INDEMNITY AGREEMENT
Exhibit 10.3
INDEMNITY AGREEMENT
This Indemnity Agreement (“Agreement”) is made effective as of the 7th day of
August, 2007 by and between Carriage Services, Inc., a Delaware corporation (the “Company”), and
Xxxx Xxxxxx (“Indemnitee”).
RECITALS
WHEREAS, highly competent persons have become more reluctant to serve publicly held
corporations as directors 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 Company (the “Board”) has determined that, in order to
attract and retain qualified individuals, the Company will attempt to maintain on an ongoing basis,
at its sole expense, liability insurance to protect persons serving the Company 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 Company believes that, given current market conditions and trends, such insurance
may be available to it in the future at higher premiums and with more exclusions. At the same
time, directors, officers, and other persons in service to corporations or business enterprises are
being increasingly subjected to expensive and time-consuming litigation relating to, among other
things, matters that traditionally would have been brought only against the corporation or business
enterprise itself. The Amended and Restated Bylaws of the Company (“Bylaws”) require
indemnification of the officers and directors of the Company. Indemnitee may also be entitled to
indemnification pursuant to the Delaware General Corporation Law (“DGCL”). The Bylaws and the DGCL
expressly provide that the indemnification provisions set forth therein are not exclusive, and
thereby contemplate that contracts may be entered into between the Company and members of the
Board, officers and other persons with respect to indemnification.
WHEREAS, the uncertainties relating to such insurance and to indemnification have increased
the difficulty of attracting and retaining such persons.
WHEREAS, the Board has determined that the Company should act to assure such persons that
there will be increased certainty of such protection in the future.
WHEREAS, it is reasonable, prudent and necessary for the Company contractually to obligate
itself to indemnify, and to advance expenses on behalf of, such persons to the fullest extent
permitted by applicable law so that they will serve or continue to serve the Company free from
undue concern that they will not be so indemnified.
WHEREAS, this Agreement is a supplement to and in furtherance of the Bylaws and any
resolutions adopted pursuant thereto, and shall not be deemed a substitute therefor, nor to
diminish or abrogate any rights of Indemnitee thereunder.
NOW, THEREFORE, in consideration of the premises and the covenants contained herein, the
Company and Indemnitee do hereby covenant and agree as follows:
1. Services to the Company. Indemnitee will serve or continue to serve, at the will of the
Company, as an officer, director or key employee of the Company for so long, as Indemnitee is duly
elected or appointed or until Indemnitee tenders his or her resignation.
2. Definitions. As used in this Agreement:
(a) A “Change in Control” shall be deemed to occur upon the earliest to occur after the date
of this Agreement of any of the following events:
(i) Acquisition of Stock by Third Party. Any Person (as defined below) is or becomes the
Beneficial Owner (as defined below), directly or indirectly, of securities of the Company
representing twenty percent (20%) or more of the combined voting power of the Company’s then
outstanding securities;
(ii) Change in Board of Directors. During any period of two (2) consecutive years (not
including any period prior to the execution of this Agreement), individuals who at the beginning,
of such period constitute the Board, and any new director (other than a director designated by a
person who has entered into an agreement with the Company to effect a transaction described in
Sections 2(a)(i), 2(a)(iii) or 2(a)(iv)) whose election by the Board or nomination for election by
the Company’s stockholders was approved by a vote of at least two-thirds of the directors then
still in office who either were directors at the beginning of the period or whose election or
nomination for election was previously so approved, cease for any reason to constitute a least a
majority of the members of the Board;
(iii) Corporate Transactions. The effective date of a merger or consolidation of the Company
with any other entity, other than a merger or consolidation which would result in the voting
securities of the Company outstanding immediately prior to such merger or consolidation continuing
to represent (either by remaining outstanding or by being converted into voting securities of the
surviving entity) more than 51% of the combined voting power of the voting securities of the
surviving entity outstanding immediately after such merger or consolidation and with the power to
elect at least a majority of the board of directors or other governing body of such surviving
entity;
(iv) Liquidation. The approval by the stockholders of the Company of a complete liquidation
of the Company or an agreement or series of agreements for the sale or disposition by the Company
of all or substantially all of the Company’s assets; or
(v) Other Events. There occurs any other event of a nature that would be required to be
reported in response to Item 6(e) of Schedule 14A of Regulation 14A (or a response to any similar
schedule or form) promulgated under the Exchange Act (as defined below), whether or not the Company
is then subject to such reporting requirement.
