EXHIBIT 10.1
CONVERSE INC.
FORM OF INDEMNIFICATION AGREEMENT
This Indemnification Agreement ("AGREEMENT") is made as of this
____________ by and between Converse Inc., a Delaware corporation (the
"COMPANY"), and _________________________("INDEMNITEE").
RECITALS
A. The Company desires to attract and retain qualified directors,
officers, employees and other agents, and to provide them with protection
against liability and expenses incurred while acting in that capacity;
B. The Certificate of Incorporation and Bylaws of the Company contain
provisions for indemnifying directors and officers of the Company, and the
Bylaws and Delaware law contemplate that separate contracts may be entered into
between the Company and its directors and officers, employees and other agents
with respect to their indemnification by the Company, which contracts may
provide greater protection than is afforded by the Certificate of Incorporation
and Bylaws;
C. The Company understands that Indemnitee has reservations about serving
or continuing to serve the Company without adequate protection against personal
liability arising from such service, and that it is also of critical importance
to Indemnitee that adequate provision be made for advancing costs and expenses
of legal defense; and
D. The Board of Directors and the stockholders of the Company have
approved as being in the best interests of the Company indemnity contracts
substantially in the form of this Agreement for directors and officers of the
Company and its subsidiaries and for certain other employees and agents of the
Company designated by the Board of Directors.
NOW, THEREFORE, in order to induce Indemnitee to serve or to continue to
serve as a director and/or officer of the Company, and in consideration of
Indemnitee's service to the Company, the parties agree as follows:
1. Contractual Indemnity. In addition to the indemnification provisions of
the Bylaws of the Company, the Company hereby agrees, subject to the limitations
of Sections 2 and 5 hereof:
(a) To indemnify, defend and hold Indemnitee harmless to the
greatest extent possible under applicable law from and against any and all
judgments, fines, penalties, amounts paid in settlement and any other amounts
reasonably incurred or suffered by Indemnitee (including attorneys' fees) if
Indemnitee acted in good faith and in a manner Indemnitee reasonably believed to
be in or not opposed to the best interests of the Company, and, with respect to
any criminal action or proceeding, had no reasonable cause to believe
Indemnitee's conduct was unlawful, in connection with any threatened, pending or
completed action, suit or proceeding, whether civil, criminal,
administrative or investigative, including an action by or in the right of the
Company, to which Indemnitee is, was or at any time becomes a party, or is
threatened to be made a party, by reason of the fact that Indemnitee is, was or
at any time becomes a director, officer, employee or agent of the Company or is
or was serving or at any time serves at the request of the Company as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise (collectively referred to hereafter as a
"Claim"), whether or not arising prior to the date of this Agreement.
(b) To pay any and all expenses reasonably incurred by Indemnitee in
defending any Claim or Claims (including reasonable attorneys' fees and expenses
and other reasonable costs of investigation and defense), as the same are
incurred and in advance of the final disposition of any such Claim or Claims,
upon receipt of a written undertaking by or on behalf of Indemnitee (which shall
be unsecured and shall not bear interest) to reimburse such amounts if it shall
be ultimately determined that Indemnitee (i) is not entitled to be indemnified
by the Company under this Agreement, and (ii) is not entitled to be indemnified
by the Company under the Certificate of Incorporation or the Bylaws of the
Company.
(c) The termination of any action or proceeding by judgment, order,
settlement, conviction, or upon a plea of nolo contendere or its equivalent,
shall not, of itself, create a presumption that (i) Indemnitee did not act in
good faith and in a manner which Indemnitee reasonably believed to be in the
best interests of the Company, or (ii) with respect to any criminal action or
proceeding, Indemnitee had reasonable cause to believe that Indemnitee's conduct
was unlawful.
