Exhibit 10.4
INDEMNIFICATION AGREEMENT
This INDEMNIFICATION AGREEMENT is made this _____ day of ___________,
199_ ("Agreement"), by and among XXXXXXX PACIFIC PROPERTIES, INC., a Maryland
corporation (the "Company"), XXXXXXX PACIFIC OPERATING PARTNERSHIP, L.P., a
Delaware limited partnership (the "Operating Partnership") and
________________________ ("Indemnitee").
WHEREAS, at the request of the Company, Indemnitee currently serves as
director and/or officer of the Company and may, therefore, be subjected to
claims, suits or proceedings arising as a result of Indemnitee's service in such
capacity; and
WHEREAS, as an inducement to Indemnitee to continue to serve as such
director and/or an officer, the Company has agreed to indemnify Indemnitee
against expenses and costs incurred by Indemnitee in connection with any such
claims, suits or proceedings, to the fullest extent that is lawful; and
WHEREAS, as recited in Section 15 hereof, it is in the interests of the
parties that the Operating Partnership have the same indemnification obligations
to the Indemnitee as the indemnification obligations of the Company to the
Indemnitee; and
WHEREAS, the parties by this Agreement desire to set forth their
agreement regarding indemnification;
NOW, THEREFORE, in consideration of the premises and the covenants
contained herein, the parties hereto covenant and agree as follows:
Section 1. Definitions. For purposes of this Agreement:
(a) "Board of Directors" means the Board of Directors of the
Company.
(b) "Change in Control" means a change in control of the
Company occurring after the date of this Agreement of a nature that would be
required to be reported in response to Item 6(e) of Schedule 14A of Regulation
14A (or in response to any similar item on any similar schedule or form)
promulgated under the Securities Exchange Act of 1934 (the "Act"), whether or
not the Company is then subject to such reporting requirement; provided,
however, that, without limitation, such a Change in Control shall be deemed to
have occurred if after the date of this Agreement (i) any "person" (as such term
is used in Sections 13(d) and 14(d) of the Act) is or becomes the "beneficial
owner" (as defined in Rule 13d-3 under the Act), directly or indirectly, of
either (A) 30% or more of the outstanding shares of Common Stock of the Company
or (B) 30% (by right to vote or to grant or withhold approval) of any other
class or classes which individually or together have the power to elect a
majority of the Company's Board of Directors without the prior approval of at
least two-thirds of the members of the Board of Directors in office
immediately prior to such person attaining such percentage interest; (ii) there
occurs a proxy contest, or the Company is a party to a merger, consolidation,
sale of assets, plan of liquidation or other reorganization not approved by at
least two-thirds of the members of the Board of Directors then in office, as a
consequence of which members of the Board of Directors in office immediately
prior to such transaction or event constitute less than a majority of the Board
of Directors thereafter; or (iii) during any period of two consecutive years,
other than as a result of an event described in clause (b)(ii) of this Section
1, individuals who at the beginning of such period constituted the Board of
Directors (including for this purpose any new director whose election 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 were directors at
the beginning of such period) cease for any reason to constitute at least a
majority of the Board of Directors.
(c) "Corporate Status" means the status of a person as a
director, officer, employee or agent of the Company or of any other corporation,
partnership, limited liability company, joint venture, trust, employee benefit
plan or other enterprise which such person is or was serving at the request of
the Company.
(d) "Disinterested Director" means a director of the Company
who is not and was not a party to the Proceeding in respect of which
indemnification or advance of Expenses is sought by Indemnitee.
(e) "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, or being or preparing to be a witness in
a Proceeding.
(f) "Independent Counsel" means a law firm, or a member of a
law firm, selected by the Board of Directors by vote as set forth in Section
8(b), 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 the Operating Partnership or Indemnitee in any matter material to any such
party, 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, the Operating Partnership or Indemnitee in an
action to determine Indemnitee's rights under this Agreement.
(g) "MGCL" mean the Maryland General Corporation Law.
