EXHIBIT 10.10
DIRECTOR INDEMNIFICATION AGREEMENT
This Director Indemnification Agreement, dated as of ___________ ___,
2005 (this "AGREEMENT"), is made by and between LHC Group, Inc., a Delaware
corporation (the "COMPANY"), and _____________________ ("INDEMNITEE").
RECITALS:
A. Section 141 of the Delaware General Corporation Law provides
that the business and affairs of a corporation shall be managed by or under the
direction of its board of directors.
B. By virtue of the managerial prerogatives vested in the
directors of a Delaware corporation, directors act as fiduciaries of the
corporation and its stockholders.
C. Thus, it is critically important to the Company and its
stockholders that the Company be able to attract and retain the most capable
persons reasonably available to serve as directors of the Company.
D. In recognition of the need for corporations to be able to
induce capable and responsible persons to accept positions in corporate
management, Delaware law authorizes (and in some instances requires)
corporations to indemnify their directors and officers, and further authorizes
corporations to purchase and maintain insurance for the benefit of their
directors and officers.
E. The Delaware courts have recognized that indemnification by a
corporation serves the dual policies of (1) allowing corporate officials to
resist unjustified lawsuits, secure in the knowledge that, if vindicated, the
corporation will bear the expense of litigation, and (2) encouraging capable
women and men to serve as corporate directors and officers, secure in the
knowledge that the corporation will absorb the costs of defending their honesty
and integrity.
F. The number of lawsuits challenging the judgment and actions of
directors of Delaware corporations, the costs of defending those lawsuits and
the threat to directors' personal assets have all materially increased over the
past several years, chilling the willingness of capable women and men to
undertake the responsibilities imposed on corporate directors.
G. Recent federal legislation and rules adopted by the Securities
and Exchange Commission and the national securities exchanges have exposed such
directors to new and substantially broadened civil liabilities.
H. Under Delaware law, a director's right to be reimbursed for
the costs of defense of criminal actions, whether such claims are asserted under
state or federal law, does not depend upon the merits of the claims asserted
against the director and is separate and distinct from any right to
indemnification the director may be able to establish.
I. Indemnitee is, or will be, a director of the Company and his
willingness to serve in such capacity is predicated, in substantial part, upon
the Company's willingness to indemnify him in accordance with the principles
reflected above, to the fullest extent permitted by the laws of the State of
Delaware, and upon the other undertakings set forth in this Agreement.
J. Therefore, in recognition of the need to provide Indemnitee
with substantial protection against personal liability, in order to procure
Indemnitee's continued service as a director of the Company and to enhance
Indemnitee's ability to serve the Company in an effective manner, and in order
to provide such protection pursuant to express contract rights (intended to be
enforceable irrespective of, among other things, any amendment to the Company's
certificate of incorporation or bylaws (collectively, the "CONSTITUENT
DOCUMENTS"), any change in the composition of the Company's Board of Directors
(the "BOARD") or any change-in-control or business combination transaction
relating to the Company), the Company wishes to provide in this Agreement for
the indemnification of and the advancement of Expenses to Indemnitee as set
forth in this Agreement and for the continued coverage of Indemnitee under the
Company's directors' and officers' liability insurance policies.
K. In light of the considerations referred to in the preceding
recitals, it is the Company's intention and desire that the provisions of this
Agreement be construed liberally, subject to their express terms, to maximize
the protections to be provided to Indemnitee hereunder.
AGREEMENT:
NOW, THEREFORE, the parties hereby agree as follows:
1. CERTAIN DEFINITIONS. In addition to terms defined elsewhere
herein, the following terms have the following meanings when used in this
Agreement with initial capital letters:
(a) "CHANGE IN CONTROL" shall have occurred at such time, if
any, as Incumbent Directors cease for any reason to constitute a majority of
Directors. For purpose of this Section 1(a), "INCUMBENT DIRECTORS" means the
individuals who, as of the date hereof, are Directors of the Company and any
individual becoming a Director subsequent to the date hereof whose election,
nomination for election by the Company's stockholders, or appointment, was
approved by a vote of at least two-thirds of the then Incumbent Directors
(either by a specific vote or by approval of the proxy statement of the Company
in which such person is named as a nominee for director, without objection to
such nomination); provided, however, that an individual shall not be an
Incumbent Director if such individual's election or appointment to the Board
occurs as a result of an actual or threatened election contest (as described in
Rule 14a-12(c) of the Securities Exchange Act of 1934, as amended) with respect
to the election or removal of Directors or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person other than the
Board.
