LINCOLN NATIONAL CORPORATION Indemnification Agreement
Exhibit
10.1
LINCOLN
NATIONAL CORPORATION
This
Indemnification Agreement (“Agreement”) is made as of November 5, 2008, by and
between LINCOLN
NATIONAL CORPORATION, a corporation organized under the laws of the State
of Indiana (the “Corporation”), and _______________ (“Indemnitee”).
RECITALS
WHEREAS, highly competent
persons have become more reluctant to serve for-profit corporations as directors
or officers or in other capacities unless they are provided with adequate
protection through insurance or adequate indemnification against inordinate
risks of claims and actions against them arising out of their service to and
activities on behalf of the corporation;
WHEREAS, the Board of
Directors of the Corporation (the “Board”) has determined that, in order to
attract and retain qualified individuals to serve as members of the Board and/or
officers of the Corporation and/or its Subsidiaries (as defined in Section 2),
the Corporation will attempt to maintain on an ongoing basis, at its sole
expense, liability insurance to protect persons serving the Corporation and its
subsidiaries from certain liabilities. Although the furnishing of such insurance
has been a customary and widespread practice among United States based
corporations and other business enterprises, the Corporation believes that,
given current market conditions and trends, such insurance may be available to
it in the future only at higher premiums and with more exclusions. At the same
time, directors and/or officers are being increasingly subjected to expensive
and time-consuming litigation relating to the business and affairs of
corporations. The Corporation recognizes that the cost of defending
and otherwise participating in such litigation can be far greater than the
financial benefits of serving as a director and/or officer;
WHEREAS, the indemnification
sections of the Corporation’s Restated Articles of Incorporation, Amended and
Restated Bylaws and the Indiana Business Corporation Law (the “IBCL”), when read
together, provide that the indemnification provisions set forth in those
documents need not be exclusive and thus contemplate that agreements may be
entered into between the Corporation and members of its Board with respect to
indemnification;
WHEREAS, the uncertainties
relating to insurance have increased the difficulty of attracting and retaining
directors and officers;
WHEREAS, the Board has
determined that the increased difficulty in attracting and retaining directors
and officers is detrimental to the best interests of the Corporation and its
constituencies;
WHEREAS, it is reasonable,
prudent and necessary for the Corporation contractually to obligate itself to
indemnify, and to pay expenses on behalf of directors and officers to the
fullest extent permitted by applicable law so that they will serve or continue
to serve the Corporation free from undue concern that they will not be so
indemnified;
WHEREAS, this Agreement is in
furtherance of the Corporation’s Restated Articles of Incorporation, Amended and
Restated Bylaws and any resolutions adopted pursuant thereto, and the IBCL, and
shall not be deemed a substitute therefor, nor to diminish or abrogate any
rights of Indemnitee thereunder;
WHEREAS, the Corporation has
entered into this Agreement and assumed the obligations imposed on it hereby in
order to induce Indemnitee to serve or continue to serve as a director and/or
officer of the Corporation, and the Corporation acknowledges that Indemnitee is
relying upon this Agreement in serving as a director and/or officer of the
Corporation; and
WHEREAS, Indemnitee is willing
to serve, continue to serve and to consider additional service for or on behalf
of the Corporation on the condition that he or she be so
indemnified;
NOW, THEREFORE, in
consideration of the promises and the covenants contained herein, the
Corporation and Indemnitee do hereby covenant and agree as follows:
1. Services
to the Corporation. Indemnitee will
serve or continue to serve the Corporation and its Subsidiaries for so long as
Indemnitee is duly elected or appointed or until Indemnitee tenders his or her
resignation or otherwise ceases to be a director and/or officer.
2. Definitions. As used in this
Agreement:
(a) A
“Change in Control” shall be as defined in the Corporation’s Executive Severance
Benefit Plan or any successor plan.
(b) “Corporation”
shall include, in addition to the Corporation, any Subsidiary of which
Indemnitee is a director or officer, any corporation which results from or
survives a consolidation or merger with the Corporation as well as any
corporation absorbed in a consolidation or merger which, if its separate
existence had continued, would have had power and authority to indemnify its
directors, officers, employees or agents, so that if Indemnitee is or was a
director, officer, employee or agent of such constituent corporation, or is or
was serving at the request of such constituent corporation as a director,
officer, employee or agent of another corporation, partnership, joint venture,
trust or other enterprise, Indemnitee shall stand in the same position under the
provisions of this Agreement with respect to the resulting or surviving
corporation as Indemnitee would have with respect to such constituent
corporation if its separate existence had continued.
