INDEMNIFICATION AGREEMENT
Exhibit 10.14
THIS INDEMNIFICATION AGREEMENT (“Agreement”) is made and entered into, and is effective, as of
October 28, 2010 (the “Effective Date”) by and between AmREIT, Inc., a Maryland corporation (the
“Company”), and _______________ (“Indemnitee”).
WHEREAS, the Company desires to attract and retain the services of highly qualified
individuals, such as Indemnitee, to serve as officers and directors of the Company;
WHEREAS, highly qualified individuals have become more reluctant to serve corporations as
directors or officers unless they are provided adequate protection through indemnification and
insurance against the risks of claims and actions against them arising out of their service to and
activities on behalf of such corporations;
WHEREAS, the Company is the surviving corporation of that certain merger effective as of
November 24, 2009 by and between the Company and AmREIT, a Maryland real estate investment trust,
and, pursuant to that certain merger agreement between the Company and AmREIT dated as of July 10,
2009, the continuing officers and directors of the Company following the effectiveness of the
merger are entitled to certain indemnification rights;
WHEREAS, at the request of the Company, Indemnitee continues to serve as an officer and
director of the Company and may, therefore, be subjected to claims, suits or proceedings arising as
a result of his service;
WHEREAS, as an inducement to Indemnitee to continue to serve as such officer and director, the
Company has agreed to enter into this Agreement to indemnify and to advance expenses and costs
incurred by Indemnitee in connection with any such claims, suits or proceedings, to the maximum
extent permitted by law;
WHEREAS, Indemnitee is willing to serve, continue to serve and take on additional service for
or on behalf of the Company on the condition that Indemnitee be indemnified on the terms set forth
in this Agreement; and
WHEREAS, this Agreement is a supplement to and in furtherance of the provisions of the
Company’s Bylaws regarding indemnification and advancement of expenses and costs and shall not be
deemed a substitute therefor, nor to diminish or abrogate any right of the Indemnitee thereunder;
NOW, THEREFORE, in consideration of the premises and the covenants contained herein, the
Company and Indemnitee do hereby covenant and agree as follows:
SECTION 1. Definitions. For purposes of this Agreement:
(a) “Change in Control” means the first of the following events to occur after the Effective
Date:
(i) any “person” (as the term is used in Sections 13(d) and 14(d) of the Securities Exchange
Act of 1934, as amended (the “Exchange Act”)) or group of persons, together with its “affiliates”
(as defined in Rule 12b-2 under the Exchange Act), but excluding (A) the Company or any of its
subsidiaries, (B) any employee benefit plan of the Company or (C) a corporation owned, directly or
indirectly, by the stockholders of the Company in substantially the same proportions as their
ownership of stock of the Company, is or becomes, directly or indirectly, the “beneficial owner”
(as defined in Rule
13d-3 under the Exchange Act) of securities of the Company representing more than twenty percent
(20%) of the combined voting power of the Company’s then outstanding securities entitled to vote
generally in the election of directors (not including in the securities beneficially owned by such
person any securities acquired directly from the Company);
(ii) a majority of the Board of Directors (the “Board”) of the Company shall consist of
individuals who are not Continuing Directors. For purposes hereof, “Continuing Directors” means,
as of any date of determination, (A) an individual who on the date two years prior to such
determination date was a member of the Board, or (B) any new director whose nomination for election
by the Company’s stockholders was approved by a vote of a majority of the directors then still in
office who either were directors on the Effective Date or whose nomination for election was
previously so approved;
(iii) the consummation of a merger or consolidation of the Company or any direct or indirect
subsidiary of the Company with any other corporation or entity regardless of which entity is the
survivor, other than a merger or consolidation which would result in the voting securities of the
Company outstanding immediately prior thereto continuing to represent (either by remaining
outstanding or being converted into voting securities of the surviving entity) more than fifty
percent (50%) of the combined voting power of the voting securities of the Company, such surviving
entity or any parent thereof outstanding immediately after such merger or consolidation;
(iv) the stockholders of the Company approve a plan of complete liquidation or winding-up of
the Company, or there is consummated an agreement for the sale or disposition by the Company of
assets comprising more than eighty percent (80%) of the total value of all of the Company’s assets;
or
(v) the occurrence of any transaction or series of transactions deemed by the Board, in good
faith, to constitute a change in control of the Company.
Notwithstanding the foregoing, (1) a “Change in Control” shall not be deemed to have occurred
by virtue of the consummation of any transaction or series of integrated transactions immediately
following which the holders of the outstanding voting securities of the Company immediately prior
to such transaction or series of transactions continue to have substantially the same proportionate
ownership of the outstanding voting securities of an entity which owns all or substantially all of
the assets of the Company immediately following such transaction or series of transactions, and (2)
a “Change in Control” shall not occur for purposes of this Agreement as a result of any primary or
secondary offering of Company voting securities to the general public pursuant to a registration
statement that has been declared effective by the United States Securities and Exchange Commission.