(b) Certain Definitions. For purposes of this Agreement, the following terms shall have the
following meanings:
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(i) “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.
(ii) “Person” shall have the meaning as set forth in Sections 13(d) and 14(d) of the Exchange
Act; provided, however, that Person shall exclude (i) the Company, (ii) any trustee or other
fiduciary holding securities under an employee benefit plan of the Company, and (iii) any
corporation owned, directly or indirectly, by the stockholders of the Company in substantially the
same proportions as their ownership of stock of the Company.
(iii) “Beneficial Owner” shall have the meaning given to such term in Rule l3d-3 under the
Exchange Act; provided, however, that Beneficial Owner shall exclude any Person otherwise becoming
a Beneficial Owner by reason of the stockholders of the Company approving a merger of the Company
with another entity.
(iv) “Corporate Status” describes the status of a person who is or was a director, officer,
trustee, general partner, managing member, fiduciary, employee or agent of the Company or of any
other Enterprise (as defined below) which such person is or was serving at the request of the
Company.
(v) “Disinterested Director” means a director of the Company who is not and was not a party to
the Proceeding in respect of which indemnification is sought by Indemnitee.
(vi) “Enterprise” shall mean the Company and any other corporation, limited liability company,
partnership, joint venture, trust, employee benefit plan or other enterprise of which Indemnitee is
or was serving at the request of the Company as a director, officer, trustee, general partner,
managing member, fiduciary, employee or agent.
(vii) “Expenses” shall include all reasonable attorneys’ fees, retainers, court costs,
transcript costs, fees of experts, witness fees, travel expenses, duplicating costs, printing and
binding costs, telephone charges, postage, delivery service fees, and all other disbursements or
expenses of the types customarily incurred in connection with prosecuting, defending, preparing to
prosecute or defend, investigating, being or preparing to be a witness in, or otherwise
participating in, a Proceeding. 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, supersede as 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.
(viii) Reference to “other enterprise” shall include employee benefit plans; references to
“fines” shall include any excise tax assessed with respect to any employee benefit plan; references
to “serving at the request of the Company” shall include any service as a director, officer, which
imposes duties on, or involves services by, such director, employee or agent of the Company 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 Company” as referred to in this Agreement.
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(ix) The term “Proceeding” shall include any threatened, pending or completed action, suit,
arbitration, alternate dispute resolution mechanism, investigation, inquiry, administrative hearing
or any other actual, threatened or completed proceeding whether brought in the right of the Company
or otherwise and whether of a civil, criminal, administrative or investigative nature, in which
Indemnitee was, is or will be involved as a party or otherwise by reason of the fact that
Indemnitee is or was a director or officer of the Company, by reason of any action taken by him or
of any action on his part while acting as director or officer of the Company, or by reason of the
fact that he is or was serving, at the request of the Company as a director, officer, trustee,
general partner, managing member, fiduciary, employee or agent of any other 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 advancement of expenses can be provided under this
Agreement.
(x) “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 Company or Indemnitee in any matter material to either such party (other than
with respect to matters concerning the Indemnitee under this Agreement, or of other indemnitees
under similar indemnification agreements), or (ii) any other party to the Proceeding giving, rise
to a claim for indemnification hereunder. Notwithstanding the foregoing, the term “Independent
Counsel” shall not include any person who, under the applicable standards of professional conduct
then prevailing, would have a conflict of interest in representing either the Company or Indemnitee
in an action to determine Indemnitee’s rights under this Agreement. The Company agrees to pay the
reasonable fees and expenses of the Independent Counsel referred to above and to fully indemnify
such counsel against any and all Expenses, claims, liabilities and damages arising out of or
relating to this Agreement or its engagement pursuant hereto.
