INDEMNIFICATION AGREEMENT
This INDEMNIFICATION AGREEMENT is made this ____ day of __________, 199
("Agreement"), by and between MONARCH PROPERTIES, INC., a Maryland corporation
(the "Company"), and ________________ ("Indemnitee").
INTRODUCTORY STATEMENT
At the request of the Company, Indemnitee currently serves as a director or
officer of the Company and may, therefore, be subjected to claims, suits or
proceedings arising as a result of his service.
As an inducement to Indemnitee to continue to serve as such director or
officer, the Company has agreed to indemnify Indemnitee against expenses and
costs incurred by Indemnitee in connection with any such claims, suits or
proceedings, to the fullest extent that is lawful.
The parties by this Agreement desire to set forth their agreement regarding
indemnification.
NOW, THEREFORE, in consideration of the premises and the covenants
contained herein, the Company and Indemnitee do hereby covenant and agree as
follows:
Section 1. Definitions. For purposes of this Agreement:
(a) "Board of Directors" means the Board of Directors of the Company.
(b) "Change in Control" means a change in control of the Company
occurring after the Effective Date of a nature that would be required to be
reported in response to Item 6(e) of Schedule 14A of Regulation 14A (or in
response to any similar item on any similar schedule or form) promulgated under
the Securities Exchange Act of 1934 (the "Act"), whether or not the Company is
then subject to such reporting requirement; provided, however, that, without
limitation, such a Change in Control shall be deemed to have occurred if after
the Effective Date (i) any "person" (as such term is used in Sections 13(d) and
14(d) of the Act) is or becomes the "beneficial owner" (as defined in Rule 13d-3
under the Act), directly or indirectly, of securities of the Company
representing 50% or more of the combined voting power of the Company's then
outstanding securities without the prior approval of at least two-thirds of the
members of the Board of Directors in office immediately prior to such person
attaining such percentage interest; (ii) there occurs a proxy contest, or the
Company is a party to a merger, consolidation, sale of assets, plan of
liquidation or other reorganization not approved by at least two-thirds of the
members of the Board of Directors then in office, as a
consequence of which members of the Board of Directors in office immediately
prior to such transaction or event constitute less than a majority of the Board
of Directors thereafter; or (iii) during any period of two consecutive years,
other than as a result of an event described in clause (b)(ii) of this Section
1, individuals who at the beginning of such period constituted the Board of
Directors (including for this purpose any new director whose election or
nomination for election by the Company's stockholders was approved by a vote of
at least two-thirds of the directors then still in office who were directors at
the beginning of such period) cease for any reason to constitute at least a
majority of the Board of Directors.
(c) "Corporate Status" means the status of a person as a director,
officer, employee or agent of the Company 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 Company.
(d) "Disinterested Director" means a director of the Company who is
not and was not a party to the Proceeding in respect of which indemnification or
advance of Expenses is sought by Indemnitee.
(e) "Effective Date" means _____________, 199_.
(f) "Expenses" shall include all reasonable attorneys' 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, or being or preparing to be a witness in
a Proceeding.
(g) "Independent Counsel" means a law firm, or a member of a law firm,
selected by the Board of Directors by vote as set forth in Section 8(b), 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 Company or Indemnitee
in any matter material to either such party, 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 Company or Indemnitee in
an action to determine Indemnitee's rights under this Agreement.
(h) "MGCL" means the Maryland General Corporation Law.
(I) "Proceeding" includes any action, suit, arbitration, alternate
dispute resolution mechanism, investigation, administrative hearing or any other
proceeding, whether civil, criminal, administrative or investigative, except one
(i) initiated by an Indemnitee
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pursuant to Section 10 of this Agreement to enforce his rights under this
Agreement or (ii) pending on or before the Effective Date.
Section 2. Services by Indemnitee. Indemnitee agrees to serve as a director
of the Company and may at any time and for any reason resign from such position
(subject to any other contractual obligation or any obligation imposed by
operation of law), in which event the Company shall have no obligation under
this Agreement to continue Indemnitee in such position.
Section 3. Indemnification - General. The Company shall indemnify, and
advance Expenses to, Indemnitee (a) as provided in this Agreement and (b) to the
fullest extent permitted by Maryland law in effect on the date hereof and as
amended from time to time; provided, however, that no change in Maryland law
shall have the effect of reducing the benefits available to Indemnitee hereunder
based on Maryland law as in effect on the date hereof. The rights of Indemnitee
provided in this Section shall include, but shall not be limited to, the rights
set forth in the other Sections of this Agreement.
Section 4. Proceedings Other Than Proceedings by or in the Right of the
Company. Indemnitee shall be entitled to the rights of indemnification provided
in this Section 4 if, by reason of his Corporate Status, he is, or is threatened
to be, made a party to any threatened, pending, or completed Proceeding, other
than a Proceeding by or in the right of the Company. Pursuant to this Section 4,
Indemnitee shall be indemnified against all Expenses, judgments, penalties,
fines and amounts paid in settlement actually and reasonably incurred by him or
on his behalf in connection with a Proceeding by reason of his Corporate Status
to the maximum extent permitted by Maryland law in effect at the time of the
request for indemnification.
