EXHIBIT 10.9
INDEMNIFICATION AGREEMENT
This INDEMNIFICATION AGREEMENT (the "Agreement") is made and entered
into as of the ___ day of ________, 20__ by and between Centex Construction
Products, Inc., a Delaware corporation (the "Company"), and ____________________
(the "Director").
RECITALS
A. The Board of Directors of the Company has determined that it is in
the best interests of the Company to retain the Director's services and to
assure the Director that there will be adequate protection from certain
liabilities.
B. This Agreement is separate from and in addition to the Certificate
of Incorporation (as amended) of the Company (the "Charter") and the Bylaws (as
amended) of the Company (the "Bylaws") and any resolutions adopted pursuant
thereto, and shall not be deemed a substitute therefore, nor to diminish or
abrogate any rights of the Director thereunder.
C. Each of Section 145 of the General Corporation Law of the State of
Delaware (the "DGCL"), the Charter and the Bylaws is nonexclusive, and therefore
contemplates that contracts may be entered into with respect to indemnification
of directors, officers and employees.
D. This Agreement replaces and supersedes any prior agreement between
the Company and the Director relating to the indemnification of the Director.
E. In recognition of the Director's need for protection against
personal liability, and in part to provide the Director with specific
contractual assurance that indemnification will be available to the Director
(regardless of, among other things, any amendment to or revocation of the
Charter, the Bylaws 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, the Director as set forth in this Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual agreements herein contained, the receipt and sufficiency of which are
hereby acknowledged, the Company and the Director agree as follows:
1. Definitions. As used in this Agreement:
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(a) "Affiliate" means, with respect to any person or entity,
any other person or entity that directly, or indirectly through one or
more intermediaries, controls, or is controlled by, or is under common
control with, such person.
(b) "Centex Corporation" means Centex Corporation, a Nevada
corporation.
(c) "Change of Control" means the occurrence after the date of
this Agreement any of the following events: (a) an event required to be
reported in response to Item 6(e) of Schedule 14A of Regulation 14A (or
in response to any similar item or any similar schedule or form)
promulgated under the Exchange Act, whether or not the Company is then
subject to such reporting requirement; (b) any "person" (as such term
is used in Sections 13(d) and 14(d) of the Exchange Act), other than
Centex Corporation or any Affiliate of Centex Corporation, shall become
the "beneficial owner" (as defined in Rule 13d-3 under the Exchange
Act), directly or indirectly, of securities of the Company representing
50% or more of the combined voting power of the then outstanding voting
securities of the Company without prior approval of at least two-thirds
of the members of the Board of Directors in office immediately prior to
such person's attaining such percentage interest; (c) the Company is a
party to a merger, consolidation, sale of assets or other
reorganization, or a proxy contest, as a consequence of which members
of the Board of Directors in office immediately prior to such
transaction or event constitute less than a majority of the Board of
Directors thereafter; or (d) a change in the composition of the
Company's Board of Directors occurring within a two-year period, as a
result of which fewer than a majority of the directors in office are
Incumbent Directors; provided, however, that, notwithstanding clauses
(a) and (b) above, the acquisition by any "person" (as such term is
used in Sections 13(d) and 14(d) of the Exchange Act) of securities of
the Company directly from Centex Corporation shall not be deemed to
constitute or result in a "Change of Control."
(d) "Corporate Status" describes the status of a person who is
or was or has agreed to serve as a director, officer, employee,
fiduciary, trustee or agent of the Company or of any other corporation,
partnership, joint venture, trust, employee benefit plan or other
enterprise in which such person is or was serving in such capacity at
the request of the Company.
(e) "Expenses" includes any reasonable costs incurred by a
Director, including 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 type
customarily incurred in connection with prosecuting, defending,
preparing to prosecute or defend, investigating or being or preparing
to be a witness in a Proceeding.
