EXHIBIT 15
FORM OF INDEMNITY AGREEMENT OF EXECUTIVE OFFICER
AGREEMENT, effective as of February ___, 1999, between ASA HOLDINGS, INC.,
a Georgia corporation (the "Company"), and ____________________ (the
"Indemnitee"), whose principal residence address is ___________________________.
WHEREAS, it is essential to the Company to retain and attract as officers
the most capable persons available; and
WHEREAS, both the Company and Indemnitee recognize the increased risk of
litigation and other Claims being asserted against officers of public companies
in today's environment; and
WHEREAS, damages sought by class action plaintiffs in some cases amount to
tens of millions of dollars and, whether or not the case is meritorious, the
cost of defending them is enormous with few individual officers having the
resources to sustain such legal costs, not to mention the risk of a judgment
running into millions even in cases where the defendant was neither culpable
nor profited personally to the detriment of the corporation; and
WHEREAS, Section 14-2-857 of the Georgia Business Corporation Code, under
which the Company is organized, empowers corporation to indemnify persons
serving as officers, employees or agents of the corporation, who are not
directors of the corporation, to the extent, consistent with public policy, that
may be provided by its Articles of Incorporation, Bylaws, general or specific
action of its board of directors, or contract; and
WHEREAS, the Bylaws of the Company require the Company to indemnify any
person who was or is a party or is threatened to made a party to a proceeding
by reason of the fact that he is or was a director or officer of the Company to
the maximum extent permitted by, and in the manner provided by, the Georgia
Business Corporation Code; and
WHEREAS, in recognition of Indemnitee's need for substantial protection
against personal liability in order to enhance Indemnitee's service to the
Company in an effective manner, the increasing difficulty in obtaining
satisfactory directors' and officers' liability insurance coverage, and in part
to provide Indemnitee with specific contractual assurance that indemnification
protection provided under the Company's Bylaws will be available to Indemnitee
(regardless of, among other things, any amendment to or revocation of the
Articles of Incorporation ("Articles") or Bylaws ("Bylaws") of the Company or
any change in the composition of the Company's Board of Directors or acquisition
transaction relating to the Company), the Company wishes to provide in this
Agreement for the indemnification of and the advancing of expenses to
Indemnitee to the full extent (whether partial or complete) authorized or
permitted by law and as set forth in this Agreement, and for the continued
coverage of Indemnitee under the Company's directors' and officers' liability
insurance policies; and
WHEREAS, in order to induce Indemnitee to serve or continue to serve as an
executive officer, the Company has agreed to provide Indemnitee with the
benefits contemplated by this Agreement; and
WHEREAS, the Board of Directors is making no determination by this
Agreement that indemnification of Indemnitee for any particular act or omission
giving rise to a proceeding is permissible;
NOW, THEREFORE, in consideration of the premises and of Indemnitee agreeing
to serve or to continue to serve the Company directly or, at its request,
another enterprise, and intending to be legally bound hereby, the parties hereto
agree as follows:
1. Basic Indemnification Arrangement.
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a) In the event Indemnitee was, is, or becomes a party to or witness or
other participant in, or is threatened to be made a party to or
witness or other participant in, a Claim by reason of (or arising in
part out of) an Indemnifiable Event, the Company shall indemnify
Indemnitee to the full extent authorized or permitted by law as soon
as practicable but in any event no later than thirty (30) days after
written demand is presented to the Company, against any and 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 or amounts paid in settlement) of such Claim; provided,
however, that, except for proceedings to enforce rights to
indemnification, the Company shall not be obligated to indemnify
Indemnitee in connection with a proceeding (or part thereof) initiated
by Indemnitee unless such proceeding (or part thereof) was authorized
in advance, or unanimously consented to, by the Board of Directors of
the Company; and provided further that the Company shall not be
obligated to indemnify Indemnitee hereunder for an Indemnifiable Event
which is not (i) authorized by the Company's Board of Directors or
(ii) otherwise within the authority of the Indemnitee. If so requested
by Indemnitee, the Company shall advance (within two (2) business days
of such request) any and all Expenses to Indemnitee (an "Expense
Advance").