(b) "CLAIM" means (i) any threatened, asserted, pending or
completed claim, demand, action, suit or proceeding, whether civil, criminal,
administrative, arbitrative, investigative or other, and whether made pursuant
to federal, state or other law; and (ii) any inquiry or investigation, whether
made, instituted or conducted, by the Company or any other Person, including
without limitation any federal, state or other governmental entity, that
Indemnitee determines might lead to the institution of any such claim, demand,
action, suit or proceeding. For the avoidance of doubt, the Company intends
indemnity to be provided hereunder in respect of acts or failure to act prior
to, on or after the date hereof.
(c) "CONTROLLED AFFILIATE" means any corporation, limited
liability company, partnership, joint venture, trust or other entity or
enterprise, whether or not for profit, that is
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directly or indirectly controlled by the Company. For purposes of this
definition, "control" means the possession, directly or indirectly, of the power
to direct or cause the direction of the management or policies of an entity or
enterprise, whether through the ownership of voting securities, through other
voting rights, by contract or otherwise; provided that direct or indirect
Beneficial Ownership of capital stock or other interests in an entity or
enterprise entitling the holder to cast 15% or more of the total number of votes
generally entitled to be cast in the election of directors (or persons
performing comparable functions) of such entity or enterprise shall be deemed to
constitute control for purposes of this definition.
(d) "DISINTERESTED DIRECTOR" means a director of the Company
who is not and was not a party to the Claim in respect of which indemnification
is sought by Indemnitee.
(e) "EXPENSES" means attorneys' and experts' fees and expenses
and all other costs and expenses paid or payable in connection with
investigating, defending, being a witness in or participating in (including on
appeal), or preparing to investigate, defend, be a witness in or participate in
(including on appeal), any Claim.
(f) "INDEMNIFIABLE CLAIM" means any Claim based upon, arising
out of or resulting from (i) any actual, alleged or suspected act or failure to
act by Indemnitee in his or her capacity as a director, officer, employee or
agent of the Company or as a director, officer, employee, member, manager,
trustee or agent of any other corporation, limited liability company,
partnership, joint venture, trust or other entity or enterprise, whether or not
for profit, as to which Indemnitee is or was serving at the request of the
Company, (ii) any actual, alleged or suspected act or failure to act by
Indemnitee in respect of any business, transaction, communication, filing,
disclosure or other activity of the Company or any other entity or enterprise
referred to in clause (i) of this sentence, or (iii) Indemnitee's status as a
current or former director, officer, employee or agent of the Company or as a
current or former director, officer, employee, member, manager, trustee or agent
of the Company or any other entity or enterprise referred to in clause (i) of
this sentence or any actual, alleged or suspected act or failure to act by
Indemnitee in connection with any obligation or restriction imposed upon
Indemnitee by reason of such status. In addition to any service at the actual
request of the Company, for purposes of this Agreement, Indemnitee shall be
deemed to be serving or to have served at the request of the Company as a
director, officer, employee, member, manager, agent, trustee or other fiduciary
of another entity or enterprise if Indemnitee is or was serving as a director,
officer, employee, member, manager, agent, trustee or other fiduciary of such
entity or enterprise and (A) such entity or enterprise is or at the time of such
service was a Controlled Affiliate, (B) such entity or enterprise is or at the
time of such service was an employee benefit plan (or related trust) sponsored
or maintained by the Company or a Controlled Affiliate, or (C) the Company or a
Controlled Affiliate (by action of the Board, any committee thereof or the
Company's Chief Executive Officer ("CEO") (other than as the CEO him or
herself)) caused or authorized Indemnitee to be nominated, elected, appointed,
designated, employed, engaged or selected to serve in such capacity.
(g) "INDEMNIFIABLE LOSSES" means any and all Losses relating
to, arising out of or resulting from any Indemnifiable Claim; provided, however,
that Indemnifiable Losses shall not include Losses incurred by Indemnitee in
respect of any Indemnifiable Claim (or any matter or issue therein) as to which
Indemnitee shall have been adjudged liable to the Company, unless and only to
the extent that the Delaware Court of Chancery or the court in which such
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Indemnifiable Claim 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
Expenses as the court shall deem proper.
(h) "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 any Subsidiary) 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 named (or, as to a threatened matter, reasonably
likely to be named) party to the Indemnifiable Claim 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.