(f) "Incumbent Director" shall include directors who either
(i) are directors of the Company as of the date hereof, or (ii) are
elected, or nominated for election, to the Board of Directors with the
affirmative votes of at least a majority of the Incumbent Directors at
the time of such election or nomination (but shall not include an
individual whose election or
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nomination is in connection with an actual or threatened proxy contest
relating to the election of directors to the Company).
(g) "Independent Counsel" means a law firm, or a member of a
law firm, that is acting pursuant to Section 145 of the DGCL, is
experienced in matters of Delaware corporate law, and neither presently
is, nor in the five years prior to his or her selection or appointment
has been, retained to represent: (a) the Company or the Director in any
matter material to either such party, (b) any other party to the
Proceeding giving rise to a claim for indemnification hereunder or (c)
the beneficial owner, directly or indirectly, of securities of the
Company representing 5% or more of the combined voting power of the
then outstanding voting securities of the Company. 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 the Director in an action to determine the Director's
rights under this Agreement.
(h) "Proceeding" includes any pending or threatened action,
suit, arbitration, alternate dispute resolution mechanism,
investigation, administrative hearing or any other proceeding, whether
civil, criminal, administrative or investigative, including any appeals
therefrom.
2. Services by the Director. The Director has agreed to serve as a
director of the Company, provided that the Director may resign at any time and
for any reason from such position by giving written notice of his resignation to
the President or the Secretary of the Company in accordance with the Bylaws.
This Agreement shall not be deemed an employment contract between the Company
(or any of its Affiliates) and the Director. This Agreement shall continue in
force after the Director has ceased to serve as a director or officer of the
Company.
3. Basic Indemnification Arrangement.
(a) Indemnity. If the Director 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, any Proceeding (defined above)
by reason of his Corporate Status (defined above), the Company shall
indemnify the Director (i) as provided in this Agreement and (ii) to
the fullest extent permitted by applicable law in effect on the date
hereof and to such greater extent as applicable law may thereafter
permit, as soon as practicable but in any event no later than thirty
days after written demand is presented to the Company, against any and
all Expenses (defined above), judgments, fines, penalties and amounts
paid in settlement (including all interest, assessments and other
charges actually incurred and paid or payable in connection with or in
respect of such Expenses, judgments, fines, penalties or amounts paid
in settlement) of such Proceeding.
(b) Advancement of Expenses. To the fullest extent permitted
by Section 145(e) of the DGCL, the Director shall be entitled to
payment of, and the Company shall pay, Expenses in advance of the final
disposition of any Proceeding (an "Expense Advance") within ten days
after receipt by the Company of a written notice requesting the
advancement of such
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Expenses, which notice shall contain an undertaking by or on behalf of
the Director to repay such amount if it shall ultimately be determined
that the Director is not entitled to be indemnified by the Company as
authorized by Section 145 of the DGCL. No security shall be required
for such an undertaking and such an undertaking shall be accepted
without reference to the Director's financial ability to make
repayment. Any Expense Advance shall be made interest-free.
(c) Conditions. Notwithstanding the foregoing, (i) the
obligations of the Company under Section 3(a) shall be subject to the
condition that it shall not have been determined (in a written opinion
in any case in which Independent Counsel is involved) that the Director
would not be permitted to be indemnified under applicable law, and (ii)
the obligation of the Company to make an Expense Advance pursuant to
subsection (b) hereof shall be subject to the condition that, if, when
and to the extent that it is determined that the Director would not be
permitted to be so indemnified under applicable law, the Company shall
be entitled to be reimbursed by the Director (who hereby agrees to
reimburse the Company) for all such amounts theretofore paid. Further,
and subject to the provisions of Section 4(e), the Director shall not
be entitled to indemnification or advancement of Expenses under this
Agreement (i) with respect to any Proceeding brought or made by such
Director against the Company; or (ii) on account of any suit in which
judgment is rendered against the Director for an accounting of profits
made from the purchase and sale or sale and purchase by the Director of
securities of the Company pursuant to the provisions of Section 16(b)
of the Exchange Act or similar provisions of any federal, state or
local statutory law.
