Exhibit 10.55
INDEMNIFICATION AGREEMENT DATED AS OF OCTOBER 28, 2002 BETWEEN
EDISON SCHOOLS INC.
("EDISON"), AND XXXXXX X. XXXXXXXX ("INDEMNITEE")
WHEREAS, the Board of Directors has determined that the inability to
attract and retain qualified persons as directors and officers is detrimental to
the best interests of Edison's stockholders and that Edison should act to assure
such persons that there will be adequate certainty of protection through
insurance and indemnification against risks of claims and actions against them
arising out of their service to and activities on behalf of Edison; and
WHEREAS, Edison has adopted provisions in its Bylaws providing for
indemnification of its officers and directors to the fullest extent permitted by
applicable law, and Edison wishes to clarify and enhance the rights and
obligations of Edison and Indemnitee with respect to indemnification; and
WHEREAS, Edison has elected to follow the corporate governance
practices and procedures of the Delaware General Corporation Law, as the same
may be amended from time to time; and
WHEREAS, in order to induce and encourage highly experienced and
capable persons such as Indemnitee to serve and continue to serve as directors
and officers of Edison and in any other capacity with respect to Edison, and to
otherwise promote the desirable end that such persons will resist what they
consider unjustified lawsuits and claims made against them in connection with
the good faith performance of their duties to Edison, with the knowledge that
certain costs, judgments, penalties, fines, liabilities and expenses incurred by
them in their defense of such litigation are to be borne by Edison and they will
receive the maximum protection against such risks and liabilities as may be
afforded by law, the Board of Directors of Edison has determined that the
following Agreement is reasonable and prudent to promote and ensure the best
interests of Edison and its stockholders; and
WHEREAS, Edison desires to have Indemnitee serve as a director or
officer of Edison and in such other capacity with respect to Edison as Edison
may request, as the case may be, free from undue concern for unpredictable,
inappropriate or unreasonable legal risks and personal liabilities by reason of
Indemnitee acting in good faith in the performance of Indemnitee's duty to
Edison; and Indemnitee desires so to serve Edison, provided, and on the express
condition, that he or she is furnished with the indemnity set forth hereinafter;
Now, therefore, in consideration of Indemnitee's service as a
director or officer of Edison, the parties hereto agree as follows:
1. Service by Indemnitee. Indemnitee will serve and/or continue to
serve as a director or officer of Edison faithfully and to the best of
Indemnitee's ability so long as Indemnitee is duly elected or appointed and
until such time as Indemnitee is removed as permitted by law or tenders a
resignation in writing.
2. Indemnification. Edison shall indemnify Indemnitee to the fullest
extent permitted by the Delaware General Corporation law in effect on the date
hereof or as such law may from time to time be amended. Without diminishing the
scope of the indemnification provided by this Section, the rights of
indemnification of Indemnitee provided hereunder shall include but shall not be
limited to those rights hereinafter set forth, except that no indemnification
shall be paid to Indemnitee:
(a) to the extent expressly prohibited by Delaware law;
(b) for which payment is actually made to Indemnitee under a valid and
collectible insurance policy or under a valid and enforceable indemnity
clause, by-law or agreement of Edison or any other company or organization
on whose board Indemnitee serves at the request of Edison, except in
respect of any indemnity exceeding the payment under such insurance,
clause, bylaw or agreement;
(c) in connection with an action, suit or proceeding, or part thereof
initiated by Indemnitee, except a judicial proceeding or arbitration
pursuant to Section 9 to enforce rights under this Agreement, unless the
initiation thereof was authorized by the Board of Directors of Edison;
(d) with respect to any action, suit or proceeding brought against
Indemnitee that is authorized by the Board of Directors of Edison, except
as provided in Sections 5 and 6.
