EXHIBIT 10.1
INDEMNIFICATION AGREEMENT
THIS INDEMNIFICATION AGREEMENT (this "Agreement") is between
______________, a Texas corporation (the "Corporation"), and ______________ (the
"Indemnitee"), and is effective as of the date the Indemnitee becomes or became
a director or executive officer of the Corporation.
WHEREAS, highly competent persons have become more reluctant to serve
corporations as directors, executive officers or in other capacities unless they
are provided with adequate protection through insurance or adequate
indemnification against inordinate risks of claims and actions against them
arising out of their service to, and activities on behalf of, the corporation;
WHEREAS, the Board of Directors of the Company (the "Board") has determined
that, in order to attract and retain qualified individuals, the Company will
attempt to maintain on an ongoing basis, at its sole expense, liability
insurance to protect persons serving the Company and its subsidiaries from
certain liabilities. Although the furnishing of such insurance has been a
customary and widespread practice among United States-based corporations and
other business enterprises, the Company believes that, given current market
conditions and trends, such insurance may be available to it in the future only
at higher premiums and with more exclusions. At the same time, directors,
officers and other persons in service to corporations or business enterprises
are being increasingly subjected to expensive and time-consuming litigation
relating to, among other things, matters that traditionally would have been
brought only against the corporation or business enterprise itself;
WHEREAS, the uncertainties relating to such insurance and to
indemnification have increased the difficulty of attracting and retaining such
persons;
WHEREAS, the Board has determined that the increased difficulty in
attracting and retaining such persons is detrimental to the best interests of
the Company's stockholders and that the Company should act to assure such
persons that there will be increased certainty of such protection in the future;
WHEREAS, Indemnitee is willing to serve, continue to serve, and take on
additional service for or on behalf of the Corporation, subject to certain
conditions, including without limitation, the execution and performance of this
Agreement by the Corporation.
WHEREAS, it is intended that Indemnitee shall be paid promptly by the
Corporation all amounts necessary to effectuate in full the indemnity provided
herein.
NOW, THEREFORE, In consideration of the premises and mutual covenants
herein contained, the Corporation and the Indemnitee do hereby covenant and
agree as follows:
ARTICLE I
CERTAIN DEFINITIONS
As used herein, the following words and terms shall have the following
respective meanings (whether singular or plural):
"Change in Control" means a change in control of the Corporation 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, as amended (the "Exchange Act"), whether or
not the Corporation is then subject to such reporting requirement; provided,
however, that, without limitation, such a Change in Control shall be deemed to
have occurred if at any time after the date of this Agreement (i) any "person"
(as such term is used in Sections 13(d) and 14(d) of the Exchange Act), other
than a trustee or other fiduciary holding securities under an employee benefit
plan of the Corporation or a corporation or other entity owned directly or
indirectly by the shareholders of the Corporation in substantially the same
proportion as their ownership of stock in the Corporation, is or becomes the
"beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly
or indirectly, of securities of the Corporation representing 20% or more of the
combined voting power of the Corporation's then outstanding securities 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) the Corporation is a party to a merger, consolidation, share
exchange, sale of assets or other reorganization, or a proxy contest, 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 15-month period, 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
Corporation's shareholders 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.
"Claim" means an actual or threatened claim or request for relief.
"Corporate Status" means the status of a Person who is or was a director,
officer, partner, employee, agent or fiduciary of the Corporation or of any
other corporation, partnership, joint venture, trust, employee benefit plan or
other enterprise which such person is or was serving at the request of the
Corporation. For the purposes of this Agreement, "serving at the request of the
Corporation" includes any service by Indemnitee, which imposes duties on, or
involves services by, Indemnitee with respect to any employee benefit plan or
its participants or beneficiaries.
"Expenses" shall include all direct and indirect costs (including, without
limitation, 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 out-of-pocket expenses) actually and reasonably incurred in
connection with prosecuting, defending, preparing to prosecute or defend,
investigating, appealing or being or preparing to be a witness in a Proceeding.
Should any payments by the Company under this Agreement be determined to be
subject to any federal, state or local income or excise tax, "Expenses" also
shall include such amounts as are necessary to place Indemnitee in the same
after-tax position (after giving effect to all applicable taxes) he would have
been in had no such tax been determined to apply to such payments.
