Exhibit 10
Form of Indemnity Agreement
INDEMNITY AGREEMENT
-------------------
THIS AGREEMENT is made as of the 8th day of December, 1997, by and between
Waste Management, Inc., a Delaware corporation (the "Corporation") and the
undersigned director and/or officer (the "Indemnitee") of the Corporation,
WHEREAS, it is essential to the Corporation to retain and attract as
directors and/or officers the most capable persons available; and
WHEREAS, through its Restated Certificate of Incorporation and By-laws it
is the express policy of the Corporation to indemnify its directors and officers
so as to provide them with the maximum possible protection permitted by law; and
WHEREAS, the vagaries of "public policy" and interpretations of statutes,
certificates of incorporation and by-laws make uncertain the indemnification
protection so provided; and
WHEREAS, the Board of Directors has concluded that such uncertainty and the
continuation of present trends in litigation against corporate directors and
officers will inevitably result in less effective direction and supervision of
the Corporation's business affairs, and the Board deems such consequences to be
so detrimental to the best interests of the Corporation's stockholders that it
is not only reasonable and prudent but necessary for the Corporation
contractually to obligate itself to indemnify in a reasonable and adequate
manner its directors and officers and establish procedures and presumptions with
respect thereto to make the process of indemnification more certain; and
WHEREAS, in connection therewith, Section 145 of the General Corporation
Law of the State of Delaware, under which the Corporation is organized, empowers
corporations to indemnify, among others, any person serving as a director and/or
officer of the corporation, and such Section 145 specifies that the
indemnification set forth therein shall not be deemed exclusive of any other
rights to which those seeking indemnification may be entitled under the
certificate of incorporation, bylaws, agreements, vote of stockholders or
disinterested directors or otherwise; and
WHEREAS, the Corporation desires to have Indemnitee serve or continue to
serve as a director or officer of the Corporation or of any other corporation,
subsidiary, partnership, joint venture, or trust or other enterprise of which he
has been or is serving at the request, for the convenience of or to represent
the interests of the Corporation free from undue concern for unpredictable,
inappropriate or unreasonable claims for damages by reason of his/her Corporate
Status (as defined below) and Indemnitee desires to serve or to continue to
serve (provided that he/she is furnished the indemnity provided for
hereinafter), in one or more of such capacities;
NOW, THEREFORE, in consideration of the mutual covenants set forth herein,
the Corporation and Indemnitee hereby agrees as follows:
1. Agreement to Serve. Indemnitee will serve and/or continue to serve, at
the will of the Corporation or under separate contract, if such exists, the
Corporation or an Affiliate of the Corporation as a director and/or officer
faithfully and to the best of his ability so long as he/she is duly elected and
qualified in accordance with the provisions of the By-laws thereof or until such
time as he/she tenders his resignation in writing.
2. Indemnification. The Corporation shall indemnify, and advance Expenses
(as hereinafter defined) to, Indemnitee as provided in this Agreement and to the
fullest extent permitted by applicable law.
3. Proceedings Other Than Proceedings by or in the Right of the
Corporation. Indemnitee shall be entitled to the rights of indemnification
provided in this Section 3 if, by reason of his/her Corporate Status (as
hereinafter defined), he/she is, or is threatened to be, made a party to any
threatened, pending, or completed Proceeding (as hereinafter defined), other
than a Proceeding by or in the right of the Corporation. Pursuant to this
Section 3, Indemnitee shall be indemnified against Expenses, judgments, fines,
and amounts paid in settlement actually and reasonably incurred by him/her or on
his/her behalf in connection with such Proceeding or any claim, issue or matter
related thereto, if he/she acted in good faith and in a manner he/she reasonably
believed to be in or not opposed to the best interests of the Corporation, and,
with respect to any criminal Proceeding, had no reasonable cause to believe
his/her conduct was unlawful.
4. Proceedings by or in the Right of the Corporation. Indemnitee shall be
entitled to the rights of indemnification provided in this Section 4 if, by
reason of his/her Corporate Status, he/she is, or is threatened to be, made a
party to any threatened, pending or completed Proceeding brought by or in the
right of the Corporation to procure a judgment in its favor. Pursuant to this
Section 4, Indemnitee shall be indemnified against Expenses actually and
reasonably incurred by him/her or on his/her behalf in connection with such
Proceeding if he/she acted in good faith and in a manner he/she reasonably
believed to be in or not opposed to the best interests of the Corporation.