3. Action or Proceedings Other than an Action by or in the Right of
Edison. Except as limited by Section 2 above, Indemnitee shall be entitled to
the indemnification rights provided in this Section if Indemnitee is a party or
is threatened to be made a party to any Proceeding (other than an action by or
in the name of Edison) by reason of the fact that Indemnitee is or was a
director, officer, employee or agent of Edison, or is or was serving at the
request of Edison as a director, officer, employee or agent or fiduciary of any
other entity (including, but not limited to, another corporation, partnership,
joint venture or trust); or by reason of anything done or not done by Indemnitee
in any such capacity. Indemnitee shall also be entitled to such indemnification
if he is or is threatened to be made a witness, without regard to whether he is
a party. Pursuant to this Section, Indemnitee shall be indemnified against all
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costs, judgments, penalties, fines, liabilities and Expenses actually and
reasonably incurred by Indemnitee in connection with such Proceeding, if
Indemnitee acted in good faith and in a manner he reasonably believed to be in
or not opposed to the best interests of Edison, and with respect to any criminal
Proceeding, had no reasonable cause to believe his or her conduct was unlawful.
4. Indemnity in Proceedings by or in the Name of Edison. Except as
limited by Section 2 above, Indemnitee shall be entitled to the indemnification
rights provided in this Section if Indemnitee was or is a party or is threatened
to be made a party to any Proceeding brought by or in the name of Edison to
procure a judgment in its favor by reason of the fact that Indemnitee is or was
a director, officer, employee or agent or fiduciary of Edison, or by reason of
anything done or not done by Indemnitee in any such capacity. Indemnitee shall
also be entitled to such indemnification if he is or is threatened to be made a
witness, without regard to whether he is a party. Pursuant to this Section,
Indemnitee shall be indemnified against all costs, judgments, penalties, fines,
liabilities and Expenses actually and reasonably incurred by Indemnitee in
connection with such Proceeding if Indemnitee acted in good faith and in a
manner Indemnitee reasonably believed to be in or not opposed to the best
interests of Edison; provided, however, that no such indemnification shall be
made in respect of any claim, issue, or matter as to which Delaware law
expressly prohibits such indemnification by reason of any adjudication of
liability of Indemnitee to Edison, unless and only to the extent that the Court
of Chancery of the State of Delaware or the court in which such action or suit
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
entitled to indemnification for such costs, judgments, penalties, fines,
liabilities and Expenses as such court shall deem proper.
5. Indemnification for Costs, Charges and Expenses of Successful
Party. Notwithstanding the limitations of Section 2(d), 3 and 4 above, to the
extent that Indemnitee has been successful, on the merits or otherwise, in whole
or in part, in defense of any action, suit or proceeding (including an action,
suit or proceeding brought by or on behalf of Edison) or in defense of any
claim, issue or matter therein, including, without limitation, the dismissal of
any action without prejudice, or if it is ultimately determined that Indemnitee
is otherwise entitled to be indemnified against Expenses, Indemnitee shall be
indemnified against all Expenses actually and reasonably incurred in connection
therewith.
6. Partial Indemnification. If Indemnitee is entitled under any
provision of this Agreement to indemnification by Edison for some or a portion
of the costs, judgments, penalties, fines, liabilities or Expenses actually and
reasonably incurred in connection with any action, suit or proceeding (including
an action, suit or proceeding brought by or on behalf of Edison), but not,
however, for all of the total amount thereof, Edison shall nevertheless
indemnify Indemnitee for the portion of such costs, judgments, penalties, fines,
liabilities and Expenses actually and reasonably incurred to which Indemnitee is
entitled.
7. Determination of Entitlement to Indemnification. Upon written
request by Indemnitee for indemnification pursuant to Sections 3, 4, 5 or 6 the
entitlement of Indemnitee to
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indemnification, to the extent not provided pursuant to the terms of this
Agreement, shall be determined by the following person or persons who shall be
empowered to make such determination: (a) the Board of Directors of Edison by a
majority vote of Disinterested Directors (defined below), whether or not such
majority constitutes a quorum; (b) a committee of Disinterested Directors
designated by a majority vote of such directors, whether or not such majority
constitutes a quorum; (c) if there are no Disinterested Directors, or if the
Disinterested Directors so direct, by Independent Counsel (defined below) in a
written opinion to the Board of Directors, a copy of which shall be delivered to
Indemnitee; or (d) a majority vote of a quorum of the outstanding shares of
stock of all classes entitled to vote for directors, voting as a single class,
which quorum shall consist of stockholders who are not at that time parties to
the Proceeding in question. Such Independent Counsel shall be selected by the
Board of Directors and approved by Indemnitee. Upon failure of the Board so to
select such Independent Counsel or upon failure of Indemnitee so to approve,
such Independent Counsel shall be selected upon application to a court of
competent jurisdiction. Such determination of entitlement to indemnification
shall be made not later than 30 calendar days after receipt by Edison of a
written request for indemnification. Such request shall include documentation or
information which is necessary for such determination and which is reasonably
available to Indemnitee. Any Expenses incurred by Indemnitee in connection with
a request for indemnification hereunder shall be borne by Edison. Edison hereby
indemnifies Indemnitee for any such Expense and agrees to hold Indemnitee
harmless therefrom irrespective of the outcome of the determination of
Indemnitee's entitlement to indemnification. If the person making such
determination shall determine that Indemnitee is entitled to indemnification as
to part (but not all) of the application for indemnification, such person shall
reasonably prorate such partial indemnification among the claims, issues or
matters at issue at the time of the determination.
