1
EXHIBIT 4.5
INDEMNIFICATION AGREEMENT
This AGREEMENT, made and entered into this 9 day of December, 1998, by
and between COASTAL BHC, INC., a Florida chartered corporate organization
(hereinafter called the "Company") and XXXX X. XXXXXXX (hereinafter called
"Indemnitee").
WITNESSETH:
WHEREAS, there is a general awareness that competent and experienced
persons are becoming more reluctant to serve as directors or officers of a
corporation unless they are protected by comprehensive insurance or
indemnification, especially since shareholder and derivative lawsuits against
corporations, their directors and officers for line-of-duty decisions and
actions have increased in number in recent years for damages in amounts which
have no reasonable or logical relationship to the amount of compensation
received by the directors or officers from the corporation; and
WHEREAS, the vagaries of "public policy" and the interpretations of
ambiguous statutes, regulations and by-laws are too uncertain to provide
corporate officers and directors with adequate, reliable knowledge of legal
risks to which they may be exposed with these indeterminables multiplied for
officers and directors of corporations such as the COMPANY, engaged in the
conduct of the financial services business; and
WHEREAS, damages sought by class action plaintiffs and derivative
action plaintiffs in some cases are brought or maintained whether or not the
case is meritorious, and the cost of defending them is enormous with few
individual directors and officers having the resources to sustain such legal
costs, not to mention the risk of a judgment even in cases where the defendant
was neither culpable nor profited personally to the detriment of the
corporation; and
WHEREAS, the Board of Directors, based upon their experience as
business managers, have concluded that the continuation of present trends in
litigation against corporate directors and officers will inevitably result in
less effective direction and supervision of the COMPANY and its subsidiaries'
and affiliates' business affairs and the operation of their facilities, as
opposed to aggressive supervision and management in the search for safety,
soundness and profits, and the Board deems such consequences to be so
detrimental to the best interests of the COMPANY's shareholders that it has
concluded that its directors and officers should be provided with maximum
protection against inordinate risks in order to insure that the most capable
persons otherwise available will be attracted to such positions; therefore,
said directors have further concluded that it is not only reasonable and
prudent but necessary for the COMPANY contractually to obligate itself to
indemnify in a reasonable and adequate manner its directors and officers and
the directors and officers of its affiliates and to assume for itself maximum
liability for expenses and damages in connection with claims lodged against
them for their line-of-duty decisions and actions; and
WHEREAS, Chapter 607 of the Florida Business Corporation Act, under
which the COMPANY is organized, empowers corporations to indemnify persons
serving as a director, officer, employee or agent of the COMPANY or a person
who serves at the request of the COMPANY as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust, employee
benefit plan or other enterprise, and further specifies that the
indemnification set forth in said chapter shall not be deemed exclusive of any
other rights to which those seeking indemnification may be
2
entitled under any bylaw, agreement, vote of stockholders or disinterested
directors or otherwise, and said Chapter further empowers to a corporation to
purchase and maintain insurance on behalf of such persons against any liability
asserted against him or her and incurred by him or her in any such capacity or
arising out of his or her status as such, whether or not the corporation would
have the power to indemnify him or her against such liability under the
provisions of said laws; and
WHEREAS, the COMPANY initiated an investigation to determine the type
of insurance available, the nature and extent of the coverage provided and the
cost thereof to the COMPANY to insure each director and officer of the COMPANY
and of its affiliates against expenses (including attorneys' fees) judgments,
fines and amounts paid in settlement actually and reasonably incurred by him or
her in connection with any action, suit or proceeding with which he or she
might become threatened or made a party by reason of such status and/or such
person's line-of-duty decisions or actions; and, upon receiving such
information the directors of the COMPANY concluded that, at present, it would
be in the best interests of its shareholders for the COMPANY to purchase and
maintain such insurance as the COMPANY has in fact purchased and that its
shareholders' interests would be best served by the COMPANY's additionally
contracting with such directors and officers as it should determine to
indemnify such persons and thereby provide additional protection to such of the
COMPANY's officers and directors against such potential liabilities; and
WHEREAS, the COMPANY desires to have INDEMNITEE serve or continue to
serve as a director, officer, employee or agent of the COMPANY or of any other
corporation, subsidiary, partnership, joint venture, employee benefit plan, or
trust or other enterprise of which he or she has been or is serving, or may
serve, at the request, for the convenience of or to represent the interests of
the COMPANY and to protect the same from undue claims by reason thereof, and
INDEMNITEE desires to serve or to continue to serve (provided that he or she is
furnished the indemnity provided for hereinafter), in one or more of such
capacities.
