INDEMNIFICATION AGREEMENT
Exhibit 10.2
THIS INDEMNIFICATION AGREEMENT (“Agreement”) is made as of this day of ,
2008, by and between V.F. Corporation, a Pennsylvania corporation (the “Company”), and
[ ] (“Indemnitee”).
WHEREAS, the Company and Indemnitee recognize the prevalent risk of corporate shareholder
litigation, in general, subjecting directors to the risk of expensive litigation; and
WHEREAS, the Company desires to attract and retain the services of highly qualified
individuals, such as Indemnitee, to serve as directors of the Company and to indemnify its
directors so as to provide them with the maximum indemnification protection permitted by law as
protection against such risks.
NOW, THEREFORE, the Company and Indemnitee, intending to be legally bound, hereby agree as
follows:
1. Indemnification.
a. Third Party and Derivative Proceedings. The Company shall indemnify Indemnitee if
Indemnitee is or was a party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or investigative
(including, without limitation, an action by or in the right of the Company or any affiliate of the
Company) by reason of the fact that Indemnitee is or was a director, officer, trustee, fiduciary,
employee or agent of the Company, or any affiliate of the Company, by reason of any action or
inaction on the part of Indemnitee while an officer or director, or by reason of the fact that
Indemnitee is or was serving at the request of the Company as a director, officer, trustee,
fiduciary, employee or agent of any other enterprise, against expenses (including attorneys’ fees),
and all liabilities and loss, including, judgments, fines and amounts paid in settlement (if such
settlement is approved pursuant to Section 2(f)) actually and reasonably incurred by
Indemnitee in connection with such action, suit or proceeding so long as the Indemnitee’s actions
are not determined, in a final judicial determination (as to which all rights of appeal have been
exhausted or lapsed), to have constituted willful misconduct or recklessness.
b. Mandatory Indemnification. To the extent that Indemnitee has been successful on the
merits or otherwise in defense of any action, suit or proceeding referred to in Section
1(a) or in defense of any claim, issue or matter therein, Indemnitee shall be indemnified
against expenses (including attorneys’ fees) actually and reasonably incurred by Indemnitee in
connection therewith. For purposes of this Section 1(c), the term “successful on the merits
or otherwise” shall include, but not be limited to, (i) any termination, withdrawal, or dismissal
(with or without prejudice) of any claim, action, suit or proceeding against Indemnitee without any
express finding of liability or guilt against him, or (ii) the expiration of a reasonable period of
time after the making of any claim or threat of an action, suit or proceeding without the
institution of the same and without any promise or payment made to induce a settlement.
2. Expenses and Indemnification Procedure.
a. Advancement of Expenses. The Company shall advance all reasonable out-of-pocket
expenses incurred by Indemnitee in connection with the investigation, defense, settlement or appeal
of any civil, criminal, administrative or investigative action, suit or proceeding referenced in
Section 1(a).
b. Undertaking to Repay Expenses. In the event that it shall ultimately be determined
that Indemnitee is not entitled to be indemnified for the expenses paid by the Company pursuant to
Section 2(a) hereof or otherwise or was not entitled to be fully indemnified, Indemnitee shall
repay to the Company such amount of the advanced expenses or the appropriate portion thereof.
c. Notice/Cooperation by Indemnitee. Indemnitee shall, as a condition precedent to his
right to be indemnified under this Agreement, give the Company notice in writing as soon as
practicable of any claim made against Indemnitee for which indemnification will or could be sought
under this Agreement. Notice to the Company shall be directed to VF Corporation, 000 Xxxxxxxxx
Xxxxxx Xxxx., Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000, Facsimile: (000) 000-0000, Attention: General
Counsel (or such other address as the Company may from time to time designate in writing to
Indemnitee). Notice shall be deemed received on the third business day after the date postmarked if
sent by domestic certified or registered mail, properly addressed; otherwise, notice shall be
deemed received when such notice shall actually be received by the Company. In addition, Indemnitee
shall give the Company such information and cooperation as it may reasonably require and as shall
be within Indemnitee’s power.
