EXHIBIT 10.10
FORM OF INDEMNIFICATION AGREEMENT
This Indemnification Agreement, dated as of June 11, 1997, is made by
and between Leslie's Poolmart, Inc., a Delaware corporation (the "Corporation"),
and ((NAME)), whose name, address and position(s) at the Corporation and/or any
of the direct or indirect subsidiaries of the Corporation appear on the
signature page hereto ("Indemnitee").
RECITALS
A. Indemnitee is currently serving as, or is assuming the position
of, a director and/or officer of the Corporation and/or, at the Corporation's
request, a director, officer, employee and/or agent of another corporation,
partnership, joint venture, trust or other enterprise, and the Corporation
wishes Indemnitee to continue in such capacity(ies);
B. The Corporation and Indemnitee recognize that the present state of
the law is too uncertain to provide the Corporation's directors and officers
with adequate and reliable advance knowledge or guidance with respect to the
legal risks and potential liabilities to which they may become personally
exposed as a result of performing their duties for the Corporation;
C. The Certificate of Incorporation (the "Certificate") and the
Bylaws (the "Bylaws") of the Corporation each provide that the Corporation may
indemnify, to the fullest extent permitted by law, certain persons, including
directors, officers, employees or agents of the Corporation, against specified
expenses and losses arising out of certain threatened, pending or completed
actions, suits or proceedings;
D. Section 145(f) of the Delaware General Corporation Law (the
"DGCL") expressly recognizes that the indemnification provided by the other
subsections of Section 145 of the DGCL shall not be deemed exclusive of any
other rights to which those seeking indemnification or advancement of expenses
may be entitled under any bylaw, agreement, vote of stockholders or
disinterested directors or otherwise, both as to action in an official capacity
and as to action in another capacity while holding such office;
E. Indemnitee has indicated that s/he may not be willing to serve, or
continue to serve, as a director and/or officer of the Corporation and/or, at
the Corporation's request, as a director, officer, employee and/or agent of
another corporation, partnership, joint venture, trust or other enterprise in
the absence of an indemnification agreement of the Corporation; and
F. The Board of Directors of the Corporation has concluded that, to
retain and attract talented and experienced individuals to serve as directors
and officers of the Corporation and to encourage such individuals to take the
business risks necessary for the success of the Corporation, it is necessary for
the Corporation to contractually indemnify them, and to assume for itself
liability for expenses and damages in connection with claims against them in
connection with their service to the Corporation, and has further concluded that
the failure to provide such contractual indemnification could result in great
harm to the Corporation and its stockholders.
AGREEMENT
NOW, THEREFORE, the Corporation and Indemnitee agree as follows:
1. Definitions.
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(a) "Expenses" means, for the purposes of this Agreement, all direct
and indirect costs of any type or nature whatsoever (including, without
limitation, any fees and disbursements of Indemnitee's counsel, accountants and
other experts and other out-of-pocket costs) actually and reasonably incurred by
Indemnitee in connection with the investigation, preparation, defense or appeal
of a Proceeding; provided, however, that Expenses shall not include judgments,
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fines, penalties or amounts paid in settlement of a Proceeding unless such
matters may be indemnified under applicable provisions of the DGCL. Expenses
shall include any federal, state, local and foreign taxes imposed on Indemnitee
as a result of the actual or deemed receipt of payments under this Agreement.
(b) "Proceeding" means, for the purposes of this Agreement, any
threatened, pending or completed action, suit, arbitration or proceeding whether
civil, criminal, administrative or investigative (including actions, suits or
proceedings brought by or in the right of the Corporation) in which Indemnitee
may be or may have been involved as a party or otherwise, by reason of the fact
that Indemnitee is or was a director or officer of the Corporation, by reason of
any action taken by him or of any inaction on his part while acting as such
director or officer or by reason of the fact that s/he is or was serving at the
request of the Corporation as a director, officer, employee or agent of another
foreign or domestic corporation, partnership, joint venture, trust or other
enterprise, was a fiduciary of any trust or employee benefit plan or was a
director and/or officer of the foreign or domestic corporation which was a
predecessor corporation to the Corporation or of another enterprise at the
request of such predecessor corporation, whether or not s/he is serving in such
capacity at the time any liability or expense is incurred for which
indemnification or reimbursement can be provided under this Agreement.