3. Indemnity in Third-Party Proceedings. The Company shall indemnify Indemnitee in accordance
with the provisions of this Section 3 if Indemnitee is, or is threatened to be made, a party to or
a participant (as a witness or otherwise) in any Proceeding, other than a Proceeding by or in the
right of the Company to procure a judgment in its favor. Pursuant to this Section 3, Indemnitee
shall be indemnified against all Expenses, Judgments, fines, penalties and amounts paid in
settlement (including all interest, assessments and other charges paid or payable in connection
with or in respect of such Expenses, Judgments, fines, penalties and amounts paid in settlement)
actually and reasonably incurred by Indemnitee or on his behalf in connection with such Proceeding
or any claim, issue or matter therein, if Indemnitee acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the Company and, in the case
of a criminal proceeding had no reasonable cause to believe that his conduct was unlawful.
4. Indemnity in Proceedings by or in the Right of the Company. The Company shall indemnify
Indemnitee in accordance with the provisions of this Section 4 if Indemnitee is, or is threatened
to be made, a party to or a participant (as a witness or otherwise) in any Proceeding by or in the
right of the Company to procure a judgment in its favor. Pursuant to this Section 4, Indemnitee
shall be indemnified against all Expenses actually and reasonably incurred by him or on his behalf
in connection with such Proceeding or any claim, issue or matter therein, if Indemnitee acted in
good faith and in a manner he reasonably believed to be in or not opposed to the best interests of
the Company. No indemnification for Expenses shall be made under this Section 4 in respect of any
claim, issue or matter as to which Indemnitee shall have been finally adjudged by a court to be
liable to the Company, unless and only to the extent that any court in which the Proceeding was
brought or
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the Delaware Court of Chancery 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 indemnification.
5. Indemnification for Expenses of a Party Who is Wholly or Partly Successful.
Notwithstanding any other provisions of this Agreement, to the extent that Indemnitee is a party to
(or a participant in) and is successful, on the merits or otherwise, in any Proceeding, or in
defense of any claim, issue or matter therein, in whole or in part, the Company shall indemnify
Indemnitee against all Expenses actually and reasonably incurred by him 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 matters in such Proceeding, the
Company shall indemnify Indemnitee against all Expenses actually and reasonably incurred by him or
on his behalf in connection with each successfully resolved claim, issue or matter. If the
Indemnitee is not wholly successful in such Proceeding, the Company also shall indemnify Indemnitee
against all Expenses reasonably incurred in connection with a claim, issue or matter related to any
claim, issue, or matter on which the Indemnitee was successful. For purposes of this Section and
without limitation, the termination of any claim, issue or matter in such a Proceeding, by
dismissal, with or without prejudice, shall be deemed to be a successful result as to such claim,
issue or matter.
6 Indemnification For Expenses of a Witness. Notwithstanding any other provision of this
Agreement, to the extent that Indemnitee is, by reason of his Corporate Status, a witness in any
Proceeding to which Indemnitee is not a party, he shall be indemnified against all Expenses
actually and reasonably incurred by him or on his behalf in connection therewith.
7. Additional Indemnification.
(a) Notwithstanding any limitation in Sections 3, 4, or 5, the Company shall indemnify
Indemnitee to the fullest extent permitted by law if Indemnitee is a party to or threatened to be
made a party to any Proceeding (including a Proceeding by or in the right of the Company to procure
a judgment in its favor) against all Expenses, judgments, fines, penalties and amounts paid in
settlement (including all interest, assessments and other charges paid or payable in connection
with or in respect of such Expenses, judgments, fines, penalties and amounts paid in settlement)
actually and reasonably incurred by Indemnitee in connection with the Proceeding. No indemnity
shall be made under this Section 7(a) on account of Indemnitee’s conduct which constitutes a breach
of Indemnitee’s duty of loyalty to the Company or its stockholders or is an act or omission not in
good faith or which involves intentional misconduct or a knowing violation of the law.
