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EXHIBIT 10.14
DIRECTOR INDEMNIFICATION AGREEMENT
This Indemnification Agreement is made and entered into this 12th day
of February, 1997 (the "Agreement"), by and between Golden Sky Systems, Inc., a
Delaware corporation (together with any successor or successors thereto, the
"Company"), and ________________ ("Indemnitee").
WHEREAS, it is essential to the Company that the Company be able to
retain and attract as directors the most capable persons available;
WHEREAS, increased corporate litigation has subjected directors to
litigation risks and expenses and the limitations on the availability of
directors and officers liability insurance have made it increasingly difficult
for the Company to attract and retain such persons;
WHEREAS, the Company's by-laws require the Company to indemnify its
directors to the fullest extent permitted by law and permit the Company to make
other indemnification arrangements and agreements;
WHEREAS, the Company desires to provide Indemnitee with specific
contractual assurance of Indemnitee's rights to full indemnification against
litigation risks and expenses (regardless, among other things, of any amendment
to or revocation of such by-laws or any change in the ownership of the Company
or the composition of its Board of Directors), which indemnification is intended
to be greater than that which is afforded by the Company's certificate of
incorporation, by-laws and, to the extent insurance is available, the coverage
of Indemnitee under the Company's directors and officers liability insurance
policies; and
WHEREAS, Indemnitee is relying upon the rights afforded under this
Agreement in initially becoming and continuing in Indemnitee's position as a
director of the Company:
NOW, THEREFORE, in consideration of the premises and the covenants
contained herein, the Company and Indemnitee do hereby covenant and agree as
follows:
1. Definitions.
(a) "Corporate Status" describes the status of a person
who is serving or has served (i) as a director of the
Company, (ii) in any capacity with respect to any
employee benefit plan of the Company, or (iii) as a
director, partner, member, trustee, officer, employee
or agent of any other Entity at the request of the
Company.
(b) "Entity" shall mean any corporation, partnership,
limited liability company, joint venture, trust,
foundation, association, organization or
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other legal entity and any group or division of the
Company or any of its Subsidiaries.
(c) "Expenses" shall mean all reasonable fees, costs and
expenses incurred in connection with any Proceeding
(as defined below), including, without limitation,
attorneys' fees, disbursements and retainers
(including, without limitation, any such fees,
disbursements and retainers incurred by Indemnitee
pursuant to Section 10 of this Agreement), fees and
disbursements of expert witnesses, private
investigators and professional advisors (including,
without limitation, accountants and investment
bankers), court costs, transcript costs, fees of
experts, travel expenses, duplicating, printing and
binding costs, telephone and fax transmission
charges, postage, delivery services, secretarial
services, and other disbursements and expenses.
(d) "Indemnifiable Expenses," "Indemnifiable Liabilities"
and "Indemnifiable Amounts" shall have the meanings
ascribed to those terms in Section 3(a) below.
(e) "Liabilities" shall mean judgments, damages,
liabilities, losses, penalties, excise taxes, fines
and amounts paid in settlement.
(f) "Proceeding" shall mean any threatened, pending or
completed claim, action, suit, arbitration, alternate
dispute resolution process, investigation,
administrative hearing, appeal, or any other
proceeding, whether civil, criminal, administrative
or investigative, whether formal or informal,
including a proceeding initiated by Indemnitee
pursuant to Section 10 of this Agreement to enforce
Indemnitee's rights hereunder.
(g) "Subsidiary" shall mean any Entity that is directly
or indirectly wholly-owned or controlled by the
Company.
2. Services of Indemnitee. In consideration of the Company's
covenants and commitments hereunder, Indemnitee agrees to serve or continue to
serve as a director of the Company. However, this Agreement shall not impose any
obligation on Indemnitee or the Company to continue Indemnitee's service to the
Company or any other Entity beyond any period otherwise required by law or by
other agreements or commitments of the parties, if any, and subject to the
foregoing, Indemnitee shall be free to resign from any position he or she holds
at any time.