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"Independent Counsel" means a law firm, or a member of a law firm, that is
experienced in matters of corporation law and neither contemporaneously is, nor
in the past five (5) years theretofore has been, retained to represent: (a) the
Corporation, its Affiliates or Indemnitee in any matter material to either such
party, (b) any other party to the Proceeding giving rise to a claim for
indemnification hereunder, or (c) the beneficial owner, directly or indirectly,
of securities of the Corporation representing 10% or more of the combined voting
power of the Corporation's then outstanding voting securities. 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 Corporation or Indemnitee
in an action to determine Indemnitee's rights under this Agreement.
"Other enterprise" shall include, but shall not be limited to, an "other
entity" as defined in Section 1.01 of the TBCA (including any amendment that may
from time to time be made to such Section.
"Person" means any natural person, sole proprietorship, corporation,
partnership of any kind having a separate legal status, limited liability
company, business trust, unincorporated organization or association, mutual
company, joint stock company, joint venture, estate, trust, union or employee
organization or governmental authority.
"Potential Change in Control" shall be deemed to have occurred if (a) the
Corporation enters into an agreement, the consummation of which would result in
the occurrence of a Change in Control; (b) any person (including the
Corporation) publicly announces an intention to take or to consider taking
actions which if consummated would constitute a Change in Control; (c) any
person, other than a trustee or other fiduciary holding securities under an
employee benefit plan of the Corporation or a corporation or other entity owned
directly or indirectly by the shareholders of the Corporation in substantially
the same proportion as their ownership of stock in the Corporation, who is or
becomes the beneficial owner, directly or indirectly, of securities of the
Corporation representing 9.5% or more of the combined voting power of the
Corporation's then outstanding securities, increases his beneficial ownership of
such securities by five percentage points (5%) or more over the percentage so
owned by such person; or (d) the Board of Directors adopts a resolution to the
effect that, for purposes of this Agreement, a Potential Change in Control has
occurred.
"Proceeding" means any threatened, pending or completed action, suit,
alternative dispute resolution mechanism, hearing or any other proceeding,
whether civil, criminal, administrative, arbitrative, meditative or
investigative (except one initiated by Indemnitee pursuant to Article VI of this
Agreement to enforce his rights under this Agreement), and any appeal in or
related to any such action, suit, arbitration, investigation, hearing or
proceeding and any inquiry or investigation that could lead to such an action,
suit, proceeding or arbitration.
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"TBCA" means the Texas Business Corporation Act and any successor statute
thereto as either of them may from time to time be amended.
ARTICLE II
SERVICES BY INDEMNITEE
Section 2.1 General. Indemnitee agrees to serve as a director or executive
officer of the Corporation and, as mutually agreed on by Indemnitee and the
Corporation, as a director, officer, employee, agent or fiduciary of other
corporations, partnerships, joint ventures, trusts or other enterprises
(including, without limitation, employee benefit plans). Indemnitee may at any
time and for any reason resign or be removed from such position (subject to any
other contractual obligation or any obligation imposed by operation of law). The
Corporation shall have no obligation to continue Indemnitee in any such
position. This Agreement shall not be deemed an employment contract between the
Corporation (or any of its subsidiaries) and the Indemnitee. The provisions of
this Agreement are subject to any other obligation imposed by operation of law
and subject to any applicable provisions of the Charter or By-Laws.
Notwithstanding, the foregoing, this Agreement shall continue in force after the
Indemnitee has ceased to serve as an officer or director of the Corporation and
no longer serves at the request of the Corporation as a director, officer,
employee or agent of the Company or any subsidiary of the Corporation.