(b) Notwithstanding any limitation in Sections 3, 4, 5 or 7(a), the Company shall indemnify
Indemnitee to the fullest extent permitted by law if Indemnitee is a party to or threatened to be
made a party to any Proceeding (including a Proceeding by or in the right of the Company to procure
a judgment in its favor) against all Expenses, judgments, fines, penalties and amounts paid in
settlement (including all interest, assessments and other charges paid or payable in connection
with or in respect of such Expenses, judgments, fines, penalties and amounts paid in settlement)
actually and reasonably incurred by Indemnitee in connection with the Proceeding.
(c) For purposes of Sections 7(a) and 7(b), the meaning, of the phrase “to the fullest extent
permitted by law” shall include, but not be limited to:
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(i) to the fullest extent permitted by the provision of the DGCL that authorizes or
contemplates additional indemnification by agreement, or the corresponding provision of any
amendment to or replacement of the DGCL; and
(ii) to the fullest extent authorized or permitted by any amendments to or replacements of the
DGCL adopted after the date of this Agreement that increase the extent to which on may indemnify
its officers and directors.
8. Exclusions. Notwithstanding any provision in this Agreement, the Company shall not be
obligated under this Agreement to make any indemnity in connection with any claim made against
Indemnitee:
(a) for which payment has actually been received by or on behalf of Indemnitee under any
insurance policy or other indemnity provision, except with respect to any excess beyond the amount
actually received under any insurance policy or other indemnity provision;
(b) for an accounting of profits made from the purchase and sale (or sale and purchase) by
Indemnitee of securities of the Company within the meaning of Section 16(b) of the Exchange Act or
similar provisions of state statutory law or common law; or
(c) except as otherwise provided in Sections 13 (d)-(f) hereof, prior to a Change in Control,
in connection with any Proceeding (or any part of any Proceeding) initiated by Indemnitee,
including any Proceeding (or any part of any Proceeding) initiated by Indemnitee against the
Company or its directors, officers, employees or other indemnitees, unless (i) the Board of
Directors of the Company authorized the Proceeding (or any part of any Proceeding) prior to its
initiation or (ii) the Company provides the indemnification, in its sole discretion, pursuant to
the powers vested in the Company under applicable law.
9. Advances of Expenses; Defense of Claim.
(a) Notwithstanding any provision of this Agreement to the contrary, the Company shall advance
the expenses incurred by Indemnitee in connection with any Proceeding within ten (10) days after
the receipt by the Company of a statement or statements requesting such advances from time to time,
whether prior to or after final disposition of any Proceeding. Advances shall be unsecured and
interest-free. Advances 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. Advances shall include any and all reasonable Expenses incurred
pursuing, an action to enforce this right of advancement, including, Expenses incurred preparing
and forwarding statements to the Company to support the advances claimed. The Indemnitee shall
qualify for advances solely upon the execution and delivery to the Company of an undertaking
providing that the Indemnitee undertakes to repay the advance to the extent that it is ultimately
determined that Indemnitee is not entitled to be indemnified by the Company. This Section 9(a)
shall not apply to any claim made by Indemnitee for which indemnity is excluded pursuant to Section
8.
(b) The Company will be entitled to participate in the Proceeding at its own expense.
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(c) The Company shall not settle any action, claim or Proceeding (in whole or in part) which
would impose any expense, judgment, fine, penalty or limitation on the Indemnitee without the
Indemnitee’s prior written consent.