(h) "Proceeding" includes any action, suit, arbitration,
alternate dispute resolution mechanism, investigation, administrative hearing or
any other proceeding, whether civil, criminal, administrative or investigative,
except one (i) initiated by an Indemnitee pursuant to Section 10 of this
Agreement to enforce his rights under this Agreement or (ii) currently pending
as of the date of this Agreement.
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Section 2. Services by Indemnitee. Indemnitee agrees to serve as a
director and/or an officer of the Company and 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.
Section 3. Indemnification - General. The Company shall indemnify, and
advance Expenses to, Indemnitee (a) as provided in this Agreement and (b) to the
fullest extent permitted by Maryland law in effect on the date hereof and as
amended from time to time; provided, however, that no change in Maryland law
shall have the effect of reducing the benefits available to Indemnitee hereunder
based on Maryland law as in effect on the date hereof. The rights of Indemnitee
provided in this Section shall include, but shall not be limited to, the rights
set forth in the other Sections of this Agreement.
Section 4. Proceedings Other Than Proceedings by or in the Right of the
Company or Operating Partnership. Indemnitee shall be entitled to the rights of
indemnification provided in this Section 4 if, by reason of his Corporate
Status, he is, or is threatened to be, made a party to any threatened, pending,
or completed Proceeding, other than a Proceeding by or in the right of the
Company or Operating Partnership. Pursuant to this Section 4, Indemnitee shall
be indemnified against all Expenses, judgments, penalties, fines and amounts
paid in settlement actually and reasonably incurred by him or on his behalf in
connection with a Proceeding by reason of his Corporate Status.
Section 5. Proceedings by or in the Right of the Company or Operating
Partnership. Indemnitee shall be entitled to the rights of indemnification
provided in this Section 5, if, by reason of his Corporate Status, he is made a
party to any threatened, pending or completed Proceeding brought by or in the
right of the Company or Operating Partnership to procure a judgment in its
favor. Pursuant to this Section 5, Indemnitee shall be indemnified against all
Expenses actually and reasonably incurred by him or on his behalf in connection
with such Proceeding.
Section 6. Indemnification for Expenses of a Party Who is Wholly or
Partly Successful. Notwithstanding any other provision of this Agreement, to the
extent that Indemnitee is, by reason of his Corporate Status, made a party to
and is successful, on the merits or otherwise, in the defense of any Proceeding,
he shall be indemnified against all Expenses actually and reasonably incurred by
him or on his behalf in connection therewith. If Indemnitee is not wholly
successful in such Proceeding but is successful, on the merits or otherwise, as
to one or more but less than all claims, issues or matters in such Proceeding,
the Company shall indemnify Indemnitee against all Expenses actually and
reasonably incurred by him or on his behalf in connection with each successfully
resolved claim, issue or matter. 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.
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Section 7. Advance of Expenses. The Company shall advance all
reasonable Expenses incurred by or on behalf of Indemnitee in connection with
any Proceeding to which Indemnitee is, or is threatened to be, made a party,
within ten days after the receipt by the Company of a statement or statements
from Indemnitee requesting such advance or advances from time to time, whether
prior to or after final disposition of such Proceeding. Such statement or
statements shall reasonably evidence the Expenses incurred by Indemnitee and
shall include or be preceded or accompanies by
(a) a written affirmation by the Indemnitee of the
Indemnitee's good faith belief that the standard of conduct necessary for
indemnification by the Company is authorized by law and by this Agreement has
been met and (b) a written undertaking by or on behalf of Indemnitee to repay
any Expenses advanced if it shall ultimately be determined that such standard of
conduct has not been met or as required by Section 6 if Indemnitee is not wholly
successful.
Section 8. Procedure for Determination of Entitlement to
Indemnification.
(a) To obtain indemnification under 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. The Secretary of the Company shall, promptly upon
receipt of such a request for indemnification, advise the Board of Directors in
writing that Indemnitee has requested indemnification.