ARTICLE III
INDEMNIFICATION
Section 3.1 General. The Corporation shall indemnify, and advance Expenses
to, Indemnitee (subject to Section 7.3) to the fullest extent permitted by Texas
law in effect on the date hereof and to such greater extent as applicable law
may thereafter from time to time permit. The rights of Indemnitee provided under
the preceding sentence shall include, but shall not be limited to, the right to
be indemnified and to have Expenses advanced in all Proceedings to the fullest
extent permitted by Article 2.02-1 of the TBCA. The provisions set forth in this
Agreement are provided in addition to and as a means of furtherance and
implementation of, and not in limitation of, the obligations expressed in this
Article III. In the event of any change after the date of this Agreement in any
applicable law, statute or rule which expands the right of a Texas corporation
to indemnify a member of its Board of Directors or an officer, such changes
shall be deemed to be within the purview of the Indemnitee's rights and the
Company's obligations under this Agreement. In the event of any change in any
applicable law, statute or rule which narrows the right of a Texas corporation
to indemnify a member of its Board of Directors or an officer, such changes, to
the extent not otherwise required by law, statute or rule to be applied to this
Agreement shall have no effect on this Agreement or the parties' rights and
obligations hereunder.
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Section 3.2 Additional Indemnity of the Corporation. Indemnitee shall be
entitled to indemnification provided in Section 3.1 if, by reason of his
Corporate Status, he is, or is threatened to be made, a party to any Proceeding
(except to the extent limited by Section 3.3). Pursuant to this Section 3.2,
Indemnitee shall be indemnified against Expenses, judgments, penalties
(including excise or similar taxes), fines and amounts paid in settlement
(subject to Section 7.3) actually and reasonably incurred by him or on his
behalf in connection with such Proceeding or any Claim therein, if (1) he
conducted himself in good faith; (2) he reasonably believed: (a) in the case of
conduct in his official capacity, that his conduct was in the Corporation's best
interest; and (b) in all other cases, that his conduct was at least not opposed
to the Corporation's best interests; and, (3) in the case of any criminal
Proceeding, had no reasonable cause to believe his conduct was unlawful. Nothing
in this Section 3.2 shall limit the benefits of Section 3.1 or any other Section
hereunder.
Section 3.3 Limitation on Indemnity. The Indemnification otherwise
available to an Indemnitee under Section 3.2 shall be limited to the extent set
forth in this Section 3.3. In the event that an Indemnitee is found liable to
the Corporation or is found liable on the basis that personal benefit was
improperly received by the Indemnitee whether or not the benefit resulted from
an action taken in Indemnitee's official capacity, the Indemnitee shall be
indemnified only against reasonable Expenses actually incurred by him in
connection with the Proceeding. Notwithstanding the foregoing, no
indemnification for such Expenses shall be made in respect of any Proceeding in
which the Indemnitee shall have been found to be liable for willful or
intentional misconduct in the performance of his duty to the Corporation;
provided, however, that, if applicable law so permits, indemnification for such
Expenses shall nevertheless be made by the Corporation in such event if and only
to the extent that the court in which such Proceeding shall have been brought or
is pending, shall determine.
ARTICLE IV
EXPENSES
Section 4.1 Expenses of a Party Who Is Wholly or Partly Successful.
Notwithstanding any other provision of this Agreement, Indemnitee shall be
indemnified against all Expenses actually and reasonably incurred by him in
connection with any Proceeding to which Indemnitee is a party to (or participant
in) by reason of his Corporate Status and in which Indemnitee is successful, on
the merits or otherwise. In the event that Indemnitee is not wholly successful,
on the merits or otherwise, in a Proceeding but is successful, on the merits or
otherwise, as to any Claim in such Proceeding, the Company shall indemnify
Indemnitee against all Expenses actually and reasonably incurred by him or on
his behalf relating to each successfully resolved claim, issue or matter. For
purposes of this Section 4.1 and without limitation, the termination of any
claim, issue or matter in 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 4.2 Indemnification for Expenses as a Witness. Notwithstanding any
other provision of this Agreement, to the extent that Indemnitee is, by reason
of his Corporate Status, a witness or otherwise participates in any Proceeding
at a time when he is not named a defendant or respondent in the Proceeding, he
shall be indemnified against all Expenses actually and reasonably incurred by
him or on his behalf in connection therewith.
