Exhibit 10
[Delchamps has entered into the following Indemnity Agreement with each of
its directors.]
INDEMNITY AGREEMENT
This Agreement is made as of the _____ day of _________________, 1996,
by and between DELCHAMPS, INC., an Alabama corporation (the "Corporation"),
and [Name of Director] ("Indemnitee").
WHEREAS, Division E of Article 8 of the Alabama Business Corporation
Law (the "ABCL"), which sets forth certain provisions relating to the
indemnification of the directors of an Alabama corporation, is specifically
not exclusive of any indemnification or advance of expenses contained in a
corporation's articles of incorporation, bylaws, a resolution of a
corporation's shareholders or directors, or in a contract or otherwise; and
WHEREAS, the Corporation desires to have Indemnitee serve or continue
to serve as a director of the Corporation.
NOW, THEREFORE, in consideration of Indemnitee's service after the
date hereof, the Corporation and Indemnitee do hereby agree as follows:
1. Agreement to Serve. Indemnitee shall serve or continue to serve
as a director (and, if applicable, an officer) of the Corporation and as a
director, officer, partner, trustee, employee, agent or fiduciary of any
other corporation, partnership, joint venture, trust, employee benefit plan
or other for profit or not for profit enterprise of which he is serving at
the request of the Corporation while a director of the Corporation, and
agrees to serve in such capacities for so long as he is duly elected or
appointed and qualified or until such earlier time as he tenders his
resignation in writing.
2. Definitions. As used in this Agreement:
(a) The term "Claim" shall mean any threatened, pending or
completed claim, action, suit or proceeding, including appeals, whether
civil, criminal, administrative or investigative and whether formal or
informal and whether made judicially or extra-judicially, including any
action by or in the right of the Corporation or any separate issue or
matter therein, as the context requires.
(b) The term "Determining Body" shall mean, and the Determining
Body shall act, as follows: (i) those members of the Board of Directors
not at the time parties to the Claim ("Impartial Directors"), by majority
vote, if there is a sufficient number of Impartial Directors to constitute
a quorum of the Board of Directors, or (ii) if there is an insufficient
number of Impartial Directors to establish a quorum of the Board of
Directors, a committee duly designated by the Board of Directors (in which
designation directors who are not Impartial Directors may participate)
consisting solely of two or more Impartial Directors, by majority vote of
such committee, or (iii) special legal counsel, which may be the regular
outside counsel of the Corporation, selected by the Impartial Directors as
provided in clause (i) or the committee as provided in clause (ii) or if a
quorum of the Board of Directors cannot be obtained under clause (i) and a
committee cannot be designated under clause (ii), selected by majority vote
of the full Board of Directors (in which selection directors who are not
Impartial Directors may participate), or (iv) the shareholders of the
Corporation; provided that, shares owned by or voted under the control of
directors who are not Impartial Directors may not be voted on the
determination; and provided further that, a majority of shares entitled to
vote on the determination by virtue of not being owned by or voted under
the control of a director who is not an Impartial Director shall constitute
a quorum for the purpose of making the determination.
(c) The term "Expenses" shall mean the obligation to pay a
judgment, settlement, penalty, fine (including an excise tax assessed with
respect to an employee benefit plan), and reasonable expenses, including
counsel fees, incurred with respect to a Claim.
3. Limitation of Liability. To the fullest extent permitted by the
Articles of Incorporation and By-laws of the Corporation (each as in effect
on the date hereof), Indemnitee shall not be liable for breach of his
fiduciary duty as a director. If and to the extent such provisions are
amended to permit further limitations of liability, Indemnitee shall not be
liable for any breach of his fiduciary duty to the fullest extent permitted
by any such amendment.
4. Maintenance of Insurance. (a) The Corporation represents and
warrants that it presently maintains in force and effect a directors and
officers insurance policy, and Indemnitee represents and warrants that he
has been furnished with a copy thereof. Subject only to the provisions of
Section 4(b) hereof, the Corporation hereby agrees that, so long as
Indemnitee shall continue to serve in any capacity referred to in Section 1
hereof and thereafter so long as Indemnitee shall be subject to any
possible Claim, the Corporation shall use its commercially reasonable best
efforts to purchase and maintain in effect for the benefit of Indemnitee
one or more valid and enforceable policies of directors and officers
liability insurance providing, in all material respects, coverage at least
comparable to that currently provided pursuant to the insurance policy.
(b) The Corporation shall not be required to purchase and maintain
the insurance policy or any comparable policy if directors and officers
liability insurance is not reasonably available or if, in the reasonable
business judgment of the then Board of Directors of the Corporation, there
is insufficient benefit to the Corporation from continuing to carry such
insurance.