(b) “Corporate Status” means the status of a person as a present or former director, trustee,
officer, employee or agent of the Company or of any predecessor in merger (including, without
limitation, AmREIT or REITPlus, Inc.) or as a director, trustee, officer, partner, manager,
managing member, fiduciary, employee or agent of any other foreign or domestic corporation,
partnership, limited liability company, joint venture, trust, employee benefit plan or other
enterprise for which such person is or was serving in such capacity at the request of the Company.
As a clarification and without limiting the circumstances in which Indemnitee may be serving at the
request of the Company, service by Indemnitee shall be deemed to be at the request of the Company
if Indemnitee serves or served as a director, trustee, officer, partner, manager, managing member,
fiduciary, employee or agent of any corporation, partnership, limited liability company, joint
venture, trust, employee benefit plan or other enterprise of which (i) a majority of the voting
power or equity interest is owned directly or indirectly by the Company, or (ii) the management is
controlled, directly or indirectly, by means of voting power or contract, by the Company or another
entity so controlled by the Company.
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(c) “Disinterested Director” means a director of the Company who is not and was not a party to
the Proceeding in respect of which indemnification and/or advance of Expenses is sought by
Indemnitee.
(d) “Effective Date” means the date set forth in the first paragraph of this Agreement.
(e) “Expenses” shall include all reasonable and out-of-pocket attorneys’ fees and costs,
retainers, court costs, transcript costs, fees of experts, witness fees, travel expenses,
duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees,
federal, state, local or foreign taxes imposed on Indemnitee as a result of the actual or deemed
receipt of any payment under this Agreement, ERISA excise taxes and penalties and all other
disbursements or expenses of the types customarily incurred in connection with prosecuting,
defending, preparing to prosecute or defend, investigating, being or preparing to be a witness in
or otherwise participating in a Proceeding. Expenses shall also include Expenses incurred in
connection with asserting compulsory counterclaims that negate a plaintiff’s claims and Expenses
incurred in connection with any appeal resulting from any Proceeding including, without limitation,
the premium for, security for and other costs relating to any cost bond, supersedeas bond or other
appeal bond or its equivalent.
(f) “Independent Counsel” means a law firm, or a member of a law firm, that is experienced in
matters of corporation law as applicable to Maryland and neither is, nor in the past five years has
been, retained to represent: (i) the Company or Indemnitee in any matter material to either such
party, or (ii) any other party to or participant or witness in the Proceeding giving rise to a
claim for indemnification or advance of Expenses 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. If a
Change in Control has not occurred, Independent Counsel shall be selected by the Board, with the
approval of Indemnitee, which approval will not be unreasonably withheld. If a Change in Control
has occurred, Independent Counsel shall be selected by Indemnitee, with the approval of the Board,
which approval will not be unreasonably withheld.
(g) “Proceeding” includes any threatened, pending or completed action, suit, arbitration,
alternate dispute resolution mechanism, investigation, inquiry, administrative hearing or any other
proceeding (whether brought by or in the right of the Company or otherwise and whether civil,
criminal, administrative or investigative), including any appeal therefrom, except one pending or
completed on or before the Effective Date, unless otherwise specifically agreed in writing by the
Company and Indemnitee. If Indemnitee reasonably believes that a particular situation may lead to
or culminate in the institution of a Proceeding, such situation shall also be considered a
“Proceeding.”
SECTION 2. Services by Indemnitee. Indemnitee will serve as an officer and director
of the Company. However, this Agreement shall not impose any independent obligation on Indemnitee
or the Company to continue Indemnitee’s service to the Company beyond any period otherwise required
by law or by other agreements or commitments of the parties, if any.
SECTION 3. Indemnification — General. The Company shall indemnify, and advance
Expenses to, Indemnitee (a) as provided in this Agreement and (b) otherwise to the fullest extent
permitted by Maryland law in effect on the date hereof or to such extent as Maryland law thereafter
from time to time may permit; 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
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hereof. The rights of Indemnitee provided in this Section 3 shall include, without limitation, the
rights set forth in the other sections of this Agreement, including any additional indemnification
permitted by Section 2-418(g) of the Maryland General Corporation Law (“MGCL”).
SECTION 4. Rights to Indemnification. Except as otherwise provided by Section 13, if,
by reason of Indemnitee’s Corporate Status, Indemnitee was, is, or is threatened to be made, a
party to any Proceeding, Indemnitee shall be indemnified against all judgments, penalties, fines
and amounts paid in settlement and all Expenses actually and reasonably incurred by Indemnitee or
on Indemnitee’s behalf in connection with such Proceeding, unless it is established, by clear and
convincing evidence, that (i) the act or omission of Indemnitee was material to the matter(s)
giving rise to the Proceeding and (A) was committed in bad faith or (B) was the result of active
and deliberate dishonesty; (ii) Indemnitee actually received an improper personal benefit in money,
property or services; or (iii) in the case of any criminal Proceeding, Indemnitee had reasonable
cause to believe that the act or omission was unlawful.