10. Procedure for Notification and Application for Indemnification.
(a) Within sixty (60) days after the actual receipt by Indemnitee of notice that he or she is
a party to or a participant (as a witness or otherwise) in any Proceeding, Indemnitee shall submit
to the Company a written notice identifying the Proceeding. The omission by the Indemnitee to
notify the Company will not relieve the Company from any liability which it may have to Indemnitee
(i) otherwise than under this Agreement, and (ii) under this Agreement only to the extent the
Company can establish that such omission to notify resulted in actual prejudice to the Company.
(b) Indemnitee shall thereafter deliver to the Company a written application to indemnify
Indemnitee in accordance with this Agreement. Such application(s) may be delivered from time to
time and at such time(s) as Indemnitee deems appropriate in his or her sole discretion. Following
such a written application for indemnification by Indemnitee, the Indemnitee’s entitlement to
indemnification shall be determined according to Section 11(a) of this Agreement.
11. Procedure Upon Application for Indemnification.
(a) Upon written request by Indemnitee for indemnification pursuant to Section 10(b), a
determination, if required by applicable law, with respect to Indemnitee’s entitlement thereto
shall be made in the specific case: (i) by a majority vote of the Disinterested Directors, even
though less than a quorum of the Board; or (ii) if so requested by the Indemnitee in his or her
sole discretion, by Independent Counsel in a written opinion to the Board, a copy of which shall be
delivered to Indemnitee. If it is so determined that Indemnitee is entitled to indemnification,
payment to Indemnitee shall be made within ten (10) days after such determination. Indemnitee
shall reasonably 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 Company (irrespective of the determination as to
Indemnitee’s entitlement to indemnification) and the Company hereby indemnifies and agrees to hold
Indemnitee harmless therefrom.
(b) In the event the determination of entitlement to indemnification is to be made by
Independent Counsel pursuant to Section 11(a) hereof, the Independent Counsel shall be selected as
provided in this Section 11(b). If a Change in Control shall not have occurred, the Independent
Counsel shall be selected by the Board of Directors, and the, Company shall give written notice to
Indemnitee advising him 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 (unless
Indemnitee shall request that such selection be made by the Board of Directors, in which event the
preceding sentence shall apply), and Indemnitee shall give written notice to the Company advising
it of the identity of the Independent Counsel so selected. In either event, Indemnitee or the
Company, as the case may be, may, within 10 days after such written notice of selection shall have been
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received, deliver to the Company 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. Absent a proper and timely objection, the
person so selected shall act as Independent Counsel. If such written objection is so made and
substantiated, the Independent Counsel so selected may not serve as Independent Counsel unless and
until such objection is withdrawn or a court of competent jurisdiction has determined that such
objection is without merit. If, within 20 days after submission by Indemnitee of a written request
for indemnification pursuant to Section 10(a) hereof, no Independent Counsel shall have been
selected and not objected to, either the Company or Indemnitee may petition a court of competent
jurisdiction for resolution of any objection which shall have been made by the Company or
Indemnitee to the other’s selection of Independent Counsel and/or for the appointment as
Independent Counsel of a person selected by the Court or by such other person as the Court shall
designate, and the person with respect to whom all objections are so resolved or the person so
appointed shall act as Independent Counsel under Section 11(a) hereof. Upon the due commencement
of any judicial proceeding or arbitration pursuant to Section 13(a) of this Agreement, Independent
Counsel shall be discharged and relieved of any further responsibility in such capacity (subject to
the applicable standards of professional conduct then prevailing).
(c) The Company agrees to pay the reasonable fees of Independent Counsel and to fully
indemnify such Independent Counsel against any and all Expenses, claims, liabilities and damages
arising out of or relating to this Agreement or its engagement pursuant hereto.
12. Presumptions and Effect of Certain Proceedings.
(a) In making a determination with respect to entitlement to indemnification hereunder, the
person or persons or entity making such determination shall presume that Indemnitee is entitled to
indemnification under this Agreement if Indemnitee has submitted a request for indemnification in
accordance with Section 10(b) of this Agreement, and the Company shall have the burden of proof to
overcome that presumption in connection with the making by any person, persons or entity of any
determination contrary to that presumption. Neither the failure of the Company (including by its
directors or independent legal 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 Company
(including by its directors or independent legal 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.