5. Indemnity.
(a) Except with respect to a Claim commenced by Indemnitee
against the Corporation or by Indemnitee as a derivative action by or in
the name of the Corporation that has not been authorized by the
Corporation, unless prohibited by law, the Corporation shall indemnify
Indemnitee against any Expenses actually and reasonably incurred by
Indemnitee in connection with a Claim if Indemnitee is or is threatened to
be made a defendant or respondent in connection with the Claim because
Indemnitee is or was a director or officer of the Corporation or is or was,
while a director of the Corporation, serving at the Corporation's request
as a director, officer, partner, trustee, employee, agent or fiduciary of
another corporation, partnership, joint venture, trust, employee benefit
plan or other for profit or not for profit enterprise (whether such Claim
relates to service by Indemnitee in such positions before or after the date
of this Agreement), under the following circumstances: (i) if Indemnitee
is successful, on the merits or otherwise, in the defense of any Claim, or
of any claim, issue or matter in connection with such Claim
(notwithstanding that Indemnitee was not successful on any other claim,
issue or matter in connection with such Claim); provided, that if
Indemnitee is successful on the merits or otherwise in the defense of any
claim, issue or matter in connection with a Claim, such indemnification
shall relate only to Expenses incurred in connection with such claim, issue
or matter; or (ii) the Indemnitee is found by the Determining Body to have
met the Standard of Conduct (as hereinafter defined); provided that no
indemnification shall be made in respect of any Claim as to which
Indemnitee shall have been adjudicated in a final judgment to be liable for
willful, intentional and deliberate infliction of harm on the Corporation
or the shareholders or to have obtained an improper personal financial
benefit, unless, and only to the extent that, a court shall determine upon
application by Indemnitee that Indemnitee is entitled to indemnity for such
Expenses. The Corporation shall pay or reimburse expenses incurred by a
director in connection with the directors's appearance as a witness in
connection with a Claim at a time when the director has not been made a
defendant or respondent to the Claim.
(b) For purposes of this Agreement, the "Standard of Conduct" is
met if Indemnitee (i) conducted himself in good faith, and (ii) in the case
of conduct in Indemnitee's official capacity with the Corporation,
reasonably believed his conduct was in the best interests of the
Corporation or, in all other cases, reasonably believed his conduct was at
least not opposed to the best interests of the Corporation, and (iii) in
the case of a Claim that is a criminal action or proceeding, Indemnitee had
no reasonable cause to believe that his conduct was unlawful. "Official
capacity" means the office of director or officer of the Corporation and
does not include service for any other corporation or any partnership,
joint venture, trust, employee benefit plan or other enterprise. In the
case of a Claim that concerns the conduct of the Indemnitee as a fiduciary
to an employee benefit plan, the "Standard of Conduct" is met when
Indemnitee's conduct with respect to the plan is for a purpose Indemnitee
reasonably believed to be in the interests of the participants in and
beneficiaries of such employee benefit plan. The termination of any Claim
by judgment, order, settlement, conviction, or upon a plea of nolo
contendere or its equivalent, shall not be, of itself, determinative that
Indemnitee did not meet the Standard of Conduct.
(c) Promptly upon becoming aware of the existence of any Claim
as to which the Indemnitee may be indemnified for Expenses and as to which
Indemnitee desires to obtain indemnification, Indemnitee shall so notify
the Chief Executive Officer of the Corporation, but the failure to promptly
notify the Chief Executive Officer shall not relieve the Corporation from
any obligation under this Agreement, except and to the extent that such
failure has materially and irrevocably harmed the Corporation's ability to
defend against such Claim pursuant to Section 5(f) of this Agreement. Upon
receipt of such request, the Chief Executive Officer shall promptly advise
the Board of Directors of the request and that the establishment of a
Determining Body with respect thereto will be a matter to be considered at
the next regularly scheduled meeting of the Board. If a meeting of the
Board of Directors is not regularly scheduled within 120 calendar days of
the date the Chief Executive Officer receives notice of the Claim, the
Chief Executive Officer shall cause a special meeting of the Board of
Directors to be called within such period in accordance with the provisions
of the Corporation's By-laws. After the Determining Body has been
established, the Determining Body shall inform the Indemnitee of the
constitution of the Determining Body, and Indemnitee shall provide the
Determining Body with all facts relevant to the Claim known to such
Indemnitee and deliver to the Determining Body all documents relevant to
the Claim in Indemnitee's possession. Before the 60th day after its
receipt from the Indemnitee of such information (the "Determination Date"),
the Determining Body shall determine whether or not Indemnitee has met the
Standard of Conduct and shall advise Indemnitee of its determination.
Prior to the Determination Date, Indemnitee shall also provide such
additional information as the Determining Body may reasonably request (the
receipt of which shall not begin a new 60-day period). If Indemnitee shall
have supplied the Determining Body with all relevant information, including
all additional information reasonably requested by the Determining Body,
any failure of the Determining Body to make a determination by or on the
Determination Date as to whether the Standard of Conduct was met shall be
deemed to be a determination that the Standard of Conduct was met by
Indemnitee.