SECTION 5. Indemnification of Expenses of a Witness. Notwithstanding any other
provision of this Agreement, if Indemnitee is or may be, by reason of Indemnitee’s Corporate
Status, made a witness or otherwise asked to participate in any Proceeding to which Indemnitee is
not a party, Indemnitee shall be paid or reimbursed all Expenses actually and reasonably incurred
by Indemnitee or on Indemnitee’s behalf in connection therewith within ten (10) days after the
receipt by the Company of a statement or statements 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.
SECTION 6. Court-Ordered Indemnification. Notwithstanding any other provision of this
Agreement, a court of appropriate jurisdiction, upon application of Indemnitee and such notice as
the court shall require, may order indemnification in the following circumstances:
(a) if it determines Indemnitee is entitled to reimbursement under Section 2-418(d)(1) of the
MGCL, the court shall order indemnification, in which case Indemnitee shall be entitled to recover
the Expenses of securing such reimbursement; or
(b) if it determines that Indemnitee is fairly and reasonably entitled to indemnification in
view of all the relevant circumstances, whether or not Indemnitee (i) has met the standards of
conduct set forth in Section 2-418(b) of the MGCL or (ii) has been adjudged liable for receipt of
an improper personal benefit under Section 2-418(c) of the MGCL, the court may order such
indemnification as the court shall deem proper. However, indemnification with respect to any
Proceeding by or in the right of the Company or in which liability shall have been adjudged in the
circumstances described in Section 2-418(c) of the MGCL shall be limited to Expenses actually and
reasonably incurred by him or on his behalf in connection with a Proceeding.
SECTION 7. Indemnification for Expenses of a Party Who is Wholly or Partly Successful.
Notwithstanding any other provision of this Agreement, and without limiting any such provision, to
the extent that Indemnitee is, by reason of his Corporate Status, made a party to (or otherwise
becomes a participant in) any Proceeding and is successful, on the merits or otherwise, in the
defense of such Proceeding, he shall be indemnified for 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 under this
Section 7 for all Expenses actually and reasonably incurred by him or on his behalf in connection
with each successfully resolved claim, issue or matter, allocated on a reasonable and proportionate
basis. For purposes of this Section and without
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limitation, the termination of any claim, issue or matter in such a Proceeding by dismissal, with
or without prejudice, shall be deemed to be a successful result as to such claim, issue or matter.
SECTION 8. Contribution. If the indemnity contained in Section 3, 4, 5 or 7 of this
Agreement is unavailable or insufficient to hold Indemnitee harmless in a Proceeding described
therein, then in accordance with applicable law and separate from and in addition to the indemnity
provided elsewhere herein, the Company shall contribute to the amount paid or payable by Indemnitee
as a result of such Expenses, judgments, penalties, fines and amounts paid in settlement actually
and reasonably incurred by or on behalf of Indemnitee in connection with such Proceeding or any
claim, issue or matter therein, (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company and Indemnitee, or (ii) if the allocation provided by clause (i)
above is not permitted by applicable law, in such proportion as is appropriate to reflect not only
the relative benefits referred to in clause (i) above but also the relative fault of the Company
and Indemnitee in connection with the action or inaction which resulted in such Expenses,
judgments, penalties, fines or amounts paid in settlement, as well as any other relevant equitable
considerations. In connection with the registration of the Company’s securities, the relative
benefits received by the Company and Indemnitee shall be deemed to be in the same respective
proportions that the net proceeds from the offering (before deducting expenses) received by the
Company and Indemnitee, in each case as set forth in the table on the cover page of the applicable
prospectus, bear to the aggregate public offering price of the securities so offered. The relative
fault of the Company and Indemnitee shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the Company or Indemnitee and
the parties’ relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The Company and Indemnitee agree that it would not be just and
equitable if contribution pursuant to this Section 8 were determined by pro rata or per capita
allocation or by any other method of allocation which does not take account of the equitable
considerations referred to above in this Section. In connection with any registration of the
Company’s securities, in no event and notwithstanding the other provisions of this Section 8 shall
Indemnitee be required to contribute any amount hereunder in excess of the lesser of (i) that
proportion of the total of such Expenses, judgments, penalties, fines or amounts paid in settlement
indemnified against equal to the proportion of the total securities sold under such registration
statement that is being sold by Indemnitee or (ii) the proceeds received by Indemnitee from his
sale of securities under such registration statement. No person found guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act of 1933, as amended)
shall be entitled to contribution from any person who was not found guilty of such fraudulent
misrepresentation.