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3. Agreement to Indemnify. Subject to the requirements of
applicable law, the Company agrees to indemnify Indemnitee as follows:
(a) Subject to the exceptions contained in Section 4(a)
below, if Indemnitee was or is a party or is
threatened to be made a party to any Proceeding
(other than an action by or in the right of the
Company) by reason of Indemnitee's Corporate Status,
Indemnitee shall be indemnified by the Company
against all Expenses and Liabilities incurred or paid
by Indemnitee in connection with such Proceeding
(referred to herein as "Indemnifiable Expenses" and
"Indemnifiable Liabilities," respectively, and
collectively as "Indemnifiable Amounts").
(b) Subject to the exceptions contained in Section 4(b)
below, if Indemnitee was or is a party or is
threatened to be made a party to any Proceeding by or
in the right of the Company to procure a judgment in
its favor by reason of Indemnitee's Corporate Status,
Indemnitee shall be indemnified by the Company
against all Indemnifiable Expenses.
4. Exceptions and Limitations to Indemnification.
(a) Exceptions. Indemnitee shall be entitled to
indemnification under Sections 3(a) and 3(b) above in
all circumstances other than the following:
(i) If indemnification is requested under
Section 3(a) and it has been adjudicated
finally by a court of competent jurisdiction
that, in connection with the subject of the
Proceeding out of which the claim for
indemnification has arisen, Indemnitee
failed to act in good faith and in a manner
Indemnitee reasonably believed to be in or
not opposed to the best interests of the
Company or, with respect to any criminal
action or proceeding, Indemnitee had
reasonable cause to believe that
Indemnitee's conduct was unlawful,
Indemnitee shall not be entitled to payment
of Indemnifiable Amounts hereunder.
(ii) If indemnification is requested under
Section 3(b) and
(A) it has been adjudicated
finally by a court of
competent jurisdiction
that, in connection with
the subject of the
Proceeding out of which the
claim for indemnification
has arisen, Indemnitee
failed to act in good faith
and in a manner Indemnitee
reasonably believed to be
in or not opposed to the
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best interests of the
Company, Indemnitee shall
not be entitled to payment
of Indemnifiable Expenses
hereunder; or
(B) it has been adjudicated
finally by a court of
competent jurisdiction that
Indemnitee is liable to the
Company with respect to any
claim, issue or matter
involved in the Proceeding
out of which the claim for
indemnification has arisen,
including, without
limitation, a claim that
Indemnitee received an
improper personal benefit,
no Indemnifiable Expenses
shall be paid with respect
to such claim, issue or
matter unless the Court of
Chancery or another court
in which such Proceeding
was brought shall determine
upon application that,
despite the adjudication of
liability, but in view of
all the circumstances of
the case, Indemnitee is
fairly and reasonably
entitled to indemnity for
such Indemnifiable Expenses
which such court shall deem
proper.
(b) Limitations. In the event Indemnitee has requested
indemnification by the Company for Indemnifiable
Amounts as a result of Indemnitee's Corporate Status
as described in Section 1(a)(iii), then the Company
shall indemnify the Indemnitee for Indemnifiable
Amounts to the extent the Indemnitee is not otherwise
indemnified for such Indemnifiable Amounts by such
other Entity.
5. Procedure for Payment of Indemnifiable Amounts. Indemnitee
shall submit to the Company a written request specifying the Indemnifiable
Amounts for which Indemnitee seeks payment under Section 3 of this Agreement and
the basis for the claim. The Company shall pay such Indemnifiable Amounts to
Indemnitee within twenty (20) calendar days of receipt of the request. At the
request of the Company, Indemnitee shall furnish such documentation and
information as are reasonably available to Indemnitee and necessary to establish
that Indemnitee is entitled to indemnification hereunder.