Notwithstanding the foregoing, no indemnification against such Expenses shall be
made in respect of any claim, issue or matter in such Proceeding as to which
Indemnitee shall have been adjudged to be liable to the Corporation if
applicable law prohibits such indemnification; provided, however, that if
applicable law so permits, indemnification against Expenses shall nevertheless
be made by the Corporation in such event if and only to the extent that the
Court of Chancery of the State of Delaware, or the court in which such
Proceeding shall have been brought or is pending, shall determine.
5. Indemnification for Expenses of a Party Who is Wholly or Partly
Successful. Notwithstanding any other provision of this Agreement, to the
extent that Indemnitee is, by reason of his/her Corporate Status, a party to and
is successful, on the merits or otherwise, in any Proceeding or any claim, issue
or matter therein, he/she shall be indemnified against all Expenses actually and
reasonably incurred by him/her or on his/her behalf in connection therewith. If
2
Indemnitee is not wholly successful in such a Proceeding but is successful, on
the merits or otherwise, as to one or more but less than all claims, issues or
matters in such a Proceeding, the Corporation shall indemnify Indemnitee against
all Expenses actually and reasonably incurred by him/her or on his/her behalf in
connection with each successfully resolved claim, issue or matter. For purposes
of this Section 5 and without limitation, the termination of any claim, issue or
matter in such a Proceeding by dismissal, with or without prejudice, shall be
deemed to be a successful result as to such claim, issue or matter.
6. Indemnification for Expenses of a Witness. Notwithstanding any other
provision of this Agreement, to the extent that Indemnitee is, by reason of
his/her Corporate Status, a witness in any Proceeding, he/she shall be
indemnified against all Expenses actually and reasonably incurred by him/her or
on his/her behalf in connection therewith.
7. Advancement of Expenses. The Corporation shall advance all reasonable
Expenses incurred by or on behalf of Indemnitee in connection with any
Proceeding within ten (10) days after the receipt by the Corporation of a
statement or statements from Indemnitee requesting such advance or advances from
time to time, whether prior to or after final disposition of such Proceeding.
Such statement or statements shall reasonably evidence the Expenses incurred by
Indemnitee and shall include or be preceded or accompanied by an undertaking by
or on behalf of Indemnitee to repay any Expenses advanced if it shall ultimately
be determined that Indemnitee is not entitled to be indemnified against such
Expenses.
8. Procedure for Determination of Entitlement to Indemnification.
(a) To obtain indemnification under this Agreement, Indemnitee shall
submit to the Corporation a written request, including therein or therewith such
documentation and information as is reasonably available to Indemnitee and is
reasonably necessary to determine whether and to what extent 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 Indemnitee has requested indemnification.
(b) Upon written request by Indemnitee for indemnification pursuant to
the first sentence of Section 8(a) hereof, a determination, if required by
applicable law, with respect to Indemnitee's entitlement thereto shall be made
in the specific case as follows: (i) if a Change in Control (as hereinafter
defined) shall have occurred, by Independent Counsel (as hereinafter defined)
(unless Indemnitee shall request that such determination be made by the Board of
Directors or the stockholders, in which case by the person or persons or in the
manner provided for in clauses (ii) or (iii) of this Section 8(b)) in a written
opinion to the Board of Directors, a copy of which shall be delivered to
Indemnitee; (ii) if a Change in Control shall not have occurred, at the
discretion of the Board of Directors (a) by the Board of Directors by a majority
vote of a quorum consisting of Disinterested Directors (as hereinafter defined),
or (b) if a quorum of the Board of Directors consisting of Disinterested
Directors is not obtainable or, even if obtainable, such quorum of Disinterested
Directors so directs, by Independent Counsel in a written opinion to the Board
of Directors, a copy of which shall be delivered to Indemnitee or (c) by the
stockholders of the Corporation; or (iii) as provided in Section 9(b); and, if
so determined that
3
Indemnitee is entitled to indemnification, payment to Indemnitee shall be made
within ten (10) days after such determination.
