EXHIBIT 10.2
FORM OF DIRECTOR INDEMNIFICATION AGREEMENT
This Agreement made and entered into this ___ day of _____, 200_ (the
"AGREEMENT"), by and between WII Holdings, Inc., a Delaware corporation (the
"COMPANY," which term shall include, where appropriate, any Entity (as
hereinafter defined) controlled directly or indirectly by the Company), and
________ (the "INDEMNITEE"):
WHEREAS, it is essential to the Company that it be able to retain and
attract as directors the most capable persons available;
WHEREAS, increased corporate litigation has subjected directors to
litigation risks and expenses, and the limitations on the availability of
directors and officers liability insurance have made it increasingly difficult
for the Company to attract and retain such persons;
WHEREAS, the Company's Certificate of Incorporation and Bylaws (the
"Certificate" and "Bylaws," respectively) require it to indemnify its directors
to the fullest extent permitted by law and permit it to make other
indemnification arrangements and agreements;
WHEREAS, the Company desires to provide Indemnitee with specific
contractual assurance of Indemnitee's rights to full indemnification against
litigation risks and expenses (regardless, among other things, of any amendment
to or revocation of the Certificate or Bylaws or any change in the ownership of
the Company or the composition of its Board of Directors);
WHEREAS, the Company intends that this Agreement provide Indemnitee with
greater protection than that which is provided by the Company's Certificate and
Bylaws; and
WHEREAS, Indemnitee is relying upon the rights afforded under this
Agreement in becoming a director of the Company.
NOW, THEREFORE, in consideration of the promises and the covenants
contained herein, the Company and Indemnitee do hereby covenant and agree as
follows:
1. DEFINITIONS.
(a) "CORPORATE STATUS" describes the status of a person who is
serving or has served (i) as a director or officer of the Company, (ii) in any
capacity with respect to any employee benefit plan of the Company, or (iii) as a
director, partner, trustee, officer, employee, or agent of any other Entity at
the request of the Company. For purposes of subsection (iii) of this Section
1(a), if Indemnitee is serving or has served as a director, partner, trustee,
officer, employee or agent of a Subsidiary, Indemnitee shall be deemed to be
serving at the request of the Company.
(b) "ENTITY" shall mean any corporation, partnership, limited
liability company, joint venture, trust, foundation, association, organization
or other legal entity.
(c) "EXPENSES" shall mean all fees, costs and expenses incurred by
Indemnitee in connection with any Proceeding (as defined below), including,
without limitation, attorneys' fees, disbursements and retainers (including,
without limitation, any such fees, disbursements
and retainers incurred by Indemnitee pursuant to Sections 10 and 11(c) of this
Agreement), fees and disbursements of expert witnesses, private investigators
and professional advisors (including, without limitation, accountants and
investment bankers), court costs, transcript costs, fees of experts, travel
expenses, duplicating, printing and binding costs, telephone and fax
transmission charges, postage, delivery services, secretarial services, and
other disbursements and expenses.
(d) "INDEMNIFIABLE EXPENSES," "INDEMNIFIABLE LIABILITIES" and
"INDEMNIFIABLE AMOUNTS" shall have the meanings ascribed to those terms in
Section 3(a) below.
(e) "LIABILITIES" shall mean judgments, damages, liabilities, losses,
penalties, excise taxes, fines and amounts paid in settlement.
(f) "PROCEEDING" shall mean any threatened, pending or completed
claim, action, suit, arbitration, alternate dispute resolution process,
investigation, inquiry, administrative hearing, appeal, or any other proceeding,
whether civil, criminal, administrative, arbitrative or investigative, whether
formal or informal, including a proceeding initiated by Indemnitee pursuant to
Section 10 of this Agreement to enforce Indemnitee's rights hereunder.
(g) "SUBSIDIARY" shall mean any corporation, partnership, limited
liability company, joint venture, trust or other Entity of which the Company
owns (either directly or through or together with another Subsidiary of the
Company) either (i) a general partner, managing member or other similar interest
or (ii) (A) 50% or more of the voting power of the voting capital equity
interests of such corporation, partnership, limited liability company, joint
venture or other Entity, or (B) 50% or more of the outstanding voting capital
stock or other voting equity interests of such corporation, partnership, limited
liability company, joint venture or other Entity.