(d) If at any time during the 60-day period ending on the
Determination Date, Indemnitee becomes aware of any relevant facts or
documents not theretofore provided by him to the Determining Body,
Indemnitee shall promptly inform the Determining Body of such facts or
documents, unless the Determining Body has obtained such facts or documents
from another source. The provision of such facts or documents to the
Determining Body shall not begin a new 60 day period.
(e) The Determining Body shall have no power to revoke a
determination that Indemnitee met the Standard of Conduct unless it
concludes that Indemnitee (i) has submitted fraudulent information to the
Determining Body or (ii) has failed to comply with the provisions of
Sections 5(c) or 5(d) hereof.
(f) In the case of any Claim not involving any threatened or
pending criminal proceeding,
(i) if prior to the Determination Date the Determining Body
has affirmatively made a determination that the Indemnitee met the Standard
of Conduct (not including a determination deemed to have been made by
inaction), the Corporation may, except as otherwise provided below,
individually or jointly with any other indemnifying party similarly
notified, assume the defense thereof with counsel reasonably satisfactory
to the Indemnitee. If the Corporation assumes the defense of the Claim, it
shall notify Indemnitee of such action and keep Indemnitee informed as to
the progress of such defense, including any proposed settlements, so that
Indemnitee may make an informed decision as to the need for separate
counsel. After notice from the Corporation that the Corporation is
assuming the defense of the Claim, the Corporation will not be liable to
Indemnitee under this Agreement for any legal fees and expenses
subsequently incurred by Indemnitee in connection with the defense other
than as provided below. Indemnitee shall have the right to employ its own
counsel in such action, suit or proceeding, but the fees and expenses of
such counsel incurred after such notice from the Corporation of its
assumption of the defense shall be at the expense of Indemnitee unless (A)
the employment of counsel by Indemnitee has been authorized by the
Determining Body, (B) Indemnitee shall have concluded reasonably that there
may be a conflict of interest between the Corporation and Indemnitee in the
conduct of the defense of such action or (C) the Corporation shall not in
fact have employed counsel to assume the defense of such action, in each of
which cases the fees and expenses of counsel shall be at the expense of the
Corporation. The Corporation shall not be entitled to assume the defense
of any action, suit or proceeding brought by or in the right of the
Corporation or as to which Indemnitee shall have made the conclusion
provided for in (B) above; and
(ii) the Corporation shall fairly consider any proposals by
Indemnitee for settlement of the Claim. If the Corporation proposes a
settlement of the Claim and such settlement is acceptable to the person
asserting the Claim, or the Corporation believes a settlement proposed by
the person asserting the Claim should be accepted, it shall inform
Indemnitee of the terms of such proposed settlement and shall fix a
reasonable date by which Indemnitee shall respond. If Indemnitee agrees to
such terms, he shall execute such documents as shall be necessary to make
final the settlement. If Indemnitee does not agree with such terms,
Indemnitee may proceed with the defense of the Claim in any manner he
chooses, provided that if Indemnitee is not successful on the merits or
otherwise, the Corporation's obligation to indemnify such Indemnitee as to
any Expenses incurred following his disagreement shall be limited to the
lesser of (A) the total Expenses incurred by Indemnitee following his
decision not to agree to such proposed settlement or (B) the amount that
the Corporation would have paid pursuant to the terms of the proposed
settlement. If, however, the proposed settlement would impose upon
Indemnitee any requirement to act or refrain from acting that would
materially interfere with the conduct of Indemnitee's affairs, Indemnitee
may refuse such settlement and continue his defense of the Claim, if he so
desires, at the Corporation's expense in accordance with the terms and
conditions of this Agreement without regard to the limitations imposed by
the immediately preceding sentence. In any event, the Corporation shall
not be obligated to indemnify Indemnitee for any amount paid in a
settlement that the Corporation has not approved.
(g) In the case of any Claim involving a proposed, threatened or
pending criminal proceeding, Indemnitee shall be entitled to conduct the
defense of the Claim with counsel of his choice and to make all decisions
with respect thereto; provided that the Corporation shall not be obliged to
indemnify Indemnitee for any amount paid in settlement of such a Claim
unless the Corporation has approved such settlement.
