Exhibit 10.1
This Indemnification Agreement ("Agreement") is made as of ____________, 200_ by and between Encore
Capital Group, Inc., a Delaware corporation (the "Company"), and ___________ ("Indemnitee").
RECITALS
WHEREAS,
highly competent persons have become more reluctant to serve publicly-held corporations as
directors, officers or in other capacities unless they are provided with adequate
protection through insurance or adequate indemnification against inordinate risks of
claims and actions against them arising out of their service to and activities on behalf
of the corporation;
WHEREAS,
the Board of Directors of the Company (the “Board”) has determined that, in
order to attract and retain qualified individuals, the Company will attempt to maintain on
an ongoing basis, at its sole expense, liability insurance to protect persons serving the
Company and its subsidiaries from certain liabilities. Although the furnishing of such
insurance has been a customary and widespread practice among United States-based
corporations and other business enterprises, the Company believes that, given current
market conditions and trends, such insurance may be available to it in the future only at
higher premiums and with more exclusions. At the same time, directors, officers, and other
persons in service to corporations or business enterprises are being increasingly
subjected to expensive and time-consuming litigation relating to, among other things,
matters that traditionally would have been brought only against the Company or business
enterprise itself. The Certificate of Incorporation of the Company require indemnification
of the officers and directors of the Company. Indemnitee may also be entitled to
indemnification pursuant to the Delaware General Corporation Law (“DGCL”). The
Certificate of Incorporation and the DGCL expressly provide that the indemnification
provisions set forth therein are not exclusive, and thereby contemplate that contracts may
be entered into between the Company and members of the board of directors, officers and
other persons with respect to indemnification;
WHEREAS,
the uncertainties relating to such insurance and to indemnification have increased the
difficulty of attracting and retaining such persons;
WHEREAS,
the Board has determined that the increased difficulty in attracting and retaining such
persons is detrimental to the best interests of the Company’s stockholders and
that the Company should act to assure such persons that there will be increased certainty
of such protection in the future;
WHEREAS,
it is reasonable, prudent and necessary for the Company contractually to obligate itself
to indemnify, and to advance expenses on behalf of, such persons to the fullest extent
permitted by applicable law so that they will serve or continue to serve the Company free
from undue concern that they will not be so indemnified;
WHEREAS,
this Agreement is a supplement to and in furtherance of the Certificate of Incorporation
of the Company and any resolutions adopted pursuant thereto, and shall not be deemed a
substitute therefor, nor to diminish or abrogate any rights of Indemnitee thereunder;
WHEREAS,
Indemnitee does not regard the protection available under the Company’s
Certificate of Incorporation and insurance as adequate in the present circumstances, and
may not be willing to serve or continue to serve as an officer or director without
adequate protection, and the Company desires Indemnitee to serve in such capacity.
Indemnitee is willing to serve, continue to serve and to take on additional service for or
on behalf of the Company on the condition that he be so indemnified; and
NOW,
THEREFORE, in consideration of the premises and the covenants contained herein, the
Company and Indemnitee do hereby covenant and agree as follows:
Section
1. Services to the Company. Indemnitee agrees to serve or continue to serve [as a
[director] [officer] [employee] [agent] of the Company] [,at the request of the Company,
as a [director] [officer] [employee] [agent] [fiduciary] of another corporation,
partnership, joint venture, trust, employee benefit plan or other
enterprise]. Indemnitee may at any time and for any reason resign from such position
(subject to any other contractual obligation or any obligation imposed by operation of
law), in which event the Company shall have no obligation under this Agreement to
continue Indemnitee in such position. This Agreement shall not be deemed an employment
contract between the Company (or any of its subsidiaries or any Enterprise) and
Indemnitee. Indemnitee specifically acknowledges that Indemnitee’s employment
with the Company (or any of its subsidiaries or any Enterprise), if any, is at will, and
the Indemnitee may be discharged at any time for any reason, with or without cause,
except as may be otherwise provided in any written employment contract between Indemnitee
and the Company (or any of its subsidiaries or any Enterprise), other applicable formal
severance policies duly adopted by the Board, or, with respect to service as a director
or officer of the Company, by the Company’s Certificate of Incorporation, the
Company’s By-laws, and the DGCL. The foregoing notwithstanding, this
Agreement shall continue in force after Indemnitee has ceased to serve as an [officer]
[director] [agent] [employee] of the Company.
Section 2.
Definitions. As used in this Agreement:
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(a)
“Access
Period” mean the period commencing on the date Indemnitee first became a
member of the Board of the Company and ending on the date this Agreement is
terminated in accordance with Section 16 hereof.
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(b)
“Board
Papers” means all materials provided to Indenmitee specifically in
connection with any meeting of the Board or any committee of the Board, whether
in documentary form or some other form, including, but not limited to, board
papers, submissions, minutes, memoranda, legal opinions, financial statements
and subcommittee papers during the Relevant Period.
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(c)
A
“Change in Control” shall be deemed to occur upon the earliest to
occur after the date of this Agreement of any of the following events:
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i. Acquisition
of Stock by Third Party. Any Person (as defined below) is or becomes the
Beneficial Owner (as defined below), directly or indirectly, of securities of
the Company representing twenty percent (20%) or more of the combined voting
power of the Company’s then outstanding securities;
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ii. Change
in Board of Directors. During any period of two (2) consecutive years (not
including any period prior to the execution of this Agreement), individuals who
at the beginning of such period constitute the Board, and any new director
(other than a director designated by a person who has entered into an agreement
with the Company to effect a transaction described in Sections 2(c)(i),
2(c)(iii) or 2(c)(iv)) whose election by the Board or nomination for election
by the Company’s stockholders was approved by a vote of at least
two-thirds of the directors then still in office who either were directors at
the beginning of the period or whose election or nomination for election was
previously so approved, cease for any reason to constitute a least a majority
of the members of the Board;
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iii. Corporate
Transactions. The effective date of a merger or consolidation of the
Company with any other entity, other than a merger or consolidation which would
result in the voting securities of the Company outstanding immediately prior to
such merger or consolidation continuing to represent (either by remaining
outstanding or by being converted into voting securities of the surviving
entity) more than 51% of the combined voting power of the voting securities of
the surviving entity outstanding immediately after such merger or consolidation
and with the power to elect at least a majority of the board of directors or
other governing body of such surviving entity;
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iv. Liquidation.
