WELLCARE HEALTH PLANS, INC. INDEMNIFICATION AGREEMENT
Exhibit 10.3
This INDEMNIFICATION AGREEMENT (this “Agreement”) is entered into as of May
14, 2009 (the “Effective Date”)
by and between WellCare Health Plans, Inc., a Delaware corporation (the
“Company”), and Xxxxxxx X. Xxxx (“Indemnitee”). Capitalized
terms used and not otherwise defined in the section or provision of this
Agreement in which they are used have the meanings set forth in Section 10
hereof.
RECITALS
A.
The Board of Directors of the Company has determined that the increasing
difficulty in attracting and retaining qualified persons as directors and
officers is detrimental to the best interests of the Company’s stockholders and
that the Company should act to assure such persons that there will be adequate
insurance and indemnification against risks of claims and actions against them
arising out of their service to and activities on behalf of the
Company.
B.
Section 145 of the General Corporation Law
of the State of Delaware (the “DGCL”) empowers the Company to indemnify and
advance expenses to its officers, directors, employees and agents by agreement
and to indemnify and advance expenses to persons who serve, at the request of
the Company, as directors, officers, employees, or agents of other corporations
or enterprises, and expressly provides that the indemnification provided by
Section 145 is not exclusive.
C.
The Company has adopted provisions in its Certificate of
Incorporation providing for mandatory indemnification of its officers and
directors to the fullest extent permitted by applicable law, subject to certain
limitations specified in the Certificate of Incorporation, and the Company
wishes to clarify and enhance the rights and obligations of the Company and the
Indemnitee with respect to indemnification and advancement of
expenses.
D.
To the extent that Indemnitee previously has entered
into an indemnification agreement with the Company (or other agreement with
the Company that sets forth the indemnification rights and obligations of the
Indemnitee and the Company) that remains in full force and effect (a “Previous
Agreement”), the Company desires that such Previous Agreement shall govern the
indemnification rights and obligations of Indemnitee and the Company with
respect to Proceedings (as defined below) that arose or may arise from actual or
alleged events, occurrences, acts or omissions occurring prior to the Effective
Date (regardless of whether such Proceedings were or are initiated before, on or
after the Effective Date).
E.
Regardless of whether an Indemnitee has entered into a
Previous Agreement, the Company desires that this Agreement shall govern the
indemnification rights and obligations of Indemnitee and the Company with
respect to Proceedings initiated on or after the Effective Date
and arising out of actual or alleged events, occurrences, acts or
omissions occurring on or after the Effective Date.
F.
The Company desires to attract and retain the services
of highly qualified individuals, such as Indemnitee, to serve the Company and/or
one or more of its Subsidiaries and, in order to induce Indemnitee to provide or
to continue to provide services to the Company and/or one or more of its
Subsidiaries, wishes to provide for the indemnification and advancing of
expenses to Indemnitee to the maximum extent permitted by law.
G. In
view of the considerations set forth above, the Company desires that Indemnitee
be entitled to indemnification and advancement, subject to and in accordance
with the terms and conditions set forth herein.
NOW, THEREFORE, the Company and Indemnitee hereby agree as follows:
1. Indemnification and
Advancement of Expenses
(a) Indemnification for
Losses
To the fullest extent permitted by applicable law and in a manner permitted by
such law, if Indemnitee is or was or becomes, a party to or is otherwise
involved in any Proceeding, or is or was threatened to be made a party to or a
participant in any such Proceeding, by reason of the Indemnitee’s Corporate
Status, or by reason of (or arising in part out of) any actual or alleged event
or occurrence related to the Indemnitee’s Corporate Status, or by reason of any
actual or alleged act or omission on the part of Indemnitee taken or omitted in
or relating to the Indemnitee’s Corporate Status, then the Company shall
indemnify Indemnitee against any and all Losses actually and reasonably incurred
by the Indemnitee or on the Indemnitee’s behalf in connection with such a
Proceeding or any claim, issue, or matter therein.
(b) Indemnification for Expenses
as a Witness
Notwithstanding anything in this Agreement to the contrary, to the fullest
extent permitted by applicable law and in a manner permitted by such law, to the
extent that the Indemnitee, by reason of the Indemnitee’s Corporate
Status, is or was or becomes, or is or was threatened to be made, a witness in
any Proceeding to which the Indemnitee is not a party, the Indemnitee shall be
indemnified against all Expenses actually and reasonably incurred by the
Indemnitee or on the Indemnitee’s behalf in connection
therewith.