(c) “Disinterested
Director” means a director of the Corporation who is not and was not a party to
the Proceeding as defined herein in respect of which indemnification is sought
by Indemnitee.
(d) “Enterprise”
shall mean any other corporation, partnership, limited liability Corporation,
joint venture, trust, employee benefit plan or other enterprise of which
Indemnitee is or was serving at the request of the Corporation as a director,
member, partner, officer, employee, agent or fiduciary.
2
(e) “Expenses”
shall include all reasonable attorneys’ and accountants’ fees, retainers, court
costs, transcript costs, fees of experts, witness fees, travel expenses,
duplicating costs, printing and binding costs, telephone charges, postage,
delivery service fees, and all other disbursements or expenses of the types
customarily incurred in connection with prosecuting, defending, preparing to
prosecute or defend, investigating, being or preparing to be a witness in, or
otherwise being involved with, a Proceeding as defined in this Agreement.
Expenses also shall include Expenses incurred in connection with any appeal
resulting from any Proceeding, including without limitation the premium,
security for, and other costs relating to any cost bond, supersedeas bond, or
other appeal bond or its equivalent. Expenses, however, shall not include
amounts paid in settlement by Indemnitee or the amount of judgments or fines
against Indemnitee.
(f) “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
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 Corporation or Indemnitee in an
action to determine Indemnitee’s rights under this Agreement.
(g) The
term “Proceeding” shall include any threatened, pending or completed action,
suit, arbitration, alternate dispute resolution mechanism, investigation
(including but not limited to any internal corporate investigation), inquiry,
administrative hearing or any actual, threatened or completed proceeding,
including any and all appeals, whether brought in the right of the Corporation
or otherwise and whether of a civil, criminal, administrative or investigative
nature, in which Indemnitee was, is, or will be a party to, a witness in or
otherwise participates in by reason of the fact that Indemnitee is or was a
director or officer of the Corporation, by reason of any action taken by him or
her or of any action on his or her part while acting as director or officer of
the Corporation, or by reason of the fact that he or she is or was serving at
the request of the Corporation as a director, officer, employee or agent of
another Enterprise, in each case whether or not serving in such capacity at the
time any liability or expense is incurred for which indemnification,
reimbursement, or payment of expenses can be provided under this Agreement;
except one initiated by a Indemnitee to enforce his rights under this
Agreement. Any Indemnitee serving, in any capacity, (i) another
corporation of which a majority of the shares entitled to vote in the election
of its directors is held, directly or indirectly, by the Corporation, or (ii)
any employee benefit plan of the Corporation or of any corporation referred to
in clause (i), shall be deemed to be doing so at the request of the
Corporation.
(h) “Subsidiary”
means any subsidiary of the Corporation as defined by Rule 1-02(x) of Regulation
S-X and upon whose board the Indemnitee is serving as a director, any
corporation or other legal entity which results from or survives a consolidation
or merger with such Subsidiary as well as any corporation or other legal entity
absorbed in a consolidation or merger which, if its separate existence had
continued, would have had power and authority to indemnify its directors,
officers, employees or agents, so that if the Indemnitee is or was a director,
officer, employee or agent of such constituent corporation or other legal
entity, or is or was serving at the request of such constituent corporation or
other legal entity as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other Enterprise, the
Indemnitee shall stand in the same position under the provisions of this
Agreement with respect to the resulting or surviving corporation as the
Indemnitee would have with respect to such constituent corporation if its
separate existence had continued.
3
(i) References
to “fines” shall include, but are not limited to, any excise tax assessed with
respect to any employee benefit plan; references to “serving at the request of
the Corporation” shall include any service as a director, officer, employee or
agent of the Corporation which imposes duties on, or involves services by, such
director, officer, employee or agent with respect to an employee benefit plan,
its participants or beneficiaries; and a person who acted in good faith and in a
manner he or she reasonably believed to be in the best interests of the
participants and beneficiaries of an employee benefit plan shall be deemed to
have acted in a manner “not opposed to the best interests of the Corporation” as
referred to in this Agreement.