6. Indemnification for Expenses of a Party Who is Wholly or
Partly Successful. Notwithstanding any other provision of this Agreement, and
without limiting any such provision, to the extent that Indemnitee is, by reason
of Indemnitee's Corporate Status, a party to and is successful, on the merits or
otherwise, in any Proceeding, Indemnitee shall be indemnified against all
Expenses reasonably incurred by Indemnitee or on Indemnitee's behalf in
connection therewith. 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
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matters in such Proceeding, the Company shall indemnify Indemnitee against all
Expenses reasonably incurred by Indemnitee or on Indemnitee's behalf in
connection with each successfully resolved claim, issue or matter. For purposes
of this Agreement, the termination of any claim, issue or matter in such a
Proceeding by dismissal, with prejudice, shall be deemed to be a successful
result as to such claim, issue or matter.
7. Effect of Certain Resolutions. Neither the settlement or
termination of any Proceeding nor the failure of the Company to award
indemnification or to determine that indemnification is payable shall create an
adverse presumption that Indemnitee is not entitled to indemnification
hereunder. In addition, the termination of any proceeding by judgment, order,
settlement, conviction, or upon a plea of nolo contendere or its equivalent
shall not create a presumption that Indemnitee did not act in good faith and in
a manner which Indemnitee reasonably believed to be in or not opposed to the
best interests of the Company or, with respect to any criminal action or
proceeding, had reasonable cause to believe that Indemnitee's action was
unlawful.
8. Agreement to Advance Interim Expenses; Conditions. The Company
shall pay to Indemnitee all Indemnifiable Expenses incurred by Indemnitee in
connection with any Proceeding, including a Proceeding by or in the right of the
Company, in advance of the final disposition of such Proceeding, if Indemnitee
furnishes the Company with a written undertaking to repay the amount of such
Indemnifiable Expenses advanced to Indemnitee if it is finally determined by a
court of competent jurisdiction that Indemnitee is not entitled under this
Agreement to indemnification with respect to such Expenses. Such undertaking
shall be an unlimited general obligation of Indemnitee, shall be accepted by the
Company without regard to the financial ability of Indemnitee to make repayment,
and in no event shall be required to be secured.
9. Procedure for Payment of Interim Expenses. Indemnitee shall
submit to the Company a written request specifying the Indemnifiable Expenses
for which Indemnitee seeks an advancement under Section 8 of this Agreement,
together with documentation evidencing that Indemnitee has incurred such
Indemnifiable Expenses. Payment of Indemnifiable Expenses under Section 8 shall
be made no later than twenty (20) calendar days after the Company's receipt of
such request and the undertaking required by Section 8.
10. Remedies of Indemnitee.
(a) Right to Petition Court. In the event that Indemnitee
makes a request for payment of Indemnifiable Amounts
under Sections 3 and 5 above or a request for an
advancement of Indemnifiable Expenses under Sections
8 and 9 above and the Company fails to make such
payment or advancement in a timely manner pursuant to
the terms of this Agreement, Indemnitee may petition
the appropriate judicial authority to enforce the
Company's obligations under this Agreement.
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(b) Burden of Proof. In any judicial proceeding brought
under Section 10(a) above, the Company shall have the
burden of proving that Indemnitee is not entitled to
payment of Indemnifiable Amounts hereunder.
(c) Expenses. In the event that the Indemnitee prevails
on the merits for any claims brought under this
Section 10(a), the Company agrees to reimburse
Indemnitee in full for any Expenses incurred by
Indemnitee in connection with investigating,
preparing for, litigating, defending or settling any
action brought by Indemnitee under Section 10(a)
above, or in connection with any claim or
counterclaim brought by the Company in connection
therewith.
(d) Validity of Agreement. The Company shall be precluded
from asserting in any Proceeding, including, without
limitation, an action under Section 10(a) above, that
the provisions of this Agreement are not valid,
binding and enforceable or that there is insufficient
consideration for this Agreement and shall stipulate
in court that the Company is bound by all the
provisions of this Agreement.