(i) "LOSSES" means any and all Expenses, damages, losses,
liabilities, judgments, fines, penalties (whether civil, criminal or other) and
amounts paid or payable in settlement, including without limitation all
interest, assessments and other charges paid or payable in connection with or in
respect of any of the foregoing.
(j) "PERSON" means any individual, entity, or group, within
the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of
1934, as amended.
(k) "STANDARD OF CONDUCT" means the standard for conduct by
Indemnitee that is a condition precedent to indemnification of Indemnitee
hereunder against Indemnifiable Losses relating to, arising out of or resulting
from an Indemnifiable Claim. The Standard of Conduct is (i) good faith and
reasonable belief by Indemnitee that his action was in or not opposed to the
best interests of the Company and, with respect to any criminal action or
proceeding, that Indemnitee had no reasonable cause to believe that his conduct
was unlawful, or (ii) any other applicable standard of conduct that may
hereafter be substituted under Section 145(a) or (b) of the Delaware General
Corporation Law or any successor to such provision(s).
2. INDEMNIFICATION OBLIGATION. Subject only to Section 7 and to
the proviso in this Section, the Company shall indemnify, defend and hold
harmless Indemnitee, to the fullest extent permitted or required by the laws of
the State of Delaware in effect on the date hereof or as such laws may from time
to time hereafter be amended to increase the scope of such permitted
indemnification, against any and all Indemnifiable Claims and Indemnifiable
Losses; provided, however, that, except as provided in Sections 4 and 20,
Indemnitee shall not be entitled to indemnification pursuant to this Agreement
in connection with any Claim initiated by Indemnitee against the Company or any
director or officer of the Company unless the Company has joined in or consented
to the initiation of such Claim. The Company acknowledges that the foregoing
obligation is substantially broader than that now provided by applicable law and
the Company's Constituent Documents and intends that it be interpreted
consistently with this Section and the recitals to this Agreement.
3. ADVANCEMENT OF EXPENSES. Indemnitee shall have the right to
advancement by the Company prior to the final disposition of any Indemnifiable
Claim of any and all Expenses relating to, arising out of or resulting from any
Indemnifiable Claim paid or incurred by
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Indemnitee or which Indemnitee determines in good faith are reasonably likely to
be paid or incurred by Indemnitee and as to which Indemnitee's counsel provides
supporting documentation. Without limiting the generality or effect of any other
provision hereof, Indemnitee's right to such advancement is not subject to the
satisfaction of any Standard of Conduct. Without limiting the generality or
effect of the foregoing, within five business days after any request by
Indemnitee that is accompanied by supporting documentation for specific Expenses
to be reimbursed or advanced, the Company shall, in accordance with such request
(but without duplication), (a) pay such Expenses on behalf of Indemnitee, (b)
advance to Indemnitee funds in an amount sufficient to pay such Expenses, or (c)
reimburse Indemnitee for such Expenses; provided that Indemnitee shall repay,
without interest any amounts actually advanced to Indemnitee that, at the final
disposition of the Indemnifiable Claim to which the advance related, were in
excess of amounts paid or payable by Indemnitee in respect of Expenses relating
to, arising out of or resulting from such Indemnifiable Claim. In connection
with any such payment, advancement or reimbursement, at the request of the
Company, Indemnitee shall execute and deliver to the Company an undertaking,
which need not be secured and shall be accepted without reference to
Indemnitee's ability to repay the Expenses, by or on behalf of the Indemnitee,
to repay any amounts paid, advanced or reimbursed by the Company in respect of
Expenses relating to, arising out of or resulting from any Indemnifiable Claim
in respect of which it shall have been determined, following the final
disposition of such Indemnifiable Claim and in accordance with Section 7, that
Indemnitee is not entitled to indemnification hereunder.
4. INDEMNIFICATION FOR ADDITIONAL EXPENSES. Without limiting the
generality or effect of the foregoing, the Company shall indemnify and hold
harmless Indemnitee against and, if requested by Indemnitee, shall reimburse
Indemnitee for, or advance to Indemnitee, within five business days of such
request accompanied by supporting documentation for specific Expenses to be
reimbursed or advanced, any and all Expenses paid or incurred by Indemnitee or
which Indemnitee determines in good faith are reasonably likely to be paid or
incurred by Indemnitee in connection with any Claim made, instituted or
conducted by Indemnitee for (a) indemnification or reimbursement or advance
payment of Expenses by the Company under any provision of this Agreement, or
under any other agreement or provision of the Constituent Documents now or
hereafter in effect relating to Indemnifiable Claims, and/or (b) recovery under
any directors' and officers' liability insurance policies maintained by the
Company, regardless in each case of whether Indemnitee ultimately is determined
to be entitled to such indemnification, reimbursement, advance or insurance
recovery, as the case may be; provided, however, that Indemnitee shall return,
without interest, any such advance of Expenses (or portion thereof) which
remains unspent at the final disposition of the Claim to which the advance
related.
