses' fees) and, if requested by Indemnitee, shall
(within two business days of that request) advance those costs and expenses to
Indemnitee, that are incurred by Indemnitee in connection with any claim
asserted against or action brought by Indemnitee for (i) indemnification or
advance payment of Expenses by the Company under this Agreement or any other
agreement or provision of the Company's charter or by-laws now or hereafter in
effect relating to Claims for Indemnifiable Events or (ii) recovery under any
directors' and officers' liability insurance policies maintained by the
Company, regardless of whether Indemnitee ultimately is determined to be
entitled to that indemnification, advance expense payment, or insurance
recovery, as the case may be.
6. Partial Indemnity. If Indemnitee is entitled under any
provision of this Agreement to indemnification by the Company for some or a
portion of the Expenses, judgments, fines, penalties, and amounts paid in
settlement of a Claim but not, however, for all of the total amount thereof,
the Company shall nevertheless indemnify Indemnitee for the portion thereof to
which Indemnitee is entitled. Moreover, notwithstanding any other provision of
this Agreement, to the extent that Indemnitee has been successful on the merits
or otherwise in defense of any or all Claims relating in whole or in part to an
Indemnifiable Event or in defense of any issue or matter therein, including
dismissal without prejudice, Indemnitee shall be indemnified against all
Expenses incurred in connection therewith.
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7. Contribution.
(a) Contribution Payment. To the extent the
indemnification provided for under any provision of this Agreement is
determined (in the manner hereinabove provided) not to be permitted under
applicable law, then in the event Indemnitee was, is, or becomes a party to or
witness or other participant in, or is threatened to be made a party to or
witness or other participant in, a Claim by reason of (or arising in part out
of) an Indemnifiable Event, the Company, in lieu of indemnifying Indemnitee,
shall contribute to the amount of any and all Expenses, judgments, fines, or
penalties assessed against or incurred or paid by Indemnitee on account of that
Claim and any and all amounts paid in settlement of that Claim (including all
interest, assessments, and other charges paid or payable in connection with or
in respect of such Expenses, judgments, fines, penalties, or amounts paid in
settlement) for which such indemnification is not permitted ("Contribution
Amounts"), in such proportion as is appropriate to reflect the relative fault
with respect to the Indemnifiable Event giving rise to the Contribution Amounts
of Indemnitee, on the one hand, and of the Company and any and all other
parties (including officers and directors of the Company other than Indemnitee)
who may be at fault with respect to such Indemnifiable Event (collectively,
including the Company, the "Third Parties") on the other hand.
(b) Relative Fault. The relative fault of the Third
Parties and the Indemnitee shall be determined (i) by reference to the relative
fault of Indemnitee as determined by the court or other governmental agency
assessing the Contribution Damages or (ii) to the extent such court or other
governmental agency does not apportion relative fault, by the Reviewing Party
(which shall include Special Counsel) after giving effect to, among other
things, the relative intent, knowledge, access to information, and opportunity
to prevent or correct the applicable Indemnifiable Event and other relevant
equitable considerations of each party. The Company and Indemnitee agree that
it would not be just and equitable if contribution pursuant to this Section 7
were determined by pro rata allocation or by any other method of allocation
which does take account of the equitable considerations referred to in this
Section 7(b).
8. Burden of Proof. In connection with any determination by the
Reviewing Party or otherwise as to whether Indemnitee is entitled to be
indemnified under any provision of this Agreement or to receive contribution
pursuant to Section 7 of this Agreement, the burden of proof shall be on the
Company to establish that Indemnitee is not so entitled.
9. No Presumption. For purposes of this Agreement, the
termination of any claim, 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
Indemnitee 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.
10. Non-exclusivity. The rights of Indemnitee hereunder shall be
in addition to any other rights Indemnitee may have under the Company's charter
or by-laws, the Delaware General Corporation Law or otherwise. To the extent
that a change in the Delaware General Corporation
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Law (whether by statute or judicial decision) permits greater indemnification
by agreement than would be afforded currently under the Company's charter or
by-laws and this Agreement, it is the intent of the parties hereto that
Indemnitee shall enjoy by this Agreement the greater benefits so afforded by
that change.
11. Liability Insurance. Except as otherwise agreed to by the
Company and Indemnitee in a written agreement, to the extent the Company
maintains an insurance policy or policies providing directors' and officers'
liability insurance, Indemnitee shall be covered by that policy or those
policies, in accordance with its or their terms, to the maximum extent of the
coverage available for any Company director or officer.
12. Period of Limitations. No legal action shall be brought and
no cause of action shall be asserted by or on behalf of the Company or any
affiliate of the Company against Indemnitee or Indemnitee's spouse, heirs,
executors, or personal or legal representatives after the expiration of three
years from the date of accrual of that cause of action, and any claim or cause
of action of the Company or its affiliate shall be extinguished and deemed
released unless asserted by the timely filing of a legal action within that
three-year period; provided, however, that, if any shorter period of
limitations is otherwise applicable to any such cause of action, the shorter
period shall govern.
13. Amendments. No supplement, modification, or amendment of 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 (whether or not
similar) nor shall that waiver constitute a continuing waiver.
14. Subrogation. In the event of payment under this Agreement,
the Company shall be subrogated to the extent of that payment to all of the
rights of recovery of Indemnitee, who shall execute all papers required and
shall do everything that may be necessary to secure those rights, including the
execution of the documents necessary to enable the Company effectively to bring
suit to enforce those rights.
15. No Duplication of Payments. The Company shall not be liable
under this Agreement to make any payment in connection with any claim made
against Indemnitee to the extent Indemnitee has otherwise actually received
payment (under any insurance policy, provision of the Company's charter or
by-laws or otherwise) of the amounts otherwise indemnifiable hereunder.
16. Binding Effect. This Agreement shall be binding upon and
inure to the benefit of and be enforceable by the parties hereto and their
respective successors, assigns (including any direct or indirect successor by
purchase, merger, consolidation, or otherwise to all or substantially all of
the business or assets of the Company), spouses, heirs, and personal and legal
representatives. This Agreement shall continue in effect regardless of whether
Indemnitee continues to serve as an officer or director of the Company or
another enterprise at the Company's request.
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17. Severability. If any provision of this Agreement is held to
be illegal, invalid, or unenforceable under present or future laws effective
during the term hereof, that provision shall be fully severable; this Agreement
shall be construed and enforced as if that illegal, invalid, or unenforceable
provision had never comprised a part hereof; and the remaining provisions shall
remain in full force and effect and shall not be affected by the illegal,
invalid, or unenforceable provision or by its severance from this Agreement.
Furthermore, in lieu of that illegal, invalid, or unenforceable provision,
there shall be added automatically as a part of this Agreement a provision as
similar in terms to the illegal, invalid, or unenforceable provision as may be
possible and be legal, valid, and enforceable.
18. Governing Law. This Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of Delaware,
excluding choice of law and conflicts of law principles which may direct the
application of laws of a different jurisdiction.
19. Headings. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
20. Notices. Whenever this Agreement requires or permits notice
to be given by one party to the other, such notice must be in writing to be
effective and shall be deemed delivered and received by the party to whom it is
sent upon actual receipt (by any means) of such notice. Receipt of a notice by
any officer of the Company shall be deemed receipt of such notice by the
Company.
21. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but in making proof
hereof it shall not be necessary to produce or account for more than one such
counterpart.
EXECUTED as of the date first written above.
CHAMPION COMMUNICATION SERVICES, INC.
By:___________________________________________
Name:_________________________________________
Title:________________________________________
INDEMNITEE:
______________________________________________
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