2. Indemnification.
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(a) Third Party Proceedings. To the fullest extent permitted by law,
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the Corporation shall indemnify and hold harmless Indemnitee against Expenses
and liabilities of any type whatsoever (including, but not limited to,
judgments, fines, penalties, and amounts paid in settlement (if the settlement
is approved in advance by the Corporation, which approval shall not be
unreasonably withheld)) actually and reasonably incurred by Indemnitee in
connection with a Proceeding (other than a Proceeding by or in the right of the
Corporation) if Indemnitee acted in good faith and in a manner Indemnitee
reasonably believed to be in, or not opposed to, the best interests of the
Corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe Indemnitee's conduct was unlawful. The termination
of any Proceeding by judgment, order, settlement, conviction, or upon a plea of
nolo contendere or its equivalent, shall not, of itself, create a presumption
that Indemnitee did not act in good faith and in a manner that Indemnitee
reasonably believed to be in, or not opposed to, the best interests of the
Corporation, or, with respect to any criminal Proceeding, had reasonable cause
to believe that Indemnitee's conduct was unlawful. Notwithstanding the
foregoing, no indemnification shall be made in any criminal proceeding where
Indemnitee has been adjudged guilty unless a disinterested majority of the
directors determines that Indemnitee did not receive, participate in or share in
any pecuniary benefit to the detriment of the Corporation and, in view of all
the circumstances of the case, Indemnitee is fairly and reasonably entitled to
indemnity for Expenses or liabilities.
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(b) Proceedings by or in the Right of the Corporation. To the fullest
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extent permitted by law, the Corporation shall indemnify and hold harmless
Indemnitee against Expenses actually and reasonably incurred by Indemnitee in
connection with the defense or settlement of a Proceeding by or in the right of
the Corporation to procure a judgment in its favor if Indemnitee acted in good
faith and in a manner Indemnitee reasonably believed to be in, or not opposed
to, the best interests of the Corporation. Notwithstanding the foregoing, no
indemnification shall be made in respect of any claim, issue or matter as to
which Indemnitee shall have been adjudged to be liable to the Corporation in the
performance of Indemnitee's duty to the Corporation unless and only to the
extent that the court in which such Proceeding is or was pending shall determine
upon application that, in view of all the circumstances of the case, Indemnitee
is fairly and reasonably entitled to indemnity for Expenses and then only to the
extent that the court shall determine.
(c) Scope. Notwithstanding any other provision of this Agreement
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other than Sections 3 and 13, the Corporation shall indemnify Indemnitee to the
fullest extent permitted by law, notwithstanding that such indemnification is
not specifically authorized by other provisions of this Agreement, the
Certificate, the Bylaws or statute.
3. Limitations on Indemnification. Any other provision herein to the
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contrary notwithstanding, the Corporation shall not be obligated pursuant to the
terms of this Agreement:
(a) Excluded Acts. To indemnify Indemnitee for any acts or omissions
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or transactions from which a director may not be relieved of liability under
Section 102(b)(7) of the DGCL; or
(b) Claims Initiated by Indemnitee. To indemnify or advance Expenses
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to Indemnitee with respect to Proceedings or claims initiated or brought
voluntarily by Indemnitee and not by way of defense, except with respect to
proceedings brought to establish or enforce a right to indemnification under
this Agreement or any other statute or law or otherwise as required under
Section 145 of the DGCL, but such indemnification or advancement of Expenses may
be provided by the Corporation in specific cases if a majority of the
disinterested directors has approved the initiation or bringing of such suit; or
(c) Lack of Good Faith. To indemnify Indemnitee for any Expenses
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incurred by Indemnitee with respect to any proceeding instituted by Indemnitee
to enforce or interpret this Agreement, if a court of competent jurisdiction
determines that each of the material assertions made by Indemnitee in such
proceeding was not made in good faith or was frivolous; or
(d) Insured Claims. To indemnify Indemnitee for Expenses or
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liabilities of any type whatsoever (including, but not limited to, judgments,
fines or penalties, and amounts paid in settlement) which have been paid
directly to or on behalf of Indemnitee by an insurance carrier under a policy of
directors' and officers' liability insurance maintained by the Corporation or
any other policy of insurance maintained by the Corporation or Indemnitee; or
(e) Claims Under Section 16(b). To indemnify Indemnitee for Expenses
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and the payment of profits arising from the purchase and sale by Indemnitee of
securities in violation of Section 16(b) of the Securities Exchange Act of 1934,
as amended, or any similar successor statute.
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4. Determination of Right to Indemnification. Upon receipt of a
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written claim addressed to the Board of Directors for indemnification pursuant
to Section 2 of this Agreement, the Corporation shall determine by any of the
methods set forth in Section 145(d) of the DGCL whether Indemnitee has met the
applicable standards of conduct that make it permissible under applicable law to
indemnify Indemnitee. If a claim under Section 2 of this Agreement is not paid
in full by the Corporation within thirty days after such written claim has been
received by the Corporation, Indemnitee may at any time thereafter bring suit
against the Corporation to recover the unpaid amount of the claim and, unless
such action is dismissed by the court as frivolous or brought in bad faith,
Indemnitee shall be entitled to be paid also the expense of prosecuting such
claim. Neither the failure of the Corporation (including its Board of
Directors, independent legal counsel, or its stockholders) to make a
determination prior to the commencement of such action that indemnification of
Indemnitee is proper in the circumstances because Indemnitee has met the
applicable standard of conduct under applicable law, nor an actual determination
by the Corporation (including its Board of Directors, independent legal counsel
or its stockholders) that Indemnitee has not met such applicable standard of
conduct, shall create a presumption that Indemnitee has not met the applicable
standard of conduct. The court in which such action is brought shall determine
whether Indemnitee or the Corporation shall have the burden of proof concerning
whether Indemnitee has or has not met the applicable standard of conduct.