3. Indemnification. If Indemnitee is, or is
threatened to be made, a party to, a witness in or otherwise participates in any
Proceeding, the Corporation shall indemnify Indemnitee, to the extent legally
permissible, against all Expenses, judgments, liabilities, fines, penalties and
amounts paid in settlement actually and reasonably incurred by Indemnitee or on
his or her behalf in connection with the Proceeding if Indemnitee (a)(i)
conducted himself or herself in good faith; (ii) reasonably believed that
Indemnitee’s conduct was in the best interests of the Corporation or in all
other cases, at least not opposed to the best interests of the Corporation; and
(iii) in the case of any criminal proceeding, had reasonable cause to believe
Indemnitee’s conduct was lawful, or had no reasonable cause to believe
Indemnitee’s conduct was unlawful; or (b) engaged in conduct for which
Indemnitee shall not be liable under any provisions of the Corporation’s
Restated Articles of Incorporation or Amended and Restated Bylaws.
4. Indemnification for Expenses
of a Party Who is Wholly or Partly Successful.
(a) Notwithstanding
Section 3 above, in any Proceeding, if Indemnitee is not wholly successful in
such Proceeding, but has been adjudged to be liable to the Corporation as to one
or more but less than all claims, issues or matters in such Proceeding, no
indemnification shall be made in respect of any claim, issue or matter as to
which Indemnitee shall have been adjudged to be liable to the Corporation,
unless and only to the extent that an Indiana Court (as defined in Section 22)
or any court in which the Proceeding was brought shall determine upon
application that, despite the adjudication of liability to the Corporation, in
view of all the circumstances of the case, Indemnitee is fairly and reasonably
entitled to such indemnification. However, in any Proceeding, the
Corporation shall indemnify Indemnitee against all Expenses actually and
reasonably incurred by him or her or on his or her behalf and, to the extent
permitted by law, amounts paid in settlement, in connection with each claim,
issue or matter as to which Indemnitee is successful on the merits or has
reached a settlement.
(b) To
the extent that Indemnitee has been successful on the merits or otherwise in
defense of any Proceeding, or in defense of any claim, issue or matter therein,
Indemnitee shall be indemnified by the Corporation to the fullest extent
authorized by the IBCL, as the same exists or may hereafter be amended, against
all Expenses actually and reasonably incurred or suffered by Indemnitee or on
Indemnitee’s behalf in connection therewith. Indemnification pursuant
to this Section 4(b) shall not require a determination pursuant to Section 9 of
this Agreement.
(c) For
purposes of this Section 4 and without limitation, the termination of any claim,
issue or matter in a Proceeding in which Indemnitee is a defendant by dismissal,
with or without prejudice, shall be deemed to be a successful result as to such
claim, issue or matter.
4
5. Additional
Indemnification.
(a) Notwithstanding
any limitation in Sections 3 or 4, the Corporation shall indemnify Indemnitee to
the extent permitted by law if Indemnitee is a party to or threatened to be made
a party to, a witness in or otherwise participates in any Proceeding against all
Expenses, judgments, fines and amounts paid in settlement actually and
reasonably incurred by Indemnitee in connection with the Proceeding (i) unless
Indemnitee’s conduct constitutes a breach of Indemnitee’s duty of loyalty to the
Corporation; (ii) except for liability for acts or omissions not in good faith
or which involve intentional misconduct or a knowing violation of law; or (iii)
except for liability related to any transaction from which Indemnitee derived an
improper benefit.
(b) For
purposes of this Agreement, the meaning of the phrase “to the extent permitted
by law" shall include, but not be limited to:
i. the
fullest extent permitted by the provision of the IBCL that authorizes or
contemplates additional indemnification by agreement, or the corresponding
provision of any amendment to or replacement of the IBCL; and
ii. the
fullest extent authorized or permitted by any amendments to or replacements of
the IBCL adopted after the date of this Agreement that increase the extent to
which a corporation may indemnify its officers and directors.
6. Exclusions. Notwithstanding
any provision in this Agreement, the Corporation shall not be obligated under
this Agreement to make any payment for indemnity including Expenses, judgments,
liabilities, fines and amounts paid in settlement to the extent that the amount
for which Indemnitee seeks indemnification, or a portion thereof:
(a) has
actually been made to or on behalf of Indemnitee under any insurance policy,
contract, agreement or otherwise; or
(b) in
connection with any Proceeding (or any part of any Proceeding) initiated or
brought voluntarily by Indemnitee, including any Proceeding (or any part of any
Proceeding) initiated by Indemnitee against the Corporation or its directors,
officers or employees, unless (i) the Board authorized the Proceeding
(or any part of any Proceeding) prior to its initiation or (ii) the Corporation
provides the indemnification, in its sole discretion, pursuant to the powers
vested in the Corporation under applicable law.