4. Procedures for Determination of Entitlement to Indemnification.
(a) To obtain indemnification under this Agreement, the
Director shall submit to the Company a written request, including
therein or therewith such documentation and information as is
reasonably available to the Director and is reasonably necessary to
determine whether and to what extent the Director is entitled to
indemnification. The Secretary of the Company shall, promptly upon
receipt of such a request for indemnification, advise the Board of
Directors of the Company in writing that the Director has requested
indemnification. The Director shall cooperate with the party reviewing
the Director's entitlement to indemnification, including providing to
said party upon reasonable advance request any documentation or
information that is not privileged or otherwise protected from
disclosure and that is reasonably available to the Director and
reasonably necessary to such determination. The Company shall pay any
costs or expenses (including attorneys' fees and disbursements)
incurred by the Director in so cooperating (irrespective of the
determination as to the Director's entitlement to indemnification) and
the Company hereby indemnifies and agrees to hold the Director harmless
therefrom.
(b) Determining Entitlement to Indemnification Prior to a
Change of Control. If a Change of Control has not occurred prior to or
at the time a request for indemnification hereunder is submitted to the
Company, a Director's entitlement to indemnification shall be
determined in accordance with ss. 145(d) of the DGCL; provided,
however, that the provision of said statute allowing the stockholders
of the Company to make such a determination shall
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not apply. If entitlement to indemnification is to be determined by
Independent Counsel, the Company shall furnish notice to the Director
within ten days after receipt of the request for indemnification,
specifying the identity and address of Independent Counsel. The
Director may, within 14 days after receipt of such written notice of
selection, deliver to the Company a written objection to such
selection. Such objection may be asserted only on the ground that the
Independent Counsel so selected does not meet the requirements of
Independent Counsel and the objection shall set forth with
particularity the factual basis of such assertion. If there is an
objection to the selection of Independent Counsel, either the Company
or the Director may petition the Court of Chancery of the State of
Delaware or any other court of competent jurisdiction for a
determination that the objection is without a reasonable basis or for
the appointment of Independent Counsel selected by the court.
(c) Determining Entitlement to Indemnification After a Change
of Control. If a Change of Control has occurred prior to or at the time
a request for indemnification hereunder is submitted to the Company, a
Director's entitlement to indemnification shall be determined in a
written opinion of Independent Counsel selected by the Director. The
Director shall give the Company written notice advising of the identity
and address of the Independent Counsel so selected. The Company may,
within fourteen days after receipt of such written notice of selection,
deliver to the Director a written objection to such selection. The
Director may, within fourteen days after the receipt of such objection
from the Company, submit the name of another Independent Counsel and
the Company may, within fourteen days after receipt of such written
notice of selection, deliver to the Director a written objection to
such selection. Such objection may be asserted only on the ground that
the Independent Counsel so selected does not meet the requirements of
Independent Counsel and the objection shall set forth with
particularity the factual basis of such assertion. The Director may
petition the Court of Chancery of the State of Delaware or any other
court of competent jurisdiction for a determination that the Company's
objection to any selection of Independent Counsel is without a
reasonable basis or for the appointment as Independent Counsel of a
person selected by the court.
(d) Expenses of Independent Counsel. The Company shall pay any
and all reasonable fees and expenses of Independent Counsel acting
pursuant to this Section 4 and in any proceeding to which it is a party
or witness in respect of its investigation and written report and shall
pay all reasonable fees and expenses incident to the procedures in
which such Independent Counsel was selected or appointed. No
Independent Counsel may serve if a timely objection has been made to
his or her selection until a court has determined that such objection
is without a reasonable basis.