(c) In the event the determination of entitlement to indemnification
is to be made by Independent Counsel pursuant to Section 8(b), the Independent
Counsel shall be selected as provided in this Section 8(c). If a Change in
Control shall not have occurred, the Independent Counsel shall be selected by
the Board of Directors, and the Corporation shall give written notice to
Indemnitee advising him/her of the identity of the Independent Counsel so
selected. If a Change in Control shall have occurred, the Independent Counsel
shall be selected by Indemnitee (unless Indemnitee shall request that such
selection be made by the Board of Directors, in which event the preceding
sentence shall apply), and Indemnitee shall give written notice to the
Corporation advising it of the identity of the Independent Counsel so selected.
In either event, Indemnitee or the Corporation, as the case may be, may, within
seven (7) days after such written notice of selection shall have been given,
deliver to the Corporation or to Indemnitee, as the case may be, a written
objection to such selection. Such objection may be asserted only on the ground
that the Independent Counsel so selected does not meet the requirements of
"Independent Counsel" (as hereinafter defined) and the objection shall set forth
with particularity the factual basis of such assertion. The Corporation shall
pay any and all reasonable fees and expenses of Independent Counsel incurred by
such Independent Counsel in connection with acting pursuant to Section 8(b).
9. Presumptions and Effect of Certain Proceedings.
(a) If a Change in Control shall have occurred, when making a
determination with respect to entitlement to indemnification hereunder, the
person, persons or entity making such determination shall presume that
Indemnitee is entitled to indemnification under this Agreement if Indemnitee has
submitted a request for Indemnification in accordance with Section 8(a) and the
Corporation shall have the burden of proof to overcome that presumption in
connection with the making by any person, persons or entity of any determination
contrary to that presumption.
(b) If the person, persons or entity empowered or selected under
Section 8 to determine whether Indemnitee is entitled to indemnification shall
not have made such determination within forty-five (45) days after receipt by
the Corporation of the request therefor, the requisite determination of
entitlement to indemnification shall be deemed to have been made and Indemnitee
shall be entitled to such indemnification, absent a prohibition of such
indemnification under applicable law.
(c) The termination of any Proceeding or of any claim, issue or matter
related thereto by judgment, order, settlement or conviction, or upon a plea of
nolo contendere or its equivalent, shall not (except as otherwise expressly
provided in this Agreement) of itself adversely affect the right of Indemnitee
to indemnification or create a presumption that Indemnitee did not act in good
faith and in a manner which he/she reasonably believed to be in or not opposed
to the best interest of the Corporation or, with respect to any criminal
Proceeding, that Indemnitee had reasonable cause to believe that his/her conduct
was unlawful. In addition, neither the failure of
4
the Independent Counsel to have made a determination as to whether Indemnitee
has met any particular standard of conduct or had any particular belief, nor an
actual determination by the Independent Counsel that the Indemnitee has not met
such standard of conduct or did not have such belief, prior to the commencement
of proceedings by Indemnitee to secure an arbitral or judicial determination
that Indemnitee should be indemnified under applicable law shall be a defense to
Indemnitee's claim or create a presumption that Indemnitee has not met any
particular standard of conduct or did not have any particular belief.
10. Arbitration.
(a) All disputes between the parties with respect to the terms or
conditions of this Agreement shall be exclusively resolved by and through an
arbitration proceeding to be conducted under the auspices of the American
Arbitration Association (the "AAA") in Chicago, Illinois pursuant to the AAA's
Commercial Arbitration Rules (the "Arbitration"). Such Arbitration shall be
conducted in as expedited a manner as is then permitted by such rules. The
Arbitrators in any such Arbitration shall be persons who are expert in the
subject matter of the dispute. Both the foregoing agreement of the parties to
arbitrate any and all such claims, and the results, determination, finding,
judgment and/or award rendered through such Arbitration shall be final and
binding on the parties thereto and may be specifically enforced by legal
proceedings.
(b) The Corporation shall appoint one (1) Arbitrator and Indemnitee
shall appoint one (1) Arbitrator within the period of thirty (30) calendar days
commencing on the date of any claim hereunder, and the two Arbitrators so
appointed shall appoint a third Arbitrator within the period thirty (30)
calendar days commencing on the date on which the last of the two Arbitrators
has been selected. If either the Corporation or Indemnitee fails to select its
respective Arbitrator, or in the event that the two Arbitrators chosen by the
Corporation and the Indemnitee are unable or unwilling to select a third
Arbitrator within fourteen (14) calendar days following the selection of the
last of them, then the AAA shall select the Arbitrator that was not selected by
the Corporation, Indemnitee or the first two Arbitrators, as the case may be,
and the three Arbitrators shall constitute the arbitration panel for purposes of
the dispute.