The approval by the stockholders of the Company of a complete liquidation of
the Company or an agreement for the sale or disposition by the Company of all
or substantially all of the Company’s assets; and
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v. Other
Events. There occurs any other event of a nature that would be required to
be reported in response to Item 6(e) of Schedule 14A of Regulation 14A (or a
response to any similar item on any similar schedule or form) promulgated under
the Exchange Act (as defined below), whether or not the Company is then subject
to such reporting requirement.
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For purposes of this Section
2(c) and Section 2(i) of this Agreement, the following terms shall have the
following meanings:
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(A) “Exchange
Act” shall mean the Securities Exchange Act of 1934, as amended.
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(B) “Person” shall
have the meaning as set forth in Sections 13(d) and 14(d) of the Exchange
Act; provided, however, that Person shall exclude (i) the Company, (ii)
any trustee or other fiduciary holding securities under an employee
benefit plan of the Company, and (iii) any corporation owned, directly or
indirectly, by the stockholders of the Company in substantially the same
proportions as their ownership of stock of the Company.
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(C) “Beneficial
Owner” shall have the meaning given to such term in Rule 13d-3 under
the Exchange Act; provided, however, that Beneficial Owner shall exclude
any Person otherwise becoming a Beneficial Owner by reason of the
stockholders of the Company approving a merger of the Company with another
entity.
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(d) “Corporate
Status” describes the status of a person who is or was a director,
officer, employee or agent of the Company or of any other corporation, limited
liability company, partnership or joint venture, trust, employee benefit plan
or other enterprise which such person is or was serving at the request of the
Company.
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(e) “Director
Indemnitee” means, for purposes of Section 14(f) of this Agreement, an
Indemnitee who is or was a director of the Company as of the date of this
Agreement or who hereafter becomes a director of the Company prior to the
termination of this Agreement.
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(f) “Disinterested
Director” means a director of the Company who is not and was not a party
to the Proceeding in respect of which indemnification is sought by Indemnitee.
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(g) “Enterprise” shall
mean the Company and any other corporation, limited liability company,
partnership, joint venture, trust, employee benefit plan or other enterprise of
which Indemnitee is or was serving at the request of the Company as a director,
officer, employee, agent or fiduciary.
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(h) “Expenses” shall
include all reasonable attorneys’ fees, retainers, court costs,
transcript costs, fees of experts, witness fees, travel expenses, duplicating
costs, printing and binding costs, telephone charges, postage, delivery service
fees, and all other disbursements or expenses of the types customarily incurred
in connection with prosecuting, defending, preparing to prosecute or defend,
investigating, being or preparing to be a witness in, or otherwise
participating in, a Proceeding. Expenses also shall include Expenses incurred
in connection with any appeal resulting from any Proceeding, including without
limitation the premium, security for, and other costs relating to any cost
bond, supersedeas bond, or other appeal bond or its equivalent. Expenses,
however, shall not include amounts paid in settlement by Indemnitee or the
amount of judgments or fines against Indemnitee.
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(i) “Independent
Counsel” means a law firm, or a member of a law firm, that is experienced
in matters of corporation law and neither presently is, nor in the past five
years has been, retained to represent: (i) the Company or Indemnitee in any
matter material to either such party (other than with respect to matters
concerning the Indemnitee under this Agreement, or of other indemnitees under
similar indemnification agreements), or (ii) any other party to the Proceeding
giving rise to a claim for indemnification hereunder. Notwithstanding the
foregoing, the term “Independent Counsel” shall not include any
person who, under the applicable standards of professional conduct then
prevailing, would have a conflict of interest in representing either the
Company or Indemnitee in an action to determine Indemnitee’s rights
under this Agreement. The Company agrees to pay the reasonable fees and
expenses of the Independent Counsel referred to above and to fully indemnify
such counsel against any and all Expenses, claims, liabilities and damages
arising out of or relating to this Agreement or its engagement pursuant hereto.
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(j) A
“Potential Change in Control” shall be deemed to occur upon the
earliest to occur after the date of this Agreement of any of the following
events:
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i. Agreement
Relating to Change in Control. The Company enters into an agreement, the
consummation of which would result in the occurrence of a Change in Control;
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ii. Public
Announcement Relating to Change in Control. Any Person (including the Company)
publicly announces an intention to take or to consider taking actions which if
consummated would constitute a Change in Control;
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iii. Acquisition
of Stock by Third Party. Any Person (other than (i) the Company or any of its
subsidiaries, or (ii) any pension, profit sharing, employee stock ownership or
other employee benefit plan of the Company or any of its subsidiaries or any
trustee of or fiduciary with respect to any such plan when acting in such
capacity) who is or becomes the Beneficial Owner of ten percent (10%) or more
of the combined voting power of the Company’s then outstanding securities,
increases his, her or its Beneficial Ownership of such combined voting power by
five percent (5%) or more over the percentage so owned by such Person on the
date hereof; or
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iv. Board
Declaration. The Board adopts a resolution to the effect that, for purposes of
this Agreement, a Potential Change in Control has occurred.