2. Limitations on Contractual Indemnity. Indemnitee shall not be entitled
to indemnification or advancement of expenses under Section 1:
(a) if a court of competent jurisdiction, by final judgment or
decree, shall determine that (i) the Claim or Claims in respect of which
indemnity is sought arise from Indemnitee's fraudulent, dishonest or willful
misconduct, or (ii) such indemnity is not permitted under applicable law; or
(b) on account of any suit in which judgment is rendered for an
accounting of profits made from the purchase or sale by Indemnitee of securities
of the Company in violation of the provisions of Section 16(b) of the Securities
Exchange Act of 1934 and amendments thereto or similar provisions of any
federal, state or local statutory law; or
(c) for any acts or omissions or transactions from which a director
may not be relieved of liability under the Delaware General Corporation Law; or
(d) with respect to proceedings or claims initiated or brought
voluntarily by Indemnitee and not by way of defense, except (i) with respect to
proceedings brought in good faith to establish or enforce a right to
indemnification under this Agreement or any other statute or law, or (ii) at the
Company's discretion, in specific cases if the Board of Directors of the Company
has approved the initiation or bringing of such suit; or
(e) for expenses or liabilities of any type whatsoever (including,
but not limited to, judgments, fines, ERISA excise taxes or penalties, and
amounts paid in settlement) which have been paid directly to Indemnitee by an
insurance carrier under a policy of directors' and officers' liability insurance
maintained by the Company; or
(f) for any expenses incurred by the Indemnitee with respect to any
proceeding instituted by Indemnitee to enforce or interpret this Agreement, if a
court of competent jurisdiction determines that each of the material assertions
made by the Indemnitee in such proceeding was not made in good faith or was
frivolous.
Notwithstanding any limitations set forth in this Section 2, regarding the
Company's obligation to provide indemnification, Indemnitee shall be entitled
under Section 4 to receive expense advances hereunder with respect to any such
Claim unless and until a court having jurisdiction over the Claim shall have
made a final judicial determination (as to which all rights of appeal therefrom
have been exhausted or lapsed) that Indemnitee has engaged in acts, omissions or
transactions for which Indemnitee is prohibited from receiving indemnification
under this Section 2.
3. Continuation of Contractual Indemnity. Subject to the termination
provisions of Section 11, all agreements and obligations of the Company
contained herein shall continue for so long as Indemnitee shall be subject to
any possible action, suit, proceeding or other assertion of a Claim or Claims.
4. Expenses; Indemnification Procedure. The Company shall advance all
expenses incurred by Indemnitee in connection with the investigation, defense,
settlement or appeal of any civil or criminal action or proceeding referenced in
Section 1 hereof (but not amounts actually paid in settlement of any such action
or proceeding). Indemnitee hereby undertakes to repay such amounts advanced if,
and to the extent that, it shall ultimately be determined that Indemnitee is not
entitled to be indemnified by the Company as authorized hereby. The advances to
be made hereunder shall be paid by the Company to Indemnitee within twenty (20)
days following delivery of a written request therefor by Indemnitee to the
Company.
5. Notification and Defense of Claim. If any action, suit, proceeding or
other Claim is brought against Indemnitee in respect of which indemnity may be
sought under this Agreement:
(a) Indemnitee will promptly notify the Company in writing of the
commencement thereof, and the Company and any other indemnifying party similarly
notified will be entitled to participate therein at its own expense or to assume
the defense thereof and to employ counsel reasonably satisfactory to Indemnitee
provided however, that failure to provide such notice in accordance with this
Section 2(b) shall not affect Indemnitee's rights to receive any expenses or
expense advances hereunder unless and except to the extent that the Company did
not otherwise learn of such Claim and such failure of Indemnitee to provide such
notice results in the forfeiture by the Company of substantial rights and
defenses. Notice to the Company shall be directed to the Chief Executive Officer
of the Company at the address shown on the signature page of this Agreement (or
such other address as the Company shall designate in writing to Indemnitee).
Notice shall be deemed received three (3) business days after the date
postmarked if sent by domestic
certified or registered mail, properly addressed; otherwise notice shall be
deemed received when such notice shall actually be received by the Company.
Indemnitee shall have the right to employ its own counsel in connection with any
such Claim and to participate in the defense thereof, and the reasonable fees
and expenses of such counsel to the Indemnitee shall be borne by the Company
upon delivery to the Company of the undertaking referred to in subparagraph (b)
of Section 1. However, in no event will the Company be obligated to pay the fees
or expenses of more than one firm of attorneys representing Indemnitee and any
other agents of the Company in connection with any one Claim or separate but
substantially similar or related Claims in the same jurisdiction arising out of
the same general allegations or circumstances.