(c) Mandatory Payment of
Expenses
Notwithstanding any other provision of this Agreement to the contrary, to the
extent that Indemnitee has been successful on the merits or otherwise,
including, without limitation, the dismissal of an action without prejudice, in
defense of any Proceeding or in the defense of any claim, issue or matter
therein, Indemnitee shall be indemnified against all Expenses incurred by
Indemnitee in connection therewith.
(d) Procedure for Determination
of Entitlement to Indemnification
(i) To obtain
indemnification under this Agreement, the Indemnitee shall submit to the Company
a written request for indemnification, including therein or therewith, except to
the extent previously provided to the Company in connection with a request or
requests for advancement pursuant to Section 1(e) hereof, a statement or
statements reasonably evidencing all Losses incurred or paid by or on behalf of
the Indemnitee and for which indemnification is requested. The
Secretary of the Company shall, promptly upon receipt of such a request for
indemnification, advise the Board of Directors in writing that the Indemnitee
has requested indemnification.
(ii) Upon
written request by the Indemnitee for indemnification pursuant to the first
sentence of Section 1(d)(i) hereof, if required by applicable law and to the
extent not otherwise provided pursuant to the terms of this Agreement, a
determination with respect to the Indemnitee’s entitlement to indemnification
shall be made in the specific case by the Reviewing Party. If there
has not been a Change in Control, or if there has been a Change in Control which
has been approved by a majority of the directors of the Company who were
directors immediately prior to the Change in Control (the “Incumbent
Directors”), the Reviewing Party shall be selected by the Board of Directors of
the Company by a majority vote of the Disinterested Directors, and if there has
been a Change in Control which has not been approved by a majority of the
Incumbent Directors, the Reviewing Party shall be Independent Legal
Counsel.
(iii) Notice in writing of
any determination as to the Indemnitee’s entitlement to indemnification shall be
delivered to the Indemnitee promptly after such determination is made, and if
such determination of entitlement to indemnification has been made by
Independent Counsel, such determination shall be set forth in a written opinion
addressed to the Board of Directors, and such notice to Indemnitee shall be
accompanied by a copy of such written opinion. If it is determined
that the Indemnitee is entitled to indemnification, then payment to the
Indemnitee of all amounts to which the Indemnitee is determined to be entitled
shall be made within thirty (30) days after such determination. If it
is determined that the Indemnitee is not entitled to indemnification, then the
written notice to the Indemnitee (or, if such determination has been made by
Independent Counsel in a written opinion, the copy of such written opinion
delivered to the Indemnitee) shall disclose the basis upon which such
determination is based.
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(e)
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Advancement of
Expenses
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Notwithstanding anything in this
Agreement to the contrary, but subject to Section 8(b) hereof, if Indemnitee is
or was or becomes a party to or is otherwise involved in any Proceeding
(including as a witness), or is or was threatened to be made a party to or a
participant (including as a witness) in any such Proceeding, by reason of the
Indemnitee’s Corporate Status, or by reason of (or arising in part out of) any
actual or alleged event or occurrence related to the Indemnitee’s Corporate
Status, or by reason of any actual or alleged act or omission on the part of
Indemnitee taken or omitted in or relating to the Indemnitee’s Corporate Status,
then the Company shall advance all Expenses actually and reasonably incurred by
or on behalf of the Indemnitee in connection with any such Proceeding in advance
of the final disposition of such Proceeding within ten (10) calendar days after
the receipt by the Company of invoices presented to Indemnitee for such
Expenses; provided Indemnitee shall undertake to repay any Expenses advanced if
it shall ultimately be determined that the Indemnitee is not entitled to be
indemnified against such Expenses under this Agreement or
otherwise. Any advances and undertakings to repay pursuant to this
Section 3 shall be unsecured and interest free.