d. Procedure. Any indemnification and advances provided for in Section 1 and
this Section 2 shall be made no later than 45 days after receipt of the written request of
Indemnitee, coupled with appropriate documentation to support the requested payment. If a claim
under this Agreement, under any statute, or under any provision of the Company’s Articles of
Incorporation or Bylaws providing for indemnification is not paid in full by the Company within 45
days after receipt of a fully documented written request for payment thereof has first been
received by the Company, Indemnitee may, but need not, at any time thereafter bring an action
against the Company to recover the unpaid amount of the claim and, subject to Section 13,
Indemnitee shall also be entitled to be paid for the expenses (including attorneys’ fees) of
bringing such action. It shall be a defense to any such action (other than an action brought to
enforce a claim for expenses incurred in connection with any action, suit or proceeding in advance
of its final disposition) that Indemnitee has not met the standards of conduct which make it
permissible under applicable law for the Company to indemnify Indemnitee for the amount claimed,
but the burden of proving such defense shall be on the Company, and Indemnitee shall be entitled to
receive interim payments of expenses pursuant to Section 2(a) unless and until such defense
may be finally adjudicated by court order or judgment from which no further right of appeal exists.
It is the parties’ intention that if the Company contests Indemnitee’s right to indemnification,
the question of Indemnitee’s right to indemnification shall be for the court to decide, and neither
the failure of the Company (including its Board of Directors, any committee or subgroup of the
Board of Directors, independent legal counsel, or its shareholders) to have made a determination
that indemnification of Indemnitee is proper in the circumstances because Indemnitee has met the
applicable standard
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of conduct required by applicable law, nor an actual determination by the
Company (including its Board of Directors, any committee or subgroup of the Board of Directors,
independent legal counsel, or its shareholders) that Indemnitee has not met such applicable
standard of conduct, shall create a presumption that Indemnitee has or has not, as the case may be,
met the applicable standard of conduct.
e. Notice to Insurers. If, at the time of the receipt of a notice of claim pursuant to
Section 2(b), the Company has directors’ and officers’ liability insurance in effect, the
Company shall give prompt notice of the commencement of such proceeding to the insurers in
accordance with the procedures set forth in the respective policies. The Company shall thereafter
take all necessary or desirable action to cause such insurers to pay, on behalf of Indemnitee, all
amounts payable as a result of such proceeding in accordance with the terms of such policies.
f. Selection of Counsel. If the Company shall be obligated under Section 1 or
Section 2 to pay the expenses of any proceeding against Indemnitee, the Company shall be
entitled to assume the defense of such proceeding, with counsel approved by Indemnitee, upon the
delivery to Indemnitee of written notice of its election to do so. After delivery of such notice,
approval of such counsel by Indemnitee and the retention of such counsel by the Company, the
Company will not be liable to Indemnitee under this Agreement for any fees of any other counsel
subsequently incurred by Indemnitee with respect to the same proceeding; provided that (i)
Indemnitee shall have the right to employ separate counsel in any such proceeding at Indemnitee’s
expense; and (ii) if (A) the employment of counsel by Indemnitee has been previously authorized by
the Company, (B) Indemnitee shall have reasonably concluded that there may be a conflict of
interest between the Company and Indemnitee in the conduct of any such defense, or (C) the Company
shall not, in fact, have employed counsel to assume the defense of such proceeding, then the
reasonable fees and expenses of Indemnitee’s counsel shall be at the expense of the Company.
g. Settlements. The Company shall not be liable to Indemnitee 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 penalty or
limitation on Indemnitee without Indemnitee’s written consent. Neither the Company nor Indemnitee
will unreasonably withhold consent to any proposed settlement.
h. Change in Control.
(1) If, at any time subsequent to the date of this Agreement, members of the Incumbent Board
do not constitute a majority of the members of the Board of Directors, or there is otherwise a
Change in Control, then upon the request of Indemnitee, the Company shall cause the determination
of indemnification and advances required by Section 2 to be made by a third party (mutually
agreed upon by the parties or failing such agreement, as determined by the Chief Judge of the
Federal District Court for the Eastern District of Pennsylvania). The fees and expenses incurred by
the third party in making the determination of indemnification and advances shall be borne solely
by the Company. If such third party is unwilling and/or unable to make the determination of
indemnification and advances, then the
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Company shall cause the indemnification and advances to be
made by a majority vote or consent of a Board of Directors committee consisting solely of members
of the Incumbent Board.