NOW, THEREFORE, in consideration of the premises and the covenants
contained herein, the COMPANY and INDEMNITEE do hereby covenant and agree as
follows:
1. AGREEMENT TO SERVE. INDEMNITEE will serve and/or continue to serve,
at the will of the COMPANY or under separate contract, if such exists, the
COMPANY and such Affiliates of the COMPANY as INDEMNITEE shall from time to
time agree, as a director, officer, employee and agent thereof, faithfully and
to the best of his or her ability so long as he or she is duly elected and
qualified in accordance with the provisions of the Bylaws thereof or until such
time as he or she tenders his or her resignation in writing.
2. INDEMNIFICATION. The COMPANY shall, and does hereby agree to,
indemnify and hold harmless in all respects INDEMNITEE:
(a) If INDEMNITEE is a person who was or is a party or is
threatened to be made a party to, a person named in, or a witness named for,
any threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative, legislative or investigative in nature (other than an
action by or in the right of the COMPANY) by reason of the fact that he or she
is or was a director, officer, employee or agent of the COMPANY or is or was
serving at the request of the
-2-
3
COMPANY as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, including any employee
benefit plan, ("Affiliate") or by reason of anything actually or allegedly done
or not done by him or her in any such capacity, against any and all
liabilities, claims, assessments, judgments, fines, penalties and amounts paid
in settlement thereof, as well as any and all costs, fees and expenses
(including attorneys' fees) actually and reasonably incurred by him or her in
connection with the investigation, defense or appeal of such action, suit or
proceeding or in the defense of any claim, issue or matter described therein;
(b) If INDEMNITEE is a person who was or is a party or is
threatened to be made a party to, a person named in, or a witness named for,
any threatened, pending or completed action, suit or proceeding by or in the
right of the COMPANY to procure a judgment in its favor by reason of the fact
that he or she is or was a director, officer, employee or agent of the COMPANY
or is or was serving at the request of the COMPANY as a director, officer,
employee or agent of any Affiliate, or by reason of anything actually or
allegedly done or not done by him or her in any such capacity, against any and
all liabilities, claims, assessments, judgments, fines, penalties and amounts
paid in settlement thereof, as well as any and all costs, fees and expenses
(including attorneys' fees) actually and reasonably incurred by him or her in
connection with the investigation, defense, settlement or appeal of such
action, suit or proceeding;
(c) To the full extent provided, allowed, authorized or not
prohibited by: (i) Section 607.0850 of the Florida Business Corporation Act or
any amendment thereof (to the extent such amendment permits, authorize or
allows broader indemnification rights than permitted, authorized or allowed
prior thereto), or other statutory provision authorizing, allowing, permitting
or not prohibiting such indemnification that is adopted hereafter; and (ii)
Article VII of the COMPANY's Bylaws; and
(d) To the extent INDEMNITEE has been successful on the merits or
otherwise in defense of any actions, suits or proceedings referred to in
subsections (a), (b) or (c) of this section, or in the defense of any claim,
issue or matter described therein, against any and all costs, fees and expenses
(including attorneys' fees) actually and reasonably incurred by him or her in
connection with the investigation, defense or appeal of such actions, suits or
proceedings.
3. ASSUMPTION OF LIABILITY BY THE COMPANY. If INDEMNITEE is deceased
and is entitled to indemnification under any provision of this Agreement, the
COMPANY shall indemnify and hold harmless INDEMNITEE's estate and his or her
spouse, heirs, administrators and executors against and the COMPANY shall
assume, and does hereby agree to assume, any and all liabilities, claims,
assessments, judgments, fines, penalties and amounts paid in settlement
thereof, as well as any and all costs, fees and expenses (including attorneys'
fees) actually and reasonably incurred by or for INDEMNITEE or his or her
estate, in connection with the investigation, defense, settlement or appeal of
any such action, suit or proceeding. Further, when requested in writing by the
spouse of INDEMNITEE, and/or the heirs, executors or administrators of
INDEMNITEE's estate, the COMPANY shall provide appropriate evidence of the
COMPANY's agreement set out herein, to indemnify INDEMNITEE against, and to
itself assume, such costs, liabilities and expenses.