2. Remedies of
Indemnitee
(a) Adjudication of Entitlement
to Indemnification or Advancement
In the event that (i) a determination
is made by the Reviewing Party pursuant to Section 1(d) of this Agreement that
the Indemnitee is not entitled to indemnification, (ii) advancement of Expenses
is not timely made pursuant to Section 2 of this Agreement, (iii) if the
determination of entitlement to indemnification is not to be made by Independent
Counsel pursuant to Section 1(d) hereof, no determination of entitlement to
indemnification shall have been made pursuant to Section 1(d) within thirty (30)
days after receipt by the Company of the Indemnitee’s written request for
indemnification, (iv) if the determination of entitlement to indemnification is
to be made by Independent Counsel pursuant to Section 1(d) hereof, no
determination of entitlement to indemnification shall have been made pursuant to
Section 1(d) hereof within sixty (60) days after receipt by the Company of the
Indemnitee’s written request for indemnification, (v) payment of indemnification
is not made pursuant to Section 1(b) or Section 1(c) of this Agreement within
thirty (30) days after receipt by the Company of a written request therefor, or
(vi) payment of indemnification pursuant to Section 1(a) of this Agreement is
not made within thirty (30) days after a determination has been made pursuant to
Section 1(d) that the Indemnitee is entitled to indemnification, then the
Indemnitee shall be entitled to commence a proceeding in the Court of Chancery
of the State of Delaware (or other court of competent jurisdiction) seeking to
establish or enforce the Indemnitee’s entitlement to such indemnification or
advancement of Expenses, and the Company hereby consents to service of process
and to appear in any such proceeding commenced in the Court of Chancery of the
State of Delaware. If a determination shall have been made by the Reviewing
Party pursuant to Section 1(d) of this Agreement that the Indemnitee is not
entitled to indemnification, any judicial proceeding commenced pursuant to this
Section 2(a) shall be conducted in all respects as a de novo trial on the merits
and the Indemnitee shall not be prejudiced by reason of any adverse
determination by the Reviewing Party.
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(b)
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Notice by
Indemnitee
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Indemnitee
shall, as a condition precedent to Indemnitee’s right to be indemnified under
this Agreement, provide the Company notice in writing as soon as practicable of
any Proceeding for which indemnification will or could be sought under this
Agreement. The failure of the Indemnitee to so notify the Company
shall not relieve the Company of any obligation that it may have to the
Indemnitee under this Agreement or otherwise, except to the extent the Company
is materially prejudiced by such failure.
(c) No Presumptions; Burden of
Proof
(i) For
purposes of this Agreement, the termination of any Proceeding by judgment,
order, settlement (whether with or without court approval) or conviction, or
upon a plea of nolo contendre or its equivalent, shall not create a presumption
that Indemnitee did not meet any particular standard of conduct or have any
particular belief or that a court has determined that indemnification is not
permitted by applicable law. In addition, neither the failure of the
Reviewing Party to have made a determination as to whether Indemnitee has met
any particular standard of conduct or had any particular belief, nor an actual
determination by the Reviewing Party that Indemnitee has not met such standard
of conduct or did not have such belief, prior to the commencement of legal
proceedings by Indemnitee to secure a judicial determination that Indemnitee
should be indemnified under applicable law, shall be a defense to Indemnitee’s
claim or create a presumption that Indemnitee has not met any particular
standard of conduct or did not have any particular belief.
(ii) In connection
with any determination by the Reviewing Party or the Court of Chancery of the
State of Delaware (or other court of competent jurisdiction) as to whether
Indemnitee is entitled to be indemnified hereunder, the burden of proof shall be
on the Company to establish that Indemnitee is not so entitled.
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(d)
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Notice to
Insurers
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If, at the time of the receipt by the Company of a notice of a Proceeding
pursuant to Section 2(b) hereof, the Company has liability insurance in
effect which may cover such Proceeding, the Company shall give prompt notice of
the commencement 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 Indemnitee, all amounts payable as a result of such action, suit,
proceeding, inquiry or investigation in accordance with the terms of such
policies.
3.
Scope;
Nonexclusivity
(a) Scope
It is understood that the parties to this Agreement intend for this Agreement to
be interpreted and enforced so as to provide indemnification and advancement of
Expenses to Indemnitee to the fullest extent now or hereafter permitted by law,
subject only to the express exceptions and limitations otherwise set forth in
this Agreement. In the event of any change after the date of this
Agreement in any applicable law, statute or rule which expands the right of a
member of the Board of Directors or an officer, employee, agent or fiduciary of
the Company or any Subsidiary, as applicable, to receive indemnification from
the Company, it is the intent of the parties hereto that Indemnitee shall enjoy
by this Agreement the greater benefits afforded by such change. In
the event of any change in any applicable law, statute or rule which narrows the
right of a member of the Board of Directors or an officer, employee, agent or
fiduciary of the Company or any Subsidiary, as applicable, to receive
indemnification from the Company, such change, to the extent not otherwise
required by such law, statute or rule to be applied to this Agreement, shall
have no effect on this Agreement or the parties’ rights and obligations
hereunder.