7. Notification
of Indemnifiable Claim. Indemnitee shall,
as a condition precedent to his right to be indemnified under this Agreement,
give the Corporation notice in writing as soon as practicable of any claim made
against Indemnitee for which indemnification will or could be sought under this
Agreement. Indemnitee agrees promptly to notify the Corporation in
writing upon being served with any summons, citation, subpoena, complaint,
indictment, information or other document relating to any Proceeding or matter
which will or could be subject to indemnification or payment of Expenses covered
hereunder. The Corporate Secretary of the Corporation shall, promptly upon
receipt of such notice, advise the Board in writing of such
notice. The failure of Indemnitee to timely notify the Corporation
shall not relieve the Corporation of any obligation which it may have to the
Indemnitee under this Agreement or otherwise, unless such failure to provide
timely notice materially prejudices the Corporation. The omission to
notify the Corporation will not relieve the Corporation from any liability for
indemnification which it may have to Indemnitee otherwise than under this
Agreement.
5
8. Advancement
of Expenses. Any Expenses
incurred by Indemnitee in connection with any Proceeding in which Indemnitee
was, is, or will be a party to, a witness in or otherwise participates by reason
of the fact that Indemnitee is or was a director or officer of the Corporation,
by reason of any action taken by him or her or of any action on his or her part
while acting as director or officer of the Corporation, or by reason of the fact
that he or she is or was serving at the request of the Corporation as a
director, officer, employee or agent of another Enterprise shall be paid by the
Corporation in advance of the final disposition of such matter within ten (10)
days after the receipt by the Corporation of a statement or statements from
Indemnitee requesting such advancement; provided, however, that the
payment of such Expenses incurred by Indemnitee in advance of the final
disposition of such matter under this Section 8 shall be made only upon receipt
of (i) a written affirmation of Indemnitee’s good faith belief that Indemnitee
has met the applicable standard of conduct set forth herein, (ii) an unlimited
written undertaking by Indemnitee to repay any Expenses so advanced in the event
that it shall ultimately be determined that Indemnitee is not entitled to be
indemnified by the Corporation, and (iii) a determination is made that the facts
then known to those making the determination would not preclude indemnification
under Section 3. Payment of Expenses pursuant to this Section shall
be unsecured and interest free. Payment of Expenses shall be made
without regard to Indemnitee’s ability to repay the expenses and without regard
to Indemnitee’s ultimate entitlement to indemnification under the other
provisions of this Agreement. Such payment shall include any and all
reasonable Expenses incurred pursuing an action to enforce this right of payment
of Expenses, including Expenses incurred preparing and forwarding statements to
the Corporation to support the payment claimed. This Section 8 shall
not apply to any claim for Expenses made by Indemnitee for which indemnity is
excluded pursuant to Section 6. Notwithstanding anything else
contained in this Section 8, to the extent that the Corporation is prohibited by
applicable law from making payment of Expenses to Indemnitee prior to the
Corporation’s determination that Indemnitee is entitled to indemnification, the
Corporation shall not pay Expenses to the Indemnitee pursuant to this
Section. Nothing herein shall be construed to limit the Corporation’s
right to seek damages from Indemnitee, including but not limited to the full
amount of the Expenses paid by the Corporation hereunder. The selection by the
Corporation of defense counsel for Indemnitee in connection with any Proceeding,
shall be made only with the approval of the Indemnitee, which approval shall not
be unreasonably withheld, upon the delivery to Indemnitee of written notice of
the Corporation’s election to do so. After delivery of such notice, approval of
such counsel by Indemnitee and the retention of such counsel by the Corporation,
the Corporation will not be liable to Indemnitee under this Agreement for any
fees of counsel subsequently incurred by Indemnitee with respect to the same
Proceeding, provided that (i) Indemnitee shall have the right to employ his
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
Corporation, (B) Indemnitee shall have reasonably concluded that there may be a
conflict of interest between the Corporation and Indemnitee in the conduct of
any such defense, or (C) the Corporation shall not, in fact, have employed
counsel to assume the defense of such Proceeding, then the fees and expenses of
Indemnitee’s counsel shall be at the expense of the Corporation.
6
9. Procedure Upon Application
for Indemnification.