-3-
4
4. PARTIAL INDEMNIFICATION. If INDEMNITEE is entitled under any
provision of this Agreement to indemnification by the COMPANY for some or a
portion of the liabilities, claims, assessments, judgments, fines, penalties
and amounts paid in settlement thereof, as well as any and all costs, fees and
expenses (including attorneys' fees) actually and reasonably incurred in
connection with any such suit, action or proceeding but not, however, for all
of the total amount thereof, the COMPANY, nevertheless, shall, and does hereby
agree to, indemnify INDEMNITEE for the portion thereof to which INDEMNITEE is
entitled.
5. INDEMNIFICATION PROCEDURES.
(a) Promptly after receipt by INDEMNITEE of notice of the
commencement of or the threat of commencement of any action, suit or
proceeding, INDEMNITEE shall, if indemnification with respect thereto may be
sought from the COMPANY under this Agreement, notify the COMPANY of the
commencement or the threat of commencement of such action, suit or proceeding.
(b) If, at the time of the receipt of such notice, the COMPANY has
D&O Insurance or other applicable insurance in effect, the COMPANY shall give
prompt notice of the commencement or threat thereof of such action, suit or
proceeding to the insurers in accordance with the procedures set forth in the
respective policies in favor of INDEMNITEE. The COMPANY shall thereafter take
all necessary or desirable action to cause such insurers to pay, on behalf of
INDEMNITEE, all indemnification payable as a result of such action, suit or
proceeding in accordance with the terms of such policies.
(c) To the extent the COMPANY does not, at the time of the
commencement of or the threat of commencement of such action, suit or
proceeding, have applicable D&O Insurance or other insurance, or if a
determination is made that any indemnification arising out of such action, suit
or proceeding will not be payable or fully and completely payable under the D&O
Insurance or other insurance then in effect, or in the event the COMPANY shall
for any reason fail to make any determination regarding any applicable D&O
Insurance or other insurance, the COMPANY shall be obligated to pay the
expenses of any such action, suit or proceeding in advance of the final
disposition thereof, and the COMPANY, if appropriate, and to the extent agreed
to by the INDEMNITEE, shall be entitled to assume the defense of such action,
suit or proceeding, with counsel satisfactory to INDEMNITEE, upon the delivery
to INDEMNITEE of written notice of its election so to do. After delivery of
such notice and upon the agreement by the INDEMNITEE and the assumption of the
defense by the COMPANY, the COMPANY will not be liable to INDEMNITEE under this
Agreement for any legal or other expenses subsequently incurred by the
INDEMNITEE in connection with such defense other than reasonable expenses of
investigation; PROVIDED THAT INDEMNITEE shall have the right to employ his or
her counsel in any such action, suit or proceeding, but the fees and expenses
of such counsel incurred after delivery of notice from the COMPANY of its
assumption of such defense shall be at the INDEMNITEE's expense; PROVIDED
FURTHER THAT if: (i) the employment of counsel by INDEMNITEE has been
previously authorized by the COMPANY; (ii) INDEMNITEE shall have reasonably
concluded that there may be a conflict of interest between the COMPANY and
INDEMNITEE in the conduct of any such defense; or (iii) the COMPANY shall not,
in fact, have employed counsel to assume the defense of such action; then the
fees and expenses of counsel shall be at the expense of the COMPANY.
-4-
5
(d) All payments on account of the COMPANY's indemnification
obligations under this Agreement shall be made within sixty (60) days of
INDEMNITEE's written request therefor unless a determination is made that the
claims giving rise to INDEMNITEE's request are excluded claims or otherwise not
payable under this Agreement, PROVIDED THAT all payments on account of the
COMPANY's obligations for advancement of expenses prior to the final
disposition of any action, suit or proceeding shall be made within twenty (20)
days of INDEMNITEE's written request therefor or upon such earlier date as is
appropriate to properly defend any such action, suit or proceeding, COMPANY's
obligation to advance expenses hereunder shall not be subject to any such
determination but shall be subject to Paragraph 5(e) of this Agreement.