5. Advancement and Repayment of Expenses. The Expenses incurred by
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Indemnitee in defending and investigating any Proceeding shall be paid by the
Corporation prior to the final disposition of such Proceeding within thirty days
after receiving from Indemnitee copies of invoices presented to Indemnitee for
such Expenses and an undertaking by or on behalf of Indemnitee to the
Corporation to repay such amount to the extent it is ultimately determined that
Indemnitee is not entitled to indemnification. In determining whether or not to
make an advance hereunder, the ability of Indemnitee to repay shall not be a
factor. Notwithstanding the foregoing, in a proceeding brought by the
Corporation directly, in its own right (as distinguished from an action brought
derivatively or by any receiver or trustee), the Corporation shall not be
required to make the advances called for hereby if a majority of the
disinterested directors determine that it does not appear that Indemnitee has
met the standards of conduct that made it permissible under applicable law to
indemnify Indemnitee and that the advancement of Expenses would not be in the
best interests of the Corporation and its stockholders.
6. Partial Indemnification. If Indemnitee is entitled under any
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provision of this Agreement to indemnification or advancement by the Corporation
of some or a portion of any Expenses or liabilities of any type whatsoever
(including, but not limited to, judgments, fines, penalties, and amounts paid in
settlement) incurred by him in the investigation, defense, settlement or appeal
of a Proceeding, but is not entitled to indemnification or advancement of the
total amount thereof, the Corporation shall nevertheless indemnify or pay
advancements to Indemnitee for the portion of such Expenses or liabilities to
which Indemnitee is entitled.
7. Notice to Corporation by Indemnitee. Indemnitee shall notify the
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Corporation in writing of any matter with respect to which Indemnitee intends to
seek indemnification hereunder as soon as reasonably practicable following the
receipt by Indemnitee of written notice thereof; provided that any delay in so
notifying the Corporation shall not constitute a waiver by Indemnitee of his
rights hereunder. The written notification to the Corporation shall be
addressed to the Board of Directors and shall include a description of the
nature of the Proceeding and the facts underlying the Proceeding and be
accompanied by copies of any documents filed with the court, if any, in which
the Proceeding is pending. In
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addition, Indemnitee shall give the Corporation such information and cooperation
as it may reasonably require and as shall be within Indemnitee's power.
8. Defense of Claim. In the event that the Corporation shall be
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obligated under Section 5 hereof to pay the Expenses of any Proceeding against
Indemnitee, the Corporation, if appropriate, shall be entitled to assume the
defense of such Proceeding, with counsel approved by Indemnitee, which approval
shall not be unreasonably withheld, upon the delivery to Indemnitee of written
notice of its election to do so. After delivery of such notice, approval of
such counsel by Indemnitee and the retention of such counsel by the Corporation,
the Corporation will not be liable to Indemnitee under this Agreement for any
fees of counsel subsequently incurred by Indemnitee with respect to the same
Proceeding; provided that (i) Indemnitee shall have the right to employ his own
counsel in any such Proceeding at Indemnitee's expense, and (ii) if (A) the
employment of counsel by Indemnitee has been previously authorized by the
Corporation, or (B) Indemnitee shall have reasonably concluded that there may be
a conflict of interest between the Corporation and Indemnitee in the conduct of
such defense or (C) the Corporation shall not, in fact, have employed counsel to
assume the defense of such Proceeding, then the fees and expenses of
Indemnitee's counsel shall be paid by the Corporation.
9. Attorneys' Fees. If any legal action is necessary to enforce the
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terms of this Agreement, the prevailing party shall be entitled to recover, in
addition to other amounts to which the prevailing party may be entitled, actual
attorneys' fees and court costs as may be awarded by the court.
10. Continuation of Obligations. All agreements and obligations of
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the Corporation contained herein shall continue during the period Indemnitee is
a director or officer of the Corporation, or is or was serving at the request of
the Corporation as a director, officer, fiduciary, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, and shall
continue thereafter so long as Indemnitee shall be subject to any possible
Proceeding by reason of the fact that Indemnitee served in any capacity referred
to herein.