SECTION 9. Advancement of Expenses for a Party. Except as otherwise provided in
Section 13, the Company shall, without requiring a preliminary determination of Indemnitee’s
ultimate entitlement to indemnification hereunder, pay or reimburse all Expenses reasonably
incurred by or on behalf of Indemnitee in connection with any Proceeding to which Indemnitee is, or
is threatened to be made, a party by reason of Indemnitee’s Corporate Status, in advance of the
final disposition of such Proceeding, from time to time and as incurred, within ten (10) 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 include satisfactory evidence and documentation as to the amount of
such Expenses and shall be preceded or accompanied by (i) a written affirmation by Indemnitee of
Indemnitee’s good faith belief that he has met the standard of conduct necessary for
indemnification by the Company, as authorized by the MGCL and this Agreement and (ii) a written
undertaking, in substantially the form attached hereto as Exhibit A or in such form as may
be required under applicable law as in effect at the time of the execution thereof, by or on behalf
of Indemnitee to repay the portion of any Expenses advanced relating to claims, issues or matters
in the Proceeding as to which it shall ultimately be established, by clear and convincing evidence,
that Indemnitee has not met the standard of conduct and is therefore not entitled to be indemnified
against
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such Expenses. Indemnitee’s written certification together with a copy of the statement paid or to
be paid by Indemnitee shall constitute satisfactory evidence as to the amount of such Expenses. To
the extent that Expenses advanced to Indemnitee do not relate to a specific claim, issue or matter
in the Proceeding, such Expenses shall be allocated on a reasonable and proportionate basis. The
undertaking required by this Section 9 shall be an unlimited general obligation by or on behalf of
Indemnitee and shall be accepted without reference to Indemnitee’s financial ability to repay such
advanced Expenses and without any requirement to post security therefor. Advances shall be
unsecured and interest free. Such advances are deemed to be an obligation of the Company to
Indemnitee hereunder, and shall in no event be deemed a personal loan.
SECTION 10. 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. Indemnitee may submit one or more such requests from
time to time and at such time(s) as Indemnitee deems appropriate in his sole discretion. The
officer of the Company receiving any such request from Indemnitee shall, promptly upon receipt of
such a request for indemnification, advise the Board in writing that Indemnitee has requested
indemnification.
(b) Upon written request by Indemnitee for indemnification pursuant to Section 10(a)
of this Agreement, 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, a copy of which shall be
delivered to Indemnitee, which Independent Counsel shall be selected by the Indemnitee and approved
by the Board in accordance with Section 2-418(e)(2)(ii) of the MGCL, which approval will not be
unreasonably withheld; or (ii) if a Change in Control shall not have occurred, (A) by the Board by
a majority vote of a quorum consisting of Disinterested Directors, or, if such a quorum cannot be
obtained, then by a majority vote of a duly authorized committee of the Board consisting solely of
one or more Disinterested Directors, (B) if Independent Counsel has been selected by the Board in
accordance with Section 2-418(e)(2)(ii) of the MGCL and approved by the Indemnitee, which approval
shall not be unreasonably withheld, by Independent Counsel in a written opinion to the Board, a
copy of which shall be delivered to Indemnitee, or (C) if so directed by a majority of the members
of the Board, by the stockholders of the Company. If, with regard to Section 8 of this Agreement,
such a determination is not permitted by law or, in the case of a determination to be made pursuant
to Section 10(b)(ii), if by a majority vote a quorum of Disinterested Directors so directs, such
determination shall be made by an appropriate court of the State of Maryland or the court in which
the Proceeding giving rise to the claim for indemnification is brought. If it is so determined
that Indemnitee is entitled to indemnification or contribution, payment to Indemnitee shall be made
within ten (10) days after such determination. Indemnitee shall cooperate with the person, persons
or entity making such determination with respect to Indemnitee’s entitlement to indemnification,
including providing to such person, persons or entity upon reasonable advance request any
documentation or information which is not privileged or otherwise protected from disclosure and
which is reasonably available to Indemnitee and reasonably necessary to such determination in the
discretion of the Board or Independent Counsel if retained pursuant to clause (ii)(B) of this
Section 10(b). All reasonable Expenses actually incurred by Indemnitee in so cooperating
with the person, persons or entity making such determination shall be borne by the Company
(irrespective of the determination as to Indemnitee’s entitlement to indemnification) and the
Company shall indemnify and hold Indemnitee harmless therefrom. The Company shall pay the fees and
expenses of Independent Counsel, if one is appointed.
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SECTION 11. Presumptions and Effect of Certain Proceedings.
(a) In making a determination with respect to entitlement to indemnification hereunder, the
person, persons or entity making such determination shall in each case presume that Indemnitee is
entitled to indemnification under this Agreement if Indemnitee has submitted a written request for
indemnification in accordance with Section 10(a) of this Agreement, and the Company shall have the
burden of proof to overcome that presumption in connection with the making of any determination
contrary to that presumption.
(b) If the person, persons or entity making the determination whether Indemnitee is entitled
to indemnification shall not have made a determination within sixty (60) days after receipt by the
Company of the request therefor (or, if Independent Counsel is making the determination, within
sixty (60) days after the appointment of Independent Counsel), the requisite determination of
entitlement to indemnification shall be deemed to have been made and Indemnitee shall be entitled
to such indemnification, in the absence of (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 Maryland law. The sixty (60)-day period may be extended for a reasonable time, not to exceed
thirty (30) days, if the person, persons or entity making said determination in good faith requires
additional time for obtaining or evaluating relevant documentation and information. The foregoing
provisions of this Section 11(b) shall not apply if the determination of entitlement to
indemnification is to be made by the stockholders and if within fifteen (15) days after receipt by
the Company of the request for such determination the Board resolves to submit such determination
to the stockholders for consideration at an annual or special meeting thereof to be held within
seventy-five (75) days after the date of such receipt and such determination is made at such
meeting.