5. PARTIAL INDEMNITY. If Indemnitee is entitled under any
provision of this Agreement to indemnification by the Company for some or a
portion of any Indemnifiable Loss but not for all of the total amount thereof,
the Company shall nevertheless indemnify Indemnitee for the portion thereof to
which Indemnitee is entitled.
6. PROCEDURE FOR NOTIFICATION. To obtain indemnification under
this Agreement in respect of an Indemnifiable Claim or Indemnifiable Loss,
Indemnitee shall submit to the Company a written request therefor, including a
brief description (based upon information then available to Indemnitee) of such
Indemnifiable Claim or Indemnifiable Loss. If, at the time of the receipt of
such request, the Company has directors' and officers' liability insurance in
effect under which coverage for such Indemnifiable Claim or Indemnifiable Loss
is potentially
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available, the Company shall give prompt written notice of such Indemnifiable
Claim or Indemnifiable Loss to the applicable insurers in accordance with the
procedures set forth in the applicable policies. The Company shall provide to
Indemnitee a copy of such notice delivered to the applicable insurers and, upon
Indemnitee's request, copies of all subsequent correspondence between the
Company and such insurers regarding the Indemnifiable Claim or Indemnifiable
Loss, in each case substantially concurrently with the delivery thereof by the
Company. The failure by Indemnitee to timely notify the Company of any
Indemnifiable Claim or Indemnifiable Loss shall not relieve the Company from any
liability hereunder unless, and only to the extent that, the Company did not
otherwise learn of such Indemnifiable Claim or Indemnifiable Loss and such
failure results in forfeiture by the Company of substantial defenses, rights or
insurance coverage.
7. DETERMINATION OF RIGHT TO INDEMNIFICATION.
(a) To the extent that Indemnitee shall have been successful
on the merits or otherwise in defense of any Indemnifiable Claim or any portion
thereof or in defense of any issue or matter therein, including without
limitation dismissal without prejudice, Indemnitee shall be indemnified against
all Indemnifiable Losses relating to, arising out of or resulting from such
Indemnifiable Claim in accordance with Section 2 and no Standard of Conduct
Determination (as defined in Section 7(b)) shall be required.
(b) To the extent that the provisions of Section 7(a) are
inapplicable to an Indemnifiable Claim that shall have been finally disposed of,
any determination of whether Indemnitee has satisfied the applicable Standard of
Conduct (a "STANDARD OF CONDUCT DETERMINATION") shall be made as follows: (i) if
a Change in Control shall not have occurred, or if a Change in Control shall
have occurred but Indemnitee shall have requested that the Standard of Conduct
Determination be made pursuant to this clause (i), (A) by a majority vote of the
Disinterested Directors, even if less than a quorum of the Board, (B) if such
Disinterested Directors so direct, by a majority vote of a committee of
Disinterested Directors designated by a majority vote of all Disinterested
Directors, or (C) if there are no such Disinterested Directors, or if a majority
of the Disinterested Directors so direct, by Independent Counsel in a written
opinion addressed to the Board, a copy of which shall be delivered to
Indemnitee; and (ii) if a Change in Control shall have occurred and Indemnitee
shall not have requested that the Standard of Conduct Determination be made
pursuant to clause (i), by Independent Counsel in a written opinion addressed to
the Board, a copy of which shall be delivered to Indemnitee. Indemnitee shall
cooperate with reasonable requests of the individual or firm making such
Standard of Conduct Determination, including providing to such Person
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 without incurring any unreimbursed cost in
connection therewith. The Company shall indemnify and hold harmless Indemnitee
against and, if requested by Indemnitee, shall reimburse Indemnitee for, or
advance to Indemnitee, within five business days of such request accompanied by
supporting documentation for specific costs and expenses to be reimbursed or
advanced, any and all costs and expenses (including attorneys' and experts' fees
and expenses) incurred by Indemnitee in so cooperating with the Person making
such Standard of Conduct Determination.