b) Notwithstanding the foregoing, (i) the obligations of the Company
under Section 1(a) shall be subject to the condition that the
Reviewing Party shall not have determined (in a written opinion, in
any case in which the Independent Legal Counsel referred to in Section
2 hereof is involved) that Indemnitee would not be permitted to be
indemnified under applicable law, and (ii) the obligation of the
Company to make an Expense Advance pursuant to Section 1(a) shall be
subject to the condition that, if, when and to the extent that the
Reviewing Party determines that Indemnitee would not be permitted to
be so indemnified under applicable law, the Company shall be entitled
to be reimbursed by Indemnitee (who hereby agrees to reimburse the
Company) for all such amounts theretofore paid; provided, however,
that if Indemnitee has commenced or thereafter commences legal
proceedings in a court of competent jurisdiction to secure a
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determination that Indemnitee should be indemnified under applicable
law, any determination made by the Reviewing Party that Indemnitee
would not be permitted to be indemnified under applicable law shall
not be binding and Indemnitee shall not be required to reimburse the
Company for any Expense Advance until a final judicial determination
is made with respect thereto (as to which all rights of appeal
therefrom have been exhausted or lapsed). If there has not been a
Change in Control, the Reviewing Party shall be selected by the
Company's Board of Directors, and if there has been such a Change in
Control, the Reviewing Party shall be the Independent Legal Counsel
referred to in Section 2 hereof. If there has been no determination by
the Reviewing Party or if the Reviewing Party determines that
Indemnitee substantively would not be permitted to be indemnified in
whole or in part under applicable law, Indemnitee shall have the right
to commence litigation in any court in the State of Georgia having
subject matter jurisdiction thereof and in which venue is proper
seeking an initial determination by the court or challenging any such
determination by the Reviewing Party or any aspect thereof, including
the legal or factual bases therefor, and the Company hereby consents
to service of process and to appear in any such proceeding. Any
determination by the Reviewing Party otherwise shall be conclusive and
binding on the Company and Indemnitee.
c) No change in the Company's Article or Bylaws or in the Georgia
Business Corporation Code subsequent to the date of this Agreement
shall have the effect of limiting or eliminating the indemnification
available under this Agreement as to any act, omission or capacity for
which this Agreement provides indemnification at the time of such act,
omission or capacity. If any change after the date of this Agreement
in any applicable law, statute or rule expands the power of the
Company to indemnify the Indemnitee, such change shall to the same
extent expand the Indemnitee's rights and the Company's obligations
under this Agreement. If any change in any applicable law, statute or
rule diminishes the power of the Company to Indemnify the Indemnitee,
such change, except to the extent otherwise required by law, statute
or rule to be applied to this Agreement, shall have no effect on this
Agreement or the parties' rights and obligations hereunder.
2. Change in Control. The Company agrees that if there is a Change in Control
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of the Company, then with respect to all matters thereafter arising concerning
the rights of Indemnitee to indemnity payments and Expense Advances under this
Agreement or any other agreement, or any Article or Bylaw provision now or
hereinafter in effect relating to Claims for Indemnifiable Events, the Company
shall seek legal advice only from Independent Legal Counsel selected by
Indemnitee and approved by the Company (which approval shall not be unreasonably
withheld). Such counsel, among other things, shall render its written opinion to
the Company and Indemnitee as to whether and to what extent the Indemnitee would
be permitted to be indemnified under applicable law. The Company agrees to pay
the reasonable fees of the Independent Legal Counsel referred to above and to
fully indemnify such counsel against any and all expenses (including attorneys'
fees), claims, liabilities and damages arising out of or relating to this
Agreement or its engagement pursuant hereto.
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3. Indemnification for Additional Expenses. The Company shall indemnify
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Indemnitee against any and all expenses (including attorneys' fees) and, if
requested by Indemnitee, shall (within two (2) business days of such request)
advance such expenses to Indemnitee, which are incurred by Indemnitee in
connection with any action brought by Indemnitee for (i) indemnification or
advance payment of Expenses by the Company under this Agreement or any other
agreement, or any Article or Bylaw provision now or hereafter in effect relating
to Claims Indemnifiable Events and/or (ii) recovery under any directors' and
officers' liability insurance policies maintained by the Company, provided,
however, that if there is a final judicial determination (as to which all rights
of appeal therefrom have been exhausted or lapsed) that Indemnitee is not
entitled to such indemnification, advance payment of expenses or insurance
recovery, Indemnitee shall reimburse the Company for all such expenses
theretofore paid under this Section 3.
4. Partial Indemnity, Etc. If Indemnitee is entitled under any provision of
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this Agreement to indemnification by the Company for some or a portion of the
Expenses, judgments, fines, penalties and amounts paid in settlement of a Claim
but not, however, for all of the total amount thereof, the Company shall
nevertheless indemnify Indemnitee for the portion thereof to which Indemnitee is
entitled. Moreover, notwithstanding any other provision of this Agreement, to
the extent that Indemnitee has been successful on the merits or otherwise in
defense of any or all Claims relating in whole or in part to an Indemnifiable
Event or in defense of any issue or matter therein, including dismissal without
prejudice, Indemnitee shall be indemnified against all Expenses incurred in
connection with such Claims as to which Indemnitee has been successful.