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(b)
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Nonexclusivity
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The
indemnification and advancement of Expenses provided by this Agreement shall be
in addition to any rights to which Indemnitee may be entitled under the
certificate of incorporation, bylaws, or similar organizational documents of the
Company or any Subsidiary, any agreement, any vote of stockholders or
disinterested directors, the General Corporation Law of the State of Delaware,
under the letter agreement between the Company and the Indemnitee dated January
25, 2008 (the “Employment Letter”), or otherwise. Notwithstanding
anything in this Section 3(b) to the contrary, to the extent the time periods
specified in Sections 1 and 2 hereof with respect to the time at which the
Indemnitee shall be entitled to seek an adjudication as to the Indemnitee’s
entitlement to indemnification or advancement differ from similar time periods
specified in the Company’s Certificate of Incorporation or Bylaws, the time
periods set forth in Sections 1 and 2 hereof shall control and be binding on the
Indemnitee and the Company and shall be deemed a waiver of any contrary right
specified in the Company’s Certificate of Incorporation or
Bylaws.
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4.
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No Duplication of
Payments
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Except
to the extent required by applicable law, the Company shall not be liable under
this Agreement to make any payment to Indemnitee with respect to amounts
otherwise indemnifiable hereunder (or for which advancement is otherwise
provided hereunder) if and to the extent that the Indemnitee has otherwise
actually received such payment under any insurance policy, contract, agreement,
governing documents of the Company or Another Enterprise, or
otherwise. Nothing hereunder is intended to affect any right of
contribution of or against the Company in the event the Company and any other
person or persons have co-equal obligations to indemnify or advance expenses to
Indemnitee.
5.
Partial
Indemnification
If Indemnitee is entitled under any provision of this Agreement to
indemnification by the Company for some or a portion of Losses incurred in
connection with any Proceeding, but not for all of the total amount thereof, the
Company shall nevertheless indemnify Indemnitee for the portion of such Losses
to which Indemnitee is entitled.
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6.
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Mutual
Acknowledgement
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Both the Company and Indemnitee acknowledge that in certain instances, Federal
law or applicable public policy may prohibit the Company from indemnifying its
directors, officers, employees, agents or fiduciaries under this Agreement or
otherwise. Indemnitee understands and acknowledges that the Company
may be required in the future to undertake with the Securities and Exchange
Commission to submit the question of indemnification to a court in certain
circumstances for a determination of the Company’s right under public policy to
indemnify Indemnitee.
7.
Maintenance of Liability
Insurance
The Company shall, from time to time, make the good faith determination whether
or not it is practicable for the Company to obtain and maintain a policy or
policies of insurance with reputable insurance companies providing the officers
and directors of the Company with coverage for losses from wrongful acts, or to
ensure the Company’s performance of its indemnification obligations under this
Agreement. Among other considerations, the Company will weigh the
costs of obtaining such insurance coverage against the protection afforded by
such coverage. In all policies of director and officer liability
insurance, Indemnitee shall be named as an insured in such a manner as to
provide Indemnitee the same rights and benefits as are accorded to the most
favorably insured of the Company’s directors, if Indemnitee is a director, or to
the Company’s officers, if Indemnitee is not a director of the Company but is an
officer. Notwithstanding the foregoing, the Company shall have no
obligation to obtain or maintain such insurance if the Company 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 proved, if the
coverage provided by such insurance is limited by exclusions so as to provide an
insufficient benefit, or if Indemnitee is covered by similar insurance
maintained by a parent or Subsidiary of the Company.
8.
Exceptions
Notwithstanding anything to the contrary herein other than Section 1(c)
hereof, the Company shall not be obligated pursuant to the terms of this
Agreement:
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(a)
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Unlawful
Claims
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To indemnify Indemnitee with respect to any Proceeding if a final decision by a
court having jurisdiction shall have determined that such indemnification is not
lawful;
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(b)
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Proceedings Initiated
by Indemnitee
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To indemnify or advance Expenses to Indemnitee with respect to Proceedings
initiated or brought voluntarily by Indemnitee and not by way of defense, except
(i) as provided in Section 13 of this Agreement, (ii) with respect to any
Proceeding specifically authorized by the Board of Directors, or (iii) as
otherwise required under Section 145 of the Delaware General Corporation
Law; provided,
however, that
such indemnification or advancement of Expenses may be provided by the Company
in specific cases if the Board of Directors determines it to be appropriate;
or
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(c)
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Claims Under
Section 16(b)
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To indemnify Indemnitee for Losses incurred or sustained by or on behalf of
Indemnitee in any Proceeding for an accounting of profits arising from the
purchase and sale by Indemnitee of securities of the Company in violation of
Section 16(b) of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”), rules and regulations promulgated thereunder, or any similar
provisions of any federal, state or local statute; or
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(d)
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Standards of
Conduct
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Unless ordered by a court in a proceeding pursuant to Section 2(a) hereof or
otherwise, and except as provided in Section 1(c) and (to the extent permitted
by applicable law) Section 1(b) of this Agreement, to indemnify Indemnitee for
any Losses incurred by or on behalf of Indemnitee in connection with any
Proceeding if a determination has not been made by the Reviewing Party in the
specific case that Indemnitee has satisfied any standards of conduct required as
a condition to indemnification under Section 145 of the Delaware General
Corporation Law.