(c) The termination of any Proceeding or of any claim, issue or matter therein 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.
(d) The knowledge and/or actions, or failure to act, of any other director, officer, employee
or agent of the Company or any other director, trustee, officer, partner, manager, managing member,
fiduciary, employee or agent of any other foreign or domestic corporation, partnership, limited
liability company, joint venture, trust, employee benefit plan or other enterprise shall not be
imputed to Indemnitee for purposes of determining any other right to indemnification under this
Agreement.
SECTION 12. Remedies of Indemnitee.
(a) If (i) a determination is made pursuant to Section 10 of this Agreement that Indemnitee is
not entitled to indemnification under this Agreement, (ii) advancement of Expenses is not timely
made pursuant to Section 9 of this Agreement, (iii) no determination of entitlement to
indemnification shall have been made pursuant to Section 10(b) of this Agreement within ninety (90)
days after receipt by the Company of the request for indemnification, (iv) payment of
indemnification is not made pursuant to Section 7 of this Agreement within ten (10) days after
receipt by the Company of a written request therefor, or (v) payment of indemnification or
contribution pursuant to any other section of this Agreement or the charter or Bylaws of the
Company is not made within ten (10) days after a determination has been made that Indemnitee is
entitled to indemnification, Indemnitee shall be entitled to an adjudication in an appropriate
court located in the State of Maryland, or in any other court of competent jurisdiction, of his
entitlement to such indemnification or advance of Expenses. Alternatively, Indemnitee, at his
option, may seek an award in arbitration to be conducted by a single arbitrator pursuant
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to the commercial Arbitration Rules of the American Arbitration Association. Indemnitee shall
commence such proceeding seeking an adjudication or an award in arbitration within 180 days
following the date on which Indemnitee first has the right to commence such proceeding pursuant to
this Section 12(a); provided, however, that the foregoing clause shall not apply to a proceeding
brought by Indemnitee to enforce his rights under Section 7 of this Agreement. Except as set forth
herein, the provisions of Maryland law (without regard to its conflicts of laws rules) shall apply
to any such arbitration. The Company shall not oppose Indemnitee’s right to seek any such
adjudication or award in arbitration.
(b) In any judicial proceeding or arbitration commenced pursuant to this Section 12,
Indemnitee shall be presumed to be entitled to indemnification or advance of Expenses, as the case
may be, under this Agreement and the Company shall have the burden of proving that Indemnitee is
not entitled to indemnification or advance of Expenses, as the case may be. If Indemnitee
commences a judicial proceeding or arbitration pursuant to this Section 12, Indemnitee shall not be
required to reimburse the Company for any advances pursuant to Section 9 of this Agreement until a
final determination is made with respect to Indemnitee’s entitlement to indemnification (as to
which all rights of appeal have been exhausted or lapsed). The Company shall, to the fullest
extent not prohibited by law, be precluded from asserting in any judicial proceeding or arbitration
commenced pursuant to this Section 12 that the procedures and presumptions of this Agreement are
not valid, binding and enforceable and shall stipulate in any such court or before any such
arbitrator that the Company is bound by all of the provisions of this Agreement.
(c) If a determination shall have been made pursuant to Section 10(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 12, absent 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.
(d) In the event that Indemnitee, pursuant to this Section 12, 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 for, any and all Expenses actually and reasonably incurred by him in such judicial
adjudication or arbitration. If it shall be determined in such judicial adjudication or arbitration
that Indemnitee is entitled to receive part but not all of the indemnification or advance of
Expenses sought, the Expenses incurred by Indemnitee in connection with such judicial adjudication
or arbitration shall be appropriately prorated.
(e) Interest shall be paid by the Company to Indemnitee at the maximum rate allowed to be
charged for judgments under the Courts and Judicial Proceedings Article of the Annotated Code of
Maryland for amounts which the Company pays or is obligated to pay under this Section 12 for the
period commencing with the date on which Indemnitee requests indemnification, reimbursement or
advance of any Expenses and ending on the date such payment is made to Indemnitee by the Company.
SECTION 13. Exceptions to Right of Indemnification or Advancement of Expenses.