8. Presumptions and Effect of Certain Proceedings. The Secretary of
Edison shall, promptly upon receipt of Indemnitee's request for indemnification,
advise in writing the Board of Directors or such other person or persons
empowered to make the determination as provided in Section 7 that Indemnitee has
made such request for indemnification. Upon making such request for
indemnification, Indemnitee shall be presumed to be entitled to indemnification
hereunder and, unless otherwise required by law, Edison shall have the burden of
proof in making of any determination contrary to such presumption. If the person
or persons so empowered to make such determination shall have failed to make the
requested determination with respect to indemnification within 30 calendar days
after receipt by Edison of such request, a requisite determination of
entitlement to indemnification shall be deemed to have been made and Indemnitee
shall be absolutely entitled to such indemnification, absent actual and material
fraud in the request for indemnification. The termination of any Proceeding
described in Sections 3 or 4 by judgment, order, settlement or conviction, or
upon a plea of nolo contendere or its equivalent, shall not, of itself: (a)
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 Edison, and, with respect to any criminal Proceeding, that
Indemnitee had reasonable cause to believe that Indemnitee's conduct was
unlawful; or (b) otherwise adversely affect the rights of Indemnitee to
indemnification except as may be provided herein.
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9. Remedies of Indemnitee in Cases of Determination not to Indemnify
or to Advance Expenses. In the event that a determination is made that
Indemnitee is not entitled to indemnification hereunder or if payment has not
been timely made following a determination of entitlement to indemnification
pursuant to Sections 7 and 8, or if Expenses are not advanced pursuant to
Section 14, Indemnitee shall be entitled to final adjudication in a court of
competent jurisdiction of entitlement to such indemnification or advance.
Alternatively, Indemnitee at Indemnitee's option may seek an award in an
arbitration to be conducted by a single arbitrator pursuant to the rules of the
American Arbitration Association, such award to be made within sixty days
following the filing of the demand for arbitration. Edison shall not oppose
Indemnitee's right to seek any such adjudication or award in arbitration or any
other claim. The determination in any such judicial proceeding or arbitration
shall be made de novo and Indemnitee shall not be prejudiced by reason of a
determination (if so made) pursuant to Sections 7 or 8 that Indemnitee is not
entitled to indemnification. If a determination is made or deemed to have been
made pursuant to the terms of Section 7 or 8 that Indemnitee is entitled to
indemnification, Edison shall be bound by such determination and is precluded
from asserting that such determination has not been made or that the procedure
by which such determination was made is not valid, binding and enforceable.
Edison further agrees to stipulate in any such court or before any such
arbitrator that Edison is bound by all the provisions of this Agreement and is
precluded from making any assertions to the contrary. If the court or arbitrator
shall determine that Indemnitee is entitled to any indemnification hereunder,
Edison shall pay all Expenses actually and reasonably incurred by Indemnitee in
connection with such adjudication or award in arbitration (including, but not
limited to, any appellate Proceedings).
10. Other Rights to Indemnification. Indemnification and advancement
of Expenses provided by this Agreement shall not be deemed exclusive of any
other rights to which Indemnitee may now or in the future be entitled under any
provision of the Certificate of Incorporation, Bylaws or other organizational
documents of Edison, vote of stockholders or Disinterested Directors, provision
of law, agreement or otherwise.