(b) If the person, persons or entity empowered or selected under Section 11 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 Company of the request therefor, 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
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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 conviction, 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
Company or, with respect to any criminal Proceeding, that Indemnitee had reasonable cause to
believe that his conduct was unlawful.
(d) Reliance as Safe Harbor. 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
records or books of account of the Enterprise, including financial statements, or on information
supplied to Indemnitee by the officers of the Enterprise in the course of their duties, or 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 by the Enterprise. The provisions of this Section 12(d) shall not be deemed to be
exclusive or to limit in any way the other circumstances in which the Indemnitee may be deemed or
found to have met the applicable standard of conduct set forth in this Agreement.
(e) Actions of Others. The knowledge and/or actions, or failure to act, of any other
director, trustee, partner, managing member, fiduciary, officer, agent or employee of the
Enterprise shall not be imputed to Indemnitee for purposes of determining the right to
indemnification under this Agreement.
13. Remedies of Indemnitee.
(a) In the event that (i) a determination is made pursuant to Section 11 of this Agreement
that Indemnitee is not entitled to indemnification under this Agreement, (ii) advancement of
Expenses is not timely made pursuant to Section 9 of this Agreement, (iii) no determination of
entitlement to indemnification shall have been made pursuant to Section 11(a) of this Agreement
within 45 days after receipt by the Company of the request for indemnification, (iv) payment of
indemnification is not made pursuant to Section 5, 6, 7 or the last sentence of Section 11(a) of
this Agreement within ten (10) days after receipt by the Company of a written request therefor, or
(v) payment of indemnification pursuant to Section 3 or 4 of 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 advancement of Expenses. Alternatively, Indemnitee, at his option, may seek an
award in arbitration to be conducted by a single arbitrator pursuant to the Commercial Arbitration
Rules of the American Arbitration Association. The Company shall not oppose Indemnitee’s right to
seek any such adjudication or award in arbitration.
(b) In the event that a determination shall have been made pursuant to Section 11(a) of this
Agreement that Indemnitee is not entitled to indemnification, any judicial proceeding or
arbitration commenced pursuant to this Section 13 shall be conducted in all respects as a de
novo trial, or arbitration, on the merits and Indemnitee shall not be prejudiced by reason of
that adverse
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determination. In any judicial proceeding or arbitration commenced pursuant to this
Section 1.3 the Company shall have the burden of proving Indemnitee is not entitled to
indemnification or advancement of Expenses, as the case may be, and the Company may not refer to or
introduce into evidence any determination pursuant to Section 11(a) of this Agreement adverse to
Indemnitee for any purpose. If Indemnitee commences a judicial proceeding or arbitration pursuant
to this Section 13, Indemnitee shall not be required to reimburse the Company for any advances
pursuant to Section 9 until a final determination is made with respect to Indemnitee’s entitlement
to indemnification (as to which all rights of appeal have been exhausted or lapsed).
(c) If a determination shall have been made pursuant to Section 11(a) of this Agreement that
Indemnitee is entitled to indemnification, the Company shall be bound by such determination in any
judicial proceeding or arbitration commenced pursuant to this Section 13, absent (i) a misstatement
by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitee’s
statement not materially misleading, in connection with the request for indemnification, or (ii) a
prohibition of such indemnification under applicable law.
(d) In the event that Indemnitee, pursuant to this Section 13, seeks a judicial adjudication
of or an award in arbitration to enforce his rights under, or to recover damages for breach of,
this Agreement, Indemnitee shall be entitled to recover from the Company, and shall be indemnified
by the Company against, any and all Expenses actually and reasonably incurred by him in such
judicial adjudication or arbitration. If it shall be determined in said judicial adjudication or
arbitration that Indemnitee is entitled to receive part but not all of the indemnification or
advancement of Expenses sought, the Indemnitee shall be entitled to recover from the Company, and
shall be indemnified by the Company against, any and all Expenses reasonably incurred by Indemnitee
in connection with such judicial adjudication or arbitration.