(c) The Company shall use its reasonable efforts to cause any
Standard of Conduct Determination required under Section 7(b) to be made as
promptly as practicable. If
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(i) the Person empowered or selected under Section 7 to make the Standard of
Conduct Determination shall not have made a determination within 30 calendar
days after the later of (A) receipt by the Company of written notice from
Indemnitee advising the Company of the final disposition of the applicable
Indemnifiable Claim (the date of such receipt being the "NOTIFICATION DATE") and
(B) the selection of an Independent Counsel, if such determination is to be made
by Independent Counsel, that is permitted under the provisions of Section 7(e)
to make such determination, and (ii) Indemnitee shall have fulfilled his/her
obligations set forth in the second sentence of Section 7(b), then Indemnitee
shall be deemed to have satisfied the applicable Standard of Conduct; provided
that such 30-day period may be extended for a reasonable time, not to exceed an
additional 30 calendar days, if the Person making such determination in good
faith requires such additional time for the obtaining or evaluation or
documentation and/or information relating thereto.
(d) If (i) Indemnitee shall be entitled to indemnification
hereunder against any Indemnifiable Losses pursuant to Section 7(a), (ii) no
determination of whether Indemnitee has satisfied any applicable standard of
conduct under Delaware law is a legally required condition precedent to
indemnification of Indemnitee hereunder against any Indemnifiable Losses, or
(iii) Indemnitee has been determined or deemed pursuant to Section 7(b) or (c)
to have satisfied the applicable Standard of Conduct, then the Company shall pay
to Indemnitee, within five business days after the later of (x) the Notification
Date in respect of the Indemnifiable Claim or portion thereof to which such
Indemnifiable Losses are related, out of which such Indemnifiable Losses arose
or from which such Indemnifiable Losses resulted and (y) the earliest date on
which the applicable criterion specified in clause (i), (ii) or (iii) above
shall have been satisfied, an amount equal to the amount of such Indemnifiable
Losses. Nothing herein is intended to mean or imply that the Company is
intending to use Section 145(f) of the Delaware General Corporation Law to
dispense with a requirement that Indemnitee meet the applicable Standard of
Conduct where it is otherwise required by such statute.
(e) If a Standard of Conduct Determination is required to be,
but has not been, made by Independent Counsel pursuant to Section 7(b)(i), the
Independent Counsel shall be selected by the Board or a Board Committee, and the
Company shall give written notice to Indemnitee advising him or her of the
identity of the Independent Counsel so selected. If a Standard of Conduct
Determination is required to be, or to have been, made by Independent Counsel
pursuant to Section 7(b)(ii), the Independent Counsel shall be selected by
Indemnitee, and Indemnitee shall give written notice to the Company advising it
of the identity of the Independent Counsel so selected. In either case,
Indemnitee or the Company, as applicable, may, within five business days after
receiving written notice of selection from the other, deliver to the other 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
satisfy the criteria set forth in the definition of "Independent Counsel" in
Section 1(h), 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 properly
and timely made and substantiated, (i) 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 and (ii) the
non-objecting party may, at its option, select an alternative Independent
Counsel and give written notice to the other party advising such other party of
the identity of the alternative Independent Counsel so selected, in which case
the provisions of the two immediately preceding sentences and clause (i) of this
sentence shall apply
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to such subsequent selection and notice. If applicable, the provisions of clause
(ii) of the immediately preceding sentence shall apply to successive alternative
selections. If no Independent Counsel that is permitted under the foregoing
provisions of this Section 7(e) to make the Standard of Conduct Determination
shall have been selected within 30 calendar days after the Company gives its
initial notice pursuant to the first sentence of this Section 7(e) or Indemnitee
gives its initial notice pursuant to the second sentence of this Section 7(e),
as the case may be, either the Company or Indemnitee may petition the Court of
Chancery of the State of Delaware 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 or firm selected by the Court or by such other person as the Court shall
designate, and the person or firm with respect to whom all objections are so
resolved or the person or firm so appointed will act as Independent Counsel. In
all events, the Company shall pay all of the actual and reasonable fees and
expenses of the Independent Counsel incurred in connection with the Independent
Counsel's determination pursuant to Section 7(b).