(e) INDEMNITEE agrees and undertakes that he will reimburse the
COMPANY for all advanced expenses paid by the COMPANY in connection with any
action, suit or proceeding against INDEMNITEE in the event and only to the
extent that a determination shall have been made by a court of competent
jurisdiction in a final adjudication from which there is no further right of
appeal that the INDEMNITEE is not entitled to be indemnified by the COMPANY for
such expenses because the INDEMNITEE is not entitled to payment by operation of
law and under this Agreement.
6. PLEA OF NOLO CONTENDERE. The termination of any such action, suit
or proceeding which is covered by this Agreement by judgment, order, settlement
or conviction, or upon a plea of nolo contendere or its equivalent, shall not
of itself create a presumption for the purposes of this agreement that
INDEMNITEE did not act in good faith and in a manner, which he reasonably
believed to be in or not opposed to the best interests of the COMPANY or any of
its Affiliates and, with respect to any criminal action or proceeding, had
reasonable cause to believe that his conduct was unlawful.
7. LIMITATION OF ACTIONS AND RELEASE OF CLAIMS. No legal action shall
be brought and no cause of action shall be asserted by or on behalf of the
COMPANY or any Affiliate against INDEMNITEE, his spouse, heirs, executors or
administrators after the expiration of two years from the date INDEMNITEE
ceases (for any reason) to serve in any one or more of the capacities covered
by this Agreement, and any claim or cause of action by or on behalf of the
COMPANY or any Affiliate shall be extinguished and deemed released unless
asserted by filing of a legal action within such two-year period.
8. PREPAID EXPENSES. The costs and expenses incurred by INDEMNITEE in
investigating, defending or appealing any threatened, pending or completed
civil or criminal action, suit or proceedings, whether civil, criminal,
legislative, administrative or investigative covered hereunder, shall be paid
by the COMPANY in advance as may be appropriate properly to defend any such
action, suit or proceeding and/or paid in advance at the request of the
INDEMNITEE, and any judgments, fines or amounts paid in settlement shall be
paid by the COMPANY in advance, with the understanding and agreement hereby
made and entered into by INDEMNITEE and the COMPANY that in the event it shall
ultimately be determined as provided hereunder that INDEMNITEE was not entitled
to be indemnified, or was not entitled to be fully indemnified, that INDEMNITEE
shall repay to the COMPANY such amount, or the appropriate portion thereof, so
paid or advanced.
9. OTHER RIGHTS AND REMEDIES. The indemnification and advance payment
of expenses as provided by any provision of this agreement shall not be deemed
exclusive of any other rights
-5-
6
to which INDEMNITEE may be entitled under any provision of law, the Articles of
Incorporation, any Bylaw, this or any other agreement, vote of stockholders or
disinterested directors or otherwise, both as to action in his official
capacity and as to action in another capacity while occupying any of the
positions or having any of the relationships referred to in this Agreement, and
shall continue after INDEMNITEE has ceased to occupy such position or have such
relationships and shall inure to the benefit of the heirs, executors and
administrators of INDEMNITEE.
10. SETTLEMENT. The COMPANY shall have no obligation to indemnify
INDEMNITEE under this Agreement for any amounts paid in settlement of any
action, suit or proceeding effected without the COMPANY's prior written
consent. The COMPANY shall not settle any claim in any manner which would
impose any claim, liability, fine, penalty, costs, expenses or any obligation
on INDEMNITEE without INDEMNITEE's written consent. Neither the COMPANY nor
INDEMNITEE shall unreasonably withhold their consent to any proposed
settlement.
11. RIGHTS NOT EXCLUSIVE. The rights provided hereunder shall not be
deemed exclusive of any other rights to which the INDEMNITEE may be entitled
under any by-law, agreement, vote of stockholders or of disinterested directors
or otherwise, both as to action in his or her official capacity and as to
action in any other capacity by holding such office, and shall continue after
the INDEMNITEE ceases to serve the COMPANY as an officer, director, employee or
agent of the COMPANY or any Affiliate.