Section 4.3 Advancement of Expenses. The Corporation shall pay all
reasonable Expenses incurred by or on behalf of Indemnitee in connection with
any Proceeding or Claim, whether brought by the Corporation or otherwise, in
advance of any determination respecting entitlement to indemnification pursuant
to Article V hereof within ten (10) days after the receipt by the Corporation of
a written statement from Indemnitee (a) requesting such payment or payments from
time to time, whether prior to or after final disposition of such Proceeding or
Claim and (b) affirming Indemnitee's good faith belief that he has met the
standard of conduct necessary for indemnification under Article 2.02-1 of the
TBCA. Such statement or statements shall reasonably evidence the Expenses
incurred by Indemnitee. Indemnitee hereby undertakes and agrees that he will
reimburse and repay the Corporation for any Expenses so advanced to the extent
that it shall ultimately be determined by a court in a final adjudication from
which there is no further right of appeal, that (1) Indemnitee has not met that
standard of conduct necessary for indemnification under Article 2.02-1 of the
TBCA or (2) Indemnitee is not entitled to be indemnified against such Expenses
under Article 2.02-1(E) of the TBCA. Such undertaking shall be accepted without
reference to financial ability to repay.
ARTICLE V
PROCEDURE FOR DETERMINATION OF ENTITLEMENT
TO INDEMNIFICATION
Section 5.1 Request by Indemnitee. To obtain indemnification under this
Agreement, Indemnitee shall submit to the Corporation a written request,
including 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 or an Assistant
Secretary of the Corporation shall, promptly upon receipt of such a request for
indemnification, advise the Board in writing that Indemnitee has requested
indemnification.
Section 5.2 Determination of Request. Upon written request by Indemnitee
for indemnification pursuant to the first sentence of Section 5.1 hereof, a
determination, if required by applicable law, with respect to Indemnitee's
entitlement thereto shall be made in the specific case: (a) if a Change in
Control shall have occurred within two (2) years prior to the date of such
written request, by Independent Counsel (selected in accordance with Section
5.3) in a written opinion to the Board, a copy of which shall be delivered to
Indemnitee, unless Indemnitee shall request that such determination be made in
accordance with Article 2.02-1F (1) or (2) of the TBCA; or (b) if a Change in
Control shall not have occurred within two (2) years prior to the date of
Indemnitee's written request for indemnification, the Independent Counsel shall
be selected by the Board, and the Corporation shall give written notice to
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Indemnitee advising him of the identity of the Independent Counsel so selected,
in accordance with Article 2.02-1 of the TBCA. If it is so determined that
Indemnitee is entitled to indemnification hereunder, payment to Indemnitee shall
be made within ten (10) 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 that is not
privileged or otherwise protected from disclosure and that is reasonably
available to Indemnitee and reasonably necessary to such determination. Any
costs or expenses (including attorneys' fees and disbursements) incurred by
Indemnitee in so cooperating with the person making such determination shall be
borne by the Corporation (irrespective of the determination as to Indemnitee's
entitlement to indemnification) and the Corporation hereby agrees to indemnify
and hold harmless Indemnitee therefrom.
Section 5.3 Independent Counsel. If a Change in Control shall have occurred
and Indemnitee elects that the determination as to indemnification is to be made
by Independent Counsel, the Independent Counsel shall be selected by the Board
or a committee of the Board in accordance with Article 2.02-1(F)(3) of the TBCA.
The Corporation shall pay any and all reasonable fees and expenses of
Independent Counsel incurred by such Independent Counsel in connection with
acting pursuant to Section 5.2. Upon the due commencement of any judicial
proceeding or arbitration pursuant to Section 6.1(c) of this Agreement,
Independent Counsel shall be discharged and relieved of any further
responsibility in such capacity (subject to the applicable standards of
professional conduct then prevailing).
Section 5.4 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 presume that Indemnitee is entitled to indemnification
under this Agreement if Indemnitee has submitted a request for
indemnification in accordance with Section 5.1, and the Company shall have
the burden of proof to overcome that presumption in connection with the
making by any person, Persons or entity of any determination contrary to
that presumption.
(b) If a Change in Control shall have occurred, the Indemnitee shall be
presumed (except as otherwise expressly provided in this Agreement) to be
entitled to indemnification under this Agreement upon submission of a
request for indemnification under Section 5.1, and thereafter the
Corporation shall have the burden of proof in overcoming that presumption
in reaching a determination contrary to that presumption. The presumption
shall be used by Independent Counsel (or other person or persons
determining entitlement to indemnification) as a basis for a determination
of entitlement to indemnification unless the Corporation provides
information sufficient to overcome such presumption by clear and convincing
evidence or the investigation, review and analysis of Independent Counsel
(or such other person or persons) convinces him by clear and convincing
evidence that the presumption should not apply.