(c) The Corporation shall bear all costs in connection with such
Arbitration including, without limitation, costs of the attorneys, witnesses and
experts; provided, however, that, with respect to any claim subject to this
Section 10 which is brought by Indemnitee, Indemnitee shall be required to repay
to the Corporation his or her respective share of such costs if the arbitration
panel shall have concluded that such claim is frivolous in nature. The parties
hereto acknowledge and agree that time is of the essence in this Arbitration
proceeding, and the Arbitrators shall be instructed and required to render their
decision within ten (10) calendar days following completion of the Arbitration.
(d) Any and legal proceedings to enforce this Agreement (except for
any action to compel arbitration hereunder or any action to enforce any award or
judgment rendered thereby), shall be governed in accordance with this Section
10.
5
(e) The Corporation shall be precluded from asserting in any judicial
proceeding or arbitration commenced pursuant to this Section 10 that the
procedures and presumptions of this Agreement are not valid, binding and
enforceable and shall stipulate in any such court or before any such arbitrator
that the Corporation is bound by all the provisions of this Agreement.
11. Non-Exclusivity; Survival of Rights; Insurance.
(a) The rights of indemnification and to receive advancement of
Expenses as provided by this Agreement shall not be deemed exclusive of any
other rights to which Indemnitee may at any time be entitled under applicable
law, the Restated Certificate of Incorporation, the By-Laws, any agreement, a
vote of stockholders, a resolution of Disinterested Directors or otherwise. No
amendment, alteration or repeal of the Restated Certificate of Incorporation or
the By-Laws or of any provision hereof shall be effective as to Indemnitee with
respect to any action or omission by such Indemnitee in his/her Corporate Status
prior to such amendment, alteration or repeal. To the extent that a change in
the General Corporation Law of the State of Delaware (whether by statute or
judicial action) permits greater indemnification by agreement than would be
afforded currently under the Corporation's Restated Certificate of
Incorporation, 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 such change. The provisions of this Agreement shall continue as to
an Indemnitee whose Corporate Status has ceased and shall inure to the benefit
of his/her heirs, executors and administrators.
(b) To the extent that the Corporation maintains an insurance policy
or policies providing liability insurance for directors, officers, employees,
agents or fiduciaries of the Corporation or of any other corporation,
partnership, joint venture, trust, employee benefit plan or other enterprise
which such person serves at the request of the Corporation, Indemnitee shall be
covered by such policy or policies in accordance with its or their terms to the
maximum extent of the coverage available for any such director, officer,
employee or agent under such policy or policies.
(c) The Corporation shall not be liable under this Agreement to make
any payment of amounts otherwise indemnifiable hereunder if and to the extent
that Indemnitee has otherwise actually received such payment under any insurance
policy, contract, agreement or otherwise.
12. 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 shall not be in any way be affected or impaired thereby; and (B) to
the fullest extent possible, the provisions of this Agreement shall be construed
so as to give effect to the intent manifested by the provision held invalid,
illegal or unenforceable.
13. Definitions. For purposes of this Agreement:
6
(a) "Arbitrator" means an attorney who is an Independent Counsel and
who is selected in accordance with Section 10(b) of this Agreement to act as
arbitrator.