(h) After notifying the Corporation of the existence of a Claim,
Indemnitee may from time to time request the Corporation to pay the
Expenses (other than judgments, fines, penalties or amounts paid in
settlement) that he incurs in pursuing a defense of the Claim prior to the
time that the Determining Body determines whether the Standard of Conduct
has been met. The Corporation shall pay to Indemnitee the amount requested
(regardless of Indemnitee's apparent ability to repay such amount) upon (i)
receipt from the Indemnitee of a written affirmation of the Indemnitee's
good faith belief that he has met the Standard of Conduct, (ii) receipt of
a written undertaking by or on behalf of Indemnitee to repay such amount if
it shall ultimately be determined that he is not entitled to be indemnified
by the Corporation under the circumstances and (iii) a determination by the
Determining Body that the facts then known to the Determining Body do not
preclude indemnification and that the Expenses are reasonable; provided,
that if the Determining Body is special legal counsel, the determination
shall be made by those entitled to select such counsel.
(i) After it has been determined that the Standard of Conduct
has been met, for so long as and to the extent that the Corporation is
required to indemnify Indemnitee under this Agreement, the provisions of
Section 5(h) shall continue to apply with respect to Expenses incurred
after such time except that the Corporation shall pay to Indemnitee the
amount of any settlements, fines, penalties or judgments against him which
have become final and for which he is entitled to indemnification
hereunder, and any amount of indemnification ordered to be paid to him by a
court.
(j) Any determination by the Corporation with respect to
settlement of a Claim shall be made by the Determining Body.
(k) All determinations and judgments made by the Determining
Body hereunder shall be made in good faith.
6. Enforcement.
(a) The rights provided by this Agreement shall be enforceable
by Indemnitee in any court of competent jurisdiction.
(b) If Indemnitee seeks a judicial adjudication of his rights
under, or to recover damages for breach of, this Agreement, Indemnitee
shall be entitled to recover from the Corporation, and shall be indemnified
by the Corporation against, any and all Expenses actually and reasonably
incurred by him in connection with such proceeding, but only if he prevails
therein. If it shall be determined that Indemnitee is entitled to receive
part but not all of the relief sought, then the Indemnitee shall be
entitled to be reimbursed for all Expenses incurred by him in connection
with such judicial adjudication if the amount to which he is determined to
be entitled exceeds 50% of the amount of his claim. Otherwise, the
Expenses incurred by Indemnitee in connection with such judicial
adjudication shall be appropriately prorated.
(c) In any judicial proceeding described in this Section 6, the
Corporation shall bear the burden of proving that Indemnitee is not
entitled to the relief sought.
7. Saving Clause. If any provision of this Agreement is determined
by a court having jurisdiction over the matter to violate or conflict with
applicable law, the court shall be empowered to modify or reform such
provision so that, as modified or reformed, such provision provides the
maximum indemnification permitted by law and such provision, as so modified
or reformed, and the balance of this Agreement, shall be applied in
accordance with their terms. Without limiting the generality of the
foregoing, if any portion of this Agreement shall be invalidated on any
ground, the Corporation shall nevertheless indemnify Indemnitee to the full
extent permitted by any applicable portion of this Agreement that shall not
have been invalidated and to the full extent permitted by law with respect
to that portion that has been invalidated.
8. Non-Exclusivity; Full Protection. (a) The indemnification and
advancement of Expenses provided by or granted pursuant to this Agreement
shall not be deemed exclusive of any other rights to which Indemnitee is or
may become entitled under any statute, articles of incorporation, by-law,
authorization of stockholders or directors, agreement, or otherwise;
provided, however, that Indemnitee shall not be entitled to any duplicate
reimbursement of Expenses through this Agreement, other rights of
indemnification, insurance or otherwise.
(b) It is the intent of the Corporation by this Agreement to
indemnify and hold harmless Indemnitee to the fullest extent permitted by
law, as in effect on the date hereof or as subsequently modified,
notwithstanding that the other terms of this Agreement would provide for
lesser indemnification.
9. Confidentiality. The Corporation and Indemnitee shall keep
confidential to the extent permitted by law and their fiduciary obligations
all information and determinations provided pursuant to or arising out of
the operations of this Agreement and the Corporation and Indemnitee shall
instruct its or his agents and employees to do likewise.
10. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall constitute the original.
11. Applicable Law. This Agreement shall be governed by and
construed in accordance with the substantive laws of the State of Alabama.
12. Successors and Assigns. This Agreement shall be binding upon
Indemnitee and upon the Corporation, its successors and assigns, and shall
inure to the benefit of the Indemnitee's heirs, personal representatives,
and assigns and to the benefit of the Corporation, its successors and
assigns.
13. Amendment. No amendment, modification, termination or
cancellation of this Agreement shall be effective unless made in writing
signed by the Corporation and Indemnitee. Notwithstanding any amendment,
modification, termination or cancellation of this Agreement or any portion
hereof, Indemnitee shall be entitled to indemnification in accordance with
the provisions hereof with respect to any acts or omissions of Indemnitee
which occur prior to such amendment, modification, termination or
cancellation.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and signed as of the date and year first above written.
DELCHAMPS, INC.
By: ______________________________
Name:
Title:
INDEMNITEE
__________________________________
Name:
