1
EXHIBIT 10.28
INDEMNIFICATION AGREEMENT
THIS INDEMNIFICATION AGREEMENT (this "Agreement") is made and entered
into as of the 7th day of May, 1999, by and between The Xxxxxxx Xxxxx Group,
Inc., a Delaware corporation ("GS Inc.") and each of the Indemnitees listed on
the signature pages to this agreement (each, an "Indemnitee", and collectively,
the "Indemnitees") as such signature pages may be amended and supplemented from
time to time.
WITNESSETH
WHEREAS, GS Inc. has become party to a plan for the incorporation of
the business of The Xxxxxxx Sachs Group, L.P. ("GS Group") and the related
reorganization of the business of GS Group, which plan was approved by The
Xxxxxxx Xxxxx Corporation ("GS Corp.") in its capacity as general partner of GS
Group and by the Schedule II Limited Partners of GS Group in March 1999 (such
plan of incorporation together with all exhibits thereto as it or they may be
amended from time to time, the "Plan of Incorporation");
WHEREAS, as part of the Plan of Incorporation, GS Inc. has filed and
proposes to file registration statements (the "Registration Statements") with
the Securities and Exchange Commission for the public offering and sale of
shares of its common stock (including shares issuable in connection with
employee benefit plans) and debt securities (including medium-term notes);
2
WHEREAS, GS Inc. has requested and will request certain of the
Indemnitees to execute the Registration Statements in the capacity or capacities
listed and to be listed in such Registration Statements; and
WHEREAS, each Indemnitee is or was one or more of the following: (i) an
officer or director of GS Inc., (ii) an officer or director of GS Corp., (iii) a
person requested or authorized by the board of directors or a person authorized
by the board of directors of GS Inc. or GS Corp. to take actions on behalf of GS
Group, GS Inc. or GS Corp. in connection with the Registration Statements or the
Plan of Incorporation or (iv) a member of the Management Committee or
Partnership Committee of GS Inc. or the former Executive Committee of GS Group.
NOW, therefore, in consideration of each Indemnitee's acting and
agreeing to act in the capacities referred to above, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties do hereby agree as follows:
1. General. GS Inc. (A) will indemnify and hold harmless each
Indemnitee against any Losses (as hereinafter defined), joint or several, to
which such Indemnitee may become subject, under the Securities Act of 1933, as
amended (the "Act") or otherwise, insofar as such Losses (or actions in respect
thereof) arise out of or are based upon an untrue statement or alleged untrue
statement of a material fact contained in the Registration Statements or any
related Rule 462(b) Registration Statements or any preliminary prospectus or
prospectus comprising a part thereof, or any
-2-
3
amendment or supplement thereto, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading; provided,
however, that GS Inc. shall not be liable in any such case to the extent that
any such Losses arise out of or are based upon an untrue statement or alleged
untrue statement or omission or alleged omission relating to such Indemnitee
made in any preliminary prospectus, any registration statement or any prospectus
or any amendment or supplement in reliance upon and in conformity with written
information relating to such Indemnitee furnished to GS Inc. by such Indemnitee
expressly for use therein; and (B) will indemnify and hold harmless each
Indemnitee against any Losses (or actions in respect thereof) which otherwise
arise out of or are based upon or asserted against such Indemnitee in connection
with such Indemnitee's acting in the capacities referred to above in connection
with the transactions contemplated by the Plan of Incorporation, except to the
extent any such Losses referred to in this clause (B) arise out of or are based
upon the type of conduct for which (x) a director would not be exempt from
liability or (y) the indemnification of a director would be limited in respect
of such Losses, in the case of (x) and (y), within the meaning of Article
Twelfth of the Amended and Restated Certificate of Incorporation of GS Inc. or
Section 102(b)(7) of the Delaware General Corporation Law (whether or not such
Indemnitee is a director).
Notwithstanding the foregoing provisions of this Section 1, GS Inc. and
each Indemnitee agree that insofar as indemnification for liabilities arising
under the Act
-3-
4
may be permitted under this Agreement to an Indemnitee who is a director,
officer or controlling person of GS Inc., in the event that a claim for
indemnification against such liabilities is made by such an Indemnitee (other
than the payment by GS Inc. of expenses incurred or paid by such Indemnitee in
the successful defense of any action, suit or proceeding) in connection with a
Registration Statement, GS Inc. will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act, and GS Inc. and such Indemnitee
will be governed by the final adjudication of such question.
2. Losses. As used in this Agreement, the term "Losses" shall include,
without limitation, damages, losses, claims, judgments, liabilities, fines,
penalties, excise taxes, settlements, and costs, attorneys' fees, accountants'
fees, and disbursements and costs of attachment or similar bonds, investigation
costs, defense preparation costs, costs of preparing for and presenting evidence
or testimony, and any expenses of establishing a right to indemnification under
this Agreement. The term "Losses" shall not include taxes except to the extent
taxes are imposed in respect of payments otherwise made pursuant to this
Agreement, in which case such Indemnitee's Losses shall include an amount not
greater than the net taxes payable (taking into account any deductions or other
tax benefits available to such Indemnitee as a result of the Losses in respect
of which such payment is made).
-4-
5
3. Enforcement. Subject to the provisions of the second paragraph of
Section 1 hereof, if a claim or request by an Indemnitee under this Agreement is
not paid by GS Inc. or on its behalf, within thirty (30) days after a written
claim or request has been received by GS Inc. and, if applicable, the
affirmation in Section 5 hereof has been received by GS Inc., such Indemnitee
may at any time thereafter commence an arbitration proceeding in accordance with
Section 9 hereof against GS Inc. to recover the unpaid amount of the claim or
request and, if successful in whole or in part, such Indemnitee shall be
entitled to be paid also the expenses of prosecuting such proceeding. It shall
be a defense to any such proceeding (other than a proceeding commenced to
enforce a claim for expenses incurred in defending any actual or threatened
proceeding in advance of its final disposition where the required affirmation
and undertaking, if any is required, have been tendered to GS Inc.) that such
Indemnitee has not met the standards of conduct for GS Inc. to indemnify such
Indemnitee herein for the amount claimed, but the burden of proving such defense
shall be on GS Inc. Neither the failure of GS Inc. (including its Board of
Directors, legal counsel or shareholders) to have made a determination prior to
the commencement of such proceeding that indemnification of such Indemnitee is
proper in the circumstances because such Indemnitee has met the applicable
standard of conduct set forth herein, nor an actual determination by GS Inc.
(including its Board of Directors, legal counsel or shareholders) that such
Indemnitee has not met such applicable standard of conduct, shall be a defense
to the proceeding or create a presumption that such Indemnitee has not met the
applicable standard of conduct.
-5-
6
4. Partial Indemnification. If an Indemnitee is entitled under any
provision of this Agreement to indemnification by GS Inc. for some or a portion
of any Losses, but not for the total amount thereof, GS Inc. shall nevertheless
indemnify such Indemnitee for the portion of such Losses to which such
Indemnitee is entitled.
5. Expenses. Expenses incurred by an Indemnitee in connection with any
proceeding shall be paid by GS Inc. upon request of such Indemnitee that GS Inc.
pay such expenses, but only upon receipt by GS Inc. of (i) a written affirmation
of such Indemnitee's good faith belief that the applicable standard of conduct
necessary for indemnification by GS Inc. has been met, (ii) a written
undertaking by or on behalf of such Indemnitee to reimburse GS Inc. for expenses
if and to the extent that it is ultimately determined that the applicable
standard of conduct has not been met and (iii) satisfactory evidence of the
amount of such expenses.
6. Notice of Claim. Each Indemnitee shall promptly notify GS Inc. in
writing of any claim against such Indemnitee for which indemnification will or
could be sought under this Agreement. In addition, each Indemnitee shall give GS
Inc. such information and cooperation as it may reasonably require and as shall
be within such Indemnitee's power and at such times and places as are not unduly
burdensome for such Indemnitee.
7. Defense of Claim. With respect to any proceeding as to which an
Indemnitee notifies GS Inc. of the commencement thereof:
(a) GS Inc. will be entitled to participate at its own
expense;
-6-
7
(b) subject to Section 7(c) hereof, GS Inc. shall not, in
connection with any proceeding or related proceedings in the same
jurisdiction against any Indemnitee and any other Indemnitees, be
liable to such Indemnitee and such other Indemnitees for the fees and
expenses of more than one separate law firm (in addition to a single
firm of local counsel);
(c) except as otherwise provided below, to the extent that it
may wish, GS Inc. will be entitled to assume the defense thereof, with
counsel reasonably satisfactory to such Indemnitee, which in GS Inc.'s
sole discretion may be regular counsel to GS Inc. and may be counsel to
other Indemnitees. The Indemnitees also shall have the right to employ
one separate counsel for such Indemnitees in such action, suit or
proceeding if such Indemnitees reasonably conclude that if they did not
there would be a conflict of interest between GS Inc. and such
Indemnitees, and under such circumstances the fees and expenses of such
counsel shall be paid by GS Inc.; and
(d) GS Inc. shall not be liable to indemnify an Indemnitee
under this Agreement for any amounts paid in settlement of any action
or claim effected without GS Inc.'s written consent. GS Inc. shall not
settle any action or claim in any manner which would impose any cost or
limitation on an Indemnitee without such Indemnitee's written consent.