(e) The Company shall be precluded from asserting in any judicial proceeding or arbitration
commenced pursuant to this Section 13 that the procedures and presumptions of this Agreement are
not valid, binding and enforceable and shall stipulate in any such court or before any such
arbitrator that the Company is bound by all the provisions of this Agreement.
(f) The Company shall indemnify Indemnitee to the fullest extent permitted by law against all
Expenses and, if requested by Indemnitee, shall (within ten (10) days after the Company’s receipt
of such written request) advance such Expenses to Indemnitee, which are incurred by Indemnitee in
connection with any judicial proceeding or arbitration brought by Indemnitee for (i)
indemnification or advances of Expenses by the Company under the Agreement or any other agreement
or provision of the Company’s Certificate of Incorporation or Bylaws now or hereafter in effect or
(ii) recovery or advances under any insurance policy maintained by any person for the benefit of
Indemnitee, regardless of whether Indemnitee ultimately is determined to be entitled to such
indemnification, advance or insurance recovery, as the case may be.
14. Non-exclusivity; Survival of Rights, Insurance; Subrogation.
(a) The rights of indemnification and to receive advancement 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 Company’s Certificate of Incorporation, the Company’s Bylaws,
any agreement, a vote of stockholders or a resolution of directors, or otherwise. No amendment,
alteration or repeal of this Agreement or of any provision hereof shall limit or
10
restrict any right
of Indemnitee under this Agreement in respect of any action taken or omitted by such Indemnitee in
his Corporate Status prior to such amendment, alteration or repeal. To the extent that a change in
Delaware law, whether by statute or judicial decision, permits greater indemnification or
advancement of Expenses than would be afforded currently under the Company’s 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) To the extent that the Company maintains an insurance policy or policies providing
liability insurance for directors, officers, trustees, partners, managing members, fiduciaries,
employees, or agents of the Company or of any other Enterprise which such person serves at the
request of the Company. Indemnitee shall be covered by such policy or policies in accordance with
its or their terms to the maximum extent of the coverage available for any such director, trustee,
partner, managing member, fiduciary, officer, employee or agent under such policy or policies. If,
at the time the Company receives notice from any source of a Proceeding as to which Indemnitee is a
party or a participant (as a witness or otherwise), the Company has director and officer liability
insurance in effect, the Company shall give prompt notice of such Proceeding to the insurers in
accordance with the procedures set forth in the respective policies. The Company 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 Company shall be subrogated to the
extent of such payment to all of the rights of recovery of Indemnitee, who shall execute all papers
required and take all action necessary to secure such rights, including execution of such documents
as are necessary to enable the Company to bring suit to enforce such rights.
(d) The Company shall not be liable under this Agreement to make any payment of amounts
otherwise indemnifiable (or for which advancement is provided hereunder) hereunder if and to the
extent that Indemnitee has otherwise actually received such payment under any insurance policy,
contract, agreement or otherwise.
(e) The Company’s obligation to indemnification, or advance Expenses hereunder to Indemnitee
who is or was serving at the request of the Company as a director, officer, trustee, partner.
managing member. fiduciary, employee or agent of any other Enterprise shall be reduced by any
amount Indemnitee has actually received as indemnification or advancement of expenses from such
Enterprise.
15. Duration of Agreement. This Agreement shall continue until and terminate upon the later
of: (a) ten (10) years after the date that Indemnitee shall have ceased to serve as a director or
officer of the Company or as a director, officer, trustee, partner, managing, member, fiduciary,
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 Company, or (b) one (1) year
after the final termination of any Proceeding (including any rights of appeal thereto) then pending
in
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respect of which Indemnitee is granted rights of indemnification or advancement of Expenses
hereunder and of any proceeding commenced by Indemnitee pursuant to Section 13 of this Agreement
relating thereto (including any rights of appeal of any Section 13 Proceeding).