Section 5. Proceedings by or in the Right of the Company. Indemnitee shall
be entitled to the rights of indemnification provided in this Section 5 if, by
reason of his Corporate Status, he is made a party to any threatened, pending or
completed Proceeding brought by or in the right of the Company to procure a
judgment in its favor. Pursuant to this Section 5, Indemnitee shall be
indemnified against all amounts paid in settlement and all Expenses actually and
reasonably incurred by him or on his behalf in connection with such Proceeding
to the maximum extent permitted by Maryland law in effect at the time of the
request for indemnification.
Section 6. 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 Corporate Status, made a party to and is
successful, on the merits or otherwise, in the defense of any Proceeding, he
shall be indemnified against all Expenses actually and reasonably incurred by
him or on his behalf in connection therewith. Without limiting any other rights
of Indemnitee in this Agreement, if Indemnitee is not wholly successful in such
Proceeding but is successful, on the merits or otherwise, as to one or more but
less than all claims, issues or matters in such Proceeding, the
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Company shall indemnify Indemnitee against all Expenses actually and reasonably
incurred by him or on his behalf in connection with each successfully resolved
claim, issue or matter. For purposes of this Section 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.
Section 7. Advance of Expenses. The Company shall advance all reasonable
Expenses incurred by or on behalf of Indemnitee in connection with any
Proceeding to which Indemnitee is, or is threatened to be, made a party, within
ten days after the receipt by the Company 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 (a) a written affirmation by the Indemnitee of
the Indemnitee's good faith belief that the standard of conduct necessary for
indemnification by the Company as authorized by law and by this Agreement has
been met and (b) a written undertaking by or on behalf of Indemnitee to repay
any Expenses advanced if it shall ultimately be determined that such standard of
conduct has not been met or as required by Section 6 if Indemnitee is not wholly
successful.
Section 8. Procedure for Determination of Entitlement to Indemnification.
(a) To obtain indemnification under this Agreement, Indemnitee shall
submit to the Company 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 Company 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 promptly
be made in the specific case: (i) if a Change in Control shall have occurred, by
Independent Counsel in a written opinion to the Board of Directors, a copy of
which shall be delivered to Indemnitee; or (ii) if a Change in Control shall not
have occurred, (A) by the Board of Directors by a majority vote of a quorum
consisting of Disinterested Directors, 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) if so directed by a majority of the members of
the Board of Directors, by the stockholders of the Company. If it is determined
that Indemnitee is entitled to indemnification, payment to Indemnitee shall be
made within ten days after such determination. Indemnitee shall cooperate with
the person making such determination with respect to Indemnitee's entitlement to
indemnification, including
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providing to such person upon reasonable advance request any documentation or
information which is not privileged or otherwise protected from disclosure and
which is reasonably available to Indemnitee and reasonably necessary to such
determination. Any costs or expenses (including reasonable attorneys' fees and
disbursements) incurred by Indemnitee in so cooperating with the person making
such determination, in response to a request by such person, shall be borne by
the Company (irrespective of the determination as to Indemnitee's entitlement to
indemnification).
Section 9. Presumptions and Effect of Certain Proceedings.
(a) If a Change in Control shall have occurred, in making a
determination with respect to entitlement to indemnification hereunder, (i) the
person 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) of this Agreement, and (ii) the
Company shall have the burden of proof to overcome that presumption in
connection with the making of any determination contrary to that presumption.
(b) The termination of any proceeding by judgment, order, settlement,
conviction, a plea of nolo contendere or its equivalent, or an entry of an order
of probation prior to judgment, does not create a presumption that the
Indemnitee did not meet the requisite standard of conduct described in the MGCL
for indemnification.
Section 10. Remedies of Indemnitee.
(a) In the event that (i) a determination is made pursuant to Section
8 that Indemnitee is not entitled to indemnification under this Agreement, (ii)
advancement of Expenses is not timely made pursuant to Section 8, (iii) no
determination of entitlement to indemnification shall have been made pursuant to
Section 8(b) within 90 days after receipt by the Company of the request for
indemnification, (iv) payment of indemnification is not made pursuant to Section
6 within ten days after receipt by the Company of a written request therefor, or
(v) payment of indemnification is not made within ten days after a determination
has been made that Indemnitee is entitled to indemnification, Indemnitee shall
be entitled to an adjudication in an appropriate court of the State of Maryland,
or in any other court of competent jurisdiction, of his entitlement to such
indemnification or advancement of Expenses. Alternatively, Indemnitee, at his
option, may seek an award in arbitration to be conducted by a single arbitrator
pursuant to the commercial Arbitration Rules of the American Arbitration
Association. Indemnitee shall commence such proceeding seeking an adjudication
or an award in arbitration within 180 days after the date on which Indemnitee
first has the right to commence such proceeding pursuant to this Section 10(a).
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(b) If a Change in Control shall have occurred, in any judicial
proceeding or arbitration commenced pursuant to this Section 10 the Company
shall have the burden of proving that Indemnitee is not entitled to
indemnification or advancement of Expenses, as the case may be.