(e) Failure to Act Not a Defense. The failure of the
Company (including its Board of Directors or any
committee thereof, independent legal counsel, or
stockholders) to make a determination concerning the
permissibility of the payment of Indemnifiable
Amounts or the advancement of Indemnifiable Expenses
under this Agreement shall not be a defense in any
action brought under Section 10(a) above, and shall
not create a presumption that such payment or
advancement is not permissible.
11. Representations and Warranties of the Company. The Company
hereby represents and warrants to Indemnitee as follows:
(a) Authority. The Company has all necessary power and
authority to enter into, and be bound by the terms
of, this Agreement, and the execution, delivery and
performance of the undertakings contemplated by this
Agreement have been duly authorized by the Company.
(b) Enforceability. This Agreement, when executed and
delivered by the Company in accordance with the
provisions hereof, shall be a legal, valid and
binding obligation of the Company, enforceable
against the Company in accordance with its terms,
except as such enforceability may be limited by
applicable bankruptcy, insolvency, moratorium,
reorganization or similar laws affecting the
enforcement of creditors' rights generally.
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12. Insurance. The Company will use its commercially reasonable
efforts to obtain and maintain a policy or policies of insurance with reputable
insurance companies providing the Indemnitee with coverage for losses from
wrongful acts, and to ensure the Company's performance of its indemnification
obligations under this Agreement. In all policies of director and officer
liability insurance, Indemnitee shall be named as an insured in such a manner as
to provide Indemnitee at least the same rights and benefits as are accorded to
the most favorably insured of the Company's officers and directors.
Notwithstanding the foregoing, if the Company, after employing commercially
reasonable efforts as provided in this section, 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, or if the
coverage provided by such insurance is limited by exclusions so as to provide an
insufficient benefit, the Company shall use its commercially reasonable efforts
to obtain and maintain a policy or policies of insurance with coverage having
features as similar as practicable to those described above.
13. Contract Rights Not Exclusive. The rights to payment of
Indemnifiable Amounts and advancement of Indemnifiable Expenses provided by this
Agreement shall be in addition to, but not exclusive of, any other rights which
Indemnitee may have at any time under applicable law, the Company's by-laws or
certificate of incorporation, or any other agreement, vote of stockholders or
directors, or otherwise, both as to action in Indemnitee's official capacity and
as to action in any other capacity as a result of Indemnitee's serving as a
director of the Company.
14. Successors. This Agreement shall be (a) binding upon all
successors and assigns of the Company (including any transferee of all or a
substantial portion of the business, stock and/or assets of the Company and any
direct or indirect successor by merger or consolidation or otherwise by
operation of law) and (b) binding on and shall inure to the benefit of the
heirs, personal representatives, executors and administrators of Indemnitee.
This Agreement shall continue for the benefit of Indemnitee and such heirs,
personal representatives, executors and administrators after Indemnitee has
ceased to have Corporate Status.
15. Subrogation. In the event of any payment of Indemnifiable
Amounts under this Agreement, the Company shall be subrogated to the extent of
such payment to all of the rights of contribution or recovery of Indemnitee
against other persons, and Indemnitee shall take, at the request of the Company,
all reasonable action necessary to secure such rights, including the execution
of such documents as are necessary to enable the Company to bring suit to
enforce such rights.
16. Change in Law. To the extent that a change in applicable law
(whether by statute or judicial decision) shall permit broader indemnification
than is provided under the terms of the by-laws of the Company and this
Agreement, Indemnitee shall be entitled to such broader indemnification and this
Agreement shall be deemed to be amended to such extent.
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17. Severability. Whenever possible, each provision of this
Agreement shall be interpreted in such a manner as to be effective and valid
under applicable law, but if any provision of this Agreement, or any clause
thereof, shall be determined by a court of competent jurisdiction to be illegal,
invalid or unenforceable, in whole or in part, such provision or clause shall be
limited or modified in its application to the minimum extent necessary to make
such provision or clause valid, legal and enforceable, and the remaining
provisions and clauses of this Agreement shall remain fully enforceable and
binding on the parties.