(2) For purposes of this Agreement, a “Change in Control” shall be deemed to have occurred if
individuals who, as of the date of this Agreement, constitute the Board of Directors (the
"Incumbent Board”) cease for any reason to constitute at least a
majority of the Board of Directors; provided, however, that any individual becoming a director
subsequent to the date of this Agreement whose election, or nomination for election by the
Company’s shareholders, was approved by a vote of at least a three-quarters (3/4) of the directors
then comprising the Incumbent Board, (either by a specific vote or by approval of the proxy
statement of the Corporation in which such person is named as a nominee of the Corporation for
director), shall be considered as though such individual were a member of the Incumbent Board, but
excluding, for this purpose, any such individual whose initial assumption of office occurs as a
result of an actual or threatened election contest with respect to the election or removal of
directors or other actual or threatened solicitation of proxies or consents by or on behalf of a
Person other than the Board of Directors.
3. Additional Indemnification Rights:
a. Scope. Notwithstanding any other provision of this Agreement, the Company shall
indemnify Indemnitee to the fullest extent permitted by law, notwithstanding that such
indemnification is not specifically authorized by the other provisions of this Agreement, the
Company’s Articles of Incorporation, the Company’s Bylaws or by statute. In the event of any
change, after the date of this Agreement, in any applicable law, statute, or rule which expands the
right of a Pennsylvania corporation to indemnify a member of its board of directors, such changes
shall be, ipso facto, within the purview of Indemnitee’s rights and Company’s obligations under
this Agreement. In the event of any change in any applicable law, statute or rule which narrows the
right of a Pennsylvania corporation to indemnify a member of its board of directors, such changes
(to the extent not otherwise required by such law, statute or rule to be applied to this Agreement)
shall have no effect on this Agreement or the parties’ rights and obligations hereunder.
b. Non-exclusivity. The indemnification provided by this Agreement shall not be deemed
exclusive of any rights to which an Indemnitee may be entitled under the Company’s Articles of
Incorporation, its Bylaws, any agreement, any vote of Shareholders or disinterested directors, the
Pennsylvania Business Corporation Law of 1988, as amended, or otherwise, both as to action in
Indemnitee’s official capacity and as to action in another capacity while holding such office.
4. Continuation of Indemnity. All agreements and obligations of the Company contained
herein shall continue during the period Indemnitee is a director, officer, employee or agent of the
Company (or is or was serving at the request of the Company as a director, officer, employee or
agent of any other enterprise) and shall continue thereafter, so long as Indemnitee shall be
subject to any possible claim or threatened, pending or completed action, suit or proceeding,
whether civil, criminal or investigative, by reason of the fact that Indemnitee was a director,
officer, employee or agent of the Company or serving in any other capacity referred to herein.
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5. Partial Indemnification. 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
or penalties actually or reasonably incurred by him in the investigation, defense, appeal or
settlement of any civil or criminal action, suit or proceeding, but not for the total
amount thereof, the Company shall nevertheless indemnify Indemnitee for the portion of such
expenses, judgments, fines or penalties to which Indemnitee is entitled.
6. Mutual Acknowledgment. Both the Company and Indemnitee acknowledge that, in certain
instances, federal law or public policy may override applicable state law and prohibit the Company
from indemnifying its directors under this Agreement or otherwise. For example, the Company and
Indemnitee acknowledge that the Securities and Exchange Commission (the “SEC”) has taken the
position that indemnification is not permissible for liabilities arising under certain federal
securities laws, and federal legislation prohibits indemnification for certain ERISA violations.
Indemnitee understands and acknowledges that the Company has undertaken with the SEC to submit the
question of indemnification to a court in certain circumstances for a determination of the
Company’s right under public policy to indemnify Indemnitee.