(c) If a determination shall have been made pursuant to Section 8(b)
of this Agreement that Indemnitee is entitled to indemnification, the Company
shall be bound by such determination in any judicial proceeding or arbitration
commenced pursuant to this Section 10, absent (i) a misstatement by Indemnitee
of a material fact, or an omission of a material fact necessary to make
Indemnitee's statement not materially misleading, in connection with the request
for indemnification, or (ii) a prohibition of such indemnification under
applicable law.
(d) In the event that Indemnitee, pursuant to this Section 10, seeks a
judicial adjudication of or an award in arbitration to enforce his rights under,
or to recover damages for breach of, this Agreement, Indemnitee shall be
entitled to recover from the Company, and shall be indemnified by the Company
against, any and all expenses (of the types described in the definition of
Expenses in Section 1) actually and reasonably incurred by him in such judicial
adjudication or arbitration, but only if he prevails therein. If it shall be
determined in said judicial adjudication or arbitration that Indemnitee is
entitled to receive part but not all of the indemnification or advancement of
expenses sought, the expenses incurred by Indemnitee in connection with such
judicial adjudication or arbitration shall be appropriately prorated.
Section 11. Non-Exclusivity; Insurance; Subrogation; Exclusions.
(a) The rights of indemnification and advance 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 charter or
Bylaws of the Company, any agreement, a vote of stockholders or a resolution of
directors, or otherwise. No amendment, alteration or repeal of this Agreement or
of any provision hereof shall limit or restrict any right of Indemnitee under
this Agreement in respect of any action taken or omitted by such Indemnitee in
his Corporate Status prior to such amendment, alteration or repeal.
(b) To the extent that the Company maintains liability insurance for
directors, officers, employees, or agents of the Company or of any other
corporation, partnership, joint venture, trust, employee benefit plan or other
enterprise which such person serves at the request of the Company, 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) In the event of any payment under this Agreement, the Company
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 take all
action necessary to secure such rights, including
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execution of such documents as are necessary to enable the Company to bring suit
to enforce such rights.
(d) The Company 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.
(e) Notwithstanding any other provision of this Agreement to the
contrary, the Company shall not be liable for indemnification or advance of
Expenses in connection with any settlement or judgment for xxxxxxx xxxxxxx or
for disgorgement of profits pursuant to Section 16(b) of the Securities Exchange
Act of 1934.
Section 12. Duration of Agreement. This Agreement shall continue until and
terminate ten years after the date that Indemnitee shall have ceased to serve as
a director, officer, employee, or agent of the Company or of any other
corporation, partnership, joint venture, trust, employee benefit plan or other
enterprise which Indemnitee served at the request of the Company; provided, that
the rights of Indemnitee hereunder shall continue until the final termination of
any proceeding then pending in respect of which Indemnitee is granted rights of
indemnification or advancement of expenses hereunder and of any proceeding
commenced by Indemnitee pursuant to Section 10 relating thereto. This Agreement
shall be binding upon the Company and its successors and assigns and shall inure
to the benefit of Indemnitee and his heirs, executors and administrators.
Section 13. 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; and (b) 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.
Section 14. Exception to Right of Indemnification or Advancement of
Expenses. Notwithstanding any other provision of this Agreement, Indemnitee
shall not be entitled to indemnification or advance of Expenses under this
Agreement with respect to any Proceeding brought by Indemnitee (other than a
proceeding under Section 10(a) of the Agreement), unless the bringing of such
Proceeding or making of such claim shall have been approved by the Board of
Directors.
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Section 15. Identical Counterparts. This Agreement may be executed in one
or more counterparts, each of which shall for all purposes be deemed to be an
original but all of which together shall constitute one and the same Agreement.
Only one such counterpart signed by the party against whom enforceability is
sought needs to be produced to evidence the existence of this Agreement.
Section 16. Headings. The headings of the paragraphs 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.
Section 17. Modification and Waiver. 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 such waiver constitute a continuing waiver.
Section 18. Notice by Indemnitee. Indemnitee shall promptly notify the
Company 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 advance of Expenses covered
hereunder.
Section 19. 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:
(a) If to Indemnitee, to:
(b) If to the Company to:
Monarch Properties, Inc.
0000 Xxxxxxx Xxx Xxxxxxxxx,
Xxxxx 000
Xxxxxx, Xxxxxxx 00000
Attn: Xx. Xxxx X. Xxxxx
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with a copy to:
LeBoeuf, Lamb, Xxxxxx & XxxXxx, L.L.P.
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxx X. Xxxxxx, Xx., Esq.
or to such other address as may have been furnished to Indemnitee by the Company
or to the Company by Indemnitee, as the case may be.
Section 20. Governing Law. The parties agree that this Agreement shall be
governed by, and construed and enforced in accordance with, the laws of the
State of Maryland.
Section 21. Miscellaneous. Use of the masculine pronoun shall be deemed to
include usage of the feminine pronoun where appropriate.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
day and year first above written.
ATTEST: MONARCH PROPERTIES, INC.
By: (SEAL)
------------------------- -------------------------
Xxxxxxx Xxxxxxx Xxxx X. Xxxxx
Secretary President
WITNESS: INDEMNITEE
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