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(c) The person or persons empowered or selected under Article V of this
Agreement to determine whether Indemnitee is entitled to indemnification
(the "Reviewing Party") shall make such determination as soon as
practicable but in no event more than 30 days after receipt by the
Corporation of the request by Indemnitee therefor. If the Reviewing Party
shall not have made a determination within such 30-day period, the
requisite determination of entitlement to indemnification shall be deemed
to have been made and Indemnitee shall be entitled to such indemnification,
absent (i) a knowing misstatement by Indemnitee of a material fact, or
knowing omission of a material fact necessary to make Indemnitee's
statement not materially misleading, in connection with the request for
indemnification, or (ii) a prohibition of such indemnification under
applicable law; provided, however, that such 30-day period may be extended
for a reasonable time, not to exceed an additional 30 days, if the
Reviewing Party in good faith requires such additional time for the
obtaining or evaluating of documentation and/or information relating to
such determination; and provided, further, that the 30-day limitation set
forth in this Section 5.4(b) shall not apply and such period shall be
extended as necessary if the determination of entitlement to
indemnification is to be made by Independent Counsel pursuant to Section
5.2(a) of this Agreement, in which case the applicable period shall be as
set forth in Section 6.1(c).
(d) The termination of any Proceeding or of any Claim, issue or matter
therein, by judgment, order, settlement or conviction, or upon a plea of
nolo contendere or its equivalent, shall not (except as otherwise expressly
provided in this Agreement) of itself adversely affect the right of
Indemnitee to indemnification or create a presumption that Indemnitee did
conduct himself, in his official capacity, in good faith and in a manner
that he reasonably believed to be in the best interests of the Corporation
or, in all other cases, that was not opposed to the best interests of the
Corporation or, with respect to any criminal Proceeding, that Indemnitee
had reasonable cause to believe that his conduct was unlawful. Indemnitee
shall be deemed to have been found liable in respect of any Claim only
after he shall have been so adjudged by a court in competent jurisdiction
after exhaustion of all appeals therefrom.
(e) Any action taken by Indemnitee in connection with any employee benefit
plan shall, if taken in good faith by Indemnitee and in a manner Indemnitee
reasonably believed to be in the interest of the participants in or the
beneficiaries of that plan, be deemed to have been taken in a manner "not
opposed to the best interests of the Corporation" for all purposes of this
Agreement.
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ARTICLE VI
CERTAIN REMEDIES OF INDEMNITEE
Section 6.1 Indemnitee Entitled to Adjudication in an Appropriate Court. In
the event (a) a determination is made pursuant to Article V that Indemnitee is
not entitled to indemnification under this Agreement; (b) there has been any
failure by the Corporation to make timely payment or advancement of any amounts
due hereunder; or (c) the determination of entitlement to indemnification is to
be made by Independent Counsel pursuant to Section 5.2 and such determination
shall not have been made and delivered in a written opinion within 90 days after
(i) such Independent Counsel's being appointed, (ii) the overruling by the Court
of objections to such counsel's selection or (iii) expiration of all periods for
the Corporation or Indemnitee to object to such counsel's selection, Indemnitee
shall be entitled to commence an action seeking an adjudication in an
appropriate court of the State of Texas, 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 action seeking an adjudication or an award in arbitration within
one hundred eighty (180) days following the date on which Indemnitee first has
the right to commence such action pursuant to this Section 6.1, or such right
shall expire; provided, however, that the foregoing clause shall not apply in
respect of a proceeding brought by Indemnitee to enforce his rights under
Section 4.1. The Corporation agrees not to oppose Indemnitee's right to seek any
such adjudication or award in arbitration.