7. Officer and Director Liability Insurance. The Company shall, from time to time,
make the good faith determination whether or not it is practicable for the Company to obtain and
maintain a policy or policies of insurance with reputable insurance companies providing the
directors of the Company with coverage for losses from wrongful acts, or to ensure the Company’s
performance of its indemnification obligations under this Agreement. Among other considerations,
the Company will weigh the costs of obtaining such insurance coverage against the protection
afforded by such coverage. In all policies of directors’ and officers’ liability insurance,
Indemnitee shall be insured in such a manner as to provide Indemnitee the same rights and benefits
as are accorded to the most favorably insured of the Company’s directors. Notwithstanding the
foregoing, the Company shall have no obligation to obtain or maintain such insurance if the Company
determines in good faith that such insurance is not reasonably available, if the premium costs for
such insurance are disproportionate to the amount of coverage provided, if the coverage provided by
such insurance is limited by exclusions so as to provide an insufficient benefit, or if Indemnitee
is covered by similar insurance maintained by an affiliate of the Company.
8. Severability. Nothing in this Agreement is intended to require or shall be
construed as requiring the Company to do or fail to do any act in violation of applicable law. The
Company’s inability, pursuant to court order, to perform its obligations under this Agreement shall
not constitute a breach of this Agreement. The provisions of this Agreement shall be severable as
provided in this Section 8. If this Agreement or any portion hereof shall be invalidated on
any ground by any court of competent jurisdiction, then the Company shall nevertheless indemnify
Indemnitee to the full extent permitted by any applicable portion of this Agreement that shall not
have been invalidated, and the balance of this Agreement not so invalidated shall be enforceable in
accordance with its terms.
9. Exceptions. Any other provision herein to the contrary notwithstanding, the Company
shall not be obligated pursuant to the terms of this Agreement:
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a. Claims Initiated by Indemnitee. To indemnify or advance expenses to Indemnitee with
respect to proceedings or claims initiated or brought voluntarily by Indemnitee and not by way of
defense (such as by counterclaim, cross-claim or third-party
claim), except with respect to proceedings brought to establish or enforce a right to
indemnification under this Agreement or any other statute or law or otherwise as required under the
Pennsylvania Business Corporation Law of 1988, as amended, but such indemnification or advancement
of expenses may be provided by Company in specific cases if the Board of Directors, at its sole
discretion, finds it to be appropriate;
b. Lack of Good Faith. To indemnify Indemnitee for any expenses incurred by Indemnitee
with respect to any proceeding instituted by Indemnitee to enforce or interpret this Agreement, if
a court of competent jurisdiction determines that each of the material assertions made by
Indemnitee in such proceeding was made in bad faith or was frivolous;
c. Insured Claims. To indemnify Indemnitee for expenses or liabilities of any type
whatsoever (including, but not limited to, judgments, fines, ERISA excise taxes or penalties, and
amounts paid in settlement) which have been paid directly to Indemnitee by an insurance carrier
under a policy of officers’ and directors’ liability insurance maintained by the Company or other
enterprise;
d. Claims Under Section 16(b). To indemnify Indemnitee for expenses or the payment of
profits arising from the purchase and sale by Indemnitee of securities in violation of Section
16(b) of the Exchange Act, or any similar successor statute;
e. Illegal Activity. To indemnify Indemnitee if a court of competent jurisdiction
finally adjudges that such indemnification is illegal, including, without limitation, by virtue of
such indemnification being in violation of public policy or any provision of law.
10. Interpretation; Construction of Certain Phrases.
a. The headings of particular provisions of this Agreement are inserted for convenience only
and will not be construed as a part of this Agreement or serve as a limitation or expansion on the
scope of any term or provision of this Agreement. The words “include,” “includes” or “including”
shall be deemed to be followed by the words “without limitation.” The words “hereof,” “herein”
and “herewith” and words of similar import shall, unless otherwise stated, be construed to refer to
this Agreement as a whole and not to any particular provision of this Agreement.