(a) Upon
final disposition of a Proceeding for which indemnification is sought pursuant
to this Agreement, Indemnitee shall submit promptly (and in any event, no later
than the applicable statute of limitations) to the Board a written request for
indemnification averring that he or she has met the applicable standard of
conduct set forth herein. Any indemnification made under this
Agreement shall be made by the Corporation only as authorized in the specific
case upon a determination that indemnification of the Indemnitee is proper in
the circumstances because Indemnitee has met the applicable standard of
conduct. Such determination shall be made in the following manner:
(i) if a Change in Control shall have occurred and the Indemnitee is not a
director at the time of such determination, by Independent Counsel in a written
opinion to the Board, a copy of which shall be delivered to Indemnitee; and (ii)
in any other circumstance: (A) if there are two or more Disinterested Directors
on the Board, by the Board by a majority vote of a quorum of the Disinterested
Directors, or if a quorum of Disinterested Directors does not exist, by a
majority of the members of a committee of two or more Disinterested Directors
duly designated by the Board (directors who are not Disinterested Directors may
participate in such designation); or (B) by Independent Counsel. Indemnitee
shall cooperate with the person, persons or entity making such determination
with respect to Indemnitee's entitlement to indemnification, including providing
to such person, persons or entity 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
attorneys’ fees and disbursements) incurred by Indemnitee in so cooperating with
the person, persons or entity making such determination shall be borne by the
Corporation (irrespective of the determination as to Indemnitee’s entitlement to
indemnification) and the Corporation hereby indemnifies and agrees to hold
Indemnitee harmless therefrom.
7
(b) In
the event the determination of entitlement to indemnification is to be made by
Independent Counsel pursuant to Section 9(a) hereof, the Independent Counsel
shall be selected as provided in this Section 9 (b). If a Change in Control
shall not have occurred, the Independent Counsel shall be selected (x) if there
are two or more Disinterested Directors on the Board, by the Board by a majority
vote of a quorum of the Disinterested Directors, or if a quorum of
Disinterested Directors does not exist by a majority of the members of a
committee of two or more Disinterested Directors appointed by vote or (y) if
there are fewer than two Disinterested Directors, by the Board, in which
selection directors who do not qualify as Disinterested Directors may
participate. Such selection must be made within ten (10) days of
submission of a written request by Indemnitee for indemnification pursuant to
Section 9(a), and the Corporation shall give written notice to Indemnitee
advising him or 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 within ten (10) days of submission of a
written request by Indemnitee for indemnification pursuant to Section 9(a),
(unless Indemnitee shall request that such selection be made by the Board, 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 ten (10) 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; provided, however, that such
objection may be asserted only on the ground that the Independent Counsel so
selected does not meet the requirements of “Independent Counsel” as defined in
Section 2 of this Agreement, and the objection shall set forth with
particularity the factual basis of such assertion. The objection must also
include a proposed substitute Independent Counsel. If objection
including a proposed substituted Independent Counsel is timely made, such
substituted Independent Counsel shall serve as Independent Counsel unless
objected to within ten (10) days. An objection to the substituted
Independent Counsel may be asserted only on the ground that the Independent
Counsel so selected does not meet the requirements of “Independent Counsel” as
defined in Section 2 of this Agreement, and the objection shall set forth with
particularity the factual basis of such assertion. If written
objection is made, the Independent Counsel or substituted Independent Counsel
proposed may not serve as Independent Counsel unless and until such objection is
withdrawn or a court has determined that such objection is without
merit. If, within thirty (30) days after submission by Indemnitee of
a written request for indemnification pursuant to Section 9(a) hereof, the
parties have not agreed upon the selection of the Independent Counsel, either
the Corporation or Indemnitee may petition a court of competent jurisdiction for
resolution of any objection which shall have been made by the Corporation or
Indemnitee to the other’s selection of Independent Counsel and/or for the
appointment as Independent Counsel of a person or entity selected by the Court
or by such other person or entity as the Court shall designate, and the person
or entity with respect to whom all objections are so resolved or the person or
entity so appointed shall act as Independent Counsel under Section 9(a)
hereof.
8
10. Presumptions and Effect of
Certain Proceedings.