5. Burden of Proof. In connection with any determination by the Reviewing
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Party or otherwise 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.
6. No Presumptions. For purposes of this Agreement, the termination of any
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claim, action, suit or proceeding by judgment, order, settlement (whether with
or without court approval) or conviction, or upon a plea of nolo contendere, 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 a 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.
7. Nonexclusivity, Etc. The rights of the Indemnitee hereunder shall be in
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addition to any other rights Indemnitee may have under the Articles, Bylaws or
the Georgia Business Corporation Code or otherwise. To the extent that a change
in the Georgia Business Corporation Code (whether by statute or judicial
decision) permits greater indemnification by agreement than would be afforded
currently under
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the Articles, 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.
8. Liability Insurance.
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a) The Company hereby represented and warrants that the Company has
purchased and maintains directors' and officers' liability insurance
consisting of a primary policy issued by Federal Insurance Company
through Chubb Group of Insurance Companies under existing policy
number 8152-98-71 EPP providing $15,000,000.00 in aggregate coverage
and an excess directors' and officers' liability insurance consisting
of a supplemental policy issued by American Casualty Company of
Reading, PA, through CNA Insurance Companies under existing policy
number 169550701 providing $15,000,000.00 in aggregate coverage (the
"D&O Insurance").
b) The Company hereby covenants and agrees that, so long as Indemnitee
shall continue to serve as an executive officer of the Company and
thereafter so long as Indemnitee shall be subject to any possible
Claim or threatened, pending or completed action, suit or proceeding,
whether civil, criminal or investigative, by reason of the fact that
Indemnitee was an executive officer of the Company, the Company shall
maintain in full force and effect the D&O Insurance, or substantially
equivalent insurance coverage.
c) In all policies of D&O Insurance, Indemnitees shall be named as an
insured in such manner as to provide Indemnitee the same rights and
benefits, subject to the same limitations, as are accorded to the
Company's directors or officers most favorably insured by such policy.
9. Period of Limitations. No legal action shall be brought and no cause of
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action shall be asserted by or in the right of the Company against Indemnitee,
Indemnitee's spouse, heirs, executors or personal or legal representatives after
the expiration of two (2) 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 two (2) 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.
10. Notices
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a) The Indemnitee shall give to the Company notice in writing as soon as
practicable of any Claim made against him for which indemnification
will or could be sought under this Agreement. Failure to give such
notice shall not be cause for the Company not to indemnify
Indemnitee or advance Expenses unless the Company can demonstrate that
it was prejudiced by such failure.
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b) Notices shall be in writing and shall be either personally delivered
or sent by Federal Express or other reputable overnight courier for
next business day delivery, or sent by certified mail, return receipt
requested, addressed as follows:
If to the Company: ASA Holdings, Inc.
000 Xxxxxxxxxx Xxxxxx Xxxxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attn: Chief Executive Officer
If to the Indemnitee: at Indemnitee's address stated above
or at such other address as from time to time designated by written notice
delivered in accordance herewith. Any notice personally served shall be deemed
delivered on the date of such service. Any notice sent by overnight courier as
provided above shall be deemed delivered on the first business day after the
date such notice was actually delivered by such overnight courier or refused.
Any notice sent by mail as provided above shall be deemed delivered on the date
of actual receipt or refusal thereof.
11. Amendments, Etc. No supplement, modification or amendment of this Agreement
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shall be binding unless executed in writing by both of the parties hereto. No
waiver of any of the provisions of this Agreement shall be deemed or shall
constitute a waiver of any othe provisions hereof (whether or not similar) nor
shall such waiver constitute a continuing waiver.
12. Subrogation. In the event of payment under this Agreement, the Company
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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 shall do
everything that may be necessary to secure such rights, including the execution
of such documents necessary to enable the Company effectively to bring suit to
enforce such rights.
13. No Duplication of Payments. The Company shall not be liable under this
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Agreement to make any payment in connection with any Claim made against
Indemnitee to the extent Indemnitee has otherwise actually received payment
(under any insurance policy, the Articles, Bylaws or otherwise) of the amounts
otherwise indemnifiable hereunder.
14. Binding Effect, Etc. This Agreement shall be binding upon and inure to the
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benefit of and be enforceable by the parties hereto and their respective
successors, assigns, 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, spouses, heirs, executors and personal and legal
representatives. This Agreement shall continue in effect regardless of whether
Indemnitee continues to serve as an executive officer of the Company.