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(k) The
term “Proceeding” shall include any threatened, pending or completed
action, suit, arbitration, alternate dispute resolution mechanism,
investigation, inquiry, administrative hearing or any other actual, threatened
or completed proceeding, whether brought in the right of the Company or
otherwise and whether of a civil, criminal, administrative or investigative
nature, in which Indemnitee was, is or will be involved as a party or otherwise
by reason of the fact that Indemnitee is or was a director or officer of the
Company, by reason of any action taken by him or of any action on his part
while acting as director or officer of the Company, or by reason of the fact
that he is or was serving at the request of the Company as a director, officer,
employee or agent of another corporation, limited liability company,
partnership, joint venture, trust or other enterprise, in each case whether or
not serving in such capacity at the time any liability or expense is incurred
for which indemnification, reimbursement, or advancement of expenses can be
provided under this Agreement; except one initiated by a Indemnitee to enforce
his rights under this Agreement.
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(l) “Relevant
Period” means the period commencing on the date that Indemnitee first
became a member of the Board of the Company and ending on the date Indemnitee
ceases to serve as a member of the Board.
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(m) Reference
to “other enterprise” shall include employee benefit plans;
references to “fines” shall include any excise tax assessed with
respect to any employee benefit plan; 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; and a person who acted in good
faith and in a manner he reasonably believed to be in the best interests of the
participants and beneficiaries of an employee benefit plan shall be deemed to
have acted in manner “not opposed to the best interests of the Company” as
referred to in this Agreement.
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Section
3. Indemnity in Third-Party Proceedings. The Company shall indemnify Indemnitee in
accordance with the provisions of this Section 3 if Indemnitee is, or is threatened to be
made, a party to or a participant in any Proceeding, other than a Proceeding by or in the
right of the Company to procure a judgment in its favor. Pursuant to this Section 3,
Indemnitee shall be indemnified to the fullest extent permitted by applicable law against
all Expenses, judgments, fines and amounts paid in settlement actually and reasonably
incurred by Indemnitee or on his behalf in connection with such Proceeding or any claim,
issue or matter therein, if Indemnitee acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of the Company and, in the case of
a criminal proceeding had no reasonable cause to believe that his conduct was unlawful.
Section
4. Indemnity in Proceedings by or in the Right of the Company. The Company shall
indemnify Indemnitee in accordance with the provisions of this Section 4 if Indemnitee
is, or is threatened to be made, a party to or a participant in any Proceeding by or in
the right of the Company to procure a judgment in its favor. Pursuant to this Section 4,
Indemnitee shall be indemnified to the fullest extent permitted by applicable law against
all Expenses actually and reasonably incurred by him or on his behalf in connection with
such Proceeding or any claim, issue or matter therein, if Indemnitee acted in good faith
and in a manner he reasonably believed to be in or not opposed to the best interests of
the Company. No indemnification for Expenses shall be made under this Section 4 in
respect of any claim, issue or matter as to which Indemnitee shall have been finally
adjudged by a court to be liable to the Company, unless and only to the extent that the
Delaware Court of Chancery or any court in which the 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.
Section
5. Indemnification for Expenses of a Party Who is Wholly or Partly Successful.
Notwithstanding any other provisions of this Agreement, to the fullest extent permitted
by applicable law and to the extent that Indemnitee is a party to (or a participant in)
and is successful, on the merits or otherwise, in any Proceeding or in defense of any
claim, issue or matter therein, in whole or in part, the Company shall indemnify
Indemnitee against all Expenses actually and reasonably incurred by him 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 actually
and reasonably incurred by him or on his behalf in connection with each successfully
resolved claim, issue or matter. If the Indemnitee is not wholly successful in such
Proceeding, the Company also shall indemnify Indemnitee against all Expenses reasonably
incurred in connection with a claim, issue or matter related to any claim, issue, or
matter on which the Indemnitee was successful. For purposes of this Section and without
limitation, the termination of any claim, issue or matter in such a Proceeding by
dismissal, with or without prejudice, shall be deemed to be a successful result as to
such claim, issue or matter.
Section
6. Indemnification For Expenses of a Witness. Notwithstanding any other provision
of this Agreement, to the fullest extent permitted by applicable law and to the extent
that Indemnitee is, by reason of his Corporate Status, a witness in any Proceeding to
which Indemnitee is not a party, he shall be indemnified against all Expenses actually
and reasonably incurred by him or on his behalf in connection therewith.
Section
7. Additional Indemnification.
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(a) Notwithstanding
any limitation in Sections 3, 4, or 5, the Company shall indemnify Indemnitee
to the fullest extent permitted by applicable law if Indemnitee is a party to
or threatened to be made a party to any Proceeding (including a Proceeding by
or in the right of the Company to procure a judgment in its favor) against all
Expenses, judgments, fines and amounts paid in settlement actually and
reasonably incurred by Indemnitee in connection with the Proceeding.
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(b) For
purposes of Section 7(a), the meaning of the phrase “to the fullest extent
permitted by applicable law” shall include, but not be limited to:
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i. to
the fullest extent permitted by the provision of the DGCL that authorizes or
contemplates additional indemnification by agreement, or the corresponding
provision of any amendment to or replacement of the DGCL, and
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ii. to
the fullest extent authorized or permitted by any amendments to or replacements
of the DGCL adopted after the date of this Agreement that increase the extent
to which a corporation may indemnify its officers and directors.
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Section
8. Exclusions. Notwithstanding any provision in this Agreement, the Company shall
not be obligated under this Agreement to make any indemnity in connection with any claim
made against Indemnitee:
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(a) for
which payment has actually been made to or on behalf of Indemnitee under any
insurance policy or other indemnity provision, provided that the Company shall
remain obligated in accordance with the terms hereof to provide indemnity for
any excess beyond the amount paid under any insurance policy or other indemnity
provision; or
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(b) for
an accounting of profits made from the purchase and sale (or sale and purchase)
by Indemnitee of securities of the Company within the meaning of Section 16(b)
of the Securities Exchange Act of 1934, as amended, or similar provisions of
state statutory law or common law; or
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(c) in
connection with any Proceeding (or any part of any Proceeding) initiated by
Indemnitee, including any Proceeding (or any part of any Proceeding) initiated
by Indemnitee against the Company or its directors, officers, employees or
other indemnitees, unless (i) the Board of Directors of the Company authorized
the Proceeding (or any part of any Proceeding) prior to its initiation or (ii)
the Company provides the indemnification, in its sole discretion, pursuant to
the powers vested in the Company under applicable law.