2. SERVICES OF INDEMNITEE. In consideration of the Company's covenants and
commitments hereunder, Indemnitee agrees to serve or continue to serve as a
director of the Company for so long as he or she is duly elected and qualified
or until he or she resigns in accordance with the Bylaws or applicable law. This
Agreement shall not impose any obligation on Indemnitee or the Company to
continue Indemnitee's service to the Company beyond any period otherwise
required by law or by other agreements or commitments of the parties, if any.
3. AGREEMENT TO INDEMNIFY. The Company agrees to indemnify and hold
harmless, to the fullest extent permitted by the laws of the State of Delaware,
Indemnitee as follows:
(a) PROCEEDINGS OTHER THAN BY OR IN THE RIGHT OF THE COMPANY. Subject
to the exceptions contained in Section 4(a) below, if Indemnitee was or is a
party or is threatened to be made a party to any Proceeding (other than an
action by or in the right of the Company) by reason of Indemnitee's Corporate
Status, Indemnitee shall be indemnified by the Company against all Expenses and
Liabilities incurred or paid by Indemnitee in connection with such Proceeding
(referred to herein as "INDEMNIFIABLE EXPENSES" and "INDEMNIFIABLE LIABILITIES,"
respectively, and collectively as "INDEMNIFIABLE AMOUNTS").
(b) PROCEEDINGS BY OR IN THE RIGHT OF THE COMPANY. Subject to the
exceptions contained in Section 4(b) below, if Indemnitee was or is a party or
is threatened to be made a party to any Proceeding by or in the right of the
Company by reason of Indemnitee's Corporate Status, Indemnitee shall be
indemnified by the Company against all Indemnifiable Expenses.
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(c) CONCLUSIVE PRESUMPTION REGARDING STANDARD OF CARE. In making any
determination required to be made under Delaware law with respect to entitlement
to indemnification hereunder, the person, persons or Entity making such
determination shall presume that Indemnitee is entitled to indemnification under
this Agreement if Indemnitee submitted a request therefor in accordance with
Section 5 of this Agreement, and the Company shall have the burden of proof to
overcome that presumption in connection with the making by any person, persons
or Entity of any determination contrary to that presumption.
4. EXCEPTIONS TO INDEMNIFICATION. Indemnitee shall be entitled to
indemnification under Sections 3(a) and 3(b) above in all circumstances other
than with respect to any specific claim, issue or matter involved in the
Proceeding out of which Indemnitee's claim for indemnification has arisen, as
follows:
(a) PROCEEDINGS OTHER THAN BY OR IN THE RIGHT OF THE COMPANY. If
indemnification is requested under Section 3(a) and it has been finally
adjudicated by a court of competent jurisdiction that, in connection with such
specific claim, issue or matter, Indemnitee failed to act (i) in good faith and
(ii) in a manner Indemnitee reasonably believed to be in or not opposed to the
best interests of the Company, or, with respect to any criminal action or
proceeding, Indemnitee had reasonable cause to believe that Indemnitee's conduct
was unlawful, Indemnitee shall not be entitled to payment of Indemnifiable
Amounts hereunder.
(b) PROCEEDINGS BY OR IN THE RIGHT OF THE COMPANY. If indemnification
is requested under Section 3(b) and:
(i) it has been finally adjudicated by a court of competent
jurisdiction that, in connection with such specific claim, issue
or matter, Indemnitee failed to act (A) in good faith and (B) in
a manner Indemnitee reasonably believed to be in or not opposed
to the best interests of the Company, Indemnitee shall not be
entitled to payment of Indemnifiable Expenses hereunder; or
(ii) it has been finally adjudicated by a court of competent
jurisdiction that Indemnitee is liable to the Company with
respect to such specific claim, no Indemnifiable Expenses shall
be paid with respect to such claim, issue or matter unless the
Court of Chancery or another court in which such Proceeding was
brought shall determine upon application that, despite the
adjudication of liability, but in view of all the circumstances
of the case, Indemnitee is fairly and reasonably entitled to
indemnification for such Indemnifiable Expenses which such court
shall deem proper; or
(iii) it has been finally adjudicated by a court of competent
jurisdiction that Indemnitee is liable to the Company for an
accounting of profits made from the purchase or sale by the
Indemnitee of securities of the Company pursuant to the
provisions of Section 16 of the Securities Exchange Act of 1934,
the rules and regulations promulgated thereunder and amendments
thereto or similar provisions of any federal, state or local
statutory law, Indemnitee shall not be entitled to payment of
Indemnifiable Expenses hereunder.