8. PRESUMPTION OF ENTITLEMENT. Notwithstanding any other
provision hereof, in making any Standard of Conduct Determination, the Person
making such determination shall presume that Indemnitee has satisfied the
applicable Standard of Conduct, and the Company may overcome such presumption
only by its adducing clear and convincing evidence to the contrary. Any Standard
of Conduct Determination that is adverse to Indemnitee may be challenged by the
Indemnitee in the Court of Chancery of the State of Delaware. No determination
by the Company (including by its directors or any Independent Counsel) that
Indemnitee has not satisfied any applicable Standard of Conduct shall be a
defense to any Claim by Indemnitee for indemnification or reimbursement or
advance payment of Expenses by the Company hereunder or create a presumption
that Indemnitee has not met any applicable Standard of Conduct.
9. NO OTHER PRESUMPTION. For purposes of this Agreement, the
termination of any Claim by judgment, order, settlement (whether with or without
court approval) or conviction, or upon a plea of nolo contendere or its
equivalent, will not create a presumption that Indemnitee did not meet any
applicable Standard of Conduct or that indemnification hereunder is otherwise
not permitted.
10. NON-EXCLUSIVITY. The rights of Indemnitee hereunder will be in
addition to any other rights Indemnitee may have under the Constituent
Documents, or the substantive laws of the Company's jurisdiction of
incorporation, any other contract or otherwise (collectively, "OTHER INDEMNITY
PROVISIONS"); provided, however, that (a) to the extent that Indemnitee
otherwise would have any greater right to indemnification under any Other
Indemnity Provision, Indemnitee will without further action be deemed to have
such greater right hereunder, and (b) 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 may not, without the
consent of Indemnitee, adopt any amendment to any of the Constituent Documents
the effect of which would be to deny, diminish or encumber Indemnitee's right to
indemnification under this Agreement or any Other Indemnity Provision.
11. LIABILITY INSURANCE AND FUNDING. For the duration of
Indemnitee's service as a director and/or officer of the Company and for not
less than five years thereafter, the Company shall use commercially reasonable
efforts (taking into account the scope and amount of coverage
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available relative to the cost thereof) to cause to be maintained in effect
policies of directors' and officers' liability insurance providing coverage for
Indemnitee that is at least as favorable in scope and amount to that provided by
the Company's current policies of directors' and officers' liability insurance.
Upon request, the Company shall provide Indemnitee or his or her counsel with a
copy of all directors' and officers' liability insurance applications, binders,
policies, declarations, endorsements and other related materials. In all
policies of directors' and officers' liability insurance obtained by the
Company, Indemnitee shall be named as an insured in such a manner as to provide
Indemnitee the same rights and benefits, subject to the same limitations, as are
accorded to the Company's directors and officers most favorably insured by such
policy. Notwithstanding the foregoing, (i) the Company may, but shall not be
required to, create a trust fund, grant a security interest or use other means,
including without limitation a letter of credit, to ensure the payment of such
amounts as may be necessary to satisfy its obligations to indemnify and advance
expenses pursuant to this Agreement and (ii) in renewing or seeking to renew any
insurance hereunder, the Company will not be required to expend more than 3.0
times the premium amount of the immediately preceding policy period (equitably
adjusted if necessary to reflect differences in policy periods).
12. SUBROGATION. In the event of payment under this Agreement, the
Company shall be subrogated to the extent of such payment to all of the related
rights of recovery of Indemnitee against other Persons (other than Indemnitee's
successors), including any entity or enterprise referred to in clause (i) of the
definition of "Indemnifiable Claim" in Section 1(f). Indemnitee shall execute
all papers reasonably required to evidence such rights (all of Indemnitee's
reasonable Expenses, including attorneys' fees and charges, related thereto to
be reimbursed by or, at the option of Indemnitee, advanced by the Company).
13. NO DUPLICATION OF PAYMENTS. The Company shall not be liable
under this Agreement to make any payment to Indemnitee in respect of any
Indemnifiable Losses to the extent Indemnitee has otherwise already actually
received payment (net of Expenses incurred in connection therewith) under any
insurance policy, the Constituent Documents and Other Indemnity Provisions or
otherwise (including from any entity or enterprise referred to in clause (i) of
the definition of "Indemnifiable Claim" in Section 1(f)) in respect of such
Indemnifiable Losses otherwise indemnifiable hereunder.