16. 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.
17. Enforcement and Binding Effect.
(a) The Company expressly confirms and agrees that it has entered into this Agreement and
assumed the obligations imposed on it hereby in order to induce Indemnitee to serve as a director
or officer of the Company, and the Company acknowledges that Indemnitee is relying upon this
Agreement in serving as a director or officer of the Company.
(b) 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.
(c) The indemnification and advancement of expenses provided by, or granted pursuant to this
Agreement shall continue as to a person who has ceased to be a director, officer, employee or agent
and shall inure to the benefit of the heirs, executors and administrators of such a person.
18. Modification and Waiver. No supplement, modification or amendment of this Agreement shall
be binding unless executed in writing by 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 nor shall any waiver constitute a continuing waiver.
19. Notice by Indemnitee. Indemnitee agrees promptly to notify the Company in writing upon
being served with any summons, citation, subpoena, complaint, indictment, information or other
document relating to any Proceeding, or matter which may be subject to indemnification or
advancement of Expenses covered hereunder. The failure of Indemnitee to so notify, the Company
shall not relieve the Company of any obligation which it may have to the Indemnitee under this
Agreement or otherwise.
20. 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,
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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:
(a) If to Indemnitee, at the address indicated on the signature page of this Agreement, or
such other address as Indemnitee shall provide in writing to the Company.
(b) If to the Company to:
Carriage Services, Inc.
0000 Xxxx Xxx Xxxx., Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attn: President
0000 Xxxx Xxx Xxxx., Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attn: President
or to any other address as may have been furnished to Indemnitee in writing by the Company.
21. Contribution. To the fullest extent permissible under applicable law, if the
indemnification provided for in this Agreement is unavailable to Indemnitee for any reason
whatsoever, the Company, in lieu of indemnifying Indemnitee, shall contribute to the amount
incurred by Indemnitee, whether for judgments, fines, penalties, excise taxes, amounts paid or to
be paid in settlement and/or for Expenses, in connection with any claim relating to an
indemnifiable event under this Agreement, in such proportion as is deemed fair and reasonable in
light of all of the circumstances of such Proceeding in order to reflect (i) the relative benefits
received by the Company and Indemnitee as a result of the event(s) and/or transaction(s) giving
cause to such Proceeding; and/or (ii) the relative fault of the Company (and its directors,
officers, employees and agents) and Indemnitee in connection with such event(s) and/or
transaction(s).
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 Delaware, without regard to its conflict of laws rules. Except with respect to any
arbitration commenced by Indemnitee pursuant to Section 10(a) of this Agreement, the Company 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 Chancery Court of the
State of Delaware (the “Delaware 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 Delaware Court for purposes of any action or proceeding arising out of or in
connection with this Agreement, (iii) irrevocably appoint, to the extent such party is not a
resident of the State of Delaware, The Corporation Trust Company as its agent in the State of
Delaware as such party’s agent for acceptance of legal process in connection with any such action
or proceeding, against such party with the same legal force and validity as if served upon such
party personally within the State of Delaware, (iv) waive any objection to the laying of venue of
any such action or proceeding in the Delaware Court, and (v) waive, and agree not to plead or to make, any claim that any such
action or proceeding brought in the Delaware 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
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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
IN WITNESS WHEREOF, the parties have entered into this Agreement on the dates set forth below
their signatures but made effective for all purposes as of the day and year first above written.
| CARRIAGE SERVICES, INC. | INDEMNITEE | |||||||
By:
|
/s/ Xxxxxx X. Xxxxx
Chief Executive Officer |
/s/ Xxxx Xxxxxx
Address: 0000 Xxxxx Xxxxxxx Xxxxxx, Xxxxx 00000 |
||||||
| Date: 8/7/07 | Date: 8/7/07 | |||||||
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