(a) The
submission of the Application for Indemnification to the Board shall create a
rebuttable presumption that the Indemnitee is entitled to indemnification under
this Agreement, and the Board or Independent Counsel, as the case may be, shall
within sixty (60) days after submission of the Application for Indemnification
specifically determine that the Indemnitee is so entitled, unless it or they
possess sufficient evidence to rebut the presumption that Indemnitee has met the
applicable standard of conduct. If a determination shall have been
made pursuant to this Agreement that Indemnitee is entitled to indemnification,
the Corporation shall be bound by such determination in any judicial proceeding
commenced pursuant to Section 11, 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. Neither the failure of the Corporation (including by its
directors or Independent Counsel) to have made a determination prior to the
commencement of any action pursuant to this Agreement that indemnification is
proper in the circumstances because Indemnitee has met the applicable standard
of conduct, nor an actual determination by the Corporation (including by its
directors or Independent Counsel) that Indemnitee has not met such applicable
standard of conduct, shall be a defense to the action or create a presumption
that Indemnitee has not met the applicable standard of
conduct. Moreover, the fact that the Corporation has paid the
Indemnitee’s Expenses pursuant to Section 8 herein shall not create a
presumption that Indemnitee has met the applicable standard of conduct for
indemnification.
(b) If
the person, persons or entity empowered or selected under Section 9 of this
Agreement to determine whether Indemnitee is entitled to indemnification shall
not have made a determination within sixty (60) days after receipt by the
Corporation of the request therefore, the requisite determination of entitlement
to indemnification shall be deemed to have been made and Indemnitee shall be
entitled to such indemnification, 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; provided, however, that such 60-day period may be extended for a reasonable
time, not to exceed an additional thirty (30) days, if the person, persons or
entity making the determination with respect to entitlement to indemnification
in good faith requires such additional time for the obtaining or evaluating of
documentation and/or information relating thereto.
(c) The
termination of any Proceeding or of any claim, issue or matter therein, by
judgment, order, settlement, 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
reasonably believed to be in or not opposed to the best interests of the
Corporation.
(d) For
purposes of any determination of good faith, Indemnitee shall be deemed to have
acted in good faith if Indemnitee’s action is based on the books or records of
the Enterprise, including financial statements, on information supplied to
Indemnitee by the officers of the Enterprise in the course of their duties, on
the advice of legal counsel for the Enterprise or on information or records
given or reports made to the Enterprise by an independent certified public
accountant or by an appraiser or other expert selected with reasonable care by
the Enterprise. The provisions of this Section 10 (d) shall not be
deemed exclusive or to limit in any way the other circumstances in which the
Indemnitee may be deemed to have met the applicable standard of conduct set
forth in this Agreement.
9
(e) To
the extent legally permissible, the knowledge and/or actions, or failure to act,
of any director, officer, agent or employee of the Enterprise shall not be
imputed to Indemnitee for purposes of determining the right to indemnification
under this Agreement.
11. Remedies of
Indemnitee.
(a) In
the event that (i) a determination is made pursuant to Section 9 of this
Agreement that Indemnitee is not entitled to indemnification under this
Agreement, (ii) payment of Expenses is not timely made pursuant to Section 8 of
this Agreement, (iii) no determination of entitlement to indemnification shall
have been made pursuant to Section 9 of this Agreement within sixty (60) days
after receipt by the Corporation of the request for indemnification, or (iv)
payment of indemnification pursuant to this Agreement is not made within ten
(10) days after a determination has been made that Indemnitee is entitled to
indemnification, Indemnitee shall be entitled to an adjudication by a court of
his entitlement to such indemnification or payment of Expenses.
(b) In
the event that Indemnitee successfully sues the Corporation for indemnification
or payment of Expenses, and is successful in whole or in part, Indemnitee shall
be entitled to be paid by the Corporation for the Expense of prosecuting such
suit. If the Corporation sues Indemnitee to recover Expenses paid
prior to final disposition under Section 8 and Indemnitee is successful in
defending such suit, in whole or in part, Indemnitee shall be entitled to be
paid the Expense of defending such suit.
(c) In
the event that a determination shall have been made under this Agreement that
Indemnitee is not entitled to indemnification, any judicial proceeding commenced
pursuant to this Section shall be conducted in all respects as a de novo trial
on the merits and Indemnitee shall not be prejudiced by reason of that adverse
determination. In any judicial proceeding pursuant to this Section, the
Corporation shall have the burden of proving Indemnitee is not entitled to
indemnification or payment of Expenses, as the case may be.