Notwithstanding any other provision herein to the contrary, Indemnitee shall not be entitled
pursuant to this Agreement to:
(a) indemnification in respect of any claim, issue or matter in any Proceeding by or in the
right of the Company as to which Indemnitee shall have been adjudged to be liable to the Company;
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(b) indemnification in respect of any Proceeding charging improper personal benefit to
Indemnitee, whether or not involving action in Indemnitee’s Corporate Status, in which Indemnitee
was adjudged liable on the basis that personal benefit was improperly received;
(c) indemnification or advancement of Expenses with respect to any Proceeding brought by
Indemnitee, unless (a) the Proceeding is brought to enforce indemnification or advancement of
Expenses under this Agreement, and then only to the extent in accordance with and as authorized by
Section 12 of this Agreement or (b) the charter or Bylaws of the Company, a resolution of the
stockholders entitled to vote generally in the election of directors or of the Board or an
agreement approved by the Board to which the Company is a party expressly provide otherwise;
(d) indemnification or advancement of Expenses to the extent prohibited by Maryland law,
except as set forth in Section 6 of this Agreement; or
(e) indemnification for amounts paid in settlement of any Proceeding without the Company’s
prior written consent, which shall not be unreasonably withheld.
SECTION 14. Defense of the Underlying Proceeding.
(a) Indemnitee shall notify the Company promptly upon being served with or receiving any
summons, citation, subpoena, complaint, indictment, information, notice, request or other document
relating to any Proceeding which may result in the right to indemnification or the advance of
Expenses hereunder and shall include with such notice a description of the nature of the Proceeding
and a summary of the facts underlying the Proceeding; provided, however, that the failure to give
any such notice shall not disqualify Indemnitee from the right, or otherwise affect in any manner
any right of Indemnitee, to indemnification or the advance of Expenses under this Agreement unless
the Company’s ability to defend in such Proceeding or to obtain proceeds under any insurance policy
is materially and adversely prejudiced thereby, and then only to the extent the Company is thereby
actually so prejudiced.
(b) Subject to the provisions of the last sentence of this Section 14(b) and of Section 14(c)
below, the Company shall have the right to defend Indemnitee in any Proceeding which may give rise
to indemnification hereunder; provided, however, that the Company shall notify Indemnitee of any
such decision to defend within fifteen (15) calendar days following receipt of notice of any such
Proceeding under Section 14(a) above. After delivery of such notice, approval of such counsel by
Indemnitee and the retention of such counsel by the Company, the Company will not be liable to
Indemnitee under this Agreement for any fees of counsel subsequently incurred by Indemnitee with
respect to the same Proceeding. The Company shall not, without the prior written consent of
Indemnitee, which shall not be unreasonably withheld or delayed, consent to the entry of any
judgment against Indemnitee or enter into any settlement or compromise which (i) includes an
admission of fault of Indemnitee, (ii) does not include, as an unconditional term thereof, the full
release of Indemnitee from all liability in respect of such Proceeding, which release shall be in
form and substance reasonably satisfactory to Indemnitee, or (iii) would impose any Expense,
judgment, fine, penalty or limitation on Indemnitee. This Section 14(b) shall not apply to a
Proceeding brought by Indemnitee under Section 12 above.
(c) Notwithstanding the provisions of Section 14(b) above, if in a Proceeding to which
Indemnitee is a party by reason of Indemnitee’s Corporate Status, (i) Indemnitee reasonably
concludes, based upon an opinion of counsel approved by the Company, which approval shall not be
unreasonably withheld, that he may have separate defenses or counterclaims to assert with respect
to any issue which may not be consistent with other defendants in such Proceeding, (ii) Indemnitee
reasonably concludes, based upon an opinion of counsel approved by the Company, which approval
shall not be
9
unreasonably withheld, that an actual or apparent conflict of interest or potential conflict of
interest exists between Indemnitee and the Company, or (iii) if the Company fails to assume the
defense of such Proceeding in a timely manner, Indemnitee shall be entitled to be represented by
separate legal counsel of Indemnitee’s choice, subject to the prior approval of the Company, which
shall not be unreasonably withheld, at the expense of the Company. In addition, if the Company
fails to comply with any of its obligations under this Agreement or in the event that the Company
or any other person takes any action to declare this Agreement void or unenforceable, or institutes
any Proceeding to deny or to recover from Indemnitee the benefits intended to be provided to
Indemnitee hereunder, Indemnitee shall have the right to retain counsel of Indemnitee’s choice,
subject to the prior approval of the Company, which shall not be unreasonably withheld, at the
expense of the Company (subject to Section 12(d)), to represent Indemnitee in connection with any
such matter.
SECTION 15. Non-Exclusivity; Survival of Rights; Subrogation.
(a) The rights of indemnification and to receive advancement of Expenses as provided by this
Agreement shall not be deemed exclusive of any other rights, by indemnification or otherwise, to
which Indemnitee may at any time be entitled under applicable law, the Company’s charter or Bylaws,
any agreement, a vote of the Company’s stockholders, a resolution of the Board, or otherwise.
Unless consented to in writing by Indemnitee, no amendment, alteration or repeal of this Agreement
or 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, regardless of whether a claim with respect to such action or
inaction is raised prior or subsequent to such amendment, alteration or repeal. No right or remedy
herein conferred is intended to be exclusive of any other right or remedy, and every other right or
remedy shall be cumulative and in addition to every other right or remedy given hereunder or now or
hereafter existing at law or in equity or otherwise. The assertion of any right or remedy
hereunder, or otherwise, shall not prohibit the concurrent assertion or employment of any other
right or remedy.