12. ENFORCEMENT.
(a) INDEMNITEE's right to indemnification shall be enforceable by
INDEMNITEE only in the state courts of the State of Florida and shall be
enforceable notwithstanding any adverse determination resulting in the
liability for which indemnification is claimed, other than a determination
which has been made by the final adjudication of a court of competent
jurisdiction, the appeals period for which has expired. In any such action, if
a prior, though non-final, adverse determination has been made, the burden of
proving that indemnification is required under this Agreement shall be on
INDEMNITEE. The COMPANY shall have the burden of proving that indemnification
is not required under this Agreement if no such prior adverse determination
shall have been made.
(b) In the event that any action is instituted by INDEMNITEE under
this Agreement, or to enforce or interpret any of the terms of this Agreement,
INDEMNITEE shall be entitled to be paid all court costs and expenses, including
reasonable counsel fees, incurred by INDEMNITEE with respect to such action,
unless the court determines that each of the material assertions made by
INDEMNITEE as a basis for such action were not made in good faith or were
frivolous.
13. SEVERABILITY. If any provision or provisions of this Agreement
shall be held to be invalid, illegal or unenforceable for any reason
whatsoever: (i) the validity, legality and enforceability of the remaining
provisions of this Agreement
-6-
7
(including without limitation, all portions of any paragraphs of this Agreement
containing any such provision held to be invalid, illegal or unenforceable,
that are not themselves invalid, illegal or unenforceable) shall not in any way
be affected or impaired thereby; and (ii) to the fullest extent possible, the
provisions of this Agreement (including, without limitation, all portions of
any paragraph of this Agreement containing any such provision held to be
invalid, illegal or unenforceable, that are not themselves invalid, illegal or
unenforceable) shall be construed so as to give effect to the intent manifested
by the provision held invalid, illegal or unenforceable.
14. PRIOR AGREEMENTS. This Agreement shall be of no force and effect
with regard to the cost of settlement borne or paid by INDEMNITEE under the
provisions of any agreement executed by the COMPANY and/or INDEMNITEE prior to
the date hereof.
15. IDENTICAL COUNTERPARTS. This Agreement may be executed in one or
more counterparts, each of which shall for all purposes be deemed to be an
original and all of which shall constitute the same instrument, but only one of
which need be produced.
16. HEADINGS. The headings of the paragraphs of this Agreement are
inserted for convenience only and shall not be deemed to constitute part of
this Agreement or to affect the construction thereof.
17. USE OF CERTAIN TERMS. As used in this Agreement, the words
"herein", "hereof", and "hereunder" and other words of similar import refer to
this Agreement as a whole and not to any particular paragraph, subparagraph or
other subdivision.
18. MODIFICATION AND WAIVER. No supplement, modification or amendment
of this Agreement 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 other provisions hereof (whether or
not similar) nor shall such waiver constitute a continuing waiver.
19. NOTICE BY INDEMNITEE. INDEMNITEE agrees to promptly notify the
COMPANY in writing upon being served with any citation, complaint, indictment
or other document covered hereunder, either civil or criminal.
20. NOTICES. All notices, requests, demands and other communications
hereunder shall be in writing and shall be deemed to have been duly given if:
(i) delivered by hand and receipted for by the party to whom said notice or
other communication shall have been directed; or if (ii) mailed by certified or
registered mail with postage prepaid, on the third business day after the date
on which it is so mailed.
(a) If to INDEMNITEE, to:
Xxxx X. Xxxxxxx
---------------------
---------------------
-6-
8
(b) If to the COMPANY, to:
Xxxx X. Xxxxxxx, Chief Executive Officer
Coastal BHC, Inc.
0000 Xxxxx Xxxxxxx Xxxxx
Xxxxx, Xxxxxxx 00000
or to such other address as may have been furnished by either party to the
other.
21. GOVERNING LAW. The Parties hereto agree that this agreement shall
be construed and enforced in accordance with and governed by the Laws of the
State of Florida.
22. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon the
COMPANY and its successors and assigns and shall inure to be benefit of the
INDEMNITEE and his spouse, heirs, executors and administrators.
ENTERED into on the day and year first above written.
ATTEST: COASTAL BHC, INC.
By: /s/ XXXXXXX XXXXXXXXX By: /s/ XXXXX X. XXXXXXX
--------------------- -----------------------------
INDEMNITEE:
/s/ X.X. XXXXXXX
----------------------------------
Xxxx X. Xxxxxxx