(e) Trial De Novo. In the event that (a) a determination is
made pursuant to Section 4(b) or 4(c) that a Director is not entitled
to indemnification under this Agreement, (b) advancement of Expenses is
not timely made pursuant to Section 3(b), (c) Independent Counsel has
not made and delivered a written opinion determining a request for
indemnification (i) within 90 days after being appointed by a court,
(ii) within 90 days after objections to his or her selection have been
overruled by a court or (iii) within 90 days after the time for the
Company or the Director to object to his or her selection or (d)
payment of
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indemnification is not made within five days after a determination of
entitlement to indemnification has been made or deemed to have been
made pursuant to Section 4(b) or 4(c), the Director shall be entitled
to an adjudication in any court of competent jurisdiction of his or her
entitlement to such indemnification or advancement of Expenses. In the
event that a determination shall have been made that the Director is
not entitled to indemnification, any judicial proceeding or arbitration
commenced pursuant to this Section 4(e) shall be conducted in all
respects as a de novo trial on the merits, and the Director shall not
be prejudiced by reason of that adverse determination. If a Change of
Control shall have occurred, in any judicial proceeding commenced
pursuant to this Section 4(e), the Company shall have the burden of
proving that the Director is not entitled to indemnification or
advancement of Expenses, as the case may be. If a determination shall
have been made or deemed to have been made that the Director is
entitled to indemnification, the Company shall be bound by such
determination in any judicial proceeding commenced pursuant to this
Section 4(e), or otherwise, unless the Director knowingly
misrepresented or omitted a material fact (other than privileged
information) in connection with the request for indemnification.
The Company shall be precluded from asserting in any judicial
proceeding commenced pursuant to this Section 4(e) that the procedures
and presumptions of this Agreement are not valid, binding and
enforceable and shall stipulate in any such court that the Company is
bound by all provisions of this Agreement.
5. Notification and Defense of Proceeding.
(a) Notification. After receipt by the Director of notice of
the commencement of any Proceeding, the Director will, if a claim for
indemnification in respect thereof is to be made against the Company
under this Agreement, notify the Company of the commencement thereof;
but the omission to notify the Company will not relieve it from any
liability which it may have to the Director otherwise than under this
Agreement.
(b) Defense. With respect to any Proceeding as to which the
Director notifies the Company of the commencement thereof, the Company
will be entitled to participate therein at its own expense. Except as
otherwise provided below, to the extent that it may wish, the Company
jointly with any other indemnifying party similarly notified will be
entitled to assume the defense thereof, with counsel satisfactory to
the Director. After notice from the Company to the Director of its
election to assume the defense thereof, the Company will not be liable
to the Director under this Agreement for any legal or other expenses
subsequently incurred by the Director in connection with the defense
thereof other than reasonable costs of investigation or as otherwise
provided below. The Director shall have the right to employ counsel in
such Proceeding, but the fees and expenses of such counsel incurred
after notice from the Company of its assumption of the defense thereof
shall be at the expense of the Director unless (i) the employment of
counsel by the Director has been authorized by the Company, (ii) the
Director shall have reasonably concluded that there may be a conflict
of interest between the Company and the Director in the conduct of the
defense of such Proceeding or (iii) the Company shall not in fact have
employed counsel to assume the
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defense of such Proceeding, in each of which cases the fees and
expenses of counsel shall be borne by the Company. The Company shall
not be entitled to assume the defense of any Proceeding brought by or
on behalf of the Company or as to which the Director shall have
reasonably made the conclusion provided for in (ii) above.
(c) Settlements. The Company shall not be liable to indemnify
the Director under this Agreement for any amounts paid in settlement of
any Proceeding made without its written consent. The Company shall not
settle any Proceeding in any manner that would impose any penalty or
limitation on the Director without the Director's written consent.
Neither the Company nor the Director will unreasonably withhold their
consent to any proposed settlement.