(b) In the event of any payment by the Company 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.
(c) The Company shall not be liable under this Agreement to make any payment of amounts
otherwise indemnifiable or payable or reimbursable hereunder if and to the extent that Indemnitee
has otherwise actually received such payment under any insurance policy maintained by the Company,
contract, agreement or otherwise.
SECTION 16. Insurance. For so long as Indemnitee serves as an officer or director and
for a period thereafter so long as Indemnitee remains subject to liability under applicable
statutes of limitations, the Company will use its reasonable best efforts to acquire directors and
officers liability insurance, on terms and conditions deemed appropriate by the Board, with the
advice of counsel, covering Indemnitee or any claim made against Indemnitee by reason of his
Corporate Status and covering the Company for any indemnification or advance of Expenses made by
the Company to Indemnitee for any claims made against Indemnitee by reason of his Corporate Status.
Without in any way limiting any other obligation under this Agreement, the Company shall indemnify
Indemnitee for any payment by Indemnitee arising out of the amount of any deductible or retention
and the amount of any excess of the aggregate of all judgments, penalties, fines, settlements and
Expenses actually and reasonably incurred by Indemnitee in connection with a Proceeding over the
coverage of any insurance referred to in the previous sentence. The purchase, establishment and
maintenance of any such insurance shall not in any way limit or affect the rights or obligations of
the Company or Indemnitee under this Agreement except as expressly
10
provided herein, and the execution and delivery of this Agreement by the Company and Indemnitee
shall not in any way limit or affect the rights or obligations of the Company under any such
insurance policies. If the Company receives from Indemnitee any notice of the commencement of a
Proceeding, the Company shall give prompt notice of the commencement of such Proceeding to the
insurers in accordance with the procedures set forth in the policy. The Company shall thereafter
take all necessary or desirable action to cause such insurers to pay, on behalf of Indemnitee, all
amounts payable as a result of such Proceeding in accordance with the terms of such policy.
SECTION 17. Duration of Agreement; Binding Effect.
(a) This Agreement shall continue until and terminate ten (10) years after the date that
Indemnitee’s Corporate Status shall have ceased; 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 advance of Expenses hereunder and of any
proceeding commenced by Indemnitee pursuant to Section 12 of this Agreement relating thereto.
(b) The indemnification and advance of Expenses provided by, or granted pursuant to, this
Agreement shall be binding upon and be enforceable by the parties hereto and their respective
successors and assigns (including any direct or indirect successor by purchase, merger,
consolidation or otherwise to all or substantially all of the business or assets of the Company),
shall continue as to an Indemnitee whose Corporate Status has ceased and shall inure to the benefit
of Indemnitee and his spouse, assigns, heirs, devisees, executors and administrators and other
legal representatives.
(c) The Company shall require and cause any successor (whether direct or indirect by purchase,
merger, consolidation or otherwise) to all, substantially all or a substantial part, of the
business and/or assets of the Company, by written agreement in form and substance satisfactory to
Indemnitee, expressly to assume and agree to perform this Agreement in the same manner and to the
same extent that the Company would be required to perform if no such succession had taken place.
(d) The Company and Indemnitee agree herein that a monetary remedy for breach of this
Agreement, at some later date, may be inadequate, impracticable and difficult of proof, and further
agree that such breach may cause Indemnitee irreparable harm. Accordingly, the parties hereto
agree that Indemnitee may enforce this Agreement by seeking injunctive relief and/or specific
performance hereof, without any necessity of showing actual damage or irreparable harm and that by
seeking injunctive relief and/or specific performance, Indemnitee shall not be precluded from
seeking or obtaining any other relief to which he may be entitled. Indemnitee shall further be
entitled to such specific performance and injunctive relief, including temporary restraining
orders, preliminary injunctions and permanent injunctions, without the necessity of posting bonds
or other undertakings in connection therewith. The Company acknowledges that, in the absence of a
waiver, a bond or undertaking may be required of Indemnitee by a court, and the Company hereby
waives any such requirement of such a bond or undertaking.
SECTION 18. Severability. If any provision or provisions of this Agreement shall be
held to be invalid, illegal or unenforceable for any reason whatsoever: (i) the validity, legality
and enforceability of the remaining provisions of this Agreement (including, without limitation,
each portion of any section, paragraph or sentence of this Agreement containing any such provision
held to be invalid, illegal or unenforceable that is not itself invalid, illegal or unenforceable)
shall not in any way be affected or impaired thereby and shall remain enforceable to the
fullest extent permitted by law; (ii) such provision or provisions shall be deemed reformed to the
extent necessary to conform to applicable law and to give the maximum effect to the intent of the
parties hereto; and (iii) to the fullest extent possible, the provisions of this Agreement
(including, without limitation, each portion of any section, paragraph or sentence of this
11
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 19. 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. One such counterpart signed by the party
against whom enforceability is sought shall be sufficient to evidence the existence of this
Agreement.