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Section
9. Advances of Expenses. In accordance with the pre-existing requirement of
Article Nine of the Certificate of Incorporation of the Company, and notwithstanding any
provision of this Agreement to the contrary, the Company shall advance, to the extent not
prohibited by law, the expenses incurred by Indemnitee in connection with any Proceeding,
and such advancement shall be made within ten (10) days after the receipt by the Company
of a statement or statements requesting such advances from time to time, whether prior to
or after final disposition of any Proceeding. Advances shall be unsecured and interest
free. Advances shall be made without regard to Indemnitee’s ability to repay
the expenses and without regard to Indemnitee’s ultimate entitlement to
indemnification under the other provisions of this Agreement. Advances shall include any
and all reasonable Expenses incurred pursuing an action to enforce this right of
advancement, including Expenses incurred preparing and forwarding statements to the
Company to support the advances claimed. The Indemnitee shall qualify for advances upon
the execution and delivery to the Company of this Agreement which shall constitute an
undertaking providing that the Indemnitee undertakes to repay the advance to the extent
that it is ultimately determined that Indemnitee is not entitled to be indemnified by the
Company. This Section 9 shall not apply to any claim made by Indemnitee for which
indemnity is excluded pursuant to Section 8.
Section
10. Procedure
for Notification and Defense of Claim.
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(a) To
obtain indemnification under this Agreement or the establishment of a Trust in
favor of Indemnitee in accordance with the provisions of Section 14(f) of this
Agreement, Indemnitee shall submit to the Company a written request, including
therein or therewith such documentation and information as is reasonably
available to Indemnitee and is reasonably necessary to determine whether and to
what extent Indemnitee is entitled to indemnification following the final
disposition of such action, suit or proceeding. The Secretary of the Company
shall, promptly upon receipt of such a request for indemnification, advise the
Board in writing that Indemnitee has requested indemnification.
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(b) The
Company will be entitled to participate in the Proceeding at its own expense.
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Section 11.
Procedure Upon Application for Indemnification.
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(a) Upon
written request by Indemnitee for indemnification pursuant to the first
sentence of Section 10(a), a determination, if required by applicable law, with
respect to Indemnitee’s entitlement thereto shall be made in the
specific case: (i) if a Change in Control shall have occurred, by Independent
Counsel in a written opinion to the Board of Directors, a copy of which shall
be delivered to Indemnitee; or (ii) if a Change in Control shall not have
occurred, (A) by a majority vote of the Disinterested Directors, even though
less than a quorum of the Board, (B) if there are no such Disinterested
Directors or, if such Disinterested Directors so direct, by Independent Counsel
in a written opinion to the Board, a copy of which shall be delivered to
Indemnitee or (C) by the stockholders of the Company; and, if it is so
determined that Indemnitee is entitled to indemnification, payment to
Indemnitee shall be made within ten (10) days after such determination.
Indemnitee shall cooperate with the person, persons or entity making such
determination with respect to Indemnitee’s entitlement to
indemnification, including providing to such person, persons or entity upon
reasonable advance request any documentation or information which is not
privileged or otherwise protected from disclosure and which is reasonably
available to Indemnitee and reasonably necessary to such determination. Any
costs or expenses (including attorneys’ fees and disbursements)
incurred by Indemnitee in so cooperating with the person, persons or entity
making such determination shall be borne by the Company (irrespective of the
determination as to Indemnitee’s entitlement to indemnification)
and the Company hereby indemnifies and agrees to hold Indemnitee harmless
therefrom.
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(b) In
the event the determination of entitlement to indemnification is to be made by
Independent Counsel pursuant to Section 11(a) hereof, the Independent Counsel
shall be selected as provided in this Section 11(b). If a Change in Control
shall not have occurred, the Independent Counsel shall be selected by the Board
of Directors, and the Company shall give written notice to Indemnitee advising
him of the identity of the Independent Counsel so selected. If a Change in
Control shall have occurred, the Independent Counsel shall be selected by
Indemnitee (unless Indemnitee shall request that such selection be made by the
Board of Directors, in which event the preceding sentence shall apply), and
Indemnitee shall give written notice to the Company advising it of the identity
of the Independent Counsel so selected. In either event, Indemnitee or the
Company, as the case may be, may, within 10 days after such written notice of
selection shall have been given, deliver to the Company or to Indemnitee, as
the case may be, a written objection to such selection; provided, however,
that such objection may be asserted only on the ground that the Independent
Counsel so selected does not meet the requirements of “Independent Counsel” as
defined in Section 2 of this Agreement, and the objection shall set forth with
particularity the factual basis of such assertion. Absent a proper and timely
objection, the person so selected shall act as Independent Counsel. If such
written objection is so made and substantiated, the Independent Counsel so
selected may not serve as Independent Counsel unless and until such objection
is withdrawn or a court has determined that such objection is without merit.
If, within 20 days after the later of submission by Indemnitee of a written
request for indemnification pursuant to Section 10(a) hereof and the final
disposition of the Proceeding, no Independent Counsel shall have been selected
and not objected to, either the Company or Indemnitee may petition a court of
competent jurisdiction for resolution of any objection which shall have been
made by the Company or Indemnitee to the other’s selection of
Independent Counsel and/or for the appointment as Independent Counsel of a
person selected by the Court or by such other person as the Court shall
designate, and the person with respect to whom all objections are so resolved
or the person so appointed shall act as Independent Counsel under Section 11(a)
hereof. Upon the due commencement of any judicial proceeding or arbitration
pursuant to Section 13(a) of this Agreement, Independent Counsel shall be
discharged and relieved of any further responsibility in such capacity (subject
to the applicable standards of professional conduct then prevailing).