11. Expenses to Enforce Agreement. In the event that Indemnitee is
subject to or intervenes in any Proceeding in which the validity or
enforceability of this Agreement is at issue or seeks an adjudication or award
in arbitration to enforce Indemnitee's rights under, or to recover damages for
breach of, this Agreement, Indemnitee, if Indemnitee prevails in whole or in
part in such action, shall be entitled to recover from Edison and shall be
indemnified by Edison against any actual Expenses incurred by Indemnitee in
connection with such Proceeding.
12. Continuation of Indemnity. All agreements and obligations of
Edison contained herein shall continue during the period Indemnitee is a
director or officer of Edison and shall continue thereafter with respect to any
possible Claims based on the fact that Indemnitee was a director or officer of
Edison. This Agreement shall be binding upon all successors and assigns of
Edison (including any transferee of all or substantially all of its assets and
any successor by merger or operation of law) and shall inure to the benefit of
the heirs, personal representatives and estate of Indemnitee.
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13. Notification and Defense of Claim. Promptly after receipt by
Indemnitee of notice of any Proceeding, Indemnitee will, if a claim in respect
thereof is to be made against Edison under this Agreement, notify Edison in
writing of the commencement thereof; but the omission so to notify Edison will
not relieve it from any liability that it may have to Indemnitee.
Notwithstanding any other provision of this Agreement, with respect to any such
Proceeding of which Indemnitee notifies Edison:
(a) Edison will be entitled to participate therein at its own expense; and
(b) Except as otherwise provided in this Section 13(b), to the extent that
it may wish, Edison, jointly with any other indemnifying party similarly
notified, shall be entitled to assume the defense thereof, with counsel
satisfactory to Indemnitee. After notice from Edison to Indemnitee of its
election so to assume the defense thereof, Edison shall not be liable to
Indemnitee under this Agreement for any Expenses subsequently incurred by
Indemnitee in connection with the defense thereof except as otherwise
provided below. Indemnitee shall have the right to employ Indemnitee's own
counsel in such Proceeding, but the fees and expenses of such counsel
incurred after notice from Edison of its assumption of the defense thereof
shall be at the expense of Indemnitee unless (i) the employment of counsel
by Indemnitee has been authorized by Edison, (ii) Indemnitee shall have
reasonably concluded that there may be a conflict of interest between
Edison and Indemnitee in the conduct of the defense of such action or
(iii) Edison shall not in fact have employed counsel to assume the defense
of the action, in each of which cases the fees and expenses of
Indemnitee's counsel shall be at the expense of Edison. Edison shall not
be entitled to assume the defense of any Proceeding brought by or on
behalf of Edison or as to which Indemnitee shall have made the conclusion
provided for in (ii) above; and
(c) Edison shall not be liable to indemnify Indemnitee under this
Agreement for any amounts paid in settlement of any Proceeding effected
without Edison's written consent. Edison shall not settle any Proceeding
in any manner that would impose any penalty or limitation on or disclosure
obligation with respect to Indemnitee without Indemnitee's written
consent. Neither Edison nor Indemnitee will unreasonably withhold its
consent to any proposed settlement.
14. Advancement of Expenses. All Expenses incurred by Indemnitee in
advance of the final disposition of any Proceeding shall be paid by Edison at
the request of Indemnitee, each such advancement to be made within five calendar
days after the receipt by Edison of a statement or statements from Indemnitee
requesting such advance or advances from time to time. Indemnitee's entitlement
to such Expenses shall include those incurred in connection with any Proceeding
by Indemnitee seeking a judgment in court or an adjudication or award in
arbitration pursuant to this Agreement. Such statement or statements shall
reasonably evidence the expenses and costs incurred by Indemnitee in connection
therewith and shall include or be accompanied by an undertaking, in
substantially the form attached as Exhibit 2, by or on behalf of Indemnitee to
repay such amount if it is finally determined, after all appeals by a
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court of competent jurisdiction that Indemnitee is not entitled to be
indemnified against such Expenses by Edison as provided by this Agreement or
otherwise. Indemnitee's undertaking to repay any such amounts is not required to
be secured. Edison considers it important to furthering its business purposes to
provide advancement of expenses and does not consider and will not treat such
advancement as a personal loan to Indemnitee.