(b) "Change in Control" means
(i) The Corporation is merged or consolidated or reorganized
into or with another corporation or other legal person (an
"Acquiror") and as a result of such merger, consolidation or
reorganization less than 75% of the outstanding voting securities
or other capital interests of the surviving, resulting or
acquiring corporation or other legal person are owned in the
aggregate by the stockholders of the Corporation, directly or
indirectly, immediately prior to such merger, consolidation or
reorganization, other than by the Acquiror or any corporation or
other legal person controlling, controlled by or under common
control with the Acquiror; or
(ii) The Corporation sells all or substantially all of its
business and/or assets to an Acquiror, of which less than 75% of
the outstanding voting securities or other capital interests are
owned in the aggregate by the stockholders of the Corporation,
directly or indirectly, immediately prior to such sale, other
than by a corporation or other legal person controlling,
controlled by or under common control with the Acquiror; or
(iii) There is a report filed on Schedule 13D or Schedule
14D-1 (or any successor schedule, form or report), each as
promulgated pursuant to the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), disclosing that any person or group
(as the terms "person" and "group" are used in Section 13(d)(3)
or Section 14(d)(2) of the Exchange Act and the rules and
regulations promulgated thereunder) has become the beneficial
owner (as the term "beneficial owner" is defined under Rule 13d-3
or any successor rule or regulation promulgated under the
Exchange Act) of 20% or more of the issued and outstanding shares
of voting securities of the Corporation; or
(iv) During any period of two consecutive years, individuals
who at the beginning of any such period constitute the directors
of the Corporation cease for any reason to constitute at least a
majority thereof unless the election, or the nomination for
election by the Corporation's stockholders, of each new director
of the Corporation was approved by a vote of at least two-thirds
of such directors of the Corporation then still in office who
were directors of the Corporation at the beginning of any such
period.
(c) "Corporate Status" means the status of a person who is or was a
director, officer, employee, agent or fiduciary of the Corporation or of any
other corporation, partnership, joint venture, trust, employee benefit plan or
other enterprise which such person is or was serving at the request of the
Corporation.
7
(d) "Disinterested Director" means a director of the Corporation who
is not and was not a party to the Proceeding in respect of which indemnification
is sought by Indemnitee.
(e) "Expenses" means all attorneys' fees, retainers, court costs,
transcript costs, fees of experts, witness fees, travel 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, or being or preparing to be a witness in a
Proceeding.
(f) "Indemnitee" means any person who is, or is threatened to be made,
a witness in or a party to any Proceeding as described in Sections 3, 4, 5 or 6
by reason of his/her Corporate Status.
(g) "Independent Counsel" means a law firm, or a member of a law firm,
that is experienced in matters of corporation law and neither presently is, nor
in the past five years has been, retained to represent: (i) the Corporation or
Indemnitee in any matter (other than with respect to the rights of Indemnitee
under this Agreement or other indemnitees under similar indemnity agreements);
or (ii) any other party to the Proceeding giving rise to a claim for
indemnification hereunder. Notwithstanding the foregoing, the term "Independent
Counsel" shall not include any person who, under the applicable standards of
professional conduct then prevailing, would have a conflict of interest in
representing either the Corporation or Indemnitee in an action to determine
Indemnitee's rights under this Agreement.
(h) "Proceeding" means any action, suit, arbitration, alternate
dispute resolution mechanism, investigation, administrative hearing or any other
proceeding whether civil, criminal, administrative or investigative, except one
initiated by an Indemnitee. For purposes of this definition, a counterclaim,
cross claim or third party claim in a Proceeding shall be considered a separate
and distinct Proceeding.
14. Notice. Indemnitee shall give the Corporation notice in writing as
soon as reasonably practicable of any claim made against him/her for which
indemnity will or could be sought under this Agreement. In addition, Indemnitee
shall, at the Corporation's expense, give the Corporation such information and
cooperation as it may reasonably require and as shall be within Indemnitee's
power. Notice to the Corporation shall be directed to Waste Management, Inc.
0000 Xxxxxxxxxxx Xxxx, Xxx Xxxxx, Xxxxxxxx 00000, ATTN: Secretary (or such
other address as the Corporation shall designate in writing to Indemnitee).
Notices to Indemnitee shall be directed to the address set forth below the
signature of the Indemnitee on this Agreement (or such other address as the
Indemnitee shall designate in writing to the Corporation). Notices shall be
deemed received three (3) days after the date postmarked, if sent by prepaid
certified mail, return receipt requested, properly addressed.
15. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall constitute one and the same original.
8
16. Applicable Law. This Agreement shall be governed by and construed in
accordance with Delaware law.
17. Successors and Assigns. This Agreement shall be binding upon the
Corporation and its successors and assigns.
18. Amendment. This Agreement may be amended or modified only by a
writing executed and signed by the parties hereto.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and signed as of the day and year first above written.
WASTE MANAGEMENT, INC.
By:_____________________________________
Secretary
Its_____________________________________
INDEMNITEE:
________________________________________
PRINT NAME: ____________________________
Address for Notices:
________________________________________
9