b. For purposes of this Agreement:
(1) references to the “Company” shall include, in addition to the resulting or surviving
corporation, any constituent entity (including any constituent of a constituent) absorbed in a
consolidation or merger which, if its separate existence had continued, would have had power and
authority to indemnify its directors, officers, and employees or agents, so that if Indemnitee is
or was a director, officer, employee or agent of such constituent entity, or is or was serving at
the request of such constituent entity as a director, officer, employee or agent of any other
enterprise, Indemnitee shall stand in the same position under the
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provisions of this Agreement with
respect to the resulting or surviving corporation as Indemnitee would have with respect to such
constituent entity if its separate existence had continued;
(2) references to any “other enterprise” shall include any corporation, trust, partnership,
joint venture, or other entity;
(3) references to “fines” shall include any excise taxes or penalties assessed on Indemnitee
with respect to an employee benefit plan;
(4) references to “serving at the request of the Company” shall include any service as a
director, officer, employee or agent of the Company which imposes duties on, or involves services
by, Indemnitee with respect to an employee benefit plan, its participants, or beneficiaries;
(5) references to “affiliates” shall mean any entity which, directly or indirectly, is in the
control of, is controlled by, or is under common control with, the Company; and
(6) references to “Sections” or “clauses” shall be to Sections or clauses of this Agreement.
11. Counterparts; Facsimile Signatures. This Agreement may be executed in any number
of counterparts (including by facsimile signature), each of which shall be deemed to be an original
and all of which together shall constitute one and the same document.
12. Successors and Assigns. This Agreement shall be binding upon and inure to the
benefit of the Company and its successors and assigns, and Indemnitee and Indemnitee’s estate,
heirs, legal representatives and assigns.
13. Attorneys’ Fees. If any action is instituted by Indemnitee under this Agreement to
enforce or interpret any of the terms hereof, Indemnitee shall be entitled to be paid all court
costs and expenses, including reasonable attorneys’ fees, incurred by Indemnitee with respect to
such action, unless as a part of such action, the court of competent jurisdiction determines that
each of the material assertions made by Indemnitee as a basis for such action was made in bad faith
or was frivolous. In the event of an action instituted by or in the name of the Company under this
Agreement or to enforce or interpret any of the terms of this Agreement, Indemnitee shall be
entitled to be paid all court costs and expenses, including attorneys’ fees, incurred by Indemnitee
in defense of such action (including with respect to Indemnitee’s counterclaims and cross-claims
made in such action), unless as a part of such action the court determines that each of
Indemnitee’s material defenses to such action was made in bad faith or was frivolous.
14. Notice. All notices, requests, demands, consents and other communications
hereunder shall be in writing and shall be given or made (and shall be deemed to have been duly
given or made upon receipt) by delivery in person, by overnight courier service, or by facsimile
with receipt confirmed (followed by delivery of an original via overnight courier service). The
address for notice to the Company shall be as set forth in Section 2(b), and
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the address
for notice to Indemnitee shall be as set forth on the signature page of this Agreement, or as
subsequently modified in a notice given in accordance with this Section 14.
15. Consent to Jurisdiction. The Company and Indemnitee each hereby irrevocably
consent to the jurisdiction of the courts of the Commonwealth of Pennsylvania for all purposes in
connection with any action or proceeding which arises out of or relates to this Agreement. Any
action or proceeding instituted under or to enforce this Agreement shall be brought only in the
state courts of the Commonwealth of Pennsylvania.
16. Subrogation. In the event of payment under this Agreement, Company shall be
subrogated to the extent of such payment to all of the rights of recovery of the Indemnitee, who
shall execute all papers required and shall do everything that may be necessary to secure such
rights, including the execution of such documents necessary to enable Company effectively to bring
suit to enforce such rights.
17. Choice of Law. This Agreement shall be governed by and its provisions construed in
accordance with the laws of the Commonwealth of Pennsylvania, as applied to contracts between
Pennsylvania residents entered into and to be performed within Pennsylvania.
18. Prior Agreement. Notwithstanding any contrary provision contained herein, this
Agreement supersedes and replaces any and all prior written indemnification agreements between the
Indemnitee and the Company.
[Signature page follows]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above
written.
| V.F. Corporation | ||||||
| By: | ||||||
| Name: | ||||||
| Title: | ||||||
| Indemnitee | ||||||
| Address for Notice: | ||||||