SECTION 20. 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 21. Modification and Waiver. No supplement, modification or amendment of this
Agreement shall be binding unless executed in writing by both of the parties hereto. No waiver of
any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other
provisions hereof (whether or not similar) nor shall such waiver constitute a continuing waiver.
SECTION 22. Mutual Acknowledgement. Both the Company and Indemnitee acknowledge that
in certain instances federal law or public policy may prohibit the company from indemnifying
Indemnitee under this Agreement or otherwise. Indemnitee understands and acknowledges that the
Company shall not be required to provide indemnification or advance Expenses in violation of
applicable law.
SECTION 23. Notice to the Company’s Stockholders. To the extent required by the MGCL,
the Company shall report in writing to its stockholders the payment of any amounts for
indemnification of, or advancement of Expenses to, Indemnitee under this Agreement arising out of a
Proceeding by or in the right of the Company, with the notice of the meeting of stockholders of the
Company next following the date of the payment of any such indemnification or advancement of
Expenses or prior to the meeting.
SECTION 24. 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, to: the address set forth on the signature page hereto. | ||
| (b) | If to the Company to: | ||
| AmREIT, Inc. Xxxxx 0000 0 Xxxxxxxx Xxxxx Xxxxxxx, XX 00000 Attn: Chief Financial Officer |
or to such other address as may have been furnished in writing to Indemnitee by the Company or to
the Company by Indemnitee, as the case may be.
SECTION 25. 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, without
regard to its conflicts of laws rules.
12
SECTION 26. Consent to Jurisdiction. The Company and Indemnitee each hereby
irrevocably consent to jurisdiction and venue of the courts of the State of Texas (which courts
shall apply Maryland law) for all purposes in connection with any Proceeding which arises out of or
relates to this Agreement and agree that any Proceeding instituted under this Agreement shall be
commenced, prosecuted and contained only in the courts of the State of Texas. THE COMPANY AND
INDEMNITEE HEREBY IRREVOCABLE WAIVE ANY AND ALL RIGHTS TO TRIAL BY JURY IN ANY PROCEEDING ARISING
OUT OF OR RELATED TO THIS AGREEMENT.
SECTION 27. Miscellaneous. Use of the masculine pronoun shall be deemed to include
usage of the feminine pronoun where appropriate.
[Remainder of page left intentionally blank; signature page follows]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement effective as of the
Effective Date.
| ATTEST: | WITNESS: | |||||||
| AMREIT, INC. | ||||||||
| By: | INDEMNITEE | |||||||
Name: |
||||||||
Title:
|
Name: | |||||||
Date:
|
Address: | |||||||
| Date: | ||||||||
EXHIBIT A
FORM OF UNDERTAKING TO REPAY EXPENSES ADVANCED
The Board of Directors of AmREIT, Inc.
Re: Undertaking to Repay Expenses Advanced
Ladies and Gentlemen:
This undertaking is being provided pursuant to that certain Indemnification Agreement
effective as of the 24th day of November, 2009, by and between AmREIT, Inc. (the “Company”) and the
undersigned Indemnitee (the “Indemnification Agreement”), pursuant to which I am entitled to
advance of Expenses in connection with [DESCRIPTION OF PROCEEDING] (the “Proceeding”).
Terms used herein and not otherwise defined shall have the meanings specified in the
Indemnification Agreement.
I am subject to the Proceeding by reason of my Corporate Status or by reason of alleged
actions or omissions by me in such capacity. I hereby affirm that at all times, insofar as I was
involved as an officer and director of the Company, in any of the facts or events giving rise to
the Proceeding, I (1) did not act with bad faith or active or deliberate dishonesty, (2) did not
receive any improper personal benefit in money, property or services and (3) in the case of any
criminal proceeding, had no reasonable cause to believe that any act or omission by me was
unlawful.
In consideration of the advance of Expenses by the Company for reasonable attorneys’ fees and
related Expenses incurred by me in connection with the Proceeding (the “Advanced Expenses”), I
hereby agree that if, in connection with the Proceeding, it is established that (1) an act or
omission by me was material to the matter giving rise to the Proceeding and (a) was committed in
bad faith or (b) was the result of active and deliberate dishonesty or (2) I actually received an
improper personal benefit in money, property or services or (3) in the case of any criminal
proceeding, I had reasonable cause to believe that the act or omission was unlawful, then I shall
promptly reimburse the portion of the Advanced Expenses relating to the claims, issues or matters
in the Proceeding as to which the foregoing findings have been established and which have not been
successfully resolved as described in Section 7 of the Indemnification Agreement. To the extent
that Advanced Expenses do not relate to a specific claim, issue or matter in the Proceeding, I
agree that such Expenses shall be allocated on a reasonable and proportionate basis.
IN WITNESS WHEREOF, I have executed this Affirmation and Undertaking on this ___ day of
______________, 20__.
WITNESS:
(SEAL)