(c) INSURANCE PROCEEDS. To the extent payment is actually made to the
Indemnitee under a valid and collectible insurance policy in respect of
Indemnifiable Expenses in connection with such specific claim, issue or matter,
Indemnitee shall not be entitled to payment of
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Indemnifiable Expenses hereunder except in respect of any excess beyond the
amount of payment under such insurance.
5. PROCEDURE FOR PAYMENT OF INDEMNIFIABLE AMOUNTS. Indemnitee shall submit
to the Company a written request specifying the Indemnifiable Amounts for which
Indemnitee seeks payment under Section 3 of this Agreement and the basis for the
claim. The Company shall pay such Indemnifiable Amounts to Indemnitee within
sixty (60) calendar days of receipt of the request. At the request of the
Company, Indemnitee shall furnish such documentation and information as are
reasonably available to Indemnitee and necessary to establish that Indemnitee is
entitled to indemnification hereunder.
6. INDEMNIFICATION FOR EXPENSES OF A PARTY WHO IS WHOLLY OR PARTLY
SUCCESSFUL. Notwithstanding any other provision of this Agreement, and without
limiting any such provision, to the extent that Indemnitee is, by reason of
Indemnitee's Corporate Status, a party to and is successful, on the merits or
otherwise, in any Proceeding, Indemnitee shall be indemnified against all
Expenses reasonably incurred by Indemnitee or on Indemnitee's behalf in
connection therewith. If Indemnitee is not wholly successful in such Proceeding
but is successful, on the merits or otherwise, as to one or more but less than
all claims, issues or matters in such Proceeding, the Company shall indemnify
Indemnitee against all Expenses reasonably incurred by Indemnitee or on
Indemnitee's behalf in connection with each successfully resolved claim, issue
or matter. For purposes of this Agreement, the termination of any claim, issue
or matter in such a Proceeding by dismissal, with or without prejudice, by
reason of settlement, judgment, order or otherwise, shall be deemed to be a
successful result as to such claim, issue or matter.
7. EFFECT OF CERTAIN RESOLUTIONS. Neither the settlement or termination of
any Proceeding nor the failure of the Company to award indemnification or to
determine that indemnification is payable shall create a presumption that
Indemnitee is not entitled to indemnification hereunder. In addition, the
termination of any proceeding by judgment, order, settlement, conviction, or
upon a plea of nolo contendere or its equivalent shall not create a presumption
that Indemnitee did not act in good faith and in a manner which Indemnitee
reasonably believed to be in or not opposed to the best interests of the Company
or, with respect to any criminal action or proceeding, had reasonable cause to
believe that Indemnitee's action was unlawful.
8. AGREEMENT TO ADVANCE EXPENSES; UNDERTAKING. The Company shall advance all
Expenses incurred by or on behalf Indemnitee in connection with any Proceeding,
including a Proceeding by or in the right of the Company, in which Indemnitee is
involved by reason of such Indemnitee's Corporate Status within five (5)
business days after the receipt by the Company of a written statement from
Indemnitee requesting such advance or advances from time to time, whether prior
to or after final disposition of such Proceeding. To the extent required by
Delaware law, Indemnitee hereby undertakes to repay, without interest, any and
all of the amount of Indemnifiable Expenses paid to Indemnitee if it is finally
determined by a court of competent jurisdiction that Indemnitee is not entitled
under this Agreement to indemnification with respect to such Expenses. This
undertaking is an unlimited general obligation of Indemnitee.