-7-
8
Neither GS Inc. nor an Indemnitee will unreasonably withhold or delay
its consent to any proposed settlement.
8. Non-exclusivity. The right to indemnification and the payment of
expenses incurred in defending a proceeding in advance of its final disposition
conferred in this Agreement shall not be exclusive of or affected in any way by
any other right which an Indemnitee may have or hereafter may acquire under any
statute, certificate of incorporation, by-laws, agreement, arrangement,
resolution or instrument providing indemnification or expense payment, except
that any payments otherwise required to be made by GS Inc. hereunder shall be
offset by any and all amounts received by an Indemnitee from any other
indemnitor or under one or more liability insurance policies maintained by an
indemnitor or otherwise and shall not be duplicative of any other payments
received by an Indemnitee from GS Inc. in respect of the matter giving rise to
the indemnity hereunder. When an Indemnitee is entitled to indemnification,
expense advancement or reimbursement under this Instrument and any other
agreement, arrangement, resolution or instrument of GS Inc. or The Xxxxxxx Sachs
Group, L.P., the Indemnitee may choose to pursue its rights under one or more,
but less than all, of such applicable agreements, arrangements, resolutions or
instruments, in which case such Indemnitee need only comply with the standards
and procedures of the agreements, arrangements, resolutions or instruments under
which it chooses to pursue its rights. Without limiting the foregoing, the
rights of any indemnified person under the resolution of the Executive Committee
of GS Group, adopted on May 12, 1997 (the "Resolution")
-8-
9
shall remain in full force and effect insofar as an indemnified person has any
rights thereunder with respect to the acts, omissions and status of such person
through the date of this Agreement. The execution and delivery of this
Instrument shall constitute notice, effective as of the date of this Instrument,
that the Resolution is rescinded insofar as it relates to the acts, omissions
and status of such person after the date of this Instrument.
9. Arbitration. (a)Subject to the provisions of the second paragraph of
Section 1 and Section 9(b) hereof, any dispute, controversy or claim between an
Indemnitee and GS Inc. arising out of or relating to or concerning the
provisions of this Agreement shall be finally settled by arbitration in New York
City before, and in accordance with the rules then obtaining of, the New York
Stock Exchange, Inc. ("NYSE") or, if the NYSE declines to arbitrate the matter,
the American Arbitration Association (the "AAA") in accordance with the
commercial arbitration rules of the AAA.
(b) Notwithstanding the provision of Section 9(a) and in addition to
its right to submit any dispute or controversy to arbitration, GS Inc. may bring
an action or special proceeding in a state or federal court of competent
jurisdiction sitting in the State of Delaware, whether or not an arbitration
proceeding has theretofore been or is ever initiated, for the purpose of
temporarily, preliminarily or permanently enforcing the provisions of this
Agreement or to enforce an arbitration award, and, for the purposes of this
Section 9(b), each Indemnitee (i) expressly consents to the application of
Section 9(c) hereof to any such action or proceeding, (ii) agrees that proof
shall not be required that
-9-
10
monetary damages for breach of the provisions of this Agreement would be
difficult to calculate and that remedies at law would be inadequate and (iii)
irrevocably appoints each General Counsel of GS Inc., c/o The Corporation Trust
Company, Corporation Trust Center, 0000 Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx
00000 as such Indemnitee's agent for service of process in connection with any
such action or proceeding, who shall promptly advise such Indemnitee of any such
service of process.
(c) (i) EACH INDEMNITEE HEREBY IRREVOCABLY SUBMITS TO THE
EXCLUSIVE JURISDICTION OF ANY STATE OR FEDERAL COURT LOCATED IN THE
STATE OF DELAWARE OVER ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO OR CONCERNING THIS AGREEMENT THAT IS NOT OTHERWISE
ARBITRATED ACCORDING TO THE PROVISIONS OF SECTION 9(a) HEREOF. This
includes any suit, action or proceeding to compel arbitration or to
enforce an arbitration award. The parties acknowledge that the forum
designated by this Section 9(c) has a reasonable relation to this
Agreement, and to the parties' relationship with one another.
Notwithstanding the foregoing, nothing herein shall preclude GS Inc.
from bringing any action or proceeding in any other court for the
purpose of enforcing the provisions of this Section 9.