9.
Period of Limitations
No legal action shall be brought and no cause of action shall be asserted by or
in the right of the Company against Indemnitee, Indemnitee’s estate, spouse,
heirs, executors or personal or legal representatives after the expiration
of three (3) years from the date of accrual of such cause of action, and any
claim or cause of action of the Company shall be extinguished and deemed
released unless asserted by the timely filing of a legal action within such
three-year period; provided, however, that if any
shorter period of limitations is otherwise applicable to any such cause of
action, such shorter period shall govern.
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10.
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Construction of
Certain Terms and Phrases
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As used in this Agreement, the following terms and phrases shall have the
meanings set forth below:
(a) “Another
Enterprise” and “Other Enterprise” refer to a corporation, partnership, limited
liability company, joint venture, trust, employee benefit plan, or any other
form of enterprise, other than the Company.
(b) A “Change in
Control” shall be deemed to have occurred if (i) any “person” (as such term is
used in Sections 13(d) and 14(d) of the Exchange Act), other than a trustee
or other fiduciary holding securities under an employee benefit plan of the
Company or a corporation owned directly or indirectly by the stockholders of the
Company in substantially the same proportions as their ownership of stock of the
Company, (A) who is or becomes the beneficial owner, directly or
indirectly, of securities of the Company representing 10% or more of the
combined voting power of the Company’s then outstanding Voting Securities,
increases his beneficial ownership of such securities by 5% or more over the
percentage so owned by such person, or (B) becomes the “beneficial owner”
(as defined in Rule 13d-3 under said Act), directly or indirectly, of
securities of the Company representing more than 20% of the total voting power
represented by the Company’s then outstanding Voting Securities,
(ii) during any period of two consecutive years, individuals who at the
beginning of such period constitute the Board of Directors of the Company and
any new director whose election by the Board of Directors 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 majority thereof,
or (iii) the stockholders of the Company approve a merger or consolidation
of the Company with any other corporation other than a merger or consolidation
which would result in the Voting Securities of the Company outstanding
immediately prior thereto continuing to represent (either by remaining
outstanding or by being converted into Voting Securities of the surviving
entity) at least 80% of the total voting power represented by the Voting
Securities of the Company or such surviving entity outstanding immediately after
such merger or consolidation, or the stockholders of the Company approve a plan
of complete liquidation of the Company or an agreement for the sale or
disposition by the Company of (in one transaction or a series of transactions)
all or substantially all of the Company’s assets.
(c) References to the
“Company” shall include, in addition to the resulting corporation, any
constituent corporation (including any constituent of a constituent) absorbed in
a consolidation or merger which, if its separate existence had continued, would
have had power and authority to indemnify its directors, officers, employees,
agents or fiduciaries, so that if Indemnitee is or was a director, officer,
employee, agent or fiduciary of such constituent corporation, or is or was
serving at the request of such constituent corporation as a director, officer,
employee, agent or fiduciary of another corporation, partnership, joint venture,
employee benefit plan, trust or other enterprise, Indemnitee shall stand in the
same position under the provisions of this Agreement with respect to the
resulting or surviving corporation as Indemnitee would have with respect to such
constituent corporation if its separate existence had continued.
(d) “Corporate
Status” describes the Indemnitee’s status as a present or former director,
officer, employee, agent, or fiduciary of the Company or any Subsidiary, or the
Indemnitee’s status as a director, officer, employee, agent, or fiduciary of
Another Enterprise to the extent the Indemnitee is or was serving in such
capacity with respect to such Other Enterprise at the request of Company or any
Subsidiary.