Section 6.2 Adverse Determination Not to Affect any Judicial Proceeding. In
the event that a determination shall have been made pursuant to Article V that
Indemnitee is not entitled to indemnification, any judicial proceeding or
arbitration commenced pursuant to this Article VI shall be conducted in all
respects as a de novo trial, or arbitration, on the merits and Indemnitee shall
not be prejudiced by reason of such initial adverse determination. In any
judicial proceeding or arbitration commenced pursuant to this Article VI, the
Corporation shall have the burden of proving that Indemnitee is not entitled to
indemnification or advancement of Expenses, as the case may be.
Section 6.3 Corporation Bound by Determination Favorable to Indemnitee in
any Judicial Proceeding or Arbitration. If a determination shall have been made
or deemed to have been made pursuant to Article V that Indemnitee is entitled to
indemnification, the Corporation shall be bound by such determination in any
judicial proceeding or arbitration commenced pursuant to this Article VI, absent
(i) a misstatement by Indemnitee of a material fact, or an omission by
Indemnitee of a material fact necessary to make a statement by Indemnitee not
materially misleading, in connection with the request for indemnification, or
(ii) a prohibition of such indemnification under applicable law.
Section 6.4 Corporation Bound by the Agreement. The Corporation shall be
precluded from asserting in any judicial proceeding or arbitration commenced
pursuant to this Article VI 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 Corporation is bound by all the
provisions of this Agreement.
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Section 6.5 Indemnitee Entitled to Expenses of Judicial Proceeding. In the
event that Indemnitee 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 Corporation,
and shall be indemnified by the Corporation against, any and all expenses (of
the types described in the definition of Expenses in Article I) 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.
ARTICLE VII
MISCELLANEOUS
Section 7.1 Non-Exclusivity. The rights of Indemnitee to receive
indemnification and advancement of Expenses as provided by this Agreement shall
not be deemed exclusive of any other rights to which Indemnitee may at any time
be entitled under applicable law, the Articles of Incorporation or Bylaws of the
Corporation, any other agreement, vote of shareholders or a resolution of
directors, or otherwise. No amendment, alteration or repeal of this Agreement or
any provision hereof shall adversely affect Indemnitee's rights hereunder and
such rights shall be in addition to any rights Indemnitee may have under the
Corporation's Articles of Incorporation, Bylaws and the TBCA or otherwise. To
the extent that there is a change in the TBCA (whether by statute or judicial
decision) which allows greater indemnification by agreement than would be
afforded currently under the Corporation's Articles of Incorporation or Bylaws
and this Agreement, it is the intent of the parties hereto that the Indemnitee
shall enjoy by virtue of this Agreement the greater benefit so afforded by such
change.
Section 7.2 Insurance and Subrogation.
(a) To the extent that the Corporation maintains an insurance policy or
policies providing liability insurance for directors, officers, employees,
agents or fiduciaries of the Corporation or of any other corporation,
partnership, joint venture, trust, employee benefit plan or other
enterprise that such person serves at the request of the Corporation,
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, agent or fiduciary under such policy or
policies.
(b) In the event of any payment by the Corporation under this Agreement,
the Corporation 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 Corporation to bring suit to
enforce such rights.
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(c) The Corporation shall not be liable under this Agreement to make any
payment of 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.
Section 7.3 Certain Settlement Provisions. The Corporation shall have no
obligation to indemnify Indemnitee under this Agreement for amounts paid in
settlement of a Proceeding or Claim without the Corporation's prior written
consent. The Corporation shall not settle any Proceeding or Claim in any manner
that would impose any fine or other obligation on Indemnitee without
Indemnitee's consent. Neither the Corporation nor Indemnitee shall unreasonably
withhold their consent to any proposed settlement. The Corporation's obligation
to indemnify or advance Expenses hereunder to Indemnitee with respect to
Indemnitee's service at the request of the Corporation as a director, officer,
employee or agent of any other corporation, partnership, joint venture, trust,
employee benefit plan or other enterprise shall be reduced by any amount
Indemnitee has actually received as indemnification or advancement of Expenses
from such other corporation, partnership, joint venture, trust, employee benefit
plan or other enterprise.