(ii) The agreement of an Indemnitee as to forum is independent
of the law that may be applied in the action, and each Indemnitee
agrees to this forum even if the forum may under applicable law choose
to apply non-forum law. Each Indemnitee hereby waives, to the fullest
extent permitted by applicable law, any
-10-
11
objection which such Indemnitee now or hereafter may have to personal
jurisdiction or to the laying of venue of any such suit, action or
proceeding in any court referred to in Section 9(c)(i). The parties
undertake not to commence any action arising out of or relating to this
Agreement in any forum other than the forum described in this Section
9(c). The parties agree that, to the fullest extent permitted by
applicable law, a final and non-appealable judgment in any such suit,
action or proceeding in any such court shall be conclusive and binding
upon the parties.
10. Binding Effect. This Agreement shall be binding upon and inure to
the benefit of and be enforceable by the parties hereto and their respective
successors, assigns (including any direct or indirect successor by merger or
consolidation), heirs, executors and administrators.
11. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF DELAWARE, WITHOUT REGARD TO PRINCIPLES
OF CONFLICTS OF LAWS.
12. Amendment. Each party understands that from time to time certain
other persons may become Indemnitees and certain Indemnitees will cease to be
Indemnitees to the extent provided in this Section 12. Accordingly, this
Agreement may be amended by action of GS Inc. from time to time to add
additional Indemnitees, without the approval of any other person other than such
proposed Indemnitees, each of whom shall execute a counterpart of the signature
page of this Agreement. This
-11-
12
Agreement may also be amended by action of GS Inc. and without the approval of
any other person to remove an Indemnitee; provided that such amendment shall not
be effective unless GS Inc. has provided 30 days prior written notice to the
Indemnitee and, in any event, such amendment shall not affect any rights of such
Indemnitee to be indemnified in respect of Losses associated with the acts,
omissions or status of such Indemnitee through the effective date of such
termination (including the right to subsequent indemnification and expense
advancement and reimbursement relating to such acts, omissions or status).
13. Waiver of Breach. The failure or delay of a party at any time to
require performance by any other party of any provision of this Agreement, even
if known, shall not affect the right of such party to require performance of
that provision or to exercise any right, power, or remedy hereunder, and any
waiver by any party of any breach of any provision of this Agreement shall not
be construed as a waiver of any continuing or succeeding breach of such
provision, a waiver of the provision itself, or a waiver of any right, power, or
remedy under this Agreement. No notice to or demand on any party in any case
shall, of itself, entitle such party to other or further notice or demand in
similar or other circumstances.
14. Severability. GS Inc. and each Indemnitee agree that the agreements
and provisions contained in this Agreement are severable and divisible, that
each such agreement and provision does not depend upon any other provision or
agreement for its enforceability, and that each such agreement and provision set
forth
-12-
13
herein constitutes an enforceable obligation between GS Inc. and such
Indemnitee. Consequently, GS Inc. and each Indemnitee hereto agrees that neither
the invalidity nor the unenforceability of any provision of this Agreement shall
affect the other provisions hereof, and this Agreement shall remain in full
force and effect and be construed in all respects as if such invalid or
unenforceable provision were omitted.
15. No Presumption. The termination of any action, suit or proceeding
by judgment, order, settlement, conviction, or upon a plea of nolo contendere or
its equivalent, shall not, of itself, create a presumption that an Indemnitee
did not meet the applicable standard of conduct for indemnification under this
Agreement.
16. Notices. Any communication, demand or notice to be given hereunder
will be duly given when delivered in writing by hand or first class mail to GS
Inc. at its principal executive office or to an Indemnitee at its last address
appearing in the business records of GS Inc. (or to such other addresses as a
party may designate by written notice to GS Inc.).
17. No Assignments. No Indemnitee may assign its rights or obligations
under this Agreement without the prior written consent of GS Inc.
18. No Third Party Rights. Nothing expressed or referred to in this
Agreement will be construed to give any person other than the parties to this
Agreement any legal or equitable right, remedy or claim under or with respect to
this Agreement or any provision of this Agreement. This Agreement and all of its
provisions are for the sole
-13-
14
and exclusive benefit of the parties to this Agreement and their successors and
permitted assigns.
19. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all such
counterparts shall together constitute but one and the same instrument.
-14-
15
IN WITNESS WHEREOF, the parties hereto have entered into this Agreement
as of the date first written above.
THE XXXXXXX XXXXX GROUP, INC.
By:______________________________
Name:
Title:
-15-
16
INDEMNITEES:
-16-