(d) The
Corporation shall be precluded from asserting in any judicial proceeding
commenced pursuant to this Section that the procedures and presumptions of this
Agreement are not valid, binding and enforceable and shall stipulate in any such
court that the Corporation is bound by all the provisions of this Agreement. The
Corporation shall to the extent permitted by law, indemnify Indemnitee against
any and all Expenses and, if requested by Indemnitee, shall (within ten (10)
days after receipt by the Corporation of a written request therefore) pay in
advance such Expenses to Indemnitee, which are incurred by Indemnitee in
connection with any action brought by Indemnitee for indemnification or payment
of Expenses from the Corporation under this Agreement or under any directors’
and officers’ liability insurance policies maintained by the Corporation,
regardless of whether Indemnitee ultimately is determined to be entitled to such
indemnification, payment of Expenses or insurance recovery, as the case may
be.
10
12. Non-exclusivity; Survival of
Rights; Insurance; Subrogation.
(a) The
rights of indemnification and to receive payment 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 Corporation’s Restated
Articles of Incorporation, the Corporation’s Amended and Restated Bylaws, any
agreement, a resolution of directors or any other authorization
adopted by shareholders. 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
prior to such amendment, alteration or repeal. To the extent that a change in
Indiana law, whether by statute or judicial decision, permits greater
indemnification or payment of Expenses than would be afforded currently under
the Corporation’s Restated Articles of Incorporation, Amended and Restated
Bylaws 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. No right or remedy herein conferred is intended to be exclusive of
any other right or remedy, and every other right and remedy shall be cumulative
and in addition to every other right and remedy given hereunder or now or
hereafter existing at law or in equity or otherwise. The assertion or employment
of any right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other right or remedy.
(b) The
Corporation shall, from time to time, make the good faith determination whether
or not it is practicable for the Corporation to obtain and maintain a policy or
policies of insurance with reputable insurance companies providing the
directors, officers, employees, or agents of the Corporation with coverage for
losses from wrongful acts, or to ensure the Corporation’s performance of its
indemnification obligations under this Agreement. Among other
considerations, the Corporation will weigh the costs of obtaining such insurance
coverage against the protection afforded by such coverage. To the
extent that the Corporation maintains an insurance policy or policies providing
liability insurance for directors of the Corporation or of any other
corporation, partnership, limited liability Corporation, joint venture, trust,
employee benefits plan or other enterprise which the Indemnitee serves at the
request of the Corporation, Indemnitee shall be covered by such policy or
policies in such manner as to provide the Indemnitee the same rights and
benefits as are accorded to the most favorably insured of the Corporation’s
directors. The Corporation shall thereafter take all necessary or
desirable action to cause such insurers to pay, on behalf of the Indemnitee, all
amounts payable as a result of such proceeding in accordance with the terms of
such policies.
(c) In
the event of any payment under this Agreement, the Corporation shall be
subrogated to the extent of such payment to all of the rights of recovery of
Indemnitee, who shall execute all papers required and take all actions necessary
to secure such rights, including execution of such documents as are necessary to
enable the Corporation to bring suit to enforce such rights.
13. Duration
of Agreement. This
Agreement shall continue until and terminate upon the later of: (a) 10 years
after the date that Indemnitee shall have ceased to serve as a director or
officer of the Corporation or as a director, officer, employee or agent of any
other corporation, partnership, joint venture, trust, employee benefit plan or
other enterprise which Indemnitee served at the request of the Corporation (“Ten
Year Anniversary Date”); or (b) 1 year after the final termination of each and
every Proceeding, commenced prior to the Ten Year Anniversary Date.
11
14. Successors
and Assigns.
(a) This
Agreement shall be binding upon and be enforceable by the parties hereto and
their respective successors and 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 Corporation), shall continue
as to Indemnitee after he or she has ceased to be a director, officer, employee
or agent of the Corporation and shall inure to the benefit of Indemnitee and his
or her heirs, assigns, executors, devisees and administrators and other legal
representatives.
(b) The
Corporation shall require and cause any successor (whether direct or indirect by
purchase, merger, consolidation or otherwise) to all, substantially all or a
substantial part, of the business and/or assets of the Corporation, by written
agreement in form and substance satisfactory to Indemnitee, expressly to assume
and agree to perform this Agreement in the same manner and to the same extent
that the Corporation would be required to perform if no such succession had
taken place.
15. 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 shall remain enforceable to the fullest extent permitted by law; (b)
such provision or provisions shall be deemed reformed to the extent necessary to
conform to applicable law and to give the maximum effect to the intent of the
parties hereto; and (c) to the fullest extent possible, the provisions of this
Agreement (including, without limitation, each portion of any Section of this
Agreement containing any such provision held to be invalid, illegal or
unenforceable, that is not itself invalid, illegal or unenforceable) shall be
construed so as to give effect to the intent manifested thereby.