(b) The Company shall not be liable to indemnify Indemnitee for any
amounts paid in settlement of any Claim effected without the Company's written
consent, and the Company shall not settle any Claim in a manner which would
impose any penalty or limitation on Indemnitee or require the admission of guilt
or responsibility without Indemnitee's written consent; provided, however, that
neither the Company nor Indemnitee will unreasonably withhold its consent to any
proposed settlement and, provided further, that if a claim is settled by the
Indemnitee with the Company's written consent, or if there be a final judgment
or decree for the plaintiff in connection with the Claim by a court of competent
jurisdiction, the Company shall indemnify and hold harmless Indemnitee from and
against any and all losses, costs, expenses and liabilities incurred by reason
of such settlement or judgment.
(c) Indemnitee shall give the Company such information in the
possession of, or reasonably obtainable by, Indemnitee, and cooperation as it
may reasonably require and as shall be within Indemnitee's power and control.
(d) Any indemnification provided for in Section 1 shall be made no
later than forty-five (45) days after receipt of the written request of
Indemnitee. If a Claim under this Agreement, under any statute, or under any
provision of the Company's Certificate of Incorporation or Bylaws providing for
indemnification, is not paid in full by the Company within forty-five (45) days
after a written request for payment thereof has first been received by the
Company, Indemnitee may, but need not, at any time thereafter bring an action
against the Company to recover the unpaid amount of the claim and, subject to
Section 13 of this Agreement, Indemnitee shall also be entitled to be reimbursed
for the expenses (including attorneys' fees) of bringing such action. It shall
be a defense to any such action (other than an action brought to enforce a claim
for expenses incurred in connection with any action or proceeding in advance of
its final disposition) that Indemnitee has not met the standards of conduct
which make it permissible under applicable law for the Company to indemnify
Indemnitee for the amount claimed but the burden of proving such defense shall
be on the Company, and Indemnitee shall be entitled to receive interim payments
of expenses pursuant to Subsection 4 unless and until such defense may be
finally adjudicated by court order or judgment from which no further right of
appeal exists. It is the parties' intention that if the Company contests
Indemnitee's right to indemnification, the question of Indemnitee's right to
indemnification shall be for the court to decide, and neither the failure of the
Company (including its Board of Directors, any committee or subgroup of the
Board of Directors, independent legal counsel, or its stockholders) to have made
a determination that indemnification of Indemnitee is proper in the
circumstances because Indemnitee has met the applicable standard of conduct
required by applicable
law, nor an actual determination by the Company (including its Board of
Directors, any committee or subgroup of the Board of Directors, independent
legal counsel, or its stockholders) that Indemnitee has not met such applicable
standard of conduct, shall create a presumption that Indemnitee has or has not
met the applicable standard of conduct.
(e) If, at the time of the receipt of a notice of a Claim, the
Company has director and officer liability insurance in effect, 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 the Indemnitee, all amounts payable as a result of
such proceeding in accordance with the terms of such policies, provided however,
that nothing contained in this Section 5(e) shall excuse the Company from its
obligations to pay expenses or expense advances to Indemnitee as provided
herein.
6. Scope. Notwithstanding any other provision of this Agreement, the
Company hereby agrees to indemnify the Indemnitee against any Claim to the
fullest extent permitted by law, notwithstanding that such indemnification is
not specifically authorized by the other provisions of this Agreement, the
Company's Certificate of Incorporation, the Company's Bylaws or by statute. 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 Delaware corporation to
indemnify a member of its board of directors, an officer or other corporate
agent, such changes shall be, ipso facto, within the purview of Indemnitee's
rights and Company's obligations, under this Agreement. In the event of any
change in any applicable law, statute, or rule which narrows the right of a
Delaware corporation to indemnify a member of its Board of Directors, an
officer, or other corporate agent, such changes, to the extent not otherwise
required by applicable law to be applied to this Agreement, shall have no effect
on this Agreement or the parties' rights and obligations hereunder.
7. Partial Indemnification. If Indemnitee is entitled under any provision
of this Agreement to indemnification by the Company for some or a portion of the
expenses, judgments, fines or penalties actually or reasonably incurred by him
in the investigation, defense, appeal or settlement of any civil or criminal
action or proceeding, but not, however, for the total amount thereof, the
Company shall nevertheless indemnify Indemnitee for the portion of such
expenses, judgments, fines or penalties to which Indemnitee is entitled.
8. Public Policy. Both the Company and Indemnitee acknowledge that in
certain instances, Federal law or applicable public policy may prohibit the
Company from indemnifying its directors and officers under this Agreement or
otherwise. Indemnitee understands and acknowledges that the Company has
undertaken or 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.