6. Presumptions; Reliance and Effect of Certain Proceedings.
(a) If a Change of Control has occurred prior to or at the
time the request for indemnification hereunder is submitted to the
Company, a Director shall be presumed (except as otherwise expressly
provided in this Agreement) to be entitled to indemnification upon
submission of a request for indemnification in accordance with Section
4(a), and thereafter the Company shall have the burden of proof to
overcome the presumption in reaching a determination contrary to the
presumption. The presumption shall be used as a basis for a
determination of entitlement to indemnification unless the Company
provides information sufficient to overcome such presumption by clear
and convincing evidence, or the investigation, review and analysis of
the determination of entitlement to indemnification reveals by clear
and convincing evidence that the presumption should not apply. Neither
the failure to have made a determination prior to the commencement of
any action pursuant to this Agreement that indemnification is proper in
the circumstances because the Director has met the applicable standard
of conduct, nor an actual determination that the Director has not met
such applicable standard of conduct, shall be a defense or admissible
as evidence in any action for any purpose or create a presumption that
the Director has not acted in good faith or met any other applicable
standard of conduct.
(b) Except where the determination of entitlement to
indemnification is to be made by Independent Counsel, if the person or
persons empowered under Section 4(b) or 4(c) to determine entitlement
to indemnification shall not have made and furnished to the Director in
writing a determination within 90 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 the Director
shall be entitled to such indemnification unless the Director knowingly
misrepresented a material fact in connection with the request for
indemnification. The termination of any Proceeding, 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) in and of itself adversely affect the right of the Director
to indemnification or create a presumption that (a) the Director did
not act in good faith and in a manner that he or she reasonably
believed, in the case of conduct in his or her official capacity as a
director of the Company, to be in the best interests of the Company or,
in all other cases, that at least his or her conduct was not opposed to
the Company's best
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interests, or (b) with respect to any criminal Proceeding, the Director
had reasonable cause to believe that his or her conduct was unlawful.
(c) The knowledge and/or actions, or failure to act, of any
director, officer, agent or employee of the Company (or any affiliate
thereof) shall not be imputed to the Director for purposes of
determining the right to indemnification under this Agreement.
7. Indemnification for Additional Expenses. In the event that a
Director, pursuant to Sections 4(b), 4(c) or 4(e), seeks a judicial adjudication
to enforce his or her rights under, or to recover damages for breach of, this
Agreement, the Director shall be entitled to recover from the Company, and shall
be indemnified by the Company against, any and all Expenses actually incurred by
him or her in such judicial adjudication, but only if he or she prevails
therein.
8. Partial Indemnity, Etc. If the Director is entitled under any
provision of this Agreement to indemnification by the Company for some or a
portion of the Expenses, judgments, fines, penalties and amounts paid in
settlement but not, however, for all of the total amount thereof, the Company
shall nevertheless indemnify the Director for the portion thereof to which the
Director is entitled. Moreover, notwithstanding any other provision of this
Agreement, to the extent that the Director has been successful on the merits or
otherwise in defense of any issue or matter therein, including, without
limitation, dismissal without prejudice, the Director shall be indemnified
against all Expenses incurred in connection therewith. In connection with any
determination as to whether the Director is entitled to be indemnified hereunder
the burden of proof shall be on the Company to establish that the Director is
not so entitled.
9. No Presumption. For purposes of this Agreement, the termination of
any Proceeding, 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 the Director
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.
10. Non-exclusivity; Amendment of Charter Documents. The rights of the
Director hereunder shall be in addition to any other rights the Director may
have under the Charter, the Bylaws, pursuant to resolutions or determinations of
the Company's Board of Directors or stockholders, under the DGCL or otherwise.
The Company shall not adopt any amendment to the Charter or the Bylaws
(collectively, the "Charter Documents"), the effect of which would be to deny,
diminish or encumber the Director's rights to indemnity under the Charter
Documents, the DGCL or any other applicable law. To the extent that a change in
the DGCL (whether by statute or judicial decision) permits greater
indemnification by agreement than would be afforded currently under the Charter
Documents and this Agreement, it is the intent of the parties hereto that the
Director shall enjoy by this Agreement the greater benefits so afforded by such
change.