9. PROCEDURE FOR ADVANCE PAYMENT OF EXPENSES. Indemnitee shall submit to the
Company a written request specifying the Indemnifiable Expenses for which
Indemnitee seeks
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an advancement under Section 8 of this Agreement, together with documentation
evidencing that Indemnitee has incurred such Indemnifiable Expenses. Payment of
Indemnifiable Expenses under Section 8 shall be made no later than ten (10)
calendar days after the Company's receipt of such request.
10. REMEDIES OF INDEMNITEE.
(a) RIGHT TO PETITION COURT. In the event that Indemnitee makes a
request for payment of Indemnifiable Amounts under Sections 3 and 5 above or a
request for an advancement of Indemnifiable Expenses under Sections 8 and 9
above and the Company fails to make such payment or advancement in a timely
manner pursuant to the terms of this Agreement or in the event that the Company
or any other person takes or threatens to take any action to declare this
Agreement void or unenforceable, or institutes any litigation or other action or
proceeding designed to deny or to recover from the Indemnitee the benefits
provided or intended to be provided to the Indemnitee under this Agreement,
Indemnitee may petition the Court of Chancery to enforce the Company's
obligations under this Agreement and the Company irrevocably authorizes the
Indemnitee from time to time to retain counsel of Indemnitee's choice, at the
expense of the Company as hereafter provided, to advise and represent the
Indemnitee in connection with any such interpretation, enforcement or defense,
including without limitation, the initiation or defense of any litigation or
other legal action, whether brought by or against the Company or any director,
officer, stockholder or other person affiliated with the Company, in any
jurisdiction. Notwithstanding any existing or prior attorney-client relationship
between the Company and such counsel, the Company irrevocably consents to the
Indemnitee's entering into an attorney-client relationship with such counsel,
and in that connection therewith, the Company and the Indemnitee agree that a
confidential relationship shall exist between the Indemnitee and such counsel.
(b) BURDEN OF PROOF. In any judicial proceeding brought under Section
10(a) above, the Company shall have the burden of proving that Indemnitee is not
entitled to payment of Indemnifiable Amounts hereunder.
(c) EXPENSES. The Company agrees to reimburse Indemnitee in full for
any Expenses incurred by Indemnitee in connection with investigating, preparing
for, litigating, defending or settling any action brought by Indemnitee under
Section 10(a) above, or in connection with any claim or counterclaim brought by
the Company in connection therewith, whether or not Indemnitee is successful in
whole or in part in connection with any such action.
(d) FAILURE TO ACT NOT A DEFENSE. The failure of the Company
(including its Board of Directors or any committee thereof, independent legal
counsel, or stockholders) to make a determination concerning the permissibility
of the payment of Indemnifiable Amounts or the advancement of Indemnifiable
Expenses under this Agreement shall not be a defense in any action brought under
Section 10(a) above, and shall not create a presumption that such payment or
advancement is not permissible.
11. DEFENSE OF THE UNDERLYING PROCEEDING.
(a) NOTICE BY INDEMNITEE. Indemnitee agrees to notify the Company
promptly upon being served with any summons, citation, subpoena, complaint,
indictment, information, or other document relating to any Proceeding which may
result in the payment of Indemnifiable Amounts
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or the advancement of Indemnifiable Expenses hereunder; PROVIDED, HOWEVER, that
the failure to give any such notice shall not disqualify Indemnitee from the
right, or otherwise affect in any manner any right of Indemnitee, to receive
payments of Indemnifiable Amounts or advancements of Indemnifiable Expenses
unless the Company's ability to defend in such Proceeding is materially and
adversely prejudiced thereby.
(b) DEFENSE BY COMPANY. Subject to the provisions of the last
sentence of this Section 11(b) and of Section 11(c) below, the Company shall
have the right to defend Indemnitee in any Proceeding which may give rise to the
payment of Indemnifiable Amounts hereunder; PROVIDED, HOWEVER, that the Company
shall notify Indemnitee of any such decision to defend within ten (10) calendar
days of receipt of notice of any such Proceeding under Section 11(a) above. The
Company shall not, without the prior written consent of Indemnitee, consent to
the entry of any judgment against Indemnitee or enter into any settlement or
compromise which (i) includes an admission of fault of Indemnitee or (ii) does
not include, as an unconditional term thereof, the full release of Indemnitee
from all liability in respect of such Proceeding, which release shall be in form
and substance reasonably satisfactory to Indemnitee. This Section 11(b) shall
not apply to a Proceeding brought by Indemnitee under Section 10(a) above or
pursuant to Section 18 below.