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Section 12.
Presumptions and Effect of Certain Proceedings.
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(a) In
making a determination with respect to entitlement to indemnification
hereunder, the person or persons or entity making such determination shall
presume that Indemnitee is entitled to indemnification under this Agreement if
Indemnitee has submitted a request for indemnification in accordance with
Section 10(a) 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. Neither
the failure of the Company (including by its directors or independent legal
counsel) to have made a determination prior to the commencement of any action
pursuant to this Agreement that indemnification is proper in the circumstances
because Indemnitee has met the applicable standard of conduct, nor an actual
determination by the Company (including by its directors or independent legal
counsel) that Indemnitee has not met such applicable standard of conduct, shall
be a defense to the action or create a presumption that Indemnitee has not met
the applicable standard of conduct.
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(b) Subject
to Section 13(e), if the person, persons or entity empowered or selected under
Section 11 of this Agreement to determine whether Indemnitee is entitled to
indemnification shall not have made a determination within sixty (60) days
after receipt by the Company of the request therefor, the requisite
determination of entitlement to indemnification shall be deemed to have been
made and Indemnitee shall be entitled to such indemnification, absent (i) a
misstatement by Indemnitee of a material fact, or an omission of a material
fact necessary to make Indemnitee’s statement not materially
misleading, in connection with the request for indemnification, or (ii) a
prohibition of such indemnification under applicable law; provided, however,
that such 60-day period may be extended for a reasonable time, not to exceed an
additional thirty (30) days, if the person, persons or entity making the
determination with respect to entitlement to indemnification in good faith
requires such additional time for the obtaining or evaluating of documentation
and/or information relating thereto; and provided, further, that the foregoing
provisions of this Section 12(b) shall not apply (i) if the determination of
entitlement to indemnification is to be made by the stockholders pursuant to
Section 11(a) of this Agreement and if (A) within fifteen (15) days after
receipt by the Company of the request for such determination the Board of
Directors has resolved to submit such determination to the stockholders for
their consideration at an annual meeting thereof to be held within seventy five
(75) days after such receipt and such determination is made thereat, or (B) a
special meeting of stockholders is called within fifteen (15) days after such
receipt for the purpose of making such determination, such meeting is held for
such purpose within sixty (60) days after having been so called and such
determination is made thereat, or (ii) if the determination of entitlement to
indemnification is to be made by Independent Counsel pursuant to Section 11(a)
of this Agreement.
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(c) The
termination of any Proceeding or of any claim, issue or matter therein, by
judgment, order, settlement or conviction, or upon a plea of nolocontendere or
its equivalent, shall not (except as otherwise expressly provided in this
Agreement) of itself create a presumption 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, with respect to any criminal Proceeding,
that Indemnitee had reasonable cause to believe that his conduct was unlawful.
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(d) Reliance
as Safe Harbor. For purposes of any determination of good faith, Indemnitee
shall be deemed to have acted in good faith if Indemnitee’s action
is based on the records or books of account of the Enterprise, including
financial statements, or on information supplied to Indemnitee by the officers
of the Enterprise in the course of their duties, or on the advice of legal
counsel for the Enterprise or on information or records given or reports made
to the Enterprise by an independent certified public accountant or by an
appraiser or other expert selected with the reasonable care by the Enterprise.
The provisions of this Section 12(d) shall not be deemed to be exclusive or to
limit in any way the other circumstances in which the Indemnitee may be deemed
to have met the applicable standard of conduct set forth in this Agreement.
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(e) Actions
of Others. The knowledge and/or actions, or failure to act, of any
director, officer, agent or employee of the Enterprise shall not be imputed to
Indemnitee for purposes of determining the right to indemnification under this
Agreement.
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Section
13. Remedies of Indemnitee.
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(a) Subject
to Section 13(e), in the event that (i) a determination is made pursuant to
Section 11 of this Agreement that Indemnitee is not entitled to indemnification
under this Agreement, (ii) advancement of Expenses is not timely made pursuant
to Section 9 of this Agreement, (iii) no determination of entitlement to
indemnification shall have been made pursuant to Section 11(a) of this
Agreement within 90 days after receipt by the Company of the request for
indemnification, (iv) payment of indemnification is not made pursuant to
Section 5 or 6 or the last sentence of Section 11(a) of this Agreement within
ten (10) days after receipt by the Company of a written request therefor, or
(v) payment of indemnification pursuant to Section 3, 4 or 7 of this Agreement
is not made within ten (10) days after a determination has been made that
Indemnitee is entitled to indemnification, Indemnitee shall be entitled to an
adjudication by a court of his entitlement to such indemnification or
advancement of Expenses. Alternatively, Indemnitee, at his option, may seek an
award in arbitration to be conducted by a single arbitrator pursuant to the
Commercial Arbitration Rules of the American Arbitration Association.
Indemnitee shall commence such proceeding seeking an adjudication or an award
in arbitration within 180 days following the date on which Indemnitee first has
the right to commence such proceeding pursuant to this Section 13(a); provided,
however, that the foregoing clause shall not apply in respect of a
proceeding brought by Indemnitee to enforce his rights under Section 5 of this
Agreement. The Company shall not oppose Indemnitee’s right to seek
any such adjudication or award in arbitration.
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(b) In
the event that a determination shall have been made pursuant to Section 11(a)
of this Agreement that Indemnitee is not entitled to indemnification, any
judicial proceeding or arbitration commenced pursuant to this Section 13 shall
be conducted in all respects as a denovo trial, or arbitration,
on the merits and Indemnitee shall not be prejudiced by reason of that adverse
determination. In any judicial proceeding or arbitration commenced pursuant to
this Section 13 the Company shall have the burden of proving Indemnitee is not
entitled to indemnification or advancement of Expenses, as the case may be.