(e) “Expense” shall
include, without limitation, attorneys’ fees; retainers; disbursements of
counsel; court costs; filing fees; transcript costs; fees and expenses of
experts; fees and expenses of witnesses; fees and expenses of accountants and
other consultants (excluding public relations consultants unless approved in
advance by the Company); travel expenses; duplicating and imaging costs;
printing and binding costs; telephone charges; facsimile transmission charges;
computer legal research costs; postage; delivery service fees; fees and expenses
of third-party vendors; the premium, security for, and other costs associated
with any bond (including supersedeas or appeal bonds, injunction bonds, cost
bonds, appraisal bonds or their equivalents), in each case 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, as well as all other “expenses” within the meaning of that
term as used in Section 145 of the General Corporation Law of the State of
Delaware and all other disbursements or expenses of types customarily and
reasonably incurred in connection with prosecuting, defending, preparing to
prosecute or defend, investigating, being or preparing to be a witness in, or
otherwise participating in, actions, suits, or proceedings similar to or of the
same type as the Proceeding with respect to which such disbursements or expenses
were incurred; but, notwithstanding anything in the foregoing to the contrary,
“Expenses” shall not include amounts of judgments, penalties, or fines actually
levied against the Indemnitee in connection with any Proceeding.
(f) “Independent
Legal Counsel” shall mean an attorney or firm of attorneys who shall not have
otherwise performed services for the Company or Indemnitee within the last three
years (other than with respect to matters concerning the rights of Indemnitee
under this Agreement, or of other indemnitees under similar indemnity
agreements). Independent Legal Counsel shall be selected as
follows: (i) by a majority of the Disinterested Directors if there
has not been a Change in Control or if there has been a Change in Control which
has been approved by a majority of the Incumbent Directors; or (ii) by
Indemnitee, subject to the approval by a majority of the Disinterested Directors
(which shall not be unreasonably withheld), if there has been a Change in
Control which has not been approved by a majority of the Incumbent
Directors. The Company agrees to pay the reasonable fees of the
Independent Legal Counsel, regardless of which party selects the Independent
Legal Counsel.
(g) “Losses” means
all Expenses, judgments, penalties, fines (including any excise taxes assessed
on Indemnitee with respect to an employee benefit plan), liabilities, and
amounts paid in settlement (if such settlement is approved in advance by the
Company, which approval shall not be unreasonably withheld or delayed) in
connection with a Proceeding, and any federal, state, local or foreign taxes
imposed on Indemnitee as a result of the actual or deemed receipt of any
payments under this Agreement.
(h) “Proceeding”
means any threatened, pending, or completed action, suit, arbitration,
alternative dispute resolution mechanism, investigation (including any internal
investigation), inquiry, administrative hearing, or any other threatened,
pending, or completed proceeding, whether brought by or in the right of the
Company or otherwise, and whether civil, criminal, administrative, or
investigative.
(i) “Reviewing
Party” shall mean (i) the Board of Directors acting by a majority vote of
the directors who are not and were not parties to the Proceeding in respect of
which indemnification is being sought (the “Disinterested Directors”), even
though less than a quorum of the Board of Directors, (ii) a committee of
some or all of the Disinterested Directors designated by a majority vote of the
Disinterested Directors, even though less than a quorum of the Board of
Directors, or (iii) Independent Legal Counsel.
(j) “Subsidiary”
shall mean any corporation, partnership, limited liability company, or other
entity of which more than 50% of the voting power represented by the outstanding
voting securities or other equity interests is owned, directly or indirectly, by
the Company, by the Company and one or more other Subsidiaries, or by one or
more other Subsidiaries.
(k) “Voting
Securities,” when used with reference to the Voting Securities of the Company,
shall mean any securities of the Company that vote generally in the election of
directors.
(l) References
herein to a director of Another Enterprise (or a director of an Other
Enterprise) or to a director of a Subsidiary shall include, in the case of any
entity that is not managed by a board of directors, such other position, such as
manager or trustee or member of the governing body of such entity, that entails
responsibility for the management and direction of such entity’s affairs,
including, without limitation, the general partner of any partnership (general
or limited) and the manager or managing member of any limited liability
company.
(m) (1) References herein
to the Indemnitee’s serving at the request of the Company or a Subsidiary as a
director, officer, employee, agent, or fiduciary of Another Enterprise shall
include any service as a director, officer, employee, or agent of the Company or
any Subsidiary that imposes duties on the Indemnitee, or involves services by
the Indemnitee, with respect to an employee benefit plan of the Company or any
of its affiliates, other than solely as a participant or beneficiary of such a
plan; and (2) if the Indemnitee has acted in good faith and in a manner such the
Indemnitee reasonably believed to be in the interest of the participants and
beneficiaries of an employee benefit plan, the Indemnitee shall be deemed to
have acted in a manner not opposed to the best interests of the Company for
purposes of this Agreement and applicable law.