(c) INDEMNITEE'S RIGHT TO COUNSEL. Notwithstanding the provisions of
Section 11(b) above, if in a Proceeding to which Indemnitee is a party by reason
of Indemnitee's Corporate Status, (i) Indemnitee reasonably concludes that he or
she may have separate defenses or counterclaims to assert with respect to any
issue which may not be consistent with the position of other defendants in such
Proceeding, (ii) a conflict of interest or potential conflict of interest exists
between Indemnitee and the Company (including an actual or potential conflict
between the Indemnitee and the counsel selected by the Company), (iii) if the
Company fails to assume the defense of such proceeding in a timely manner, or
(iv) any such representation by the Company fails to meet any applicable
standards of professional conduct then prevailing, Indemnitee shall be entitled
to be represented by separate legal counsel of Indemnitee's choice at the
expense of the Company. In addition, if the Company fails to comply with any of
its obligations under this Agreement or in the event that the Company or any
other person takes any action to declare this Agreement void or unenforceable,
or institutes any action, suit or proceeding to deny or to recover from
Indemnitee the benefits intended to be provided to Indemnitee hereunder,
Indemnitee shall have the right to retain counsel of Indemnitee's choice, at the
expense of the Company, to represent Indemnitee in connection with any such
matter.
12. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company hereby
represents and warrants to Indemnitee as follows:
(a) AUTHORITY. The Company has all necessary power and authority to
enter into, and be bound by the terms of, this Agreement, and the execution,
delivery and performance of the undertakings contemplated by this Agreement have
been duly authorized by the Company.
(b) ENFORCEABILITY. This Agreement, when executed and delivered by
the Company in accordance with the provisions hereof, shall be a legal, valid
and binding obligation of the Company, enforceable against the Company in
accordance with its terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency, moratorium, reorganization or similar laws
affecting the enforcement of creditors' rights generally.
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13. CONTRACT RIGHTS NOT EXCLUSIVE. The rights to payment of Indemnifiable
Amounts and advancement of Indemnifiable Expenses provided by this Agreement
shall be in addition to, but not exclusive of, any other rights which Indemnitee
may have at any time under applicable law, the Company's Certificate or Bylaws
or any other agreement, vote of stockholders or directors (or a committee of
directors), or otherwise (collectively, "OTHER INDEMNITY PROVISIONS"), both as
to action in Indemnitee's official capacity and as to action in any other
capacity as a result of Indemnitee's serving as a director of the Company;
PROVIDED, HOWEVER, that (i) to the extent that Indemnitee otherwise would have
any greater right to indemnification under any Other Indemnity Provision,
Indemnitee will be deemed to have such greater right hereunder and (ii) to the
extent that any change is made to any Other Indemnity Provision which permits
any greater right to indemnification than that provided under this Agreement as
of the date hereof, Indemnitee will be deemed to have such greater right
hereunder. The Company shall not adopt any amendment to either the Certificate
or the By-laws the effect of which would be to deny, diminish or encumber
Indemnitee's right to indemnification under this Agreement or any Other
Indemnity Provision.
14. SUCCESSORS. This Agreement shall be (a) binding upon all successors and
assigns of the Company (including, without limitation, any transferee of all or
a substantial portion of the business, stock and/or assets of the Company and
any direct or indirect successor by merger or consolidation or otherwise by
operation of law) and (b) binding on and shall inure to the benefit of the
heirs, personal representatives, executors and administrators of Indemnitee.
This Agreement shall continue for the benefit of Indemnitee and such heirs,
personal representatives, executors and administrators after Indemnitee has
ceased to have Corporate Status.
15. SUBROGATION. In the event of any payment of Indemnifiable Amounts under
this Agreement, the Company shall be subrogated to the extent of such payment to
all of the rights of contribution or recovery of Indemnitee against other
persons, and Indemnitee shall take, at the request of the Company, all
reasonable action necessary to secure such rights, including the execution of
such documents as are necessary to enable the Company to bring suit to enforce
such rights.