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(c) If
a determination shall have been made pursuant to Section 11(a) of this
Agreement that Indemnitee is entitled to indemnification, the Company shall be
bound by such determination in any judicial proceeding or arbitration commenced
pursuant to this Section 13, absent (i) a misstatement by Indemnitee of a
material fact, or an omission of a material fact necessary to make
Indemnitee’s statement not materially misleading, in connection
with the request for indemnification, or (ii) a prohibition of such
indemnification under applicable law.
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(d) The
Company shall be precluded from asserting in any judicial proceeding or
arbitration commenced pursuant to this Section 13 that the procedures and
presumptions of this Agreement are not valid, binding and enforceable and shall
stipulate in any such court or before any such arbitrator that the Company is
bound by all the provisions of this Agreement. The Company shall indemnify
Indemnitee against any and all Expenses and, if requested by Indemnitee, shall
(within ten (10) days after receipt by the Company of a written request
therefor) advance, to the extent not prohibited by law, such expenses to
Indemnitee, which are incurred by Indemnitee in connection with any action
brought by Indemnitee for indemnification or advance of Expenses from the
Company under this Agreement or under any directors’ and
officers’ liability insurance policies maintained by the Company,
regardless of whether Indemnitee ultimately is determined to be entitled to
such indemnification, advancement of Expenses or insurance recovery, as the
case may be.
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(e) Notwithstanding
anything in this Agreement to the contrary, no determination as to entitlement
to indemnification under this Agreement shall be required to be made prior to
the final disposition of the Proceeding.
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Section 14.
Non-exclusivity; Survival of Rights; Insurance; Subrogation; Establishment of Trust.
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(a) The
rights of indemnification and to receive advancement of Expenses as provided by
this Agreement shall not be deemed exclusive of any other rights to which
Indemnitee may at any time be entitled under applicable law, the
Company’s Certificate of Incorporation, the Company’s
By-laws, any agreement, a vote of stockholders or a resolution of directors, or
otherwise. No amendment, alteration or repeal of this Agreement or of any
provision hereof shall limit or restrict any right of Indemnitee under this
Agreement in respect of any action taken or omitted by such Indemnitee in his
Corporate Status prior to such amendment, alteration or repeal. To the extent
that a change in Delaware law, whether by statute or judicial decision, permits
greater indemnification or advancement of Expenses than would be afforded
currently under the Company’s Certificate of Incorporation and this
Agreement, it is the intent of the parties hereto that Indemnitee shall enjoy
by this Agreement the greater benefits so afforded by such change. No right or
remedy herein conferred is intended to be exclusive of any other right or
remedy, and every other right and remedy shall be cumulative and in addition to
every other right and remedy given hereunder or now or hereafter existing at
law or in equity or otherwise. The assertion or employment of any right or
remedy hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other right or remedy.
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(b) To
the extent that the Company maintains an insurance policy or policies providing
liability insurance for directors, officers, employees, or agents of the
Company or of any other corporation, partnership, joint venture, trust,
employee benefit plan or other enterprise which such person serves at the
request of the Company, Indemnitee shall be covered by such policy or policies
in accordance with its or their terms to the maximum extent of the coverage
available for any such director, officer, employee or agent under such policy
or policies. If, at the time of the receipt of a notice of a claim pursuant to
the terms hereof, 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. Without limiting the foregoing, the Company will use its
reasonable best efforts to maintain director and officer liability insurance in
respect of acts or omissions occurring during the period of time that
Indemnitee serves or served as an officer, director, agent or employee of the
Company covering Indemnitee on terms at least as favorable as the coverage
currently in effect on the date hereof, provided that in satisfying its
obligation under this Section 14(b), the Company shall not be obligated to pay
premiums in excess of 200% of the amount per annum the Company paid in its last
full fiscal year prior to the date hereof, and if the Company is unable to
obtain the insurance required by this Section 14(b), it shall obtain as much
comparable insurance as possible for an annual premium equal to such maximum
amount.
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(c) In
the event of any 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 papers required and take all action necessary to secure
such rights, including execution of such documents as are necessary to enable
the Company to bring suit to enforce such rights.
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(d) The
Company shall not be liable under this Agreement to make any payment of amounts
otherwise indemnifiable (or for which advancement is provided hereunder)
hereunder if and to the extent that Indemnitee has otherwise actually received
such payment under any insurance policy, contract, agreement or otherwise.
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(e) The
Company’s obligation to indemnify or advance Expenses hereunder to
Indemnitee who is or was serving at the request of the Company as a director,
officer, employee or agent of any other corporation, limited liability company,
partnership, joint venture, trust, employee benefit plan or other enterprise
shall be reduced by any amount Indemnitee has actually received as
indemnification or advancement of expenses from such other corporation, limited
liability company, partnership, joint venture, trust, employee benefit plan or
other enterprise.