Section 7.4 Exculpation of Directors. If Indemnitee is or was a director of
the Corporation, he shall not in that capacity be liable to the Corporation or
its shareholders for monetary damages for an act or omission in Indemnitee's
capacity as a director, except that Indemnitee's liability shall not be
eliminated or limited for: (a) a breach of Indemnitee's duty of loyalty to the
Corporation or its shareholders; (b) an act or omission not in good faith that
constitutes a breach of duty of the director to the Corporation or an act or
omission that involves intentional misconduct or a knowing violation of the law;
(c) a transaction from which Indemnitee received an improper benefit, whether or
not the benefit resulted from an action taken within the scope of Indemnitee's
office; or (d) an act or omission for which the liability of Indemnitee is
expressly provided for by statute. Notwithstanding any of the foregoing, the
Indemnitee shall be exculpated from liability to the fullest extent permissible
by applicable law as in effect from time to time.
Section 7.5 Duration of Agreement. This Agreement shall continue for so
long as Indemnitee serves as a director of the Corporation or as a director,
officer, partner, employee, agent or fiduciary of any other corporation,
partnership, joint venture, trust, employee benefit plan or other enterprise in
which the Corporation has an interest, and thereafter shall survive until and
terminate upon the later to occur of: (a) ten (10) years after the date that
Indemnitee shall have ceased to serve as a director or officer of the
Corporation or of any other corporation, partnership, joint venture, trust,
employee benefit plan or other enterprise which Indemnitee served at the request
of the Corporation; (b) the final termination of all pending Proceedings in
respect of which Indemnitee is granted rights of indemnification or advancement
of expenses hereunder and of any proceeding commenced by Indemnitee pursuant to
Article VI relating thereto; or (c) the expiration of all statutes of limitation
applicable to possible Claims arising out of Indemnitee's Corporate Status. This
Agreement shall be binding upon the Corporation and its successors and assigns
and shall inure to the benefit of Indemnitee and his heirs, executors, legal
representatives and administrators, and this Agreement does not, and shall not
be construed to confer any rights on any person that is not a party to this
Agreement, other than Indemnitee's spouse, and his heirs, executors and assigns.
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Section 7.6 Notice by Each Party. Indemnitee agrees to promptly notify the
Corporation in writing upon being served with any summons, citation, subpoena,
complaint, indictment, information or other document or communication relating
to any Proceeding or Claim for which Indemnitee may be entitled to
indemnification or advancement of Expenses hereunder; provided, however, failure
to give such notice shall not deprive Indemnitee of his rights to
indemnification and advancement of Expenses under this Agreement unless the
Company is actually and materially prejudiced thereby. The Corporation agrees to
promptly notify Indemnitee in writing, as to the pendency of any Proceeding or
Claim which may involve a claim against the Indemnitee for which Indemnitee may
be entitled to indemnification or advancement of Expenses hereunder.
Section 7.7 Amendment. This Agreement may not be modified, supplemented or
amended except by a written instrument executed by or on behalf of each of the
parties hereto.
Section 7.8 Waivers. No waiver of any of the provisions of this Agreement
shall be deemed or shall constitute a waiver of any provisions hereof (whether
or not similar) not shall such waiver constitute a continuing waiver.
Section 7.9 Entire Agreement. This Agreement and the documents expressly
referred to herein constitute the entire agreement between the parties hereto
with respect to the matters covered hereby, and any other prior or
contemporaneous oral or written understandings or agreements with respect to the
matters covered hereby are expressly superseded by this Agreement. All Expenses,
liabilities and Proceedings incurred or arising during the term of any prior
understanding or agreement shall be subject to the terms and conditions of this
Agreement rather than any prior agreement.
Section 7.10 Severability. If any provision of this Agreement (including
any provision within a single section, paragraph or sentence) or the application
of such provision to any person or circumstance, shall be judicially declared to
be invalid, unenforceable or void 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 which
is not itself invalid, illegal or unenforceable) shall not in any way by
affected or impaired thereby; (b) such provision or provisions shall be deemed
reformed to the extent necessary to conform to applicable law and to give the
maximum effect to the intent of the parties hereto; and (c) to the fullest
extent possible, the provisions of this Agreement (including, without
limitation, each portion of any Section of this Agreement containing any such
provision held to be invalid, illegal or unenforceable which is not itself
invalid, illegal or unenforceable) shall be construed so as to give effect to
the intent manifested thereby.