16. CHANGE IN LAW. To the extent that a change in Delaware law (whether by
statute or judicial decision) shall permit broader indemnification or
advancement of expenses than is provided under the terms of the Bylaws and this
Agreement, Indemnitee shall be entitled to such broader indemnification and
advancements, and this Agreement shall be deemed to be amended to such extent.
17. SEVERABILITY. Whenever possible, each provision of this Agreement shall
be interpreted in such a manner as to be effective and valid under applicable
law, but if any provision of this Agreement, or any clause thereof, shall be
determined by a court of competent jurisdiction to be illegal, invalid or
unenforceable, in whole or in part, such provision or clause shall be limited or
modified in its application to the minimum extent necessary to make such
provision or clause valid, legal and enforceable, and the remaining provisions
and clauses of this Agreement shall remain fully enforceable and binding on the
parties.
18. INDEMNITEE AS PLAINTIFF. Except as provided in Section 10(c) of this
Agreement and in the next sentence, Indemnitee shall not be entitled to payment
of Indemnifiable Amounts or
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advancement of Indemnifiable Expenses with respect to any Proceeding brought by
Indemnitee against the Company, any Entity which it controls, any director or
officer thereof, or any third party, unless the Board of Directors of the
Company has consented to the initiation of such Proceeding. This Section shall
not apply to counterclaims or affirmative defenses asserted by Indemnitee in an
action brought against Indemnitee.
19. MODIFICATIONS AND WAIVER. Except as provided in Section 16 above with
respect to changes in Delaware law which broaden the right of Indemnitee to be
indemnified by the Company, no supplement, modification or amendment of this
Agreement shall be binding unless executed in writing by each 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 of this Agreement (whether or
not similar), nor shall such waiver constitute a continuing waiver.
20. GENERAL NOTICES. All notices, requests, demands and other communications
hereunder shall be in writing and shall be deemed to have been duly given (a)
when delivered by hand, (b) when transmitted by facsimile and receipt is
acknowledged, or (c) if mailed by certified or registered mail with postage
prepaid, on the third business day after the date on which it is so mailed:
(i) If to Indemnitee, to:
At his home address as shown
on the signature page to this Agreement
(ii) If to the Company, to:
WII Holdings, Inc.
c/o Behrman Capital
000 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
or to such other address as may have been furnished in the same manner by any
party to the others.
21. GOVERNING LAW; CONSENT TO JURISDICTION; SERVICE OF PROCESS. This
Agreement shall be governed by and construed in accordance with the laws of the
State of Delaware without regard to its rules of conflict of laws. Each of the
Company and the Indemnitee hereby irrevocably and unconditionally consents to
submit to the exclusive jurisdiction of the Court of Chancery of the State of
Delaware and the courts of the United States of America located in the State of
Delaware (the "DELAWARE COURTS") for any litigation arising out of or relating
to this Agreement and the transactions contemplated hereby (and agrees not to
commence any litigation relating thereto except in such courts), waives any
objection to the laying of venue of any such litigation in the Delaware Courts
and agrees not to plead or claim in any Delaware Court that such litigation
brought therein has been brought in an inconvenient forum. Each of the parties
hereto agrees, (a) to the extent such party is not otherwise subject to service
of process in the
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State of Delaware, to appoint and maintain an agent in the State of Delaware as
such party's agent for acceptance of legal process, and (b) that service of
process may also be made on such party by prepaid certified mail with a proof of
mailing receipt validated by the United States Postal Service constituting
evidence of valid service. Service made pursuant to (a) or (b) above shall have
the same legal force and effect as if served upon such party personally within
the State of Delaware. For purposes of implementing the parties' agreement to
appoint and maintain an agent for service of process in the State of Delaware,
each such party does hereby appoint The Corporation Trust Company, 0000 Xxxxxx
Xxxxxx, Xxxxxxxxxx, Xxx Xxxxxx Xxxxxx, Xxxxxxxx 00000, as such agent and each
such party hereby agrees to complete all actions necessary for such appointment.
[Signature Page Follows]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
WII HOLDINGS, INC.
By:
--------------------------------
Name:
Title:
INDEMNITEE
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