11. Insurance and Subrogation. To the extent the Company maintains an
insurance policy or policies providing liability insurance for directors or
officers of the Company or of any other corporation, partnership, joint venture,
trust, employee benefit plan or other enterprise which such person serves at the
request of the Company, the Director shall be covered by such policy or policies
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in accordance with its or their terms to the maximum extent of coverage
available for any such director or officer under such policy or policies. The
Company agrees to provide the Director immediate notice of any lapse or
cancellation of any such insurance coverage, and shall provide the Director
copies of all correspondence and notices from the Company's insurance agent,
broker or carrier relating to any actual or potential lapse, non-renewal or
cancellation.
In the event of any payment hereunder, the Company shall be
subrogated to the extent of such payment to all the rights of recovery of the
Director, 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.
The Company shall not be liable under this Agreement to make
any payment of amounts otherwise indemnifiable hereunder if, and to the extent
that, the Director has otherwise actually received such payment under any
insurance policy, contract, agreement or otherwise.
12. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
13. Indulgences, Etc. Neither the failure nor any delay on the part of
either party to exercise any right, remedy, power or privilege under this
Agreement shall operate as a waiver thereof, nor shall any single or partial
exercise of any right, remedy, power or privilege preclude any other or further
exercise of the same or of any right, remedy, power or privilege, nor shall any
waiver of any right, remedy, power, or privilege with respect to any occurrence
be construed as a waiver of such right, remedy, power or privilege with respect
to any other occurrence.
14. Notices. Any notice or other communication required or permitted to
be sent to the Company pursuant to this Agreement shall be addressed to the
Secretary of the Company and any such notice or other communication to a
Director shall be given in writing by depositing the same in the United States
mail, with postage thereon prepaid, addressed to the person to whom such notice
is directed at the address of such person on the records of the Company, and
such notice shall be deemed given at the time when the same shall be so
deposited in the United States mail.
15. Provisions Separable. The provisions of this Agreement are
independent of and separable from each other, and no provision shall be affected
or rendered invalid or unenforceable by virtue of the fact that for any reason
any other or others of them may be invalid or unenforceable in whole or in part.
16. Entire Agreement. This Agreement contains the entire understanding
between the parties hereto with respect to the subject matter hereof, and
supersedes all prior and contemporaneous agreements and understandings,
inducements or conditions, express or implied, oral or written, except as herein
contained, which shall be deemed terminated effective immediately. The express
terms hereof control and supersede any course of performance and/or usage of the
trade inconsistent with any of the terms hereof. This Agreement may not be
modified or amended other than by an agreement in writing.
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17. Headings; Index. The headings of paragraphs herein are included
solely for convenience of reference and shall not control the meaning or
interpretation of any of the provisions of this Agreement.
18. Governing Law. This Agreement shall be governed by, and construed
and enforced in accordance with, the laws in effect in the State of Delaware
without giving effect to principles of conflict of laws.
19. Survival. The covenants and agreements of the parties set forth in
this Agreement are of a continuing nature and shall survive the expiration,
termination or cancellation of this Agreement, regardless of the reason
therefor.
20. Binding Effect, Etc. This Agreement shall be binding upon and inure
to the 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
or assets of the Company, 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 or assets of the
Company, by written agreement in form and substance satisfactory to the
Director, 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 indemnity provisions of this Agreement
shall continue in effect regardless of whether the Director continues to serve
as an employee of the Company.
21. No Strict Construction. The parties hereto confirm that they have
each participated in the negotiation and preparation of this Agreement and that
this Agreement represents the joint agreement and understanding of the parties.
The parties hereto have mutually chosen the language used in this Agreement, and
no rule of strict construction construing ambiguities against any party hereto
shall be applied.
* * * * * * * *
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IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed by its officer thereunto duly authorized, and Director has signed this
Agreement, all as of the day and year first above written.
CENTEX CONSTRUCTION PRODUCTS, INC.
By:
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Name:
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Title:
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, Director
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