(b) Upon written request by Indemnitee for indemnification
pursuant to the first sentence of Section 8(a) hereof, a determination, if
required by applicable law, with respect to Indemnitee's entitlement thereto
shall promptly 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 the Board of Directors by a majority
vote of a quorum consisting of Disinterested Directors, or (B) if a quorum of
the Board of Directors consisting of Disinterested Directors is not obtainable
or, even if obtainable, such quorum of Disinterested Directors so direct, by
Independent Counsel in a written opinion to the Board of Directors, a copy of
which shall be delivered to Indemnitee or (C) if so directed by a majority of
the members of the Board of Directors, by the stockholders of the Company. If it
is determined that Indemnitee is entitled to indemnification, payment to
Indemnitee shall be made within ten days after such determination. Indemnitee
shall cooperate with the person making such determination with respect to
Indemnitee's entitlement to indemnification, including providing to such person
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 reasonable attorneys' fees and disbursements)
incurred by Indemnitee in so cooperating with the person making such
determination, in response to a request by such person, shall be borne by the
Company (irrespective of the determination as to Indemnitee's entitlement to
indemnification).
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Section 9. Presumptions and Effect of Certain Proceedings.
(a) If a Change in Control shall have occurred, in making a
determination with respect to entitlement to indemnification hereunder, (i) the
person 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 8(a) of this Agreement, and (ii) the
Company shall have the burden of proof to overcome that presumption in
connection with the making of any determination contrary to that presumption.
(b) The termination of any proceeding by judgment, order,
settlement, conviction, a plea of nolo contendere or its equivalent, or an entry
of an order of probation prior to judgment, does not create a presumption that
Indemnitee did not meet the requisite standard of conduct described herein for
indemnification.
Section 10. Remedies of Indemnitee.
(a) In the event that (i) a determination is made pursuant to
Section 8 that Indemnitee is not entitled to indemnification under this
Agreement, (ii) advancement of Expenses is not timely made pursuant to Section
8, (iii) no determination of entitlement to indemnification shall have been made
pursuant to Section 8(b) within 90 days after receipt by the Company of the
request for indemnification, (iv) payment of indemnification is not made
pursuant to Section 6 within ten days after receipt by the Company of a written
request therefor, or (v) payment of indemnification is not made within ten days
after a determination has been made that Indemnitee is entitled to
indemnification, Indemnitee shall be entitled to an adjudication in an
appropriate court of the State of Maryland, or in any other court of competent
jurisdiction, 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 after the date on which Indemnitee first has the right to
commence such proceeding pursuant to his Section 10(a).
(b) If a Change in Control shall have occurred, in any
judicial proceeding or arbitration commenced pursuant to this Section 10 the
Company shall have the burden of proving that Indemnitee is not entitled to
indemnification or advancement of Expenses, as the case may be.
(c) If a determination shall have been made pursuant to
Section 8(b) 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 10, 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) In the event that Indemnitee, pursuant to this Section 10,
seeks a judicial adjudication of or an award in arbitration to enforce his
rights under, or to recover damages for breach of, this Agreement, Indemnitee
shall be entitled to recover from the Company, and shall be indemnified by the
Company against, any and all expenses (of the types described in the definition
of Expenses in Section 1) actually and reasonably incurred by him in such
judicial adjudication or arbitration, but only if he prevails therein. If it
shall be determined in said judicial adjudication or arbitration that Indemnitee
is entitled to receive part but not all of the indemnification or advancement of
expenses sought, the expenses incurred by Indemnitee in connection with such
judicial adjudication or arbitration shall be appropriately prorated.
Section 11. Non-Exclusivity; Insurance; Subrogation; Exclusions.
(a) The rights of indemnification and advance 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 charter
of Bylaws of the Company, 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.
(b) To the extent that the Company maintains 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.
(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.
(d) The Company shall not be liable under this Agreement to
make any payment or amounts otherwise indemnifiable hereunder if and to the
extent that Indemnitee has otherwise actually received such payment under any
insurance policy, contract, agreement or otherwise.