14. DEFENSE OF CLAIMS. Subject to the provisions of applicable
policies of directors' and officers' liability insurance, the Company shall be
entitled to participate in the defense of any Indemnifiable Claim or to assume
or lead the defense thereof with counsel reasonably satisfactory to the
Indemnitee; provided that if Indemnitee determines, after consultation with
counsel selected by Indemnitee, that (a) the use of counsel chosen by the
Company to represent Indemnitee would present such counsel with an actual or
potential conflict, (b) the named parties in any such Indemnifiable Claim
(including any impleaded parties) include both the Company and Indemnitee and
Indemnitee shall conclude that there may be one or more legal defenses available
to him or her that are different from or in addition to those available to the
Company, (c) any such representation by such counsel would be precluded under
the applicable standards of professional conduct then prevailing, or (d)
Indemnitee has interests in the claim or underlying subject matter that are
different from or in addition to those of other Persons against whom the Claim
has been made or might reasonably be expected to be made, then Indemnitee shall
be entitled to retain separate counsel (but not more than one law firm plus, if
applicable, local counsel in respect of any particular Indemnifiable Claim for
all indemnitees in Indemnitee's
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circumstances) at the Company's expense. The Company shall not be liable to
Indemnitee under this Agreement for any amounts paid in settlement of any
threatened or pending Indemnifiable Claim effected without the Company's prior
written consent. The Company shall not, without the prior written consent of the
Indemnitee, effect any settlement of any threatened or pending Indemnifiable
Claim which the Indemnitee is or could have been a party unless such settlement
solely involves the payment of money and includes a complete and unconditional
release of the Indemnitee from all liability on any claims that are the subject
matter of such Indemnifiable Claim. Neither the Company nor Indemnitee shall
unreasonably withhold its consent to any proposed settlement; provided that
Indemnitee may withhold consent to any settlement that does not provide a
complete and unconditional release of Indemnitee.
15. SUCCESSORS AND BINDING AGREEMENT.
(a) The Company shall require any successor (whether direct or
indirect, by purchase, merger, consolidation, reorganization or otherwise) to
all or substantially all of the business or assets of the Company expressly to
assume and agree to perform this Agreement in the same manner and to the same
extent the Company would be required to perform if no such succession had taken
place. This Agreement shall be binding upon and inure to the benefit of the
Company and any successor to the Company, including without limitation any
Person acquiring directly or indirectly all or substantially all of the business
or assets of the Company whether by purchase, merger, consolidation,
reorganization or otherwise (and such successor will thereafter be deemed the
"COMPANY" for purposes of this Agreement), but shall not otherwise be assignable
or delegable by the Company.
(b) This Agreement shall inure to the benefit of and be
enforceable by the Indemnitee's personal or legal representatives, executors,
administrators, heirs, distributees, legatees and other successors.
(c) This Agreement is personal in nature and neither of the
parties hereto shall, without the consent of the other, assign or delegate this
Agreement or any rights or obligations hereunder except as expressly provided in
Sections 15(a) and 15(b). Without limiting the generality or effect of the
foregoing, Indemnitee's right to receive payments hereunder shall not be
assignable, whether by pledge, creation of a security interest or otherwise,
other than by a transfer by the Indemnitee's will or by the laws of descent and
distribution, and, in the event of any attempted assignment or transfer contrary
to this Section 15(c), the Company shall have no liability to pay any amount so
attempted to be assigned or transferred.
16. NOTICES. For all purposes of this Agreement, all
communications, including without limitation notices, consents, requests or
approvals, required or permitted to be given hereunder must be in writing and
shall be deemed to have been duly given when hand delivered or dispatched by
electronic facsimile transmission (with receipt thereof orally confirmed), or
one business day after having been sent for next-day delivery by a nationally
recognized overnight courier service, addressed to the Company (to the attention
of the Secretary of the Company) and to Indemnitee at the applicable address
shown on the signature page hereto, or to such other address as any party may
have furnished to the other in writing and in accordance herewith, except that
notices of changes of address will be effective only upon receipt.
17. GOVERNING LAW. The validity, interpretation, construction and
performance of this Agreement shall be governed by and construed in accordance
with the substantive laws of the
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State of Delaware, without giving effect to the principles of conflict of laws
of such State. The Company and Indemnitee each hereby irrevocably consent to the
jurisdiction of the Chancery Court of the State of Delaware for all purposes in
connection with any action or proceeding which arises out of or relates to this
Agreement, waive all procedural objections to suit in that jurisdiction,
including without limitation objections as to venue or inconvenience, agree that
service in any such action may be made by notice given in accordance with
Section 16 and also agree that any action instituted under this Agreement shall
be brought only in the Chancery Court of the State of Delaware.