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(f) In
the event of a Potential Change in Control the Company shall, upon written
request by a Director Indemnitee containing the information required by Section
10(a) of this Agreement, create a trust (the “Trust”) for the benefit
of the Director Indemnitee and from time to time upon written request of the
Director Indemnitee shall fund the Trust in an amount sufficient to satisfy any
and all amounts for which the Director Indemnitee is entitled to
indemnification or advancement of Expenses hereunder that are actually paid or
that the Director Indemnitee reasonably determines from time to time may be
payable by the Company under this Agreement; provided, however, that the
Company shall not be required to establish the Trust if, at the time a written
request by the Director Indemnitee is made pursuant to this Section 14(f), the
Company provides the Director Indemnitee with written evidence reasonably
satisfactory to the Director Indemnitee that the Company maintains director and
officer liability insurance in respect of acts or omissions occurring during
the period of time that the Director Indemnitee serves or served as an officer,
director, agent or employee of the Company covering the Director Indemnitee on
terms at least as favorable as the coverage currently in effect on the date
hereof, without taking into account the limitation on premiums the Company is
required to pay pursuant to Section 14(b) of this Agreement. The amount or
amounts to be deposited in the Trust pursuant to the foregoing funding
obligation (or, if applicable, the adequacy of director and officer liability
insurance maintained by the Company pursuant to the proviso to the preceding
sentence) shall be determined by the applicable party specified in Section
11(a) of this Agreement. The terms of the Trust shall provide that upon a
Change in Control: (i) the Trust shall not be revoked or the principal thereof
invaded without the written consent of the Director Indemnitee; (ii) the
trustee of the Trust shall advance, within ten (10) days of a request by the
Director Indemnitee, any and all Expenses to the Director Indemnitee (and the
Director Indemnitee hereby agrees to reimburse the Trust under the
circumstances under which the Director Indemnitee would be required to
reimburse the Company under Section 9 of this Agreement); (iii) the Company
shall continue to fund the Trust from time to time in accordance with the
funding obligations set forth above; (iv) the trustee of the Trust shall
promptly pay to the Director Indemnitee all amounts and Expenses for which the
Director Indemnitee shall be entitled to indemnification pursuant to this
Agreement; and (v) all unexpended funds in the Trust shall revert to the
Company upon a final determination by a court of competent jurisdiction in a
final decision from which there is no further right of appeal that the Director
Indemnitee has been fully indemnified under the terms of this Agreement. The
trustee of the Trust shall be chosen by the Director Indemnitee.
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Section
15. Access to Board Papers.
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(a) The
Company agrees to maintain a complete set of Board Papers, in a systematic and
organized manner, in secure custody during the Access Period; provided, however,
that if the relevant Board Papers were created prior to the date of this
Agreement, the Company shall be deemed to have satisfied its obligations under
this Section 15(a) if it uses all reasonable efforts to collate and keep those
Board Papers in the manner required hereby. Subject to the foregoing proviso
and the limitation in Sections 15(b) and 15(c), if Indemnitee asks to inspect,
or for a copy of, any Board Paper during the Access Period and the request is
made in connection with any Proceedings or the threat of any Proceedings, the
Company must, within fourteen (14) days after receiving that request: (i) allow
Indemnitee (or a person nominated in writing by Indemnitee) to inspect the
Board Paper at the Company’s registered office (or any other place
agreed by the Company and Indemnitee), and (ii) provide Indemnitee a copy of
the Board Paper without charge.
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(b) Indemnitee
hereby acknowledges that: (i) the Company remains the owner of all Board Papers
and the Company may request Indemnitee to provide the Company with reasons why
Indemnitee requires access to a document, (ii) as a condition to Indemnitee’s
right to receive any Board Papers, Indemnitee must, on written request by the
Company, provide the Company with written reasons why Indemnitee requires
access to a document, and (iii) Indemnitee must return to the Company or
destroy all copies of any Board Paper obtained from the Company under this
Section 15 within ten (10) days after the relevant Proceedings are finally
resolved or the threat of such Proceedings has ceased to materially exist.
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(c) If
the Company has any right (including a right it has jointly or in common with
Indemnitee or with Indemnitee and others) to privilege, such as attorney-client
privilege, with respect to any document which Indemnitee inspects, copies or
uses under this Agreement or the DGCL: (i) that document is to be treated by
Indemnitee as confidential, (ii) by permitting the inspection, copying or use
to Indemnitee or Indemnitee’s permitted nominee, the Company does not
waive any privilege, and (iii) in so inspecting, copying or using the document
by himself or herself or through Indemnitee’s permitted nominee,
Indemnitee must use his or her best efforts to ensure that so far as is
practical the right to privilege is not lost or waived, whether by Indemnitee
or the Indemnitee’s nominee or otherwise and as a condition to providing
any such document to Indemnitee the Company may require Indemnitee to enter
into a reasonable and customary joint defense or other similar agreement for
the protection of any such privilege. Nothing in this Agreement shall be deemed
to prevent or preclude the Company from relying on privilege in proceedings
between Indemnitee and the Company (including in respect of a document which
the Company has disclosed to Indemnitee outside those proceedings).
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(d) Nothing
in this Section 15 shall be deemed to limit any right of access Indemnitee
otherwise has to Board Papers.
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(e) Indemnitee
hereby agrees not disclose any confidential information contained in a Board
Paper to a third party unless: (i) the Company has given its prior written
consent to such disclosure, (ii) Indemnitee is required to do so by law, (iii)
the disclosure is made for the purpose of obtaining professional advice or in
connection with the relevant Proceedings or the threat of such Proceedings in
relation to which Indemnitee was given access to the Board Paper, or (iv) the
disclosure is made on behalf of the Company and for Company purposes in
furtherance of Indemnitee’s duties as a director, officer, employee or
agent of the Company at the time such disclosure is made; provided, however,
if Indemnitee is entitled to disclose confidential information under this
Section 15(e) and the Board Papers include any information to which
attorney-client privilege attaches for the benefit of the Company, or both the
Company and Indemnitee, Indemnitee must use his or her best efforts to avoid
doing anything that will cause that privilege to be waived, extinguished or
lost by the Company in relation to third parties.
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Section
16. Duration of Agreement. This Agreement shall continue until and terminate upon
the later of: (a) 10 years after the date that Indemnitee shall have ceased to serve as a
[director] [officer] [agent] [employee] of the Company or (b) 1 year after the final
termination of any Proceeding then pending in respect of which Indemnitee is granted
rights of indemnification or advancement of Expenses hereunder and of any proceeding
commenced by Indemnitee pursuant to Section 13 of this Agreement relating thereto. This
Agreement shall be binding upon the Company and its successors and assigns and shall
inure to the benefit of Indemnitee and his heirs, executors and administrators.