9. Insurance. Although the Company may from time to time maintain
insurance for the purpose of indemnifying Indemnitee and other agents of the
Company against personal liability, including costs of legal defense, nothing in
this Agreement shall obligate the Company to do so.
10. No Restrictions. The rights and remedies of Indemnitee under this
Agreement shall not be deemed to exclude or impair any other rights or remedies
to which Indemnitee may be entitled under the Certificate of Incorporation or
Bylaws of the Company, or under any other agreement, provision of law or
otherwise, nor shall anything contained herein restrict the right of the Company
to indemnify Indemnitee in any proper case even though not specifically provided
for in this Agreement, nor shall anything contained herein restrict Indemnitee's
right to contribution as may be available under applicable law. The
indemnification provided under this Agreement shall continue as to Indemnitee
for any action Indemnitee took or did not take while serving in an indemnified
capacity even though Indemnitee may have ceased to serve in such capacity.
11. Termination. The Company may terminate this Agreement at any time upon
ninety (90) days written notice, but any such termination will not affect Claims
relating to events occurring prior to the effective date of termination.
12. Severability. Each of the provisions of this Agreement is a separate
and distinct agreement and independent of the others, so that if any provision
hereof shall be held to be invalid or unenforceable for any reason, such
invalidity or unenforceability shall not affect the validity or enforceability
of the other provisions hereof. 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.
13. Attorneys' Fees. In the event of any litigation or other action or
proceeding to enforce or interpret this Agreement, the prevailing party as
determined by the court shall be entitled to an award of its reasonable
attorneys' fees and other costs, in addition to such relief as may be awarded by
a court or other tribunal.
14. Further Assurances. The parties will do, execute and deliver, or will
cause to be done, executed and delivered, all such further acts, documents and
things as may be reasonably required for the purpose of giving effect to this
Agreement and the transactions contemplated hereby.
15. Acknowledgment. The Company expressly acknowledges that it has entered
into this Agreement and assumed the obligations imposed on the Company hereunder
in order to induce Indemnitee to serve or to continue to serve as an agent of
the Company, and acknowledges that Indemnitee is relying on this Agreement in
serving or continuing to serve in such capacity.
16. Construction of Certain Phrases.
(a) "Company": For purposes of this Agreement, references to the
"Company" shall also include, in addition to the resulting corporation in any
consolidation or merger to which Converse Inc. is a party, any constituent
corporation (including any constituent of a constituent) absorbed in
consolidation or merger which, if its separate existence had continued, would
have had power and authority to indemnify its directors, officers, employees or
agents, so that if Indemnitee is or was a director, officer, employee or agent
of such constituent corporation, or is or was serving at
the request of such constituent corporation as a director, officer, employee or
agent of another corporation, partnership, joint venture, 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.
(b) Benefit Plans: References to "fines" contained in this Agreement
shall include any excise taxes assessed on Indemnitee with respect to an
employee benefit plan; and references to "serving at the request of the Company"
shall include any service as a director, officer, employee or agent of the
Company which imposes duties on, or involves services by, such director,
officer, employee or agent with respect to an employee benefit plan, its
participants, or beneficiaries.
17. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall constitute an original.
18. Notice. All notices, requests, demands and other communications under
this Agreement shall be in writing and shall be deemed duly given (i) if
delivered by hand and receipted for by the party addressee, on the date of such
receipt, or (ii) if mailed by domestic certified or registered mail with postage
prepaid, on the third business day after the date postmarked. Addresses for
notice to either party are as shown on the signature page of this Agreement, or
as subsequently modified by written notice.
19. 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.
20. Governing Law; Binding Effect; Amendment.
(a) This Agreement shall be interpreted and enforced in accordance
with the laws of the State of Delaware applicable to contracts entered into in
Delaware.
(b) This Agreement shall be binding upon Indemnitee and the Company,
their successors and assigns, and shall inure to the benefit of Indemnitee, his
heirs, personal representatives and assigns and to the benefit of the Company,
its successors and assigns.
(c) No amendment, modification, termination or cancellation of this
Agreement shall be effective unless in writing signed by both parties hereto.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
CONVERSE INC.
By:
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Title:
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Address:
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AGREED TO AND ACCEPTED:
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Address:
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