16. Entire
Agreement. Except as
otherwise specified herein, this Agreement constitutes the entire agreement
between the parties hereto with respect to the subject matter hereof and
supersedes all prior agreements and understandings, oral, written and implied,
between the parties hereto with respect to the subject matter
hereof.
17. Effectiveness
of Agreement. This Agreement
shall be effective as of the date set forth on the first page and may apply to
acts or omissions of Indemnitee which occurred prior to such date if Indemnitee
was an officer, director, employee or other agent of the Corporation, or was
serving at the request of the Corporation as a director, officer, employee or
agent of another corporation, partnership, limited liability Corporation, joint
venture, trust or other enterprise, at the time such act or omission occurred,
and shall continue to exist after the rescission or restrictive modification of
this Agreement with respect to events occurring prior to such rescission or
restrictive modification.
18. Modification
and Waiver. No
supplement, modification or amendment of this Agreement shall be binding unless
executed in writing by the parties thereto. No waiver of any of the provisions
of this Agreement shall be deemed or shall constitute a waiver of any other
provisions of this Agreement nor shall any waiver constitute a continuing
waiver.
19. Notices. All notices,
requests, demands and other communications under this Agreement shall be in
writing and shall be deemed to have been duly given (a) if delivered by hand and
receipted for by the party to whom said notice or other communication shall have
been directed, or (b) mailed by certified or registered mail with postage
prepaid, on the third business day after the date on which it is so
mailed:
12
If to
Indemnitee, at the address indicated on the signature page of this Agreement, or
such other address as Indemnitee shall provide to the Corporation.
If to the
Corporation, to
Lincoln
National Corporation
Attention: Corporate
Secretary
000 X.
Xxxxxx Xxxxxxx Xxxx
Xxxxxx,
Xxxxxxxxxxxx 00000
or to any
other address as may have been furnished to Indemnitee by the
Corporation.
20. Contribution. The Corporation hereby
agrees to fully indemnify and hold harmless Indemnitee from any claims for
contribution which may be brought by officers, directors or employees of the
Corporation other than Indemnitee who may be jointly liable with
Indemnitee.
21. Specific
Performance. The Corporation
and Indemnitee agree that a monetary remedy for breach of this Agreement, at
some later date, may be inadequate, impracticable and difficult of proof, and
further agree that such breach may cause Indemnitee irreparable
harm. Accordingly, the parties hereto agree that Indemnitee may
enforce this Agreement by seeking injunctive relief and/or specific performance
hereof, without any necessity of showing actual damage or irreparable harm and
that by seeking injunctive relief and/or specific performance, Indemnitee shall
not be precluded from seeking or obtaining other relief to which he or she may
be entitled. The Corporation and Indemnitee further agree that
Indemnitee shall be entitled to such specific performance and injunctive relief,
including temporary restraining orders, preliminary injunctions and permanent
injunctions, without the necessity of posting bonds or other undertaking in
connection therewith. The Corporation acknowledges that in the
absence of a waiver, a bond or undertaking may be required of Indemnitee by an
Indiana Court, (as defined in Section 2) and the Corporation hereby waives any
such requirement of such a bond or undertaking.
22. Applicable
Law and Consent to Jurisdiction. This Agreement and the legal
relations among the parties shall be governed by, and construed and enforced in
accordance with, the laws of the State of Indiana, without regard to its
conflict of laws rules. The Corporation and Indemnitee hereby
irrevocably and unconditionally (i) agree that any action or proceeding arising
out of or in connection with this Agreement shall be brought only in
the appropriate court in the State of Indiana (the "Indiana Court"), and not in
any other state or federal court in the United States of America or any court in
any other country, (ii) consent to submit to the exclusive jurisdiction of the
Indiana Court for purposes of any action or proceeding arising out of or in
connection with this Agreement, (iii) waive any objection to the laying of venue
of any such action or proceeding in the Indiana Court, and (iv) waive, and agree
not to plead or to make, any claim that any such action or proceeding brought in
the Indiana Court has been brought in an improper or inconvenient
forum.
23. 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.
24. Miscellaneous. Use of the masculine pronoun
shall be deemed to include usage of the feminine pronoun where appropriate. 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.
13