15. Severability. The provisions of this Agreement shall be severable in the
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event that any of the provisions hereof (including any provision within a single
section, paragraph or sentence) is held by a
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court of competent jurisdiction to be invalid, void or otherwise unenforceable
in any respect, and the validity and enforceability of any such provision in
every other respect and of the remaining provisions hereof shall not be in any
way impaired and shall remain enforceable to the full extent permitted by law.
16. Governing Law. This Agreement shall be governed by and construed and
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enforced in accordance with the laws of the State of Georgia applicable to
contracts made and to be performed in such state without giving effect to the
principles of conflicts of laws.
17. Certain Definitions.
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a) Change in Control. For purposes of this Agreement, a Change in Control
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shall mean the occurrence of any one or more of the following events:
(i) acquisition of at least twenty-five percent (25%) of the voting
stock of the Company by any single entity or group other than Delta
Air Lines, Inc. or a subsidiary thereof, the Company, a subsidiary or
an employee benefit plan (or trust forming a part hereof or a trustee
thereof acting solely in its capacity as trustee) maintained by the
Company or a subsidiary, (ii) ownership of more than fifty percent
(50%) of the voting stock of the Company by Delta Air Lines, Inc. or a
subsidiary thereof, (iii) individuals who constitute the Board on
February 14, 1999 (the "Incumbent Board") cease for any reason to
constitute at least a majority thereof; provided that any person
becoming a director subsequent to February 14, 1999, whose election or
nomination for election was approved by a vote of at least three-
quarters of the directors comprising the Incumbent Board (either by a
specific vote or by approval of the proxy statements of the Company in
which such person is named as a nominee for director, without
objection to such nomination) shall be, for purposes of this clause,
considered as though such person were a member of the incumbent Board;
provided, however, that no individual initially elected or nominated
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as a director of the Company as a result of an actual or threatened
election contest with respect to directors of any other actual or
threatened solicitation of proxies or consents by or on behalf of any
person other than the board shall be deemed to be a member of the
incumbent Board, (iv) the sale or disposition of all or substantially
all of the assets of the Company, or (v) consummation of a
reorganization, merger or consolidation or similar form of corporate
transaction involving the Company, unless, immediately following such
transaction more than 50% of the total voting power of the publicly
traded corporation resulting from such transaction eligible to elect
directors of such corporation would be represented by shares that were
Company voting stock immediately prior to such transaction, and such
voting power would be in substantially the same proportion as the
voting power of such Company voting stock immediately prior to the
transaction. Notwithstanding the foregoing, a Change in Control shall
not be deemed to occur solely because any person acquires beneficial
ownership of more than 25% of the Company voting stock as a result of
the acquisition of the Company voting stock by the Company which
reduces the number of Company voting stock outstanding; provided, that
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if after such acquisition by the
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Company such person becomes the beneficial owner of additional Company
voting stock that increases the percentage of outstanding Company voting
stock beneficially owned by such person, a Change in Control of the Company
shall then occur.
b) Claim: any threatened, pending or completed action, suit or proceeding, or
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any inquiry or investigation, whether instituted by or in the right of the
Company or any other party, that Indemnitee in good faith believes might
lead to the institution of any such action, suit or proceeding, whether
civil, criminal, administrative, investigative or other, arising in
connection with an Indemnifiable Event.
c) Expenses: include attorneys' fees and all other costs, expenses and
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obligations paid or incurred in connection with investigating, defending,
being a witness in or participating in (including on appeal), or preparing
to defend, be a witness in or participate in any Claim relating to any
Indemnifiable Event.
d) Indemnifiable Event: any event or occurrence related to the fact that
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Indemnitee is or was an executive officer of the Company, or is or was
serving at the request of the Company as a director, officer, or trustee of
another corporation, trust or other enterprise, or by reason of anything
done or not done by Indemnitee in any such capacity.
e) Independent Legal Counsel: an attorney or firm of attorneys, selected in
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accordance with the provisions of Section 2, who shall not have otherwise
performed services for the Company or Indemnitee within the last five (5)
years.
f) Reviewing Party: any appropriate person or body consisting of a member of
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members of the Company's Board of Directors or any other person or body
appointed by the Board who is not a party to the particular Claim for which
Indemnitee is seeking indemnification, or Independent Legal Counsel.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement this
_____ day of ____________, 1999.
ASA HOLDINGS, INC.
By: ____________________________________
Name:
Title:
___________________________________
Indemnitee
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