15. Separability. If any provision or provisions of this Agreement
shall be held to be invalid, illegal or unenforceable for any reason whatsoever
(1) the validity, legality and enforceability of the remaining provisions of
this Agreement (including without limitation, all portions of any paragraphs of
this Agreement containing any such provision held to be invalid, illegal or
unenforceable, that are not by themselves invalid, illegal or unenforceable)
shall not in any way be affected or impaired thereby, and (ii) to the fullest
extent possible, the provisions of this Agreement (including, without
limitation, all portions of any paragraph of this Agreement containing any such
provision held to be invalid, illegal or unenforceable, that are not themselves
invalid, illegal or unenforceable) shall be construed so as to give effect to
the intent of the parties that Edison provide protection to Indemnitee to the
fullest enforceable extent.
16. Headings; References; Pronouns. The headings of the sections 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.
References herein to section numbers are to sections of this Agreement. All
pronouns and any variations thereof shall be deemed to refer to the masculine,
feminine, neuter, singular or plural as appropriate.
17. Definitions. For purposes of this Agreement:
(a) "Disinterested Director" means a director of Edison who is not or was
not a party to the Proceeding in respect of which indemnification is being
sought by Indemnitee.
(b) "Expenses" includes, without limitation, expenses of any and all
investigations, judicial or administrative proceedings or appeals, amounts
paid in settlement by or on behalf of Indemnitee, attorneys' fees, witness
fees and expenses, fees and expenses of accountants and other advisors,
retainers and disbursements and advances thereon, and any expenses of
establishing a right to indemnification under Sections 7, 9 and 11 above
but shall not include the amount of judgments, fines or penalties actually
levied against Indemnitee.
(c) "Independent Counsel" means a law firm or a member of a law firm that
neither is presently nor in the past five years has been retained to
represent: (i) Edison 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
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interest in representing either Edison or Indemnitee in an action to
determine Indemnitee's right to indemnification under this Agreement.
(d) "Proceeding" includes any threatened, pending or completed
investigation, action, suit or proceeding, whether brought in the name of
Edison or otherwise, against Indemnitee, for which indemnification is not
prohibited under Section 2 above and whether of a civil, criminal,
administrative or investigative nature, including, but not limited to,
actions, suits or proceedings in which Indemnitee may be or may have been
involved as a party or otherwise, by reason of the fact that Indemnitee is
or was a director, officer, employee or agent of Edison, or is or was
serving, at the request of Edison, as a director, officer, employee or
agent or fiduciary of any other entity, including, but not limited to,
another corporation, partnership, joint venture or trust, or by reason of
anything done or not done by Indemnitee in any such capacity, whether or
not Indemnitee is serving in such capacity at the time any liability or
expense is incurred for which indemnification or reimbursement can be
provided under this Agreement.
18. Other Provisions.
(a) This Agreement shall be interpreted and enforced in accordance with
the laws of Delaware.
(b) 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 as evidence of the existence of this Agreement.
(c) This agreement shall not be deemed an employment contract between
Edison and any Indemnitee who is an officer of Edison, and, if Indemnitee
is an officer of Edison, Indemnitee specifically acknowledges that
Indemnitee may be discharged at any time for any reason, with or without
cause, and with or without severance compensation, except as may be
otherwise provided in a separate written contract between Indemnitee and
Edison.
(d) Upon a payment to Indemnitee under this Agreement, Edison shall be
subrogated to the extent of such payment to all of the rights of
Indemnitee to recover against any person for such liability, and
Indemnitee shall execute all documents and instruments required and shall
take such other actions as may be necessary to secure such rights,
including the execution of such documents as may be necessary for Edison
to bring suit to enforce such rights.
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(e) No supplement, modification or amendment of this Agreement shall be
binding unless executed in writing by both 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.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement
on and as of the day and year first above written.
EDISON SCHOOLS INC.
By /s/ H. Xxxxxxxxxxx Xxxxxxx
--------------------------------
H. Xxxxxxxxxxx Xxxxxxx
Chief Executive Officer
/s/ Xxxxxx X. Xxxxxxxx
--------------------------------
Xxxxxx X. Xxxxxxxx
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