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Section 7.11 Notices. Unless otherwise expressly provided herein, all
notices, requests, demands, consents, waivers, instructions, approvals and other
communications hereunder shall be in writing and shall be deemed to have been
duly given if (a) delivered by hand and receipted for by the party to whom said
notice or other communication shall have been directed or (b) mailed by
certified or registered mail with postage prepaid, on the third (3rd) business
day after the date on which it is so mailed:
If to the Corporation: Gexa Energy
_________________________
_________________________
Attn: Chairman
If to Indemnitee:
_________________________
_________________________
_________________________
_________________________
or to such other address as may have been furnished to the Indemnitee by
the Corporation or to the Corporation by Indemnitee, as the case may be. All
notices and other communications given to any party in accordance with the
provisions of this Agreement shall be deemed to have been given when delivered
or sent to the intended recipient thereof in accordance with the provisions of
this Section 7.11.
Section 7.12 Contribution. To the fullest extent permissible under
applicable law, if the indemnification provided for in this Agreement is
unavailable to Indemnitee for any reason whatsoever, the Company, in lieu of
indemnifying Indemnitee, shall contribute to the amount incurred by Indemnitee,
whether for judgments, fines, penalties, excise taxes, amounts paid or to be
paid in settlement and/or for Expenses, in connection with any claim relating to
an indemnifiable event under this Agreement, in such proportion as is deemed
fair and reasonable in light of all the circumstances of such Proceeding in
order to reflect: (a) the relative benefits received by the Company and
Indemnitee as a result of the event(s) and/or transaction(s) giving cause to
such Proceeding; and/or (b) the relative fault of the Company (and its
directors, officers, employees and agents) and Indemnitee in connection with
such event(s) and/or transaction(s).
Section 7.13 Governing Law. This Agreement and the legal relations among
the parties shall be construed in accordance with and governed by, the laws of
the State of Texas, without regard to its conflict of law rules.
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Section 7.14 Headings. The Article and Section headings in this Agreement
are for convenience of reference only, and shall not be deemed to alter or
affect the meaning or interpretation of any provisions hereof.
Section 7.15 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original and all of which
together shall be deemed to be one and the same instrument. Only one such
counterpart signed by the party against whom enforceability is sought needs to
be produced to evidence the existence of this Agreement.
Section 7.16 Certain Persons Not Entitled to Indemnification.
Notwithstanding any other provision of this Agreement, Indemnitee shall not be
entitled to indemnification or advancement of Expenses hereunder with respect to
any Proceeding or any Claim therein, brought or made by Indemnitee or any claim
therein prior to a Change of Control, unless the bringing of such Proceeding or
making of such Claim shall be approved by the Board, and except as specifically
provided in Article V or Article VI hereof.
Section 7.17 Indemnification for Negligence, Gross Negligence, etc. WITHOUT
LIMITING THE GENERALITY OF ANY OTHER PROVISION HEREUNDER, IT IS THE EXPRESS
INTENT OF THIS AGREEMENT THAT INDEMNITEE BE INDEMNIFIED AND EXPENSES BE ADVANCED
REGARDLESS OF INDEMNITEE'S ACTS OF NEGLIGENCE, GROSS NEGLIGENCE, INTENTIONAL OR
WILLFUL MISCONDUCT TO THE EXTENT THAT INDEMNIFICATION AND ADVANCEMENT OF
EXPENSES IS ALLOWED UNDER APPLICABLE LAW AS IF EFFECT FROM TIME TO TIME PURSUANT
TO THE TERMS OF THIS AGREEMENT.
Section 7.18 Miscellaneous. Use of the masculine pronoun shall be deemed to
include usage of the feminine pronoun where appropriate. When used in this
Agreement, the words "herein," "hereof" and words of similar import shall refer
to this Agreement as a whole and not to any provision of this Agreement, and the
word "Section" refers to a Section of this Agreement, unless otherwise
specified.
[Signature page follows]
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IN WITNESS WHEREOF, this Agreement has been duly executed and delivered to
be effective as of the date first above written.
GEXA ENERGY
____________________________
Name: ______________________
Title:______________________
INDEMNITEE
____________________________
Name: ______________________
Title:______________________
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