(e) Notwithstanding any other provision of this Agreement to
the Contrary, the Company shall not be liable for indemnification or advance of
Expenses in connection with any settlement or judgment for xxxxxxx xxxxxxx or
for disgorgement of profits pursuant to Section 16(b) of the Securities Exchange
Act of 1934.
Section 12. Duration of Agreement. This Agreement shall continue until
and terminate ten years after the date that Indemnitee shall have ceased to
serve as a director, officer, employee, or agent of the Company or of any other
corporation, partnership, limited liability company, joint
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venture, trust, employee benefit plan or other enterprise which Indemnitee
served at the request of the Company; provided, that the rights of Indemnitee
hereunder shall continue until 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 10 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 13. 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 (b) 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 14. Exception to Right of Indemnification or Advancement of
Expenses. Notwithstanding any other provision of this Agreement, Indemnitee
shall not be entitled to indemnification or advance of Expenses under this
Agreement with respect to any Proceeding brought by Indemnitee, unless the
bringing of such Proceeding or making of such claim shall have been approved by
the Board of Directors.
Section 15. Obligations of Operating Partnership. The Operating
Partnership shall have the same obligations to the Indemnitee as the obligations
of the Company hereunder, the Operating Partnership hereby acknowledging and
confirming to the Indemnitee (a) that the services of the Indemnitee as a
director and/or an officer of the Company are important and valuable to the
Operating Partnership because of the Company's status as general partner of the
Operating Partnership, and (b) that the business and affairs of the Company are
conducted primarily through, and the assets of the Company are owned primarily
by, the Operating Partnership. Without limiting the other provisions of this
Agreement, and subject only to any limitations in the Partnership Agreement of
the Operating Partnership as restated and amended through the date of this
Agreement, the Indemnitee shall be entitled to indemnification and to his other
rights hereunder with respect to matters arising in the conduct of the affairs
of the Operating Company to the same extent as with respect to matters arising
in the conduct of the affairs of the Company.
Section 16. 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.
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Section 17. Headings. The headings of the paragraphs of this Agreement
are inserted for convenience only and shall not be deemed to constitute part of
this Agreement or to affect the construction thereof.
Section 18. Modification and Waiver. No supplement, modification or
amendment of this Agreement shall be binding unless executed in writing by all
of the parties signatory hereto. No waiver of any of the provisions of this
Agreement shall be deemed or shall constitute a waiver of any other provisions
hereof (whether or not similar) nor shall such waiver constitute a continuing
waiver.
Section 19. Notice by Indemnitee. Indemnitee shall promptly 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 advance of Expenses covered
hereunder.
Section 20. Notices. All notices, requests, demands and other
communications hereunder shall be in writing and shall be deemed to have been
duly given if (i) delivered by hand and receipted for by the party to whom said
notice or other communication shall have been directed, or (ii) mailed by
certified or registered mail with postage prepaid, on the third business day
after the date on which it is so mailed: (a) if to Indemnitee, at the principal
residence of the Indemnitee on the most recent personnel records of the Company
or of the Operating Partnership provided by the Indemnitee; (b) if to the
Company or to the Operating Partnership, to the Corporate Secretary of the
Company at the Company's corporate headquarters in San Diego, California; or in
either case to such other address as may have been furnished to Indemnitee by
the Company or the Operating Partnership or to the Company and the Operating
Partnership by Indemnitee, as the case may be. In any event, notice to either
the Company or to the Operating Partnership shall constitute notice to the other
of them.
Section 21. Governing Law. The parties agree that this Agreement shall
be governed by, and construed and enforced in accordance with, the laws of the
State of Maryland.
Section 22. Miscellaneous. Use of the masculine pronoun shall be deemed
to include usage of the feminine pronoun where appropriate.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the day and year first above written.
ATTEST: XXXXXXX PACIFIC PROPERTIES, INC.
XXXXXXX PACIFIC OPERATING
PARTNERSHIP, L.P.
Each by:
------------------------- ------------------------------
Secretary President
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