18. Indemnitee as Plaintiff. Except as provided in Section 10(c)
of this Agreement and in the next sentence, Indemnitee shall not be entitled to
payment of Indemnifiable Amounts or advancement of Indemnifiable Expenses with
respect to any Proceeding brought by Indemnitee against the Company, any Entity
which it controls, any director or officer thereof, or any third party, unless
the Company has consented to the initiation of such Proceeding. This Section
shall not apply to counterclaims or affirmative defenses asserted by Indemnitee
in an action brought against Indemnitee.
19. Modifications and Waiver. Except as provided in Section 16
above with respect to changes in applicable law which broaden the right of
Indemnitee to be indemnified by the Company, no supplement, modification or
amendment of this Agreement shall be binding unless executed in writing by each
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 of this
Agreement (whether or not similar), nor shall such waiver constitute a
continuing waiver.
20. General Notices. All notices, requests, demands and other
communications hereunder shall be in writing and shall be deemed to have been
duly given (a) when delivered by hand, (b) when transmitted by facsimile and
receipt is acknowledged, or (c) if mailed by certified or registered mail with
postage prepaid, on the third business day after the date on which it is so
mailed:
(i) If to Indemnitee, at the mailing address as
shown on the signature page hereto, or at
any other address designated by Indemnitee.
(ii) If to the Company, to:
Golden Sky Systems, Inc.
000 X. 00xx Xxxxxx, Xxxxx 000
Xxxxxx Xxxx, XX 00000
Fax: (000) 000-0000
Attn: President
or to such other address as may have been furnished in the same manner by any
party to the others.
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21. Governing Law. This Agreement shall be governed by and
construed and enforced under the laws of the jurisdiction in which the Company
or its successor or successors are incorporated from time to time (the
"Jurisdiction") without giving effect to the provisions thereof relating to
conflicts of law.
22. Consent to Jurisdiction. The Company hereby irrevocably and
unconditionally consents to the jurisdiction of the courts of the Jurisdiction
and the United States District Court in the Jurisdiction. The Company hereby
irrevocably and unconditionally waives any objection to the laying of venue of
any Proceeding arising out of or relating to this Agreement in the courts of the
Jurisdiction or the United States District Court in the Jurisdiction, and hereby
irrevocably and unconditionally waives and agrees not to plead or claim that any
such Proceeding brought in any such court has been brought in an inconvenient
forum.
23. Agreement Governs. This Agreement is to be deemed consistent
wherever possible with relevant provisions of the Company's by-laws and
certificate of incorporation; however, in the event of a conflict between this
Agreement and such provisions, the provisions of this Agreement shall control.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the parties hereto have executed this Director
Indemnification Agreement as of the day and year first written above.
GOLDEN SKY SYSTEMS, INC.
By:
-----------------------------------
Name:
Title:
INDEMNITEE
--------------------------------------
Name:
Address:
Telephone:
Facsimile:
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Schedule of Director Indemnification Agreements
o Director Indemnification Agreement by and between Golden Sky Systems,
Inc. and Xxxxxx X. Xxxxx, dated as of February 12, 1997
o Director Indemnification Agreement by and between Golden Sky Systems,
Inc. and Xxxxxx X. Xxxxxxx, dated as of February 12, 1997
o Director Indemnification Agreement by and between Golden Sky Systems,
Inc. and Xxxxxx X. Xxxxxx, dated as of February 12, 1997
o Director Indemnification Agreement by and between Golden Sky Systems,
Inc. and Xxxxxxx X. Xxxxxxxx, dated as of February 12, 1997
o Director Indemnification Agreement by and between Golden Sky Systems,
Inc. and Xxxxxxx X. Chairman, dated as of February 12, 1997
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