18. VALIDITY. If any provision of this Agreement or the
application of any provision hereof to any Person or circumstance is held
invalid, unenforceable or otherwise illegal, the remainder of this Agreement and
the application of such provision to any other Person or circumstance shall not
be affected, and the provision so held to be invalid, unenforceable or otherwise
illegal shall be reformed to the extent, and only to the extent, necessary to
make it enforceable, valid or legal. In the event that any court or other
adjudicative body shall decline to reform any provision of this Agreement held
to be invalid, unenforceable or otherwise illegal as contemplated by the
immediately preceding sentence, the parties thereto shall take all such action
as may be necessary or appropriate to replace the provision so held to be
invalid, unenforceable or otherwise illegal with one or more alternative
provisions that effectuate the purpose and intent of the original provisions of
this Agreement as fully as possible without being invalid, unenforceable or
otherwise illegal.
19. MISCELLANEOUS. No provision of this Agreement may be waived,
modified or discharged unless such waiver, modification or discharge is agreed
to in writing signed by Indemnitee and the Company. No waiver by either party
hereto at any time of any breach by the other party hereto or compliance with
any condition or provision of this Agreement to be performed by such other party
shall be deemed a waiver of similar or dissimilar provisions or conditions at
the same or at any prior or subsequent time. No agreements or representations,
oral or otherwise, expressed or implied with respect to the subject matter
hereof have been made by either party that are not set forth expressly in this
Agreement.
20. LEGAL FEES AND EXPENSES. It is the intent of the Company that
Indemnitee not be required to incur legal fees and or other Expenses associated
with the interpretation, enforcement or defense of Indemnitee's rights under
this Agreement by litigation or otherwise because the cost and expense thereof
would substantially detract from the benefits intended to be extended to
Indemnitee hereunder. Accordingly, without limiting the generality or effect of
any other provision hereof, if it should reasonably appear to Indemnitee that
the Company has failed to comply with any of its obligations under 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 improperly
deny, or to improperly recover from, Indemnitee the benefits provided or
intended to be provided to Indemnitee hereunder, 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 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 by or against the Company or any
director, officer, stockholder or other Person affiliated with the Company, in
any jurisdiction. Without limiting the generality or effect of any other
provision hereof or respect to whether Indemnitee prevails, in whole or in part,
in
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connection with any of the foregoing, the Company will pay and be solely
financially responsible for any and all attorneys' and related fees and expenses
actually and reasonably incurred by Indemnitee in connection with any of the
foregoing.
21. CERTAIN INTERPRETIVE MATTERS. Unless the context of this
Agreement otherwise requires, (1) "it" or "its" or words of any gender include
each other gender, (2) words using the singular or plural number also include
the plural or singular number, respectively, (3) the terms "hereof," "herein,"
"hereby" and derivative or similar words refer to this entire Agreement, (4) the
terms "Article," "Section," "Annex" or "Exhibit" refer to the specified Article,
Section, Annex or Exhibit of or to this Agreement, (5) the terms "include,"
"includes" and "including" will be deemed to be followed by the words "without
limitation" (whether or not so expressed), and (6) the word "or" is disjunctive
but not exclusive. Whenever this Agreement refers to a number of days, such
number will refer to calendar days unless business days are specified and
whenever action must be taken (including the giving of notice or the delivery of
documents) under this Agreement during a certain period of time or by a
particular date that ends or occurs on a non-business day, then such period or
date will be extended until the immediately following business day. As used
herein, "business day" means any day other than Saturday, Sunday or a United
States federal holiday.
22. ENTIRE AGREEMENT. This Agreement and the Constituent Documents
constitute the entire agreement, and supersede all prior agreements and
understandings, both written and oral, between the parties hereto with respect
to the subject matter of this Agreement. Any prior agreements or understandings
between the parties hereto with respect to indemnification are hereby terminated
and of no further force or effect.
23. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which will be deemed to be an original but all of which
together shall constitute one and the same agreement.
[ SIGNATURE PAGE FOLLOWS ]
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IN WITNESS WHEREOF, Indemnitee has executed and the Company has caused
its duly authorized representative to execute this Agreement as of the date
first above written.
LHC GROUP, INC.
By:
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Name:
----------------------
Title:
----------------------
INDEMNITEE
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Name:
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