11. Assumption of Prior Agreement; Successors and Assigns.
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(a) The Corporation hereby expressly assumes the obligations of
Leslie's California, a California corporation (the "Predecessor"), under the
Predecessor's bylaws, articles and indemnification agreements as to all acts or
omissions occuring prior to the effective time (the "Effective Time") of the
merger of the Predecessor with and into the Corporation.
(b) This Agreement establishes contract rights that shall be binding
upon, and shall inure to the benefit of, the successors, assigns, heirs and
legal representatives of the parties hereto.
12. Non-exclusivity.
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(a) The provisions for indemnification and advancement of expenses set
forth in this Agreement shall not be deemed to be exclusive of any other rights
that Indemnitee may have under any provision of law, the Certificate or Bylaws,
the vote of the Corporation's stockholders or disinterested directors, other
agreements or otherwise, both as to action in his official capacity and action
in another capacity while occupying his position as a director or officer of the
Corporation; provided, however, that as to all acts or omissions
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occurring after the Effective Time, this Agreement supercedes in its entirety
any and all prior agreements with respect to the subject matter hereof between
Indemnitee and the Predecessor.
(b) In the event of any changes, after the date of this Agreement, in
any applicable law, statute, or rule that expand the right of a Delaware
corporation to indemnify its directors and officers, Indemnitee's rights and the
Corporation's obligations under this Agreement shall be expanded to the fullest
extent permitted by such changes. In the event of any changes in any applicable
law, statute or rule, that narrow the right of a Delaware corporation to
indemnify a director and officer, such changes, to the extent not otherwise
required by such law, statute or rule to be applied to this Agreement, shall
have no effect on this Agreement or the parties' rights and obligations
hereunder.
13. Effectiveness of Agreement. This Agreement shall be effective as
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of the date set forth on the first page and may apply to acts or omissions of
Indemnitee that occurred prior to such date if Indemnitee was a director or
officer of the Corporation or its predecessor, or was serving at the request of
the Corporation or its predecessor as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise, at
the time such act or omission occurred.
14. Severability. Nothing in this Agreement is intended to require
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or shall be construed as requiring the Corporation to do or fail to do any act
in violation of applicable law. The Corporation's inability, pursuant to court
order, to perform its obligations under this Agreement shall not constitute a
breach of this Agreement. The provisions of this Agreement shall be severable
as provided in this Section 14. If this Agreement or any portion hereof shall
be invalidated on any ground by any court of competent jurisdiction, then the
Corporation shall nevertheless indemnify Indemnitee to the fullest extent
permitted by any applicable portion of this Agreement that shall not have been
invalidated, and the balance of this Agreement not so invalidated shall be
enforceable in accordance with its terms.
15. Governing Law. This Agreement shall be interpreted and enforced
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in accordance with the laws of the State of Delaware without regard to its rules
pertaining to conflicts of laws. To the extent permitted by applicable law, the
parties hereby waive any provisions of law that render any provision of this
Agreement unenforceable in any respect.
16. Notice. All notices, requests, demands and other communications
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under this Agreement shall be in writing and shall be deemed duly given (i) if
delivered by hand and receipted for by the party addressed, on the date of such
receipt, or (ii) if delivered by facsimile transmission to the recipient
followed by a copy sent by mail on the same date as the facsimile transmission,
on the date of receipt of such facsimile transmission, or (iii) if mailed by
certified or registered mail with postage prepaid, on the third business day
after the mailing date. Addresses for notice to either party are as shown on
the signature page of this Agreement, or as subsequently modified by written
notice.
17. Mutual Acknowledgment. Both the Corporation and Indemnitee
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acknowledge that in certain instances, federal law or applicable public policy
may prohibit the Corporation from indemnifying its directors and officers under
this Agreement or otherwise. Indemnitee understands and acknowledges that the
Corporation has undertaken or may be required in the future to undertake with
the Securities and Exchange Commission to submit the question of indemnification
to a court in certain circumstances for a determination of the Corporation's
right under public policy to indemnify Indemnitee.
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18. Counterparts. This Agreement may be executed in several
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counterparts, each of which shall constitute an original.
19. Amendment and Termination. No amendment, modification,
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termination or cancellation of this Agreement shall be effective unless in
writing signed by both parties hereto.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year set forth above.
LESLIE'S POOLMART, INC.
A DELAWARE CORPORATION
By: __________________________________________
Title: Chief Executive Officer and President
Notices should be addressed to:
Chief Financial Officer
Leslie's Poolmart, Inc.
00000 Xxxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxxxx 00000
INDEMNITEE:
____________________________
((NAME))
____________________________
Street Address
____________________________
City, State and Zip Code
Position(s): ((POSITION 1))
((POSITION 2))
((POSITION 3))
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