Section
17. Severability. If any provision or provisions of this Agreement shall be held
to be invalid, illegal or unenforceable for any reason whatsoever: (a) the validity,
legality and enforceability of the remaining provisions of this Agreement (including
without limitation, each portion of any Section of this Agreement containing any such
provision held to be invalid, illegal or unenforceable, that is not itself invalid,
illegal or unenforceable) shall not in any way be affected or impaired thereby and shall
remain enforceable to the fullest extent permitted by law; (b) such provision or
provisions shall be deemed reformed to the extent necessary to conform to applicable law
and to give the maximum effect to the intent of the parties hereto; and (c) to the
fullest extent possible, the provisions of this Agreement (including, without limitation,
each portion of any Section of this Agreement containing any such provision held to be
invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable)
shall be construed so as to give effect to the intent manifested thereby.
Section
18. Enforcement.
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(a) The
Company expressly confirms and agrees that it has entered into this Agreement
and assumed the obligations imposed on it hereby in order to induce Indemnitee
to serve or continue to serve as a director or officer of the Company, and the
Company acknowledges that Indemnitee is relying upon this Agreement in serving
as a director or officer of the Company.
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(b) This
Agreement is a supplement to and in furtherance of the Certificate of
Incorporation of the Company, the By-laws of the Company and applicable law,
and shall not be deemed a substitute therefor, nor to diminish or abrogate any
rights of Indemnitee thereunder or under any other prior written agreement to
which the Company or its predecessors, on the one hand, and Indemnitee and his
or her affiliates, on the other, are a party[; provided, however, that this
Agreement shall be deemed to supersede that certain Indemnification Agreement,
dated as of __________ (the “Prior Indemnification Agreement”),
between ___________ and Indemnitee, which Prior Indemnification Agreement shall
terminate and be of no further force or effect upon the execution and delivery
hereof by the Company and Indemnitee].
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Section
19. Modification and Waiver. No supplement, modification or amendment of this
Agreement shall be binding unless executed in writing by the parties thereto. 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 nor shall any waiver constitute a continuing
waiver.
Section
20. Notice by Indemnitee. Indemnitee agrees promptly to notify the Company in
writing upon being served with any summons, citation, subpoena, complaint, indictment,
information or other document relating to any Proceeding or matter which may be subject
to indemnification or advancement of Expenses covered hereunder. The failure of
Indemnitee to so notify the Company shall not relieve the Company of any obligation which
it may have to the Indemnitee under this Agreement or otherwise.
Section
21. Notices. All notices, requests, demands and other communications under
this Agreement shall be in writing and shall be deemed to have been duly given if (a)
delivered by hand and receipted for by the party to whom said notice or other
communication shall have been directed, (b) mailed by certified or registered mail with
postage prepaid, on the third business day after the date on which it is so mailed, (c)
mailed by reputable overnight courier and receipted for by the party to whom said notice
or other communication shall have been directed or (d) sent by facsimile transmission,
with receipt of oral confirmation that such transmission has been received:
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(a) If
to Indemnitee, at the address indicated on the signature page of this
Agreement, or such other address as Indemnitee shall provide to the Company.
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Encore
Capital Group, Inc.
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0000 Xxxx Xxxxx, Xxxxx 000
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Xxx Xxxxx, Xxxxxxxxxx 00000
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Attn: Corporate
Secretary
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Facsimile: (000) 000-0000
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or to any other address as may have
been furnished to Indemnitee by the Company.
Section
22. Contribution. To the fullest extent permissible under applicable law, if the
indemnification provided for in this Agreement is unavailable to Indemnitee for any
reason whatsoever, the Company, in lieu of indemnifying Indemnitee, shall contribute to
the amount incurred by Indemnitee, whether for judgments, fines, penalties, excise taxes,
amounts paid or to be paid in settlement and/or for Expenses, in connection with any
claim relating to an indemnifiable event under this Agreement, in such proportion as is
deemed fair and reasonable in light of all of the circumstances of such Proceeding in
order to reflect (i) the relative benefits received by the Company and Indemnitee as a
result of the event(s) and/or transaction(s) giving cause to such Proceeding; and/or (ii)
the relative fault of the Company (and its directors, officers, employees and agents) and
Indemnitee in connection with such event(s) and/or transaction(s).
Section
23. Applicable Law and Consent to Jurisdiction. This Agreement and the legal
relations among the parties shall be governed by, and construed and enforced in
accordance with, the laws of the State of Delaware, without regard to its conflict of
laws rules. Except with respect to any arbitration commenced by Indemnitee pursuant to
Section 13(a) of this Agreement, the Company and Indemnitee hereby irrevocably and
unconditionally (i) agree that any action or proceeding arising out of or in connection
with this Agreement shall be brought only in the Chancery Court of the State of Delaware
(the “Delaware Court”), and not in any other state or federal court in the
United States of America or any court in any other country, (ii) consent to submit to the
exclusive jurisdiction of the Delaware Court for purposes of any action or proceeding
arising out of or in connection with this Agreement, (iii) appoint, to the extent such
party is not otherwise subject to service of process in the State of Delaware,
irrevocably The Corporation Trust Company of Delaware, [address] as its agent in the
State of Delaware as such party’s agent for acceptance of legal process in
connection with any such action or proceeding against such party with the same legal
force and validity as if served upon such party personally within the State of Delaware,
(iv) waive any objection to the laying of venue of any such action or proceeding in the
Delaware Court, and (v) waive, and agree not to plead or to make, any claim that any such
action or proceeding brought in the Delaware Court has been brought in an improper or
inconvenient forum.
Section
24. 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 but all of
which together shall constitute one and the same Agreement. Only one such counterpart
signed by the party against whom enforceability is sought needs to be produced to
evidence the existence of this Agreement.
Section
25. Miscellaneous. Use of the masculine pronoun shall be deemed to include usage
of the feminine pronoun where appropriate. 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.
IN
WITNESS WHEREOF, the parties have caused this Agreement to be signed as of the day and
year first above written.
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ENCORE CAPITAL GROUP, INC.
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INDEMNITEE |
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Address: 8875 Aero Drive, Suite 200
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Address:
—————————— |
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San Diego, California 92123
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—————————— |
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Attn: Corporate Secretary
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—————————— |
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