11.
Counterparts
This Agreement may be executed in one or more counterparts, each of which shall
constitute an original.
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12.
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Binding Effect;
Successors and Assigns; Survival of
Rights
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This Agreement shall be binding upon and inure to the benefit of and be
enforceable by the parties hereto and their respective successors (including any
direct or indirect successor by purchase, merger, consolidation or otherwise to
all or substantially all of the business and/or assets of the Company), assigns,
spouses, heirs, and personal and legal representatives. The Company
shall require and cause any successor (whether direct or indirect by purchase,
merger, consolidation or otherwise) to all, substantially all, or a substantial
part, of the business and/or assets of the Company, by written agreement in form
and substance reasonably satisfactory to Indemnitee, expressly to assume and
agree to perform this Agreement in the same manner and to the same extent that
the Company would be required to perform if no such succession had taken
place. The indemnification, advancement, and other rights provided
by, or granted pursuant to, this Agreement shall continue during the period that
the Indemnitee is a director, officer, employee, agent, or fiduciary of the
Company or a Subsidiary or is serving in any such capacity with respect to
Another Enterprise at the request of the Company or a Subsidiary, and shall
continue after such period so long as Indemnitee shall be subject to any
possible Proceeding (including any appeal therefrom), by reason of Indemnitee’s
Corporate Status, or by reason of (or arising in part out of) any actual or
alleged event or occurrence related to the Indemnitee’s Corporate Status, or by
reason of any actual or alleged act or omission on the part of Indemnitee taken
or omitted in or relating to the Indemnitee’s Corporate Status, and shall
further continue for such period of time following the conclusion of any such
Proceeding as may be reasonably necessary for Indemnitee to enforce rights and
remedies pursuant to this Agreement as provided in Section 2 of this
Agreement.
13. Attorneys’ Fees and Other
Expenses in Enforcement Proceedings
In the event that (a) the Indemnitee commences a
proceeding seeking (1) to establish or enforce the Indemnitee’s entitlement to
indemnification or advancement of Expenses pursuant to the terms of this
Agreement, (2) to otherwise enforce Indemnitee’s rights under or to interpret
the terms of this Agreement, (3) to recover damages for breach of this
Agreement, (4) to establish or enforce Indemnitee’s entitlement to
indemnification or advancement pursuant to the Certificate of Incorporation or
Bylaws of the Company, or (5) to enforce or interpret the terms of any liability
insurance policy maintained by the Company (each such proceeding an “Indemnitee
Enforcement Proceeding”), or (b) the Company commences a proceeding against the
Indemnitee seeking (1) to recover, pursuant to an undertaking or otherwise,
amounts previously advanced to Indemnitee, (2) to enforce the Company’s rights
under or to interpret the terms of this Agreement, or (3) to recover damages for
breach of this Agreement (each such proceeding a “Company Enforcement
Proceeding” and together with each form of Indemnitee Enforcement Proceeding, an
“Enforcement Proceeding”), then the 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 or on behalf of such Indemnitee in
connection with such Enforcement Proceeding, but only if (and only to the
extent) the Indemnitee prevails therein. The Company also shall be
required to advance all Expenses actually and reasonably incurred by or on
behalf of the Indemnitee in connection with any Enforcement Proceeding in
advance of the final disposition of such proceeding within ten (10) calendar
days after the receipt by the Company of invoices presented to Indemnitee for
such Expenses; provided Indemnitee undertakes to repay any Expenses so advanced
if and to the extent Indemnitee does not prevail in such Enforcement
Proceeding.
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14.
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Notice
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All notices and other communications required or permitted hereunder shall be in
writing, shall be effective when received, and shall in any event be deemed to
be received (a) five (5) days after deposit with the U.S. Postal Service or
other applicable postal service, if delivered by certified or registered mail,
postage prepaid, (b) upon delivery, if delivered by hand, (c) one
business day after the business day of deposit with Federal Express or similar
overnight courier, freight prepaid, or (d) one day after the business day of
delivery by facsimile transmission, if delivered by facsimile transmission, with
copy by first class mail, postage prepaid, and shall be addressed if to
Indemnitee, at Indemnitee’s address as set forth beneath Indemnitee’s signature
to this Agreement and if to the Company at the address of its principal
corporate offices (attention: Secretary) or at such other address as a party may
designate by ten days’ advance written notice to the other party
hereto.
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15.
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Headings
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The headings used in this Agreement have been inserted for convenience of
reference only and do not define or limit the provisions hereof.
16.
Severability
The provisions of this Agreement shall be severable in the event that any of the
provisions hereof (including any provision within a single section, paragraph or
sentence) are held by a court of competent jurisdiction to be invalid, void or
otherwise unenforceable, and the remaining provisions shall remain enforceable
to the fullest extent permitted by law. Furthermore, to the fullest
extent possible, the provisions of this Agreement (including, without
limitations, each portion of this Agreement containing any provision held to be
invalid, void or otherwise unenforceable, that is not itself invalid, void or
unenforceable) shall be construed so as to give effect to the intent manifested
by the provision held invalid, illegal or unenforceable.
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17.
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Choice of
Law;
Submission to Jurisdiction; Service of
Process
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This Agreement shall be governed by and its provisions construed and enforced in
accordance with the laws of the State of Delaware, as applied to contracts
between Delaware residents, entered into and to be performed entirely within the
State of Delaware, without regard to the conflict of laws principles
thereof. The Company and the Indemnitee each hereby irrevocably and
unconditionally (i) agrees and consents to the nonexclusive jurisdiction of the
courts of the State of Delaware for all purposes in connection with any action,
suit, or proceeding that arises out of or relates to this Agreement and agrees
that any such action instituted under this Agreement may be brought in the Court
of Chancery of the State of Delaware or other court of the State of Delaware
having jurisdiction over such matter; (ii) waives any objection to the laying of
venue of any such action or proceeding in the courts of the State of Delaware;
and (iii) waives, and agrees not to plead or to make, any claim that any such
action or proceeding brought in the courts of the State of Delaware has been
brought in an improper or otherwise inconvenient forum. Each of the
Company and the Indemnitee hereby consents to service of any summons and
complaint and any other process that may be served in any action, suit, or
proceeding arising out of or relating to this Agreement by mailing by certified
or registered mail, with postage prepaid, copies of such process to such party
at its address for receiving notice pursuant to Section 14
hereof. Nothing herein shall preclude service of process by any other
means permitted by applicable law.
18. Subrogation
In the event of 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 documents required and shall do all acts that may be necessary
to secure such rights and to enable the Company effectively to bring suit to
enforce such rights.
19. Amendment and
Termination
No amendment, modification, termination or cancellation of this Agreement shall
be effective unless it is in writing signed by both 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 hereof (whether or
not similar) nor shall such waiver constitute a continuing waiver.
20. Effective Date; Prior
Agreements
This Agreement shall be effective as of the Effective Date and shall
govern the indemnification rights and obligations of Indemnitee and the Company
with respect to Proceedings arising from (a) any actual or alleged event or
occurrence related to Indemnitee’s Corporate Status, or (b) any actual or
alleged act or omission on the part of Indemnitee taken or omitted in or
relating to Indemnitee’s Corporate Status, occurring in the case of both (a) and
(b) on or after the Effective Date. To the extent that Indemnitee has a
Previous Agreement, the indemnification rights and obligations of Indemnitee and
the Company with respect to proceedings that arose or may arise from actual or
alleged events, occurrences, acts or omissions occurring prior to the Effective
Date (regardless of whether such proceedings were or are initiated before, on or
after the Effective Date) shall be governed by such Previous Agreement and not
this Agreement.
21.
Integration and Entire
Agreement
This Agreement and the Employment Letter set forth the entire understanding
between the parties hereto and supersedes (except as set forth in paragraph 20)
and merges all previous written and oral negotiations, commitments,
understandings and agreements relating to the subject matter hereof between the
parties hereto.
22. No Construction as Employment
Agreement
Nothing contained in this Agreement shall be construed as giving Indemnitee any
right to be retained in the employ of the Company or any of its
Subsidiaries.
[SIGNATURE
PAGE FOLLOWS]
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first above written.
By:
/s/ Xxxxxx X. X'Xxxx
III
Name:
Xxxxxx X. X'Xxxx
III
Title:
Senior Vice President, General
Counsel and Secretary
AGREED TO
AND ACCEPTED BY:
Signature:
/s/ Xxxxxxx X.
Xxxx
Name:
Xxxxxxx
X.
Xxxx
Address:
00 Xxx Xxxx Xxxx,
Xxxxx000
Xxxxxxxxx,
XX
00000
Facsimile: [REDACTED